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This is an unofficial announcement of Commission action. Release of the full text of a Commission order constitutes official action. See MCI v. FCC. 515 F 2d 385 (D.C. Circ 1974).

October 11, 2001

Michael Balmoris 202-418-0253


Comprehensive Accounting and Reporting Reform is Part of Commission's Biennial Regulatory Review Process to Repeal or Modify its Rules

Washington, D.C. - Today, the Federal Communications Commission (FCC) streamlined and modified its accounting rules and its financial and operating data reporting requirements for incumbent local exchange carriers (LECs). The Report and Order and Further Notice of Proposed Rulemaking, which is part of the Commission's 2000 biennial regulatory review process, continues the Commission's reform efforts to eliminate accounting and reporting regulations that are outdated or unnecessary.

The measures adopted today overhaul two areas: 1) the Commission's accounting rules, known as Part 32 of the Uniform System of Accounts (USOA), which largely prescribe how incumbent LECs record and allocate their revenues and costs, and 2) the Commission's Automated Reporting Management Information System (ARMIS) reporting rules, which require certain carriers to report financial and operating information on an annual basis. The reforms undertaken today cover the following areas (a summary of all the reform measures is attached):

  1. Consolidated and streamlined Class A accounting requirements overall by forty-five percent, from 296 to 164 accounts, while at the same time responding to state requests to create new sub-accounts for five existing accounts.
  2. Provided greater flexibility to carriers in how they value transactions with affiliates.
  3. Eliminated cost allocation manuals and biennial audits for mid-sized carriers.
  4. Streamlined the amount of information in each ARMIS report filed by large LECs.
  5. Eliminated for mid-sized carriers three out of four financial ARMIS reports.

The USOA have been used for various purposes, such as determining interstate access charges, federal-state jurisdictional separations, and calculating universal service support. For accounting purposes, incumbent LECs are classified as either Class A, incumbent LECs with annual revenues from regulated telecommunications operations that are equal to or above the indexed revenue threshold - currently $117 million, or Class B, those falling below that threshold. Class A companies - BellSouth, Qwest, SBC, and Verizon - currently maintain 296 accounts, while the approximately 1300 Class B companies currently maintain 113 accounts.

ARMIS is an automated reporting system developed by the Commission in 1987 for collecting financial, operating, service quality, and network infrastructure information from certain incumbent LECs. It currently contains ten separate reports. Currently, 52 of the approximately 1,300 incumbent LECs file ARMIS reports on an annual basis. Thirty of the 52 are the operating companies of Verizon, SBC Communications, BellSouth, and Qwest. These companies file at the Class A level. The remaining 22 companies, the operating companies of Cincinnati Bell, C-TEC, Sprint, Alltel, Frontier, and Citizens, file ARMIS reports at the Class B level.

The Further Notice of Proposed Rulemaking that the Commission adopted today does the following:

  • Seeks to further develop the record on the appropriate circumstances for elimination of accounting and reporting requirements for incumbent LECs;
  • Seeks comment on whether certain ARMIS information would more appropriately be collected through ad hoc data requests or the Commission's Local Competition and Broadband Data Gathering Program; and,
  • Seeks comment on conforming amendments to the Commission's separations rules, necessitated by our modifications to the USOA.


Docket Nos.: CC 00-199, 97-212, 80-286, and 99-301

Action by the Commission October 11, 2001, by Report and Order and Further Notice of Proposed Rulemaking (FCC 01-305). Chairman Powell, and Commissioners Abernathy and Martin, with Commissioner Copps approving in part and dissenting in part, and Powell, Abernathy, Copps and Martin issuing statements

Common Carrier Bureau Staff Contact: Tim Peterson at 202-418-0800.

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Summary of Report and Order in CC Docket Nos. 00-199, 97-212, and 80-286

Summary of Further Notice of Proposed Rulemaking in CC Docket Nos. 00-199, 99-301, and 80-286: