FCC Record, Volume 2, No. 1, Pages 1 to 409, January 5 - January 16, 1987 Page: 22
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Federal Communications Commission Record
associated with APC. This price will be added to the basic
charge for a kilocharacter for those customers using protocol
conversion. All revenue associated with APC will be
recorded directly into the nonregulated books of account.
17. All expenses, including directly attributable expenses
related to APC, will be identified and recorded
first in the normal regulated accounts. A keep cost order
ledger number will be reported on the expense transaction,
however, before being entered into the accounting
system. This approach assures that costs will be directly
charged (100% to APC) if it is feasible to do so. If direct
assignment is not possible, objective allocation procedures
will be used. For example, other support expenses associated
with APC such as marketing, advertising, and billing
and collection will be allocated based on the wages
and salaries directly identified for APC. Either activity
will result in a credit to the regulated accounts in which
the costs were incurred and a debit to Account 106, with
corresponding entries in the nonregulated books of account.
C. Compliance with the Collocation Conditions
18. As stated in paragraphs 6-9 above, the Commission
imposed three conditions on the waiver which allows the
BOCs to collocate protocol conversion facilities in their
19. Southwestern has included. as Appendix E to its
filing, a demonstration of compliance with condition one,
the treatment of interoffice channels. This appendix contains
a schematic of Southwestern's MICROLINK II network
and contains a configuration for each LATA within
which Southwestern intends to offer MICROLINK II service
initially. Arrangements for access to the nodal locations
and the internodal links are also included along
with a schedule of tariff rates.
20. Condition two, the calculation of a NURE, Southwestern
submits, is not applicable, because there are no
inefficiencies related to APC traffic, and therefore no
NURE should be applied. A technical paper prepared by
an outside consultant, Tcknekron Communications Systems,
(Appendix F of Southwestern's Compliance Filing),
found that Southwestern's APC equipment possesses no
inefficiencies related to the passage of APC traffic. The
paper maintains that the operational characteristics of
Southwestern's packet equipment are such that its NURE
should be zero.
21. Concerning condition three, pertaining to equal
access, Southwestern states it will offer both dial-up and
dedicated access to its MICROLINK II services. All access
methods available to Southwestern will be available for
use by other vendors of packet switching service. 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 applicable tariff offering. Although
Southwestern does not intend to offer DOV access at this
time, it states that when DOV is offered, it will be made
available to all vendors on an unbundled basis.
22. Southwestern has used the intra-office (short-wire)
connection to provide cost savings for public dial access
based on an analysis of the savings associated with collocation
(Appendix G of the Compliance Filing). The
savings realized by collocation were computed for each
LATA within which Southwestern intends to make an
initial offering of MICROLINK II service. In addition to
explaining the savings resulting from the collocation of
the packet switches, Southwestern compares these savings
(Appendix G) with the costs to its competitors for links
between their packet switches and Southwestern's central
D. Compliance with Marketing Conditions
23. The criteria associated with a marketing waiver are
described in paragraph 10, above. Southwestern describes
its compliance in Sections II (B), (C), (D), Section IV of
Appendix A (Accounting Plan), and in Appendix H
(Marketing Plan) of its Compliance Filing.
24. Southwestern submits that its accounting plan describes
in detail how it will track separately all APC
marketing. advertising, and billing costs, and how it will
remove these costs from 'the regulated accounts. Employees
involved in MICROLINK II customer contact service
and sales, service order formating and service order writing
will report MICROLINK II related activities through
exception time reporting to a marketing keep cost order
ledger number. Marketing expenses attributable to APC
will be identified through the use of a Protocol Conversion
Traffic Factor (PCTF). Related advertising expenses
will be directly assigned if possible and allocated when
necessary through the use of the PCTF. A new billing
system and a revised bill rendering program will be
developed for MICROLINK II service. Developmental
cost, for example, will be directly reported to a unique
billing and collection keep cost order ledger number.
Other support expenses associated with APC marketing,
advertising, and billing and collection will be separately
identified and removed from regulated accounts.
25. Southwestern's marketing plan (Appendix H) explains
how customer proprietary information will be
made available on a "first come, first served" basis to any
competitor who possesses written customer approval for
the release of such data. Customers will have the ability to
request that their records not be released to MICROLINK
II sales personnel. Southwestern sales personnel will be
barred from access to this data either by (1) physically
placing them as far as possible from the location of such
records or (2) denying them access to database passwords.
26. The third criterion for a protocol conversion joint
marketing waiver requires Southwestern to show that it
can meet conditions two and three of the collocation
waiver requirements. As discussed above, Southwestern
has shown how it plans to comply with these two conditions.
IV. SUMMARY OF PLEADINGS
27. Comments were filed by GTE Telenet Communications
Corporation (Telenet), Tymnet Inc. (Tymnet), and
International Business Machines Corporation (IBM).
Southwestern filed a reply. These are summarized below.
28. IBM submits that while Southwestern's Compliance
Filing in a large part satisfies the Commission's requirements,
it has deficiencies that should be remedied before
Bureau approval. For example, IBM contends that Southwestern's
Compliance Filing's most obvious deficiency is
its failure to allocate the investment in the Network
Control Center (NCC) necessary for both converted and
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United States. Federal Communications Commission. FCC Record, Volume 2, No. 1, Pages 1 to 409, January 5 - January 16, 1987, book, January 1987; Washington D.C.. (digital.library.unt.edu/ark:/67531/metadc1597/m1/29/: accessed May 25, 2017), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.