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If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of All West Communications, Inc., Carbon/Emery Telecom, Inc., Central Utah Telephone, Inc., Hanksville Telecom, Inc., Manti Telephone Company, Skyline Telecom, UBET Telecom, Inc. And Qwest Corporation Joint Petition for Waiver of the Definition of "Study Area" Contained in the Part 36 Appendix-Glossary of the Commission's Rules; Petition for Waiver of Sections 61.41(c), 61.41(d) and 69.3(e)(11) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) CC Docket No. 96-45 ORDER Adopted: February 27, 2001 Released: February 27, 2001 By the Chief, Accounting Policy Division: I. INTRODUCTION 1. In this Order, we grant a request from All West Communications (All West), Carbon/Emery Telecom, Inc. (Carbon/Emery), Central Utah Telephone (Central Utah), Hanksville Telecom, Inc. (Hanksville), Manti Telephone Company (Manti), Skyline Telecom (Skyline), and UBET Telecom, Inc. (UBET) (collectively, Acquiring Companies), and Qwest Corporation (Qwest) for a waiver of the definition of "study area" contained in Part 36 Appendix-Glossary of the Commission's rules.US This waiver will permit Qwest to remove telephone exchanges comprising approximately 35,600 access lines from its Utah study area. This waiver will also permit All West, Central Utah, Manti, and Skyline to add 1,920 access lines, 2,077 access lines, 1,887 access lines, and 1,407 access lines, respectively, to their existing Utah study areas. Additionally, this waiver will permit Carbon/Emery, Hanksville, and UBET to add 12,105 access lines, 170 access lines, and 16,161 access lines, respectively, to their parent companies' existing study areas. 2. We also grant the request of All West, Carbon/Emery, Central Utah, Hanksville, and UBET for a waiver of section 61.41(c) of the Commission's rules to permit these companies to operate under rate-of-return regulation after acquiring the exchanges from Qwest that are currently under price cap regulation. In addition, we grant Manti's and Skyline's request for a waiver of section 69.605(c) of the Commission's rules to allow Manti and Skyline to continue operating as average schedule companies after the exchange acquisitions from Qwest. Finally, we grant the Acquiring Companies' request for a waiver of the tariff pooling rules included in section 69.3(e)(11) of the Commission's rules. III. STUDY AREA WAIVER A. Background 2. Study Area Boundaries. A study area is a geographic segment of an incumbent local exchange carrier's (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. The Commission froze all study area boundaries effective November 15, 1984 and an incumbent LEC must apply to the Commission for a waiver of the study area boundary freeze if it wishes to sell or purchase additional exchanges. 3. Transfer of Universal Service Support. Section 54.305 of the Commission's rules provides that a carrier acquiring exchanges from an unaffiliated carrier shall receive the same per-line levels of high-cost universal service support for which the acquired exchanges were eligible prior to their transfer. For example, if a rural carrier purchases an exchange from a non-rural carrier that receives support based on the Commission's new universal service support mechanism for non-rural carriers, the loops of the acquired exchange shall receive the same per-line support as calculated under the new non-rural mechanism, regardless of the support the rural carrier purchasing the exchange may receive for any other exchanges. In adopting section 54.305, the Commission sought to ensure that a selling carrier does not artificially inflate the price of an exchange in anticipation of the buyer's receipt of increased universal service support as a result of the transfer. High-cost support mechanisms currently include non-rural carrier forward-looking high-cost support, interim hold-harmless support for non-rural carriers, rural carrier high-cost loop support, local switching support, and Long Term Support (LTS). To the extent that a carrier acquires exchanges receiving any of these forms of support, the acquiring carrier will receive the same per-line levels of support for which the acquired exchanges were eligible prior to their transfer. 4. As described in the Commission's recent order adopting an integrated interstate access reform and universal service proposal put forth by the members of the Coalition for Affordable Local and Long Distance Service (CALLS), beginning July 1, 2000, if a price cap LEC acquires exchanges from another price cap LEC, the acquiring carrier will become eligible to receive interstate access universal service support for the acquired exchanges. Because the interstate access universal service support mechanism is capped at $650 million, transactions involving the transfer of support will not increase the mechanism's overall size. If a non-price cap LEC acquires exchanges from a price-cap LEC, per-line interstate access universal service support will not transfer. 