Recent FCC Changes to Part 32 “Uniform System of Accounts” Rules Prompt Changes to Part 36 “Jurisdictional Separation” Rules

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The Federal-State Joint Board on Jurisdictional Separations (Joint Board) has released a Recommended Decision in response to a FCC request for recommendations on the manner in which the Commission’s Part 36 “jurisdictional separations” rules should be modified after the FCC adopted revisions to its Part 32 regulations earlier this year.  According to FCC Chairman Ajit Pai, when interviewed in May 2017 by Recode journalist Tony Romm, the former Part 32 accounting rules required “companies [to] have to maintain two different sets of books, literally one for their business and one for the FCC’s purposes, and the FCC hadn’t relied on any of that paperwork in years.”  He went on to add that “[t]hose are the kinds of regulations we had in mind because I want every dollar that a company has to be spent on building out networks, not on paperwork or regulatory requirements that aren’t relevant in 2017, whatever relevance they might’ve had back in 1934 or 1996 or 2015 or whatever.”  In its Part 32 Reform Order released in February 2017, the Commission eliminated, effective January 1, 2018, its dual classification of carriers for accounting purposes.  The Recommended Decision is itself not a final action, but merely a recommendation by the Joint Board to the Commission.  The FCC still needs to adopt the recommended Part 36 rules prior to January 1, 2018 before they become effective.

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