§  32.23   Nonregulated activities.

   (a) This section describes the accounting treatment of activities
   classified for accounting purposes as "nonregulated." Preemptively
   deregulated activities and activities (other than incidental
   activities) never subject to regulation will be classified for
   accounting purposes as "nonregulated." Activities that qualify for
   incidental treatment under the policies of this Commission will be
   classified for accounting purposes as regulated activities. Activities
   that have been deregulated by a state will be classified for accounting
   purposes as regulated activities. Activities that have been deregulated
   at the interstate level, but not preemptively deregulated, will be
   classified for accounting purposes as regulated activities until such
   time as this Commission decides otherwise. The treatment of
   nonregulated activities shall differ depending on the extent of the
   common or joint use of assets and resources in the provision of both
   regulated and nonregulated products and services.

   (b) When a nonregulated activity does not involve the joint or common
   use of assets and resources in the provision of both regulated and
   nonregulated products and services, carriers shall account for these
   activities on a separate set of books consistent with instructions set
   forth in § § 32.1406 and 32.7990. Transfers of assets, and sales of
   products and services between the regulated activity and a nonregulated
   activity for which a separate set of books is maintained, shall be
   accounted for in accordance with the rules presented in § 32.27,
   Transactions with Affiliates. In the separate set of books, carriers
   may establish whatever detail they deem appropriate beyond what is
   necessary to provide this Commission with the information required in
   § § 32.1406 and 32.7990.

   (c) When a nonregulated activity does involve the joint or common use
   of assets and resources in the provision of regulated and nonregulated
   products and services, carriers shall account for these activities
   within accounts prescribed in this system for telephone company
   operations. Assets and expenses shall be subdivided in subsidiary
   records among amounts solely assignable to nonregulated activities,
   amounts solely assignable to regulated activities, and amounts related
   to assets and expenses incurred jointly or in common, which will be
   allocated between regulated and nonregulated activities. Carriers shall
   submit reports identifying regulated and nonregulated amounts in the
   manner and at the times prescribed by this Commission. Nonregulated
   revenue items not qualifying for incidental treatment as provided in
   § 32.4999(l) of this part, shall be recorded in separate subsidiary
   record categories of Account 5280, Nonregulated operating revenue.
   Amounts assigned or allocated to regulated products or services shall
   be subject to part 36 of this chapter.

   [ 52 FR 6560 , Mar. 4, 1987, as amended at  53 FR 49322 , Dec. 7, 1988;  59 FR 46930 , Sept. 13, 1994;  64 FR 50007 , Sept. 15, 1999]