5. The Petition for Waiver. On October 6, 2000, Qwest and the Acquiring Companies filed a joint petition for waiver of the definition of "study area" as set forth in Part 36 Appendix-Glossary of the Commission's rules. The requested waiver would permit Qwest to alter the boundaries of its existing Utah study area by removing 12 exchanges that it is transferring to the Acquiring Companies. The waiver would also permit the purchased exchanges to be added to the study areas of All West (acquiring 1,920 access lines), Central Utah (acquiring 2,077 access lines), Manti (acquiring 1,887 access lines), Skyline (acquiring 1,407 access lines), Emery Telephone (the parent company of Carbon/Emery and Hanksville)(acquiring 12,185 access lines), and Uintah Basin Telecommunications Association (the parent company of UBET)(acquiring 16,161 access lines). The Acquiring Companies are based in Utah. On October 18, 2000, the Common Carrier Bureau (Bureau) released a public notice seeking comment on the Petition The United States Telecom Association (USTA) and the National Telephone Cooperative Association (NTCA) filed comments in support of the Petition. Beehive Telephone Co., Inc. (Beehive) filed comments opposing the Petition. Qwest and the Acquiring Companies filed reply comments. 6. Beehive's Objections. Beehive objects to the instant waiver requests. First, Beehive contends that Qwest failed to adequately consider Beehive as a buyer of certain of the Utah exchanges that were sold to Central Utah, Skyline, and Hanksville. As a result, Beehive has requested that the Commission suspend and remand this matter to the Utah Public Service Commission (Utah Commission) for further investigation and recommendation. Second, Beehive requests that the Commission delay action on the waiver requests of Central Utah and Skyline until the conclusion of a proceeding currently pending before the Utah Commission involving the approval of the transfer of all outstanding shares of stock from Central Utah and Skyline to Lynch Telephone Corporation X (Lynch). B. Discussion 7. We find that good cause exists to waive the definition of study area contained in Part 36 Appendix-Glossary of the Commission's rules to permit Qwest to alter the boundaries of its existing Utah study area to remove twelve exchanges that it is transferring to the Acquiring Companies. We also find that good cause exists to permit the Acquiring Companies to add these exchanges to their Utah study areas. 8. Generally, the Commission's rules may be waived for good cause shown. As noted by the Court of Appeals for the D.C. Circuit, however, agency rules are presumed valid The Commission may exercise its discretion to waive a rule where the particular facts make strict compliance inconsistent with the public interest In addition, the Commission may take into account considerations of hardship, equity, or more effective implementation of overall policy on an individual basis Waiver of the Commission's rules is therefore appropriate only if special circumstances warrant a deviation from the general rule, and such a deviation will serve the public interest. In evaluating petitions seeking a waiver of the rule freezing study area boundaries, the Commission traditionally has applied a three-prong standard: (1) the change in study area boundaries must not adversely affect the universal service fund; (2) no state commission having regulatory authority over the transferred exchanges may oppose the transfer; and (3) the transfer must be in the public interest. For the reasons discussed below, we conclude that petitioners have satisfied these criteria and have demonstrated that good cause exists for waiver of the Commission's study area freeze rule. 9. First, we conclude that Qwest and the Acquiring Companies have demonstrated that the proposed change in the study area boundaries will not adversely affect any of the universal service mechanisms. Because, under the Commission's rules, carriers purchasing exchanges from an unaffiliated carrier can only receive the same level of per-line support that the selling company was receiving for those exchanges prior to the sale, there can, by definition, be no adverse impact on the universal service fund resulting from this transaction As such, the Acquiring Companies will receive the same per-line levels of support, including high-cost loop support, local switching support, and LTS, for which the acquired exchanges were eligible prior to their transfer. The Acquiring Companies' existing Utah access lines will continue to receive support based on the average schedule cost of those lines or the average schedule formulas, whichever is applicable. Therefore, we conclude that this transaction will not adversely affect the universal service mechanisms. We note that, as a result of this transaction, access lines in the Acquiring Companies' pre-acquisition study area boundaries will be eligible for different amounts of high-cost support than the access lines being transferred from Qwest's study area. We therefore direct the Acquiring Companies to submit, as part of their annual universal service data submissions, a schedule showing their methodology for excluding the costs associated with the acquired access lines from the costs associated with their pre-acquisition study areas. 