Dissemination of Information

DEPARTMENT OF AGRICULTURE

Rural Utilities Service

Dissemination of Information

AGENCY: Rural Utilities Service, USDA.

ACTION: Request for public comment.

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SUMMARY: The Rural Utilities Service (RUS) seeks comments on agency

policies for releasing and publishing information about electric and

telecommunications borrowers. RUS makes and guarantees loans to

electric and telecommunications systems serving rural areas. These

loans are generally repaid over a period of 35 years and are secured by

the borrower's assets. RUS has a responsibility to protect the security

of multimillion dollar loans, to monitor compliance with debt

covenants, and to ensure that loan funds are used for purposes

authorized by law. As part of this oversight, RUS requires that

borrowers submit certain information to RUS periodically. Currently a

great deal of this information is easily available to the public.

Both the electric and the telecommunications industries are moving

from a regulated utility model to a more competitive model. In a

regulated utility model, information about market participants is

available to the public. In contrast, under a competitive model, a

great deal of information is competitively sensitive. Release of this

information could cause competitive harm to individual respondents and

to the overall working of the market.

RUS is seeking comments on whether the current policy of providing

information to the public should be changed to reflect this new

industry environment, and whether certain information should, in the

future, be released only in an aggregated form that does not associate

data with specific borrowers.

DATES: Written comments must be received by RUS or bear a postmark or

equivalent not later than May 15, 1998.

ADDRESSES: Send comments to Sue Arnold, Office of the Assistant

Administrator, Electric Program, Rural Utilities Service, United States

Department of Agriculture, 1400 Independence Avenue, SW, Stop 1560,

Room 4024-S, Washington, DC. 20250-1560. RUS requires, in hard copy, a

signed original and 3 copies of all comments. Comments will be

available for public inspection during normal business hours.

FOR FURTHER INFORMATION CONTACT: Sue Arnold, Office of the Assistant

Administrator, Electric Program, Rural Utilities Service, United States

Department of Agriculture, 1400 Independence Avenue, SW, Stop 1560,

Room 4024-S, Washington, DC. 20250-1560. Phone: 202-690-1078. Fax: 202-

690-0717. E-mail: [email protected].

SUPPLEMENTARY INFORMATION: The Rural Utilities Service (RUS) makes and

guarantees loans to electric and telecommunications systems serving

rural areas pursuant to the Rural Electrification Act of 1936, as

amended, (7 U.S.C. 901 et seq.) (RE Act). Most loans are repaid over a

period of 35 years and are secured by the borrower's assets. As a

creditor, RUS has a fiduciary responsibility to protect the security of

multimillion dollar loans, to monitor compliance with debt covenants,

and to ensure that loan funds are used for purposes authorized by law.

As part of this oversight, RUS requires that borrowers submit certain

information to RUS. This information includes Financial and Statistical

Reports. Electric distribution borrowers submit this information in RUS

Form 7. Power supply borrowers, also known as ``generation and

transmission borrowers'' or ``G&T's,'' submit RUS Form 12.

Telecommunications borrowers report this information on RUS Form 479.

The environment of both the electric and telecommunications

industries is in a state of flux. Until very recently, most Americans

received virtually all electricity and most telecommunications services

from utilities that are regulated monopolies. Both industries are

rapidly moving away from the regulated monopoly

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model toward a more competitive model that relies heavily on market

forces.

The electric industry is now characterized by a mix of utilities

and nonutilities, and the distinction between activities performed by

utilities and activities performed by nonutilities is becoming

increasingly blurred. Both utilities and nonutilities, for example,

generate electric power, and nonutility power marketers, brokers,

aggregators, and similar entities now compete directly in business

activities that were once the exclusive domain of utilities. In fact,

electric power may pass through multiple utility and nonutility

entities before reaching ultimate consumers.

The telecommunications industry is in the midst of the deregulation

brought about by the Telecommunications Act of 1996 (1996 Act). The

service now being deregulated is local telephone service--long distance

service was deregulated in the early 1980's. Prior to the 1996 Act,

most customers bought local service from a provider that was a utility

with an exclusive franchise to serve an area. Today the Federal

Communications Commission is implementing the 1996 Act by opening local

markets to competition. The distinction between providers of long

distance and local telephone services is evaporating, and cable TV

companies, internet providers, and others are beginning to explore

entering markets that were once the exclusive domain of a traditional

telephone company.

In a regulated monopoly model, a great deal of information about

utilities is traditionally available to the public. In a competitive

environment, in contrast, a great deal of information about market

participants could be competitively sensitive. Release of this

information could cause substantial competitive harm and impede the

workings of a free market.

RUS borrowers are utilities, and RUS currently releases data about

individual borrowers on a routine basis. For example, the Statistical

Report, Electric Borrowers (RUS Information Publication 201-1) is RUS's

annual compilation of data submitted by electric borrowers on RUS Forms

7 and 12. Information about telecommunications borrowers based on RUS

Form 479 is compiled in the Statistical Report, Rural

Telecommunications Borrowers (RUS Informational Publication 300-4).

These reports may be purchased at nominal cost from the U.S. Government

Printing Office (GPO). On the other hand, comparable information about

nonutilities that compete, or may wish to compete, against RUS

borrowers is not easily available.

Because of the changes in the electric and telecommunications

industries, and the current imbalance of information available about

different industry participants, RUS is seeking public comments to help

determine whether some information now routinely published should, in

the future, be treated with more confidentiality.

Specifically, RUS requests comments on the following:

1. Should RUS change its current practice of making borrower

specific information available in the annual RUS Statistical Reports,

and in responses to specific requests from individuals?

2. How do various members of the public use information about

specific borrowers that RUS now makes available on a routine basis?

3. Specifically, what information, if any, should be withheld from

publication by RUS, and released only in an aggregated form that does

not allow information to be matched with specific borrowers? RUS

requests that respondents discuss the exact types of information that

they believe could be harmful if released.

4. What information should RUS continue to release and/or publish

at the borrower level, and why is release or publication of this

information in the public interest?

5. How could release of certain business data relating to borrowers

cause harm to RUS borrowers, RUS as a secured creditor, rural

consumers, and/or the RUS goal of ensuring that rural consumers

continue to have access to high quality, reliable electric and

telecommunications service at reasonable cost?

Dated: April 9, 1998.

Christopher A. McLean,

Acting Administrator, Rural Utilities Service.

[FR Doc. 98-10029 Filed 4-14-98; 8:45 am]

BILLING CODE 3410-15-P