WPCI 2BJ CourierCG TimesCG Times BoldXw PE37XPCG Timeset 4_230_1HPLAS4.PRS 4x  @\_)^X@2r 6 ZFf l 3|HP LaserJet 4_230_1HPLAS4.PRS 4Xw PE37\_)^XP",tB^ f ^;C]ddCCCdCCCCddddddddddCCY~~vCN~sk~CCCddCYdYdYCdd88d8ddddJN8ddddYYdYd4dddddCddddddddd8YYYYYY~Y~Y~Y~YC8C8C8C8ddddddddddYdddddsdXdXXXddx|X~d~d|XdddddddC8ddddCdoddd|8|H~d<|8dtddddHHdlLlLlLkd|H|8~ddddddddXXXd~ddkd~ddxCddCCCWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNdddCYQQddddddFddddFCChhd44ddzzdddvooChdF"dhd9dCCzCddoddCdYds]zUvdYYCCCCz~ozoY~NYdYC8YooYdYzsdzdd~YYzozzz~CdzYzzzzCCdddddddzCsdYC\   pxtll\tll@\@\`L ]4    Њ# PE37 P#2/f ' X1f $",tB^ f ^?GckkGGGkGGGGkkkkkkkkkkGG_~GSzsGGGkkG_k_k_Gkk;;k;kkkkOS;kkkk__k_k7kkkkkGkkkkkkkkk;__________G;G;G;G;kkkkkkkkkk_kkkkkzk^k^^^kk^kk^kkkkkkkG;kkkkGkwkkk<Mk@<k|kkkkMMksQsQsQskM<kkkkkkkk^^^kkkskkkGkkGGGWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNkkkG_WWkkkkkkKkkkkKGGook77kkkkk~wwGokK"kok=kGGGkkwkkGk_kzc[~k__GGGGww_S_k_G;_ww_k_zkkk__wGk_GGkkkkkkkGzk_G b33w|ssb|ssDbDb  fQCG TimesCG Times BoldCG Times Italic8wC;,Xw PE37XP<G?,  PE37PD;G?, _ pi7$"OOOO[[nxx<[xHGA"i~'K2^&+;@@rd+++@r++++@@@@@@@@@@++r9r]QX_QL]_+2ZQt_]J]VEQ_]y]]S+++@@+9@9@9+@@$$@$d@@@@02$@@]@@99@9@!@@@@@+@@@@@@@@@$]9]9]9]9]9rVX9Q9Q9Q9Q9+$+$+$+$_@]@]@]@]@_@_@_@_@]@]9_@]@]@]@_@J@]8]@]8W8W8X@X@_MP8Q@Q@P8]@]@]@]@]@_@_@+$@@@@+@^G@@Z@P$P.Q@R'P$_@J_@_@\@]@r]U.U.V@E1E1E1E@P.P$Q@_@_@_@_@_@_@y]]@R8R8R8_@Q@_@E@Q@]@M+@@+++WxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN]]]@@@+944@@q@@@rr@-@@@@r-++CC@r!!@@NNa@@]@LkkGGr+C@y-"]]@]C]]rr@rr%r@++]Nr]]]]]]]]]]+@]@G@r]V@+@]9@J]dS]]]]]]]]]];]]]]]]kVNd]7L]]]]]]]@]]]]]]]9]]]]9]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]+]]]+]]]+]]]+]]]]]]]]]]]]]]NQGNGV9Q2S9_@]9+$Z9VGtG_9V@]9]NJ@N@@Q9]9VN]GdNNN]Q_+@]]]N9NNNN^++@@@@]_@@@]]]N+J@9+t;tZZtHMyyttttttJgWWyyEEtlllUlqqUi__\Zgqttt{yyyvd_{_tttt;_~tJtttEEtttttttttttttttttttttt);)ttttt{;tttttttttttttttttttttttttttttttggtttttt~~ttddddttqqqqttiiidddd>1Rdtt8wC;,><q*"xxxxWWxxxWWkkxxx4 e (9.` ` For example, MCI continues, Bell Atlantic determined its allocation of  x_SFAS112 costs between nonregulated and regulated activities by using the ratio of  xCorporation Operations expenses to Total Company Corporation Operations expenses;  xhowever, this allocation may not be consistent with the longterm disability, workers  ]4 xcompensation or severance costs of employees under the subjecttoseparations group.9  Y4ԍ Id. at 6.9  xMCI argues that Bell Atlantic has reduced its workforce by 6,400 employees during the  ]4 xlast several years.  YN"4 xԍ Id., citing "Technology: Bell atlantic Discloses Plans to Take Charge, reduce 5,600 Jobs," Wall Street Journal, August 16, 1994. MCI argues that it is possible that a higher percent of employee  xreductions were in the part of Bell Atlantic that is subject to separations. Further, MCI  xccontends, it is possible that the areas of Bell Atlantic that are not subject to separations  xhave lower cost structures because they are less regulated, or unregulated. MCI also"* 0*((}"  ]4 xasserts that it is not clear that Bell Atlantic has included severance costs in its filing.>  Y4ԍ MCI Petition at 67.>  ]4MCI also questions the underlying assumptions of Bell Atlantic's double counting study.9 y Y-4ԍ Id. at 8.9  ]4 e W 10.` ` In reply, Bell Atlantic argues that the SFAS112 costs were already reflected  x4in its external and regulatory financial books prior to the request for exogenous  ]4 xtreatment.D, Y 4ԍ Bell Atlantic Reply at 2. D Bell Atlantic further asserts that it did not include separations pay plan benefit  xcosts in its initial adoption of SFAS112. Because the request for exogenous treatment  xcovers the SFAS112 costs as of the time of adoption of SFAS112, Bell Atlantic continues, severance costs are not part of its request.  ] 4 e 9 11.` ` Bell Atlantic argues that, because the relevant exogenous costs are the net  xincremental costs associated with the adoption of SFAS112, these costs are fixed at the  x_time of adoption and are not affected by subsequent changes in employment levels.  