10. Second, no state commission with regulatory authority over the transferred exchanges opposes the transfer. The Utah Commission indicated that it does not object to the grant of the study area waiver. 11. Finally, we conclude that the public interest is served by a waiver of the study area freeze rule. First, in its petition, Qwest and the Acquiring Companies indicate considerable public support for the exchange transfers from customers served by the exchanges of the telecommunications services provided by the exchanges. Also, in its order approving the transfer of the exchanges to the Acquiring Companies, the Utah Commission concluded that the transfer will result in "greater opportunities for service and operating efficiencies" for all customers in the exchanges. The public interest benefits also include facilities improvements and investment in the new exchanges by the Acquiring Companies. Finally, inclusion of the exchanges in the study areas of the Acquiring Companies will provide customers with the benefit of voicing their concerns to locally based companies. Based on these representations, we conclude that Qwest and the Acquiring Companies have demonstrated that grant of this waiver request serves the public interest. 12. We reject Beehive's request to deny the instant waiver request in light of its objections. Beehive claims that Qwest refused to consider Beehive as a potential buyer for the Utah exchanges that were sold to Central Utah, Skyline, and Hanksville, and requests that the Commission suspend this matter and remand it to the Utah Commission for further investigation and recommendation. The transfer of these exchanges has already been approved by the Utah Commission and as noted above, the Utah Commission has indicated that it does not object to the grant of the study area waiver requests. Absent an objection from the Utah Commission, we have no basis for denying the waiver requests at issue here. It is well settled that the Commission does not involve itself in private contractual matters when other forums exist for resolving those matters. The Utah Commission and the Utah courts are the proper forums for addressing Beehive's claims that it should have been considered by Qwest as a potential buyer. For these reasons, we also reject Beehive's request that the Commission withhold action on the waiver requests of Central Utah and Skyline until the conclusion of a proceeding pending before the Utah Commission regarding the sale of all outstanding shares of stock from Central Utah and Skyline to Lynch.USUS The transaction between Central Utah, Skyline, and Lynch is not at issue here and, as noted above, Beehive's objections to such a transfer should be made to the Utah Commission or the appropriate state or local court. XIII. PRICE CAP WAIVER A. Background 2. Section 61.41(c)(2) of the Commission's rules provides that a non-price cap carrier that acquires access lines from a price cap carrier shall become subject to price cap regulation and must file price cap tariffs within a year. In addition, Section 61.41(c)(3) of the Commission's rules provides that an average schedule company that acquires exchanges from a price cap company is permitted to retain its average schedule status. Section 61.41(d) of the Commission's rules further provides that local exchange carriers (LECs) that become subject to price cap regulation are not permitted to withdraw from such regulation. 3. In the LEC Price Cap Reconsideration Order, the Commission explained that section 61.41(c), the "all-or-nothing" rule, is intended to address two concerns regarding mergers and acquisitions involving price cap companies. The first concern was that, in the absence of the rule, a LEC might attempt to shift costs from its price cap affiliate to its non-price cap affiliate, allowing the non-price cap affiliate to charge higher rates to recover its increased revenue requirement, while increasing the earnings of the price cap affiliate. The second concern was that, absent the rule, a LEC might attempt to game the system by switching back and forth between rate-of-return regulation and price cap regulation. For example, a price cap company may attempt to "game" the system by opting out of price cap regulation, building a large rate base under rate-of-return regulation so as to raise rates and then, after returning to price caps, cutting costs back to an efficient level, thereby enabling it to realize greater profits. It would not serve the public interest, the Commission stated, to allow a carrier alternately to "fatten up" under rate-of-return regulation and "slim down" under price cap regulation, because the rates would not decrease in the manner intended under price cap regulation. 