TR Daily FCC Harmonizes Separations, USoA Rules
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Wednesday, October 17, 2018

FCC Harmonizes Separations, USoA Rules

The FCC has harmonized its jurisdictional separations rules with its Uniform System of Accounts (USoA) rules, allowing “all carriers to use the simpler jurisdictional separations processes previously reserved for smaller carriers.”

The revised separations rules will take effect Jan. 1, 2019, which it said “is the earliest practicable effective date for these changes, because it corresponds with the carriers’ practices of keeping their USOA accounts on a calendar year basis and using their USOA accounting results for regulatory purposes.”

Last year the FCC eliminated the requirement for price cap carriers to maintain regulatory accounting books under its part 32 USoA requirements and reduced the number of USoA accounts to be maintained by carriers that are still subject to part 32 rules by eliminating the additional 58 Category A accounts used by Class A carriers (TR Daily, Feb. 23, 2017). In that order, the FCC referred the issue of examining jurisdictional separation issues related to the part 32 changes for effects on separations rules.

Last fall, the Joint Board recommended the FCC delete references in its part 36 jurisdictional separations rules to Class A accounts where the references are “made in parallel with references to Class B accounts into which they will roll up.” It also recommended deleting two references to Account 3410, the only Class A account that the FCC order does not formally “roll up” into a Class B account (TR Daily, Oct. 27, 2017).

Earlier this year the FCC proposed adopting the Joint Board’s recommendations (TR Daily, Feb. 22).

In a report and order adopted yesterday and released today in WC docket 14-130 and CC docket 80-286, the FCC removed from its part 36 rules references to Class A accounts and to “the phrase ‘Class B accounts’ in Part 36 rules that contain parallel references to Class A accounts and the Class B accounts into which they roll up.”

It also deleted “references to current-year account balances and modify references to Class A carriers in other Part 36 rules” and “references to Class A accounts in sections 36.501 and 36.505 of the rules.”

The FCC amended “section 36.112 to allow former Class A carriers (carriers with revenue equal to or greater than $157 million for calendar year 2016) to select between the legacy Class A and Class B procedures in apportioning their general support facilities costs.”

“We agree with the Joint Board that requiring all carriers to use the method previously used only by Class B carriers would ‘impose a compliance burden on current Class A carriers because they would have to change their well-established manner of allocating general support expense.’ We find that both procedures provide reasonable methods for separating general support facilities costs and allowing legacy Class A carriers to select between these procedures will simplify compliance for carriers while having, at most, a de minimis effect on separations results,” the FCC said.

It also corrected “certain stylistic and typographical errors in Part 36” to make the rules clearer.

In a separate statement, Commissioner Mike O’Rielly said, “With this Report and Order, the Commission concludes our implementation of the Separations Joint Board’s Recommended Decision on harmonizing and updating our Part 36 jurisdictional separations rules. I am grateful for the concerted efforts of the Joint Board and Commission staff, and the process that enabled us to reach this occasion.

“While I appreciate the consensus that led to the current result, I am aware that Joint Board members may disagree on how to pursue long-term separations reform. On that separate issue, I am encouraged by the Commission’s progress on extending the existing separations freeze and look forward to taking further actions to eliminate unnecessary and technologically-irrelevant separations burdens,” he added. —Lynn Stanton, [email protected]

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