Interstate Rate of Return Prescription Procedures and Methodologies, Subpart G, Rate Base

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 65

[CC Docket No. 96-22; FCC 96-63]

Interstate Rate of Return Prescription Procedures and

Methodologies, Subpart G, Rate Base

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: The Federal Communications Commission proposes to amend its

rules regarding, ``Interstate Rate of Return Prescription Procedures

and Methodologies,'' to revise the rate base treatment of prepaid

postretirement benefits other than pensions (OPEB) costs recorded In

Account 1410, Other Noncurrent Assets, and all items in Account 4310,

Other Long-Term Liabilities, including accrued liabilities related to

OPEBs. The Commission is taking this action to update its interstate

rate base rules so that items of similar nature can be afforded uniform

treatment under the rate base rules.

DATES: Comments must be filed on or before April 12, 1996, and reply

comments must be filed on or before May 14, 1996.

ADDRESSES: Comments should be addressed to Office of the Secretary,

Federal Communications Commission, 1919 M Street, N.W., Washington,

D.C. 20554.

FOR FURTHER INFORMATION CONTACT: Clara Kuehn or Thaddeus Machcinski,

Common Carrier Bureau, Accounting and Audits Division, (202) 418-0800.

SUPPLEMENTARY INFORMATION: This is a synopsis of the Federal

Communications Commission's Notice of Proposed Rulemaking in CC Docket

No. 96-22, Amendments to Part 65, Interstate Rate of Return

Prescription Procedures and Methodologies, Subpart G, Rate Base, FCC

96-63, adopted February 20, 1996 and released March 7, 1996. The

complete text of the Notice of Proposed Rulemaking is available for

[[Page 9969]]

inspection and copying during normal business hours in the Commission's

Reference Center, Room 239, 1919 M Street, N.W., Washington D.C. 20554,

and may also be purchased from the Commission's copy contractor,

International Transcription Service, Inc., at 2100 M Street, N.W.,

Suite 140, Washington, D.C. 20037, telephone number (202) 857-3800.

Synopsis of Notice of Proposed Rulemaking

1. The Notice of Proposed Rulemaking invites comment on proposals

to revise the rate base treatment of prepaid postretirement benefits

other than pensions (OPEB) costs recorded in Account 1410, Other

Noncurrent Assets, and all items in Account 4310, Other Long-Term

Liabilities, including accrued liabilities related to OPEBs. The

Commission notes that it does not agree with the suggestion by some

parties that modification of its Part 65 regulations be deferred until

the conclusion of several pending investigations of LEC tariffs, which

include exogenous adjustments for OPEB costs, but invites comment on

this issue.

2. The Notice of Proposed Rulemaking proposes to include prepaid

OPEB costs recorded in Account 1410, Order Noncurrent Assets, in the

interstate rate base. The rationale for this action is our tentative

conclusion that prepaid OPEB costs in excess of the SFAS-106 cost

calculation earn a return, which benefits ratepayers by reducing

amounts companies must accrue in future periods. Because investors fund

these excess prepayments, this Notice proposes to include these excess

prepayments in the rate base. The Commission invites comment on this

proposal.

3. Currently, unfunded accrued pension costs recorded in Account

4310 are removed from the rate base, although other items recorded in

Account 4310, such as accrued OPEB liabilities, are not removed from

the rate base. The Notice of Proposed Rulemaking proposes to accord to

the accrued OPEB liabilities recorded in Account 4310 the same rate

base treatment presently accorded to unfunded accrued pension costs

without modifying the rate base treatment for other items recorded in

Account 4310. Alternatively, the Notice of Proposed Rulemaking also

proposes to exclude all amounts recorded in Account 4310 from the

interstate rate base. It is the Commission's tentative conclusion that

all items recorded in Account 4310 should be removed from the rate base

because these amounts are zero-cost sources of funds, those funds

provided to a carrier without cost to investors. The Commission invites

comment on these proposals.

4. In the Notice the Commission states that this rulemaking is a

non-restricted notice and comment proceeding. Ex parte presentations

are permitted, except during the Sunshine Agenda period, provided they

are disclosed as provided in the Commission's rules, 47 CFR 1.1202,

1.1203, 1.1206.

5. In the Notice the Commission certifies that the Regulatory

Flexibility Act of 1980 does not apply to this rulemaking proceeding

because if the proposals in this proceeding are adopted, there will not

be a significant economic impact on a substantial number of small

business entities, as defined by Section 601(3) of the Regulatory

Flexibility Act. Because of the nature of local exchange and access

service, the Commission has concluded that LECs, including small LECs,

are dominant in their fields of operation and therefore are not ``small

entities'' as defined by that act. The Secretary has sent a copy of

this Notice of Proposed Rulemaking, including the certification, to the

Chief Counsel for advocacy of the Small Business Administration in

accordance with Section 603(a) of that act.

Ordering Clause

6. Accordingly, IT IS ORDERED that, pursuant to Sections 1, 4(i),

4(j), 201 through 205, 220, and 403 of the Communications Act of 1934,

as amended, 47 U.S.C. 151, 154(i), 154(j), 201 through 205, 220 and

403, notice is hereby given of proposed amendments to Part 65, Subpart

G of the Commission's Rules, 47 CFR Part 65, Subpart G, as described in

the Notice of Proposed Rulemaking.

List of Subjects in 47 CFR Part 65

Administrative practice and procedure; Communications common

carriers; Reporting and recordkeeping requirements; Telephone.

Federal Communications Commission.

William F. Caton,

Acting Secretary.

[FR Doc. 96-5826 Filed 3-11-96; 8:45 am]

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