Sec. 64.903  Cost allocation manuals.

    (a) Each local exchange carrier with annual operating revenues that 
equal or exceed the indexed revenue threshold, as defined in Sec. 32.900 
of this chapter, shall file with the Commission within 90 days after 
publication of that threshold in the Federal Register, a manual 
containing the following information regarding its allocation of costs 
between regulated and unregulated activities:
    (1) A description of each of the carrier's nonregulated activities;
    (2) A list of all the activities to which the carrier now accords 
incidental accounting treatment and the justification therefor;
    (3) A chart showing all of the carrier's corporate affiliates;
    (4) A statement identifying each affiliate that engages in or will 
engage in transactions with the carrier and describing the nature, terms 
and frequency of each transaction;
    (5) A cost apportionment table showing, for each account containing 
costs incurred in providing regulated services, the cost pools with that 
account, the procedures used to place costs into each cost pool, and the 
method used to apportion the costs within each cost pool between 
regulated and nonregulated activities; and
    (6) A description of the time reporting procedures that the carrier 
uses, including the methods or studies designed to measure and allocate 
non-productive time.
    (b) Each carrier shall ensure that the information contained in its 
cost allocation manual is accurate. Carriers must update their cost 
allocation manuals at least annually, except that changes to the cost 
apportionment table and to the description of time reporting procedures 
must be filed at least 15 days before the carrier plans to implement the 
changes. Annual cost allocation manual updates shall be filed on or 
before the last working day of each calendar year.Proposed changes in 
the description of time reporting procedures, the statement concerning

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affiliate transactions, and the cost apportionment table must be 
accompanied by a statement quantifying the impact of each change on 
regulated operations. Changes in the description of time reporting 
procedures and the statement concerning affiliate transactions must be 
quantified in $100,000 increments at the account level. Changes in cost 
apportionment tables must be quantified in $100,000 increments at the 
cost pool level. The Chief, Common Carrier Bureau may suspend any such 
charges for a period not to exceed 180 days, and may thereafter allow 
the change to become effective or prescribe a different procedure.
    (c) The Commission may by order require any other communications 
common carrier to file and maintain a cost allocation manual as provided 
in this section.

[ 57 FR 4375 , Feb. 5, 1992, as amended at  59 FR 46358 , Sept. 8, 1994;  61 FR 50246 , Sept. 25, 1996;  62 FR 39779 , July 24, 1997]