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                           Before the
               Federal Communications Commission
                     Washington, D.C. 20554


In the Matter of                        )
                                   )    
Petition for Waiver Filed by                 )
Vermont Telephone Company, Inc               )
                                   )
Concerning the Definition of            )    AAD 95-30
"Study Area" in the Part 36                  )
Appendix-Glossary of the                )         
Commission's Rules                      )
                                
                    ORDER ON RECONSIDERATION

Adopted:   December 28, 1998                                       Released:   December 28, 1998

By the Chief, Common Carrier Bureau:

                        I.   INTRODUCTION

     1.   The Common Carrier Bureau (Bureau) has before it a petition for reconsideration filed
July 15, 1996, by Vermont Telephone Company, Inc. (Vermont Telephone).  Vermont Telephone
requests reconsideration of a portion of a June 14, 1996 Order granting Vermont's request to change
study area boundaries.  Specifically, Vermont Telephone requests the Bureau to make the study area
changes adopted in the Order effective on January 1, 1996, instead of June 14, 1996.  For the reasons
discussed below, we grant Vermont Telephone's petition for reconsideration.

                         II.  BACKGROUND

     2.   A study area is a geographic segment of an incumbent LEC's telephone operations. 
Generally, a study area corresponds to an incumbent LEC's entire service territory within a state. 
Thus, incumbent LECs operating in more than one state typically have one study area for each state,
and incumbent LECs operating in a single state typically have a single study area.  Study area
boundaries are important because incumbent LECs perform jurisdictional separations, determine high
cost loop support amounts, and generally tariff their rates at the study area level.  Effective November
15, 1984, the Commission froze all study area boundaries to ensure that incumbent LECs do not set
up high-cost exchanges within their existing service territories as separate study areas in order to
maximize interstate cost allocations.   

     3.   In July 1994, Champlain Valley Telecom, Inc, (Champlain) Northland Telephone
Company of Vermont, (Northland) and Vermont Telephone, three small rural telephone companies
formed one entity to purchase exchanges from Contel of Vermont, Inc.  In August 1994, the three
companies became independent, unaffiliated entitites and began operating separately, but they
continued to share the former Contel of Vermont study area.  On June 14, 1996, the Bureau's
Accounting and Audits Division granted Vermont Telephone's petition for waiver of the definition
of "Study Area" to allow the Contel of Vermont study area to be divided among Champlain,
Northland and Vermont Telephone.  The waiver allowed the three companies to establish new study
areas for their newly acquired exchanges.  The waiver was made effective upon release of the Order.

     4.   In its current petition, Vermont Telephone makes two arguments in support of
adjusting the effective date of the study area changes.  First, Vermont Telephone argues that the June
14, 1996 effective date will force the carrier to perform an additional cost study.  Second, Vermont
Telephone argues that the mid-year effective date adversely affects the interstate revenues that
Vermont Telephone would receive.  Specifically, Vermont Telephone states that it will have an
interstate revenue requirement that is $206,713 less than it would be if the study area changes were
effective January 1, 1996.

                         III.  DISCUSSION

     5.   We agree with Vermont Telephone's contention that performing an additional cost
study to reflect two periods of operation would be unduly burdensome and unnecessarily complex. 
Making the study area changes effective January 1, 1996 would allow Vermont Telephone's cost
study to reflect an entire year with its own study area.  We believe that separate 1996 cost studies for
separate study areas would best reflect the carriers' separate operations of these properties.  In
addition, we agree with Vermont Telephone's assertion that separate cost studies for the entire year
would be consistent with the Commission's goal of reducing regulatory burdens on small telephone
companies.  

     6.   Accordingly, for the reasons stated above, we believe that Vermont Telephone has
shown good cause for the requested retroactive effective date of January 1, 1996, and therefore grant
that request.

                       IV.  ORDERING CLAUSE

     7.   Accordingly, IT IS SO ORDERED, pursuant to sections 4(i) and 5(c) of the
Communications Act of 1934, as amended, 47 U.S.C.  154(i) and 155(c), and Sections 0.91 and
0.291 of the Commission's rules, 47 C.F.R.  0.91 and 0.291, that the petition of Vermont
Telephone Company, Inc., for retroactive adjustment of the effective date of its study area changes,
IS GRANTED.

                              FEDERAL COMMUNICATIONS COMMISSION




                              Lawrence Strickling
                              Chief, Common Carrier Bureau