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                                                           Before the
               FEDERAL COMMUNICATIONS COMMISSION
                    Washington, D.C.  20554


In the Matter of 

BellSouth Telecommunications, Inc.'s
Permanent Cost Allocation Manual
Waiver of Section 32.27
of the Commission's Rules
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AAD File No.  93-80

                                
                             ORDER

     Adopted:  January 21, 2000Released: January 24, 2000

By the Chief, Accounting Safeguards Division:

     1.  BellSouth Telecommunications, Inc. (BellSouth) filed a petition for waiver of the Commission's
affiliate transactions rules, as codified in Section 32.27, on June 29, 1993.  In its petition, BellSouth seeks
permission to record at "greater than fully distributed cost" in its cost allocation manual (CAM) the costs
for services related to directory publishing that are provided by the incumbent local exchange carrier (LEC)
to a nonregulated affiliate, BellSouth Advertising and Publishing Company (BAPCO).  In addition,
BellSouth seeks permission to record at "less than fully distributed cost" or "no charge" the costs for
services provided by BAPCO and other nonregulated affiliates to the LEC.

     2.  The Tennessee Public Service Commission (TPSC) opposes BellSouth's waiver request,
arguing that the proposed terms do not accurately reflect the contractual arrangement between BellSouth
and its nonregulated affiliate.  Specifically, TPSC argues that the proposed CAM wording is a
misstatement of the facts and is not consistent with the revenue sharing arrangement set out in the contracts
between BellSouth and BAPCO.  In reply comments BellSouth states that TPSC is incorrect in its
assertion that BellSouth's proposed CAM wording is inconsistent with the contracts between BellSouth and
BAPCO.  BellSouth states that BAPCO publishes both white and yellow page directories and that the
revenues received from publication belong to BAPCO.  BellSouth states that, under the agreement, it
provides certain services to BAPCO to facilitate the publication, such as billing and collection services,
subscriber listing data, and directory delivery information, in exchange for a publishing fee based on a
percentage of the revenues BAPCO receives.

     3.  Waiver of the Commission's rules is appropriate only if special circumstances warrant a
deviation from the general rule and such deviation will serve the public interest.  In addition, a waiver
request must be consistent with the principles underlying the rule for which a waiver is requested.  We
agree with BellSouth that, in this instance, recording at "greater than fully distributed cost" the revenues
received for a limited set of services provided to its directory publishing affiliate appears to benefit
ratepayers by recognizing increased revenues on its books of account.  We further agree with BellSouth
that recording certain services received from affiliates at "no charge" and "less than fully distributed cost"
appears to benefit ratepayers by enabling the incumbent LEC to obtain services in a cost-effective manner. 
Moreover, such accounting treatment is consistent with waivers granted to other incumbent LECs for
similar directory publishing.  Because BellSouth's proposed treatment benefits ratepayer interests, we find
that it is fully consistent with the public interest and the underlying policy goals.  Accordingly, we grant its
waiver request at this time.  This waiver applies only to those services specified in BellSouth's waiver
petition and supplement.


     4.  Accordingly, IT IS ORDERED, pursuant to Sections 1, 4(i), 4(j), 201-205, and 218-220 of the
Communications Act of 1934, as amended, 47 U.S.C.  151, 154(i), 154(j), 201-205, and 218-220, and
Sections 0.91, 0.291, 1.3, 1.106, and 32.27 of the Commissions rules, 47 C.F.R.  0.91, 0.291, 1.3,
1.106, and 32.27, that the Petition for Waiver filed by BellSouth IS HEREBY GRANTED.
 

                              FEDERAL COMMUNICATIONS COMMISSION
                    


                              Kenneth P. Moran
                                                            Chief, Accounting Safeguards Division