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Rule

2000 Biennial Regulatory Review - Comprehensive Review of the Accounting Requirements and Reporting Requirements for Incumbent Local Exchange Carriers

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Information about this document as published in the Federal Register.

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AGENCY:

Federal Communications Commission.

ACTION:

Final rule; withdrawal of amendment and partial delay of effective date.

SUMMARY:

In this document the Commission reinstates Account 3400, Accumulated amortization—tangible, a Class B Account. Reinstating Account 3400 is less burdensome for the Class B carriers. We also clarify that mid-sized carriers are not required to file ARMIS 43-02 (USOA Report), 43-03 (Joint Cost Report), and 43-04 (Separations and Access Report). The Commission delays the effective date of the changes to the part 32 chart of accounts, and derivative changes to parts 51 and 54 of the Commission rules. This delay would allow the accounting changes to be implemented at the beginning of the year.

DATES:

The amendment removing § 32.3400, published at 67 FR 5688, (February 6, 2002), which was to become effective August 6, 2002 (however, carriers were permitted to implement part 32 accounting changes as of January 1, 2002) is withdrawn as of April 24, 2002. All other amendments to part 32 and parts 51 and 54 published at 67 FR 5679-5702, which were to become effective August 6, 2002 (however, carriers were permitted to implement part 32 accounting changes as of January 1, 2002) are delayed until January 1, 2003.

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FOR FURTHER INFORMATION CONTACT:

Clifford Rand, Deputy Chief, PPD, Wireline Competition Bureau.

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SUPPLEMENTARY INFORMATION:

This is a summary of the Commission's Order on Reconsideration adopted March 7, 2002 and released March 8, 2002. The full text of the document is available for public inspection and copying during regulator business hours at the FCC Reference Information Center, Portals II, 445 12th Street, SW., Room CY-A257, Washington DC, 20554. This document may also be purchased from the Commission's duplicating contractor, Qualex International, Portal II 445 12th Street, SW., Room CY-B402, Washington, DC, 20554, telephone 202-863-2893, facsimile 202-863-2898, or via e-mail qualexint@aol.com.

Synopsis of Order

I. Background

The Commission undertook a comprehensive review of the accounting rules and Automated Reporting Management Information System (ARMIS) reporting requirements in the Phase 2 Report and Order, 67 FR 5669 (February 6, 2002). Among other things, the Commission eliminated many part 32 accounts and reduced ARMIS reporting requirements for mid-sized local exchange carriers (LECs). On the Commission's motion, pursuant to § 1.108 of the Commission's rules, the Commission issues this limited reconsideration of the rules adopted in the Phase 2 Report and Order. In this Order, the Commission reinstates Account 3400, Accumulated amortization—tangible, a Class B account, at the request of United States Telecom Association (USTA). At Sprint's request, the Commission clarifies that mid-sized carriers are not required to file ARMIS 43-02 (USOA Report), 43-03 (Joint Cost Report), and 43-04 (Separations and Access Report). Finally, at the request of the Bell Operating Companies (BOCs), the Commission extends the effective date of the changes to the Part 32 chart of accounts, and derivative changes to parts 51 and 54, adopted in the Phase 2 Report and Order, to January 1, 2003.

II. Discussion

Account 3400, Accumulated amortization—tangible. In the Phase 2 Report and Order, the Commission consolidated many of the Class A and Class B accounts. The Commission reduced the number of Class A accounts by 45 percent while retaining the accounts needed by the Commission or the states for regulatory purposes. The Commission also added several Class A subaccounts requested by commenters. The Commission concluded that the Class B account consolidation should correspond with the Class A account consolidation; otherwise, the result would be contrary to the intent to adopt a less burdensome accounting system for the Class B carriers. The Commission therefore reduced the number of Class B accounts by 27 percent. One of the Class B accounts eliminated was Account 3400, Accumulated amortization—tangible.

Account 3400, Accumulated amortization—tangible is used by Class B companies to record accumulated amortization of the type and character required of Class A companies in Start Printed Page 20053Accounts 3410 and 3420. The Commission eliminated this account in the Phase 2 Report and Order, but required Class B carriers to use Account 3410, Accumulated amortization—capitalized leases for part of what was entered into Account 3400. The remaining portion of what was in Account 3400 was intended to go into Account 2682, Leasehold improvements.

USTA argues that it would be easier for the Class B companies to use Account 3400, rather than allocate what formerly was in this account between two other accounts. USTA therefore proposes that the Commission reinstate Account 3400. The streamlining measures adopted in the Phase 2 Report and Order were intended to benefit LECs, both large and small, by reducing the number of accounts they were required to maintain, while maintaining those needed for regulatory purposes. In light of USTA's assertion that it is less burdensome for the Class B carriers to keep Account 3400, the Commission concludes that it would be appropriate to retain this account. Therefore, on reconsideration, and at the request of USTA, the Commission retains Account 3400, Accumulated amortization—tangible.

ARMIS Reports. ARMIS is an automated reporting system developed by the Commission to collect financial, operating, service quality, and network infrastructure information that carriers are required to collect under Commission rules. ARMIS Reports 43-01, 43-02, 43-03, and 43-04 contain financial information of carriers with annual operating revenues that are equal to or above the indexed revenue threshold, currently $117 million. ARMIS 43-04 (Separations and Access Report) collects information on how costs are separated between the federal and state jurisdictions.

