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PUBLIC NOTICE

FEDERAL COMMUNICATIONS COMMISSION
1919 M STREET N.W.
WASHINGTON, D.C. 20554      DA 98-795

News media information 202/418-0500.    Recorded listing of releases and texts 202/418-2222.


Report No. CC-98-12   April 24, 1998

ANNUAL ADJUSTMENT OF REVENUE THRESHOLD

     This gives notice that the revenue threshold used for classifying carriers for accounting
purposes is increased from $109 million to $112 million.  Section 402(c) of the 1996 Act
mandates that we "adjust the revenue requirements" of section 32.11, 64.903, and Part 43 of
our rules "to account for inflation as of the release date of the Commission's Report and
Order in CC Docket No. 91-141, and annually thereafter."  Prior to passage of the 1996 Act,
our rules established a $100 million threshold in "annual revenues from regulated
telecommunications operations" for the purpose of classifying carriers for accounting
purposes.  In addition, Section 64.903(a) required incumbent local exchange carriers with
"annual operating revenues of $100 million or more" to file cost allocation manuals describing
how they allocate costs between regulated and nonregulated activities and imposing annual
audit obligations on those carriers.  Similarly, Part 43 of our rules required that "carriers
having annual operating revenues in excess of $100 million" shall file certain reports with the
Commission.

      In CC Docket 96-193, we determined to use the Gross Domestic Product Chain-type
Price Index (GDP-CPI) to adjust the revenue threshold for inflation each year.  We adjust
revenue thresholds for inflation based on the annual average value of the GDP-CPI for the
revenue year relative to the value of the GDP-CPI on October 19, 1992, rounded to the
nearest $1 million.

      Accordingly, the indexed revenue threshold for 1997 is calculated as follows:  

[A]          GDP-CPI (October 19, 1992) 100.69

[B]   GDP-CPI (Annual) (1997)           112.45

[C]   Ratio: GDP-CPI (Annual) (1997) 
      GDP-CPI (October 19, 1992)  1.1168

[D]   Original Revenue Threshold        $100 million

[E]   Indexed Revenue Threshold    ([C] x [D]) $112 million         

Accordingly, the indexed revenue threshold for 1997 is $112 million.








      Action by Chief, Accounting Safeguards Division
      











Source:  National Data Tables, Survey of Current Business, Apr. 1998, tbl. 7.1.