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

In the Matter of                )
                                )
Nevada Bell/Pacific Bell/Southwestern Bell)  
Consolidated Permanent Cost Allocation Manual)              ASD 99-45
for the Separation of Regulated and)
Nonregulated Costs              )
                                )

                             ORDER


   Adopted:  September 29, 1999         Released:  September 29, 1999

By the Chief, Accounting Safeguards Division

     1.   Part 64 of the Commission's rules sets forth the procedures a carrier must follow to allocate
its costs between its regulated and nonregulated activities, and it requires carriers to describe these
procedures in a cost allocation manual (CAM).  The CAM requirements specify that when a carrier changes
its cost allocation methodology, it must quantify the effect of these changes by cost pool.

     2.   Nevada Bell, Pacific Bell, and Southwestern Bell (SBC) are subject to the Commission's
CAM requirements.  On April 1, 1997, SBC acquired Nevada Bell and Pacific Bell.  In consolidating its
operations, SBC is developing a single cost allocation system to replace the existing systems and has
informed us that in October 1999 it intends to file a consolidated CAM.  This consolidated CAM will likely
result in substantial changes to SBC's cost allocation procedures from its previous CAM filings, which in
accordance with our rules, SBC must quantify by cost pool. 

     3.   The Commission, on its own motion or on petition, may waive any provision of its rules or
orders if good cause is shown.  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, the waiver must be consistent with the principles underlying the rule for which a waiver is
requested.          

     4.   We find the public interest will be served if we waive the requirement in Section 64.903(b)
that requires SBC to quantify changes to its cost apportionment table by cost pool.  We believe that, in its
initial consolidated CAM filing, such quantification may be impractical.  For instance, in accounts in which
the existing Nevada Bell, Pacific Bell, and Southwestern Bell CAMs do not contain the same cost pool
structure, quantifying changes by cost pool could be very difficult and costly.  Moreover, in these instances,
quantification may not be accurate since there would be no basis for comparison between the previous cost
pool structure and the new cost pool structure.  Thus, we will allow SBC to quantify these changes by
account instead of by cost pool.  

     5.   In addition, we will waive the requirement that SBC's transmittal letter provide a listing of
all changes to its CAM.  We expect that there will be numerous minor changes in the consolidated CAM;
however, we will only require SBC to provide a listing of the substantive changes in the consolidated CAM. 
This listing must provide sufficient detail and explanations to aid the public and the Commission in
reviewing the consolidated CAM filing.  

     6.   We find that granting this limited waiver will benefit ratepayers by eliminating the additional
cost associated with the difficult and time consuming effort that SBC would face in quantifying changes by
cost pool.  We believe a more practical approach under these circumstances is to permit SBC to quantify the
cost apportionment table changes by account.  Allowing SBC to quantify changes in this manner will not
undermine the underlying policy goal of the rule, because in many cases, the quantification would likely be
difficult to accomplish and evaluate.  We emphasize, however, that our grant of this limited waiver of
Section 64.903(b) applies only to SBC's October 1999 CAM filing.

     7.   Accordingly, IT IS 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, 0.291 and 1.3 of the
Commission's Rules, 47 C.F.R.  0.91, 0.291 and 1.3, that the requirement in Section 64.903(b) that carriers
quantify changes to the cost apportionment table by cost pool is waived for SBC's initial consolidated
October 1999 CAM filing, and SBC may quantify revisions to its cost apportionment table by account. 
Further, in the transmittal letter associated with this CAM filing, SBC need only list the substantive changes. 
 



                              FEDERAL COMMUNICATIONS COMMISSION
                                        


                              Kenneth P. Moran
                              Chief, Accounting Safeguards Division