4. The Commission nonetheless recognized in the LEC Price Cap Reconsideration Order that narrow waivers of the price cap "all-or-nothing" rule might be justified if efficiencies created by the purchase and sale of exchanges outweigh the threat that the system might be subject to gaming. The Commission stated that waivers of section 61.41(c) will be granted conditioned on the selling price cap company's downward adjustment to its price cap indices to reflect the sale of exchanges. The Commission explained that such an adjustment is needed to remove the effects of transferred exchanges from rates that have been based, in whole or in part, upon the inclusion of those exchanges in a carrier's price cap indices. In addition, waivers of the all-or-nothing rule have been granted subject to the condition that the acquiring carrier obtain prior Commission approval of any attempt to return to price cap regulation. 5. The Acquiring Companies operate under rate-of return regulation, while Qwest is subject to price cap regulation. All West, Carbon/Emery, Central Utah, Hanksville, and UBET seek a waiver of section 61.41(c)(2) to permit them to continue to operate under rate-of-return regulation, stating that the application of these rules will not serve the purpose of the price cap rules, which is to prevent LECs from shifting costs between price cap and non-price cap affiliates and from increasing rates by switching back and forth between rate-of-return regulation and price cap regulation. NTCA and USTA support this waiver request. F. Discussion 7. For the reasons discussed below, we find that good cause exists for us to waive section 61.41(c)(2) of the Commission's rules, and that it would be in the public interest to grant the waiver request of All West, Carbon/Emery, Central Utah, Hanksville, and UBET. As discussed previously, the courts have interpreted section 1.3 of the Commission's rules to require a petitioner seeking a waiver of a Commission rule to demonstrate that special circumstances warrant a deviation from the general rule, and that such a deviation will serve the public interest. 8. We find that special circumstances warrant a waiver of section 61.41(c)(2). In evaluating requests for waiver of section 61.41(c)(2), the Bureau has taken into account the company's preferences and, in particular, the preferences of small carriers. In fact, the Commission traditionally has been sensitive to the unique administrative burdens imposed on small telephone companies by the application of its rules. In the LEC Price Cap Order, the Commission decided that small telephone companies would not be required to operate under a regulatory regime that was designed largely on the basis of the historical performance of the largest LECs. The Commission explained that small and mid-size LECs may have fewer opportunities than large companies to achieve cost savings and efficiencies and may be less productive than the seven Regional Bell Operating Companies (RBOCs) and GTE. The Commission, therefore, limited the mandatory application of price cap regulation to the eight largest LECs the seven RBOCs and GTE. 9. All West, Carbon/Emery, Central Utah, Hanksville, and UBET are all small telephone companies and have expressed a preference for operating under rate-of-return regulation. After the proposed transaction, All West will serve approximately 5,900 access lines; Carbon/Emery will serve approximately 17,200 access lines; Central Utah will serve approximately 3,600 access lines; Hanksville will serve approximately 200 access lines; and UBET will serve approximately 18,700 access lines. These operations will be smaller than other carriers that have been granted waivers of the Commission's price cap rules. Further, these companies are the types of small carriers which the Commission has previously found to be inappropriate candidates for price cap regulation. For these reasons, we find that of All West, Carbon/Emery, Central Utah, Hanksville, and UBET present special circumstances to support their waiver request. 10. We also find that a waiver of section 61.41(c)(2) serves the public interest. First, we find that the first concern identified by the Commission in adopting section 61.41(c) cost shifting between affiliates is not at issue here. Upon completion of the transaction, All West, Carbon/Emery, Central Utah, Hanksville, and UBET will operate separate and apart from Qwest. Since there will be no affiliation between these entities and Qwest, there will be no opportunity or incentive to shift costs between price cap and rate-of-return companies. Second, to safeguard against possible gaming that could result from attempts to elect price-cap regulation at a later time, we will require All West, Carbon/Emery, Central Utah, Hanksville, and UBET to seek prior Commission approval if they seek to elect price cap regulation. At that time, we can make a determination if the transaction raises concerns that we seek to address in section 61.41(c). 