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                Federal Communications Commission
                      Washington, D.C. 20554

                          August 7, 1992

                                               In reply refer to:
                                                  RAO Letter 21

                                         Released: August 7, 1992

Responsible Accounting Officer

Re: Classification of Remote Central Office Equipment for Accounting Purposes.

     It has come to our attention that recent technological advances in telecommunications have
significantly increased the use of remote switches. We believe, however, that some carriers are
improperly classifying these switches as circuit equipment rather than central office switching,
under Part 32. The inconsistency in classifying these switches appears to be the result of confusion
between remote switches and concentrators, the latter of which are properly classified as circuit
equipment under Part 32. In order to increase uniformity in the Part 32 classification of remote
switches, we are issuing definitions in this letter to differentiate between remote switches and
concentrators.

     Remote Switch: A unit that performs some, but not necessarily all, of the basic switching
functions.  The remote switch may be wholly or partially controlled by a control unit or processor
located in another switch, (i.e., the "host" switch). The remote switch may depend on the host
switch for such functions as routing, billing, traffic measurement and custom calling. Calls
between subscribers served by the same remote can be switched by the remote. When this occurs,
the voice or data path does not extend to the host switch; however, a link to the host switch may
be maintained for call control purposes. A remote switch may be able to switch calls between
subscribers it serves when the control link to the host switch fails.  The Commission's 
rules require that the cost of remote switches be included in Account 32.2211, Analog electronic
switching, or Account 32.2212, Digital electronic switching.

Remote Concentrator: A unit that consolidates subscriber lines. This equipment facilitates the use
of lesser amounts of loop plant to serve a greater number of end users. All calls are switched by
the central office switch to which the remote concentrator is connected. The voice or data path
will always extend to the host switch even for calls between subscribers served by the same remote
concentrator. If the voice or data path ,or control link between the central office and the remote
concentrator fails, all service to those subscribers served by the remote concentrator will be
interrupted until the failed link is restored. The Commission's rules require that the cost of
equipment used to reduce the amount of loop plant otherwise required to serve a given number
of subscribers by utilizing carrier systems, concentration stages or combinations of both is to be
included in Account 32.2232, Circuit equipment.

     The distinguishing attribute between a remote switch and a remote concentrator is that a
remote switch can switch calls between the subscribers it serves either routinely or if the voice or
data path, or control link to the host switch fails. Thus, for calls between subscribers served by
the same remote switch, the remote switch's voice or data path does not always extend to the host
switch. A remote concentrator, however, depends on the host switch to switch all calls, and the
voice or data path will always extend to the host switch.

     This letter is issued pursuant to authority delegated under  0.291 of the Commission's
Rules, 47 C.F.R.  0.291. Applications for review under Section 1.115 of the Commission's
Rules, 47 C.F.R.  1.115, must be filed within 30 days of the date of this letter. See 47 C.F.R.
1.4(b)(2).

     If you have any questions, please contact the Chief of the Accounting Systems Branch at
(202) 418-0810.


                                   Sincerely,


                                   Kenneth P. Moran
                                   Chief, Accounting and Audits Division
                                   Common Carrier Bureau