At the request of Sprint, the Commission clarifies that mid-sized carriers are not required to file the ARMIS 43-02, 43-03, and 43-04 reports on April 1, 2002. As Sprint observes, one of the goals in this proceeding is to reduce reporting requirements for the mid-sized carriers. The Commission hereby clarifies that its intention was to eliminate the obligation of mid-sized carriers to file ARMIS 43-02, 43-03, and 43-04 on April 1, 2002, and to require the mid-sized carriers to file the revised 43-01 and 43-8 reports on the same schedule as the larger companies.

Extending the effective date of revisions to the Part 32 chart of accounts to January 1, 2003. In the Phase 2 Report and Order, the Commission adopted changes to the accounting rules. BellSouth, on behalf of itself and SBC Communications, Verizon, and Qwest, requests that the Commission extend the effective date of the changes to the part 32 chart of accounts to January 1, 2003.

The Commission agrees with these carriers that extending the effective date of the new part 32 chart of accounts to January 1, 2003 would allow the accounting changes to be implemented at the beginning of the fiscal year and would avoid the dual data capturing that could occur if the part 32 chart of accounts changes were implemented in mid-year. The Commission also notes that this extension will give carriers additional time to revise their accounting systems to incorporate the many changes to the part 32 chart of accounts adopted in the Phase 2 Report and Order. Therefore, on reconsideration, and at the request of the Bell Operating Companies, the Commission is extending the effective date of the changes to the part 32 chart of accounts to January 1, 2003.

As a result of changes in the effective date for the accounting rules, carriers will not be able to report revised 2002 data on April 1, 2003. Consequently, the revisions to the ARMIS Reports 43-01, 43-02, and 43-03 shall be effective for filings due April 1, 2004.

Therefore, on the Commission's own motion, pursuant to § 1.108 of the Commission's rules, the Commission is extending the effective date of the new part 32 chart of accounts and derivative changes to parts 51 and 54 adopted in the Phase 2 Report and Order to January 1, 2003. The Commission is retaining Account 3400, Accumulated amortization—tangible, and the Commission is clarifying that mid-sized LECs are not required to file the ARMIS 43-02, 43-03, and 43-04 reports on April 1, 2002.

III. Procedural Matters

Final Regulatory Flexibility Certification. The Regulatory Flexibility Act of 1980, as amended, (RFA), requires that a regulatory flexibility analysis be prepared for notice and comment proceedings, unless the agency certifies that “the rule will not, if promulgated, have a significant economic impact on a substantial number of small entities.” The RFA generally defines “small entity” as having the same meaning as the term “small business,” “small organization,” and “small governmental jurisdiction.” In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act, unless the Commission has developed one or more definitions that are appropriate to its activities. Under the Small Business Act, a “small business concern” is one that: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) meets any additional criteria established by the Small Business Administration (SBA).

In the Phase 2 Report and Order, the Commission streamlined the Class A and Class B accounts and ARMIS reporting requirements for incumbent LECs, and further reduced the accounting and reporting requirements for mid-sized incumbent LECs. These rule changes generally reduced the accounting and reporting requirements for all incumbent LECs. In this Order on Reconsideration, the Commission is reinstating one Class B account, at the request of USTA. The Commission is also clarifying that mid-sized carriers are not required to file the ARMIS 43-02, 43-03, and 43-04 Reports, also at the request of USTA. Finally, the Commission is extending the effective date for the new chart of accounts adopted in the Phase 2 Report and Order to January 1, 2003, pursuant to the BOCs' request. This will allow carriers, including small entities, more time to make the necessary changes to their accounting systems. These rule changes and clarification will further reduce accounting and reporting burdens for incumbent LECs. Therefore, we certify, pursuant to section 605(b) of the RFA, that the rules adopted herein will not have a significant economic impact on a substantial number of small entities.

IV. Ordering Clauses

Pursuant to section 220(g) of the Communications Act of 1934, as amended, 47 U.S.C. 220(g), changes to the chart of accounts in part 32, System of Accounts, adopted in the Report and Order in CC Docket No. 00-199 shall be effective January 1, 2003. We will, however, permit carriers to implement the § 32.3400 rule change as of January 1, 2002.

Pursuant to the authority contained in sections 1, 4(i), 4(j), 201-205, and 218-220 of the Communications Act of 1934, as amended, 47 U.S.C. sections 151, 154(i), 154(j), 201-205, and 218-220, that mid-sized incumbent local exchange carriers are not required to file FCC Report 43-02, the USOA Report; FCC Report 43-03, the Joint Cost Report; and FCC Report 43-04, the Separations and Access Report for filings due April 1, 2002.

Pursuant to the authority contained in sections 1, 4(i), 4(j), 201-205, and 218-220 of the Communications Act of 1934, as amended, 47 U.S.C. sections 151, Start Printed Page 20054154(i), 154(j), 201-205, and 218-220, that revisions to FCC Report 43-01, the Annual Summary Report; FCC Report 43-02, the USOA Report; and FCC Report 43-03, the Joint Cost Report as set forth previously shall be effective for filings due April 1, 2004.

Pursuant to the authority contained in § 0.291 of the Commission's rules, 47 CFR 0.291, that the Common Carrier Bureau is delegated authority to implement all changes to ARMIS reporting as above set forth.

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List of Subject in 47 CFR Parts 32, 51 and 54.

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Communications Commission.

William F. Caton,

Acting Secretary.

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[FR Doc. 02-9880 Filed 4-23-02; 8:45 am]

BILLING CODE 6712-01-P