x@Furthermore, Bell Atlantic asserts, because the general ratio of regulated to nonregulated  xcosts is based on a time period contemporaneous to SFAS112 adoption, any impacts from past employee reductions would already be captured.  ]V4yA III. DISCUSSION ă  ]C4 e  12.` ` The calculations underlying Bell Atlantic's estimate of the SFAS112  xexogenous adjustment are complex and based on numerous assumptions. Although we  x3have reviewed Transmittal 704, its supporting documents and the pleadings, we find that  xseveral issues remain unresolved. In general, we find the supporting information provided  xin Transmittal 704 insufficient to answer basic questions. For example, based on the  xmaterials provided, we are unable to verify total company SFAS112 amounts or the  xmethods used to allocate portions of this total amount between regulated and nonregulated  x operations or state and interstate functions. We further find the information insufficient  ]4 xwith respect to employee terminations and separation benefits expenses, inter alia.  xlAccordingly, we conclude that an investigation of Bell Atlantic's Transmittal 704 is warranted.  ]4 e , 13.` ` On November 28, 1994, we suspended AT&T Communications (AT&T)  xTariff F.C.C. No. 1, Transmittal No. 7322, in which AT&T sought a PCI adjustment and"0*((."  ]4 xrate increases based on exogenous changes due to the implementation of SFAS112. Y4 xԍ AT&T Communications, F.C.C. Tariff No. 1, Transmittal No. 7322, CC Docket No. 94139, 9 FCC Rcd 7229 (Com. Car. Bur. 1994). We  xfind that the issues in the instant transmittal are sufficiently similar to warrant its inclusion in the AT&T investigation.  ]4 e  14.` ` Therefore, pursuant to Section 204(a) of the Communications Act@b Y4ԍ 47 U.S.C.  204(a).@ and  ]4 xSection 0.291 of the Commission's rules,? Y 4ԍ 47 C.F.R.  0.291.? we hereby add to our investigation in CC  x3Docket No. 94139 Bell Atlantic's proposed tariff changes based on the PCI adjustments  xflowing from its implementation of SFAS112. We suspend the effective date of the  x&transmittal for one day, impose an accounting order, and initiate an investigation. Issues will be designated and a pleading cycle established in a subsequent order.  ] 4 IV. ORDERING CLAUSES ă  ] 4 e B15.` ` Accordingly, IT IS ORDERED that, pursuant to Section 204(a) of the  xCommunications Act of 1934, 47 U.S.C.  204(a), and Section 0.291 of the Commission's  xRules, 47 C.F.R.  0.291, the revised rates set forth in Bell Atlantic Tariff F.C.C. No.  xx1, Transmittal No. 704 ARE SUSPENDED for one day from the current effective date and  xan investigation of those rates is instituted. Bell Atlantic SHALL FILE a supplement reflecting this suspension no later than 5 days from the release of this Order.  ]94 e 16.` ` IT IS FURTHER ORDERED that, pursuant to Section 4(i) and 204(a) of the  x"Communications Act of 1934, 47 U.S.C.  154(i), 204(a), and Section 0.291 of the  xCommission's Rules, 47 C.F.R.  0.291, Bell Atlantic SHALL KEEP ACCURATE  x@ACCOUNT of all amounts received that are associated with the rates that are the subject of this investigation.  ]4 e v17.` ` IT IS FURTHER ORDERED that Bell Atlantic SHALL INCLUDE A  xSTATEMENT in all subsequent transmittals revising rates indicating whether, and to what  x[extent, the price change is predicated upon the exogenous cost claim set forth in  ]4Transmittal No. 704. Ya$4 xԍ We anticipate that any such transmittals will be suspended for one day, included in this investigation, and made subject to an accounting order. "^ 0*((Z"Ԍ ]4 e 18.` ` IT IS FURTHER ORDERED that the petition to suspend and investigate Bell  xAtlantic Transmittal No. 704, filed by MCI Telecommunications Corporation, IS GRANTED to the extent discussed above. ` `  hhCqFEDERAL COMMUNICATIONS COMMISSION ` `  hhCqGeraldine A. Matise ` `  hhCqActing Chief, Tariff Division ` `  hhCqCommon Carrier Bureau