11. In accordance with section 61.45 of the Commission's rules, we also require Qwest to adjust its price cap indices to reflect the removal of the transferred access lines from its Utah study areas. Section 61.45 grants us discretion to require price cap carriers to make adjustments to their price cap indices to reflect cost changes resulting from rule waivers. XII. AVERAGE SCHEDULE WAIVER A. Background 2. Incumbent LECs that participate in National Exchange Carrier Association (NECA) pools collect access charges from interexchange carriers at the rates contained in the tariffs filed by NECA. Each pool participant receives revenues from the pools to recover the cost of providing service plus a pro rata share of the pool's earnings. NECA pool participants' interstate access charge settlements are determined either on the basis of cost studies or average schedule formulas. Average schedule companies are those incumbent LECs that receive compensation for use of their interstate common carrier services on the basis of formulas that are designed to simulate the disbursements that would be received by a cost study company that is representative of average schedule companies. In electing average schedule status, average schedule companies are able to avoid the administrative and financial burdens of performing interstate cost studies. 3. Section 69.605(c) of the Commission's rules provides, in pertinent part, that "a telephone company that was participating in average schedule settlements on December 1, 1982, shall be deemed to be an average schedule company." The definition of average schedule company includes existing average schedule incumbent LECs, but does not allow the creation of new average schedule companies or the conversion of cost-based carriers to average schedule status without a waiver of the Commission's rules. The limitation on the creation of new average schedule companies reflects the Commission's finding that cost studies produce the most accurate financial information, and consequently, the most accurate interstate telephone rates. 4. The special circumstances that the Bureau has found to justify waivers of section 69.605(c) fall into broad categories. First, the Bureau has granted limited opportunities for carriers serving 5,000 or fewer access lines to convert from cost-based to average schedule settlements when faced with "industry-wide changed circumstances." Second, the Bureau has granted waivers to certain small carriers that lacked the resources to operate on a cost-study basis. Third, to ensure a smooth settlement process, the Bureau has granted section 69.605(c) waivers to average schedule companies that have acquired another company, and allowed the combined companies to merge into one average schedule study area. 5. Skyline and Manti have requested a waiver of section 69.605(c) of the Commission's rules in order to continue operating as average schedule companies following the proposed transaction. Skyline and Manti argue that a waiver permitting them to retain their average schedule status is justified due to "their small size and the savings that will be realized by their not having to perform cost studies." Skyline and Manti also argue that a continuation of their average schedule status will not affect their tariffed access rates or cause any concern that the two companies may "game the system." NTCA and USTA support this waiver request. F. Discussion 7. We are persuaded that good cause exists for us to grant Skyline's and Manti's request for a waiver of section 69.605(c). The Commission has explained that the definition of "average schedule company" in section 69.605 was premised upon a policy determination that carriers with the financial resources and expertise to conduct cost studies without undue hardship should be required to measure the actual costs they incur in providing interstate service. Here, Skyline and Manti have demonstrated that because of their size, they would suffer undue hardship if required to operate on a cost study basis. The high cost of completing cost studies relative to the small size of Skyline and Manti establishes the special circumstances that warrant granting their request for a waiver of section 69.605(c) of the Commission's rules. We note that we have previously granted waivers of section 69.605(c) to similarly-sized carriers. We therefore find that Skyline and Manti's requested waiver of section 69.605(c) of the Commission rules should be granted. VIII. WAIVER OF SECTION 69.3(e)(11) A. Background 9. Under section 69.3(e)(11) of Commission's rules, any change in NECA carrier common line tariff participation and LTS resulting from a merger or acquisition of telephone properties is effective on the next annual access tariff filing effective date following the merger or acquisition. Section 69.3(e)(11) of the Commission's rules was implemented to minimize the complexity of administering the LTS program. Because the next annual access tariff filing effective date is not until July 1, 2001, the Acquiring Companies would be required to file their own interstate tariffs for the acquired access lines until July 