FCC Record, Volume 2, No. 1, Pages 1 to 409, January 5 - January 16, 1987 Page: 21

Federal Communications Commission Record

8. The Commission's third condition requires the BOCs
to provide end users with equal access both to the protocol
conversion offerings of the BOC's separate enhanced
services affiliate and for the protocol conversion
offerings of other service providers. This condition requires
the BOCs to make such access available on an
unbundled, tariffed basis, without discrimination between
BOC protocol conversion facilities and those of others. In
particular, it prohibits offering of data-over-voice (DOV)
access to the BOC network unless the BOC
offers DOV
access for the offerings of other enhanced service providers.
This requirement also mandates that "dialing parity"
be made available on a comparable basis to other enhanced
service providers. For instance, if abbreviated dialing
is used to reach the BOC's packet switched service,
comparable dialing must also be available to customers of
other enhanced service providers. Id. at 1109-12.
9. The third condition also affects the terms by which
the BOC provides to its separate subsidiary the connection
between the subsidiary's protocol conversion equipment
and BOC subscribers. The collocation waiver
permits these connections to be made using intra-office
wire rather than local loops so that the BOC may derive
cost savings equal to the difference between the tariff
prices its affiliate will pay for the intra-office connections
and the tariff prices which other packet switched service
providers must pay for the loops through which they
connect with BOC central offices. Id. This condition,
therefore. requires the BOCs to identify and explain these
cost savings in the support material accompanying their
tariff revisions. Id. at 1104-07.
10. Finally, the Commission stated that it would grant
further waivers allowing the BOCs to market protocol
conversion jointly with basic packet switching if the following
conditions are met:
[E]ach BOC seeking approval of a specific marketing
plan must make a probative and fully
documented filing that demonstrates: (1) how the
costs of marketing asynchronous format compatible
packet services by unseparated telephone company
personnel will be identified and excluded from
"above-the-line" regulatory documents; (2) what
marketing information, if any, will be available (and
on what basis) to other enhanced service vendors to
give them an opportunity comparable to that of the
BOCs' unseparated marketing personnel to vend
asynchronous format-compatible packet switched
services to the BOCs' basic telephone service subscribers;
and (3) how the petitioner's marketing
proposals relate to conditions #2 and #3 which we
are adopting herein. 10 (footnote omitted)
III. SOUTHWESTERN'S PROPOSAL
A. General
11. Southwestern's packet switch digital service,
MICROLINK II, is a data transport network service
which utilizes packet switching technology, digital transmission
facilities, and existing loop plant to provide economical
shared user network transport of data within a
primary market area. It offers Southwestern's customers a
cost effective data transport alternative to dedicated lines
or circuit switching when their data transactions are characteristically
of a sporadic nature and/or are destined to

multiple host/terminal locations. The customer may also
benefit from such intra-network features as error detection
and correction, increased security and protocol conversion.
12. Southwestern will offer both dial-up and dedicated
access to MICROLINK II services. All access methods
available to Southwestern will also be available for use by
any other vendor of packet switching services. Customers
will be able to access the MICROLINK II network by
dialing a seven digit number (unique to each LATA) or
they will have the option of obtaining dedicated private
line access to the MICROLINK II network under the
provisions of the appropriate tariff offering.
B. Accounting Plan
13. Southwestern's accounting plan is described in Appendix
A to its filing. Southwestern submits that its plan
will permit it to: (1) identify commercial MICROLINK II
costs and isolate those costs related to the commercial
protocol conversion function, (2) protect the regulated
accounts from possible distortion by the nonregulated
function of asynchronous protocol conversion (APC), and
(3) provide a clear audit trail of the accounting plan
process. Southwestern notes that its accounting plan was
developed in compliance with the Commission's Fifth
Report and Order in CC Docket No. 81-893 (Fifth Report
and Order ) FCC 84-547 (released November 20, 1984),
and that its development was guided by the Bureau's
decision in File No. ENF 84-22.6
14. According to Southwestern, the application of its
accounting plan precludes any cross-subsidization of protocol
conversion services by assigning all relevant costs
related to APC to account 106, Nonregulated Investments.
Southwestern includes as relevant costs those costs, including
overhead, which have an ascribable causeand-effect
relationship with the provision of protocol
conversion.
15. Southwestern states that its commercial MICROLINK
II investment costs will be recorded in accounting
subclass records similar to the record it maintains for
Account 100.1 "Telephone Plant in Service". Unique
geographic location code numbers will be assigned for the
two types of commercial MICROLINK II investment: (1)
basic service only in the Network Control Centers which
concerns itself with such functions as network monitoring,
routing and recording in St. Louis and Dallas, and
(2) the common investment in the nodes that form the
network in the primary marketing areas in which commercial
service is offered.
16. The amount of MICROLINK II investment and
expenses attributable to the provision of APC, Southwestern
submits, will be determined through the use of a
protocol conversion investment factor plan (attached as
Appendix B of its filing). This plan is based upon the
assumption that APC takes place in only two portions of
Southwestern's packet switch, the memory and central
processing unit. The first cost of all memory and central
processing unit equipment was obtained from Southwestern's
equipment vendor. Included in the development of
these costs were appropriate engineering and installation
costs. A portion of these total costs (attributable to APC)
was then identified on a LATA-by-LATA basis. According
to Southwestern, this investment will be recovered
through "below the line" accounting procedures and will
be identified in unregulated accounts. A price will be
developed under this plan which will cover all costs

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