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New Roman (TT)XA\  P4PI *Times New RomanTTXP\  P5QXP\  `*Times New Roman (TT)XXP\  P6QXP\  `*Times New Roman (TT)XA\  P7PI *Times New RomanTTXP\  P8QXP\  `*Times New Roman (TT)XA\  P9PI *Times New RomanTTXP\  P:QXP\  `*Times New Roman (TT)X&J\  P;Q&P\  `*Times New Roman (TT)&XP\  P<QXP\  `*Times New Roman (TT)XC\  P=QP\  `*Times New Roman (TT)XP\  P>QXP\  `*Times New Roman (TT)XXP\  P?QXP\  `*Times New Roman (TT)XA\  P@PI *Times New RomanTTXP\  PAQXP\  `*Times New Roman (TT)XXP\  PBQXP\  `*Times New Roman (TT)XA\  PCPI *Times New RomanTTXP\  PDQXP\  `*Times New Roman (TT)XA\  PEPI *Times New RomanTTXP\  PFQXP\  `*Times New Roman (TT)X&J\  PGQ&P\  `*Times New Roman (TT)&XP\  PHQXP\  `*Times New Roman (TT)XC\  PIQP\  `*Times New Roman (TT)XP\  PJQXP\  `*Times New Roman (TT)XXP\  PKQXP\  `*Times New Roman (TT)XA\  PLPI *Times New RomanTTXP\  PMQXP\  `*Times New Roman (TT)XXP\  PNQXP\  `*Times New Roman (TT)XA\  POPI *Times New RomanTTXP\  PPQXP\  `*Times New Roman (TT)XA\  PQPI *Times New RomanTTXP\  PRQXP\  `*Times New Roman (TT)X&J\  PSQ&P\  `*Times New Roman (TT)&XP\  PTQXP\  `*Times New Roman (TT)XC\  PUQP\  `*Times New Roman (TT)XP\  PVQXP\  `*Times New Roman (TT)XC\  PWQP\  `*Times New Roman (TT)XP\  PXQXP\  `*Times New Roman (TT)XC\  PYQP\  `*Times New Roman (TT)XP\  PZQXP\  `*Times New Roman (TT)XC\  P[QP\  `*Times New Roman (TT)XP\  P\QXP\  `*Times New Roman (TT)XC\  P]QP\  `*Times New Roman (TT)2  3|x X  :#C\  PQP#(##&J\  PQ&P# >Federal Communications Commission` (#E992233 yxdddyڃ >Federal Communications Commission` (#E992233 ă yxdddy` hp x (# #C\  PQP# Qm#C\  PQP##XP\  PQXP# #C\  PQP#?? y 11FF#C\  PQP##&J\  P Q&P## y  US QMm#C\  P QP#(##&J\  P Q&P# >Federal Communications Commission`(#CDA 992233 ă yxdddy` hp x (# #C\  P QP#M v'Before the FEDERAL COMMUNICATIONS COMMISSION #Washington, D.C. 20554 #&J\  P Q&P#у In the Matter of*) *) Puerto Rico Telephone Co.*) p x (# )ASD File No. 9893 ` hp x (#Petition for Waiver of Section 32.27*) of the Commission's Rules*) *  MEMORANDUM OPINION AND ORDER  p x (# Adopted: October 19, 1999Released: November 5, 1999 By the Chief, Accounting Safeguards Division ` hp x (# I. INTRODUCTION AND BACKGROUND  1.On September 24, 1998, Puerto Rico Telephone Company ("PRTC") filed a petition for waiver of the affiliate transactions rules, as codified in Section 32.27 of the Commission's rules.footnote ref#XP\  PQXP#XÍÍXÍÍXÍXÍ}X` hp x (#%'0*,.8135@8:P#э#footnote ref##XP\  P?QXP##A\  P@P#See generally Accounting Safeguards Under the Telecommunications Act of 1996,#X PA7XP# Report and Order, 12 FCC Rcd 2993 (1996) ("Accounting Safeguards Order").#XP\  PBQXP#{#&J\  PCQ&P# Specifically, Section 32.27 sets forth the procedures that all incumbent LECs, other than average schedule companies, must use to record the cost of transactions between regulated and nonregulated affiliates. Whenever possible, an incumbent LEC must record the cost #C\  PDQP#(##&J\  PEQ&P# >Federal Communications Commission` (#E992233 yxdddyڃ ` hp x (##C\  PFQP#yX` hp x (#%'0*,.8135@8:QXP#` hp x (#footnote tex#XP\  P?QXP##A\  P@P# #footnote tex##XP\  PAQXP#ѐfootnote ref#XP\  PBQXP##A\  PCP#э#footnote ref##XP\  PDQXP##A\  PEP#In 1997, PRTC recorded $143.3 million in Account 2231 (Radio systems), which includes all investment in radio systems, including cellular systems. 47 C.F.R.  32.2231. After transferring the cellular assets in 1998, PRTC recorded only $43.7 million in Account 2231. SOURCE: ARMIS 4303 Joint Cost Report, Row 2231, Row 6231.#XP\  PFQXP##&J\  PGQ&P# This information indicates that the costs of PRTC's wireless assets were included in its rates, and therefore that PRTC's ratepayers bore the risk of loss and the expense of depreciation, obsolescence, and maintenance of PRTC's cellular and paging assets. As such, PRTC's ratepayers should enjoy the benefits of any gain realized on the asset transfer in the form of a potential reduction in rates.footnote ref#XP\  PHQXP#X0ÍX0Í#C\  PIQP##XP\  PJQXP#` hp x (#footnote tex#XP\  PKQXP##A\  PLP# #footnote tex##XP\  PMQXP#ѐfootnote ref#XP\  PNQXP##A\  POP#э#footnote ref##XP\  PPQXP##A\  PQP#See Aliant Reconsideration Order at para. 10; see also Democratic Central Committee, 485 F.2d at 80611.#XP\  PRQXP##&J\  PSQ&P# 11.For the foregoing reasons, we deny PRTC's request for waiver of Section 32.27 of the Commission's rules.  IV. ORDERING CLAUSE  12.Accordingly, IT IS ORDERED, pursuant to Sections 1, 4(i), 4(j), 201205, 218220, and 254(k) of the Communications Act of 1934, as amended, 47 U.S.C.  151, 154(i), 154(j), 201205, 218220, and 254(k), and Sections 0.91, 0.291, 1.3, 1.106, 32.18, and 32.27 of the Commissions rules, 47 C.F.R.  0.91, 0.291, 1.3, 1.106, 32.18, and 32.27, that the Petition for Waiver filed by Puerto Rico Telephone Company IS HEREBY DENIED. FEDERAL COMMUNICATIONS COMMISSION Kenneth P. Moran Chief, Accounting Safeguards Division