1, 2001. In order to avoid the burdens associated with filing their own tariffs, the Acquiring Companies have requested a waiver of section 69.3(e)(11) of the Commission's rules to enable the acquired access lines to participate in the NECA carrier common line tariff upon the date of the closing of the transaction. NTCA and USTA support this waiver request. A. Discussion 10. We find that the Acquiring Companies have demonstrated that special circumstances warrant a deviation from section 69.3(e)(11) of our rules and that it would be in the public interest to grant the Acquiring Companies' waiver request. First, the inclusion of the acquired access lines in the NECA carrier common line tariff represent a minimal increase in NECA common line pool participation. Second, we believe that it would be administratively burdensome for the Acquiring Companies to file interstate tariffs for a relatively small number of access lines until July 1, 2001. Consequently, we find that the Acquiring Companies present the special circumstances to justify a waiver of section 69.3(e)(11). Moreover, we believe that a waiver of section 69.3(e)(11) will be in the public interest because the Acquiring Companies will be able to devote additional resources to providing improved telecommunications services to the affected rural areas that otherwise would normally be spent on tariff filings. We also note that, according to NECA, "inclusion of the acquired access lines in NECA's tariff, effective on March 1, 2001 . . . , will create no undue administrative burden for NECA, nor will it result in any disadvantage to other tariff participants." We, therefore, conclude that good cause exists to grant a waiver of section 69.3(e)(11) to the Acquiring Companies. VI. ORDERING CLAUSES 11. Accordingly, IT IS ORDERED, pursuant to sections 1, 4(i), 5(c), 201, and 202 of the Communications Act of 1934, as amended, 47 U.S.C.  151, 154(i), 155(c), 201, and 202, 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 petition for waiver of Part 36, Appendix-Glossary, of the Commission's rules, filed by All West Communications, Inc., Carbon/Emery Telecom, Inc., Central Utah Telephone, Inc., Hanksville Telecom, Inc., Manti Telephone Company, Skyline Telecom, UBET Telecom, Inc., and the Qwest Corporation on October 18, 2000, IS GRANTED, as described herein. 12. IT IS FURTHER ORDERED, pursuant to sections 1, 4(i), 5(c), 201, and 202 of the Communications Act of 1934, as amended, 47 U.S.C.  151, 154(i), 155(c), 201, and 202, 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 petition for waiver of section 61.41(c) of the Commission's rules, 47 C.F.R.  61.41(c) filed by All West Communications, Inc., Carbon/Emery Telecom, Inc., Central Utah Telephone, Inc., Hanksville Telecom, Inc., and UBET Telecom, Inc., IS GRANTED, as described herein. 13. IT IS FURTHER ORDERED, pursuant to sections 1, 4(i), 5(c), 201, and 202 of the Communications Act of 1934, as amended, 47 U.S.C.  151, 154(i), 155(c), 201, and 202, 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 petition for waiver of section 69.605(c) of the Commission's rules, 47 C.F.R.  69.605(c), filed by Manti Telephone Company and Skyline Telecom, IS GRANTED, as described herein. 14. IT IS FURTHER ORDERED, pursuant to sections 1, 4(i), 5(c), 201, and 202 of the Communications Act of 1934, as amended, 47 U.S.C.  151, 154(i), 155(c), 201, and 202, 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 petition for waiver of section 69.3(e)(11) of the Commission's rules, 47 C.F.R.  69.3(e)(11), filed by All West Communications, Inc., Carbon/Emery Telecom, Inc., Central Utah Telephone, Inc., Hanksville Telecom, Inc., Manti Telephone Company, Skyline Telecom, and UBET Telecom, Inc., IS GRANTED, as described herein. 15. IT IS FURTHER ORDERED, pursuant to sections 1, 4(i), 5(c), 201, and 202 of the Communications Act of 1934, as amended, 47 U.S.C.  151, 154(i), 155(c), 201, and 202, 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 All West Communications, Inc., Emery Telephone and its subsidiaries; Carbon/Emery Telecom, Inc. and Hanksville, Central Utah Telephone, Inc., Manti Telephone Company, Skyline Telecom, Uintah Basin Telecommunications Association, and its subsidiary; UBET Telecom, Inc., SHALL SUBMIT, as part of their annual USF data submission to the fund administrator, a schedule showing the methodology for excluding costs associated with the acquired access lines from costs associated with their pre-acquisition study areas. 16. IT IS FURTHER ORDERED, pursuant to sections 1, 4(i), 5(c), 201, and 202 of the Communications Act of 1934, as amended, 47 U.S.C.  151, 154(i), 155(c), 201, and 202, and sections 0.91, 0.291, 1.3, and 61.43 of the Commission's rules, 47 C.F.R.  0.91, 0.291, 1.3, and 61.43, that the Qwest Corporation SHALL ADJUST its price cap indices in its annual price cap filing to reflect cost changes resulting from this transaction, consistent with this Order. FEDERAL COMMUNICATIONS COMMISSION Katherine L. Schroder Chief, Accounting Policy Division