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If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of ) ) Sprint's Request for Waiver of ) ASD 98-77 ARMIS 43-03 Filing Requirement ) ) MEMORANDUM OPINION AND ORDER Adopted: December 22, 1998 Released: December 22, 1998 By the Chief, Accounting Safeguards Division: I. INTRODUCTION 1. On July 27, 1998, Sprint Local Telephone Companies ("Sprint") filed a petition seeking a waiver of the Commission's requirement that the Automated Reporting Management Information System, 43- 03, Joint Cost Report ("ARMIS 43-03") be filed on a study area basis for its Southeast and Northwest companies ("Petition"). On August 19, 1998 the Commission released a Public Notice soliciting comments on this Petition. No comments were filed. By this Order, we grant Sprint a limited waiver of the filing requirement for purposes of its next ARMIS 43-03 submission. II. BACKGROUND AND PETITION 2. The ARMIS reporting requirements were adopted by the Commission in 1987, 1991, and 1992 to facilitate the timely and efficient collection and analysis of incumbent local exchange carriers' ("ILECs") operating costs and revenues in order to provide an improved basis for oversight functions and to enhance the Commission's ability to quantify the effects of alternative policy proposals. The ARMIS 43-03 report provides information on the assignment of revenues and costs between regulated and nonregulated activities. Our rules require carriers to provide this information by study area. 3. Sprint requests a waiver to allow its Southeast and Northwest companies to file their Joint Cost Reports on a company-wide basis rather than on a study area basis as required by the Commission's rules. Sprint states that both companies operate in more than one state and that they do not maintain records that readily enable them to complete the Joint Cost Report by study area. Sprint states that, in order to comply with our rules, each company would have to expend approximately $300,000 annually. Sprint argues that the companies should not be required to file at the study area level because their prior company-wide filings have been adequate for the Commission's needs. III. DISCUSSION 4. Pursuant to our rules, ILECs are required to submit the ARMIS 43-03 at the study area level. Sprint's Southeast and Northwest companies are not in compliance with the study area level requirement and have not been in compliance since they first began filing the reports. Sprint now seeks a waiver of our rules to permit its companies to continue to file the ARMIS 43-03 data on an operating company basis. 5. Under Section 1.3 of the Commission's rules, we may grant waivers for good cause shown. A showing of good cause requires a demonstration that "special circumstances warrant a deviation from the general rule and such a deviation will serve the public interest." Further, the waiver must be consistent with the principles underlying the rule for which the waiver is requested. 6. In the ARMIS Order, the Commission required carriers to file the Joint Cost Reports by study area. Among other things, these reports are used to support and verify the regulated amounts that are subject to the jurisdictional separations process. These amounts must be determined and shown by study area because jurisdictional separations must be performed by study area. Moreover, it is especially important that these data be submitted in the proper format now because the Federal-State Joint Board is currently reviewing the separations rules and may be revising such rules. In this review, the Federal-State Joint Board will be assessing the jurisdictional impacts of any proposed changes in the separations rules and will be using the data submitted by the carriers in their ARMIS reports. Therefore, it is essential that the Joint Cost Report provide an accurate view of the study area costs and revenues that are subject to jurisdictional separations. 7. We find that Sprint has not demonstrated good cause to permanently waive the requirement that its Southeast and Northwest companies file the ARMIS 43-03 Reports at the study area level. We also note the relatively large sizes of the study areas in question that further compound the problems associated with data aggregated at the company-level basis. Although Sprint has been in violation of this requirement for past filings, we will not at this time require the Southeast and Northwest companies to revise the incorrectly filed ARMIS 43-03 historical filings. In addition, because it is December, 1998, we recognize that full compliance may be difficult for the 1998 reporting period, therefore, we will waive the requirement for Sprint's Southeast and Northwest companies to file their ARMIS 43-03 Reports at the study area level for the next annual ARMIS submission, which is due April 1, 1999. Sprint's Southeast and Northwest companies are required to be in full compliance with the ARMIS 43-03 study area reporting requirements for the April 1, 2000 submission covering the 1999 reporting period and thereafter. IV. ORDERING CLAUSE 8. Accordingly, IT IS ORDERED, pursuant to Sections 1, 4(i), 5(c), 201, 202, 205, and 218-220 of the Communications Act of 1934, as amended, 47 U.S.C.  151, 154(i), 155(c), 201, 202, 205, and 218-220, and Sections 0.91, 0.291, and 1.3 of the Commission's rules, 47 C.F.R.  0.91, 0.291, and 1.3 that the petition of the Sprint Local Telephone Companies for Waiver of Section 43.21 of the Commission's rules, 47 C.F.R.  43.21, IS GRANTED to the extent indicated herein and otherwise DENIED. FEDERAL COMMUNICATIONS COMMISSION Kenneth P. Moran Chief, Accounting Safeguards Division