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Ameritech Operating Companies

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Released: November 2, 2012

Federal Communications Commission

DA 12-1728

Before the

Federal Communications Commission

Washington, D.C. 20554

In the Matter of

Ameritech Operating Companies
FRN No.: 0020572830
Request to Terminate Consent Decree


Adopted: November 2, 2012

Released: November 2, 2012

By the Chief, Enforcement Bureau



1. In 1995, the Commission, the Public Utilities Commission of Ohio (Ohio Commission), the
Public Service Commission of Wisconsin (Wisconsin Commission), and the Ameritech Operating
Companies (AOCs) executed a Consent Decree regarding transactions between the AOCs and their
wholly-owned subsidiary, Ameritech Services, Inc. (ASI).1 In this Order, in response to a request filed by
AT&T Services, Inc. (AT&T),2 we terminate the AOCs’ and ASI’s obligations to the Commission under
that Consent Decree.3



2. The 1995 Consent Decree resulted from a joint Commission and state public service
commission audit of affiliate transactions between the AOCs and ASI. That audit sought to assess
whether the AOCs had complied with the Commission’s affiliate transactions rules in connection with
their transactions with ASI.4 The joint auditors found that ASI had been unable to provide documentation
substantiating the accounting and cost allocation data that ASI had provided to the AOCs in connection
with certain of those transactions and that the AOCs had used in seeking to implement the Commission’s
accounting, cost allocation, and affiliate transactions rules.5 The Consent Decree addressed this
substantiation problem by requiring that ASI follow a series of specific documentation and document

1 See Ameritech, FCC 95-223, Consent Decree Order, 10 FCC Rcd 13846 (1995) (Ameritech Consent Decree
). The AOCs are Illinois Bell Telephone Company, Indiana Bell Telephone, Incorporated, Michigan Bell
Telephone Company, The Ohio Bell Telephone Company, and Wisconsin Bell, Inc. These companies are now
wholly-owned subsidiaries of AT&T Inc.
2 Letter from Jacquelyne Flemming, AVP-External Affairs/Federal Regulatory, AT&T Services, Inc., to P. Michele
Ellison, Chief, Enforcement Bureau (dated Sept. 16, 2011) (AT&T Request).
3 Our action does not affect any obligations that AT&T may have to the Ohio Commission or the Wisconsin
Commission under the 1995 Consent Decree. We note that AT&T asserts that changes in state law enacted since the
execution of that Consent Decree have eliminated these state commissions’ authority over the subject matter of the
Decree. AT&T Request at 1-2 n.4. AT&T states further that it has notified the staff of these state commissions of
its intent to seek this relief from the Commission. Id.
4 Ameritech Consent Decree Order, 10 FCC Rcd at 13848 (Consent Decree, paras. 2-3).
5 Id. (Consent Decree, para. 4.a).

Federal Communications Commission

DA 12-1728

retention requirements, as set forth in paragraph 6(a) of the Decree.6 The Consent Decree contains no
termination date for these obligations.7
3. In support of its request for termination of the 1995 Consent Decree, AT&T argues that the
Commission has granted AT&T forbearance from the cost allocation and affiliate transactions rules that
the Consent Decree was designed to address.8 AT&T points out that the Commission “conclude[d] that
these rules as applied to AT&T, a price cap carrier generally not subject to rate-of-return regulation, are
not routinely needed to ensure that interstate charges and practices are just, reasonable, and not unjustly or
unreasonably discriminatory.”9 AT&T contends that the Consent Decree is therefore no longer necessary,
given that it requires documentation for cost allocations that the company is no longer required to make.10



4. In light of the fact that the cost allocation and affiliate transactions rules addressed by the
1995 Consent Decree no longer apply to the AOCs, we believe the public interest would be served by
relieving the AOCs and ASI of their continuing obligations under the 1995 Consent Decree.
Accordingly, AT&T’s request is hereby granted. Effective immediately, the AOCs and ASI are relieved
of their obligations to the Commission under the Consent Decree. We note, however, that
notwithstanding our action here, the AOCs, as Commission regulatees, are under a continuing obligation
to comply with all applicable Commission rules and orders. These obligations include compliance with
the Commission’s accounting rules in relation to the AOCs’ transactions with ASI and with the
compliance plan AT&T filed as a condition of the AT&T Cost Assignment Forbearance Order.11



5. Accordingly,


that pursuant to Section 4(i) of the Communications Act of
1934, as amended,12 and sections 0.111 and 0.311 of the Commission’s Rules,13 this Order




that the obligations to the Commission imposed on the AOCs
and ASI under the 1995 Consent Decree



6 See id. at 13849-50 (Consent Decree, para. 6.a)
7 We note that all of the AOCs’ substantive obligations under the Consent Decree, other than those in paragraph 6.a,
have terminated.
8 AT&T Letter at 2-3 (citing Petition of AT&T Inc. For Forbearance Under 47 U.S.C. § 160 From Enforcement of
Certain of the Commission’s Cost Assignment Rules
, WC Docket Nos. 07-21, 05-342, Memorandum Opinion and
Order, 23 FCC Rcd 7302 (2008) (subsequent history omitted) (AT&T Cost Assignment Forbearance Order). We
note that the forbearance action applies to each of the AOCs. Compare AT&T Cost Assignment Forbearance Order,
23 FCC Rcd at 7307 n.32 (stating that the forbearance relief granted AT&T is limited to the affiliates listed in
AT&T’s forbearance petitions) with Petition of AT&T Inc. For Forbearance Under 47 U.S.C. § 160 From
Enforcement of Certain of the Commission’s Cost Assignment Rules, WC Docket Nos. 07-21, at 1 n.1 (filed Jan.
25, 2007) (seeking relief for each of the AOCs, among other AT&T affiliates).
9 AT&T Letter at 3 (quoting AT&T Cost Assignment Forbearance Order, 23 FCC Rcd at 7321, para. 32).
10 AT&T Letter at 3.
11 See Ameritech Consent Decree Order, 10 FCC Rcd at 13849 (Consent Decree, para. 6.a(1)) (addressing the
accounting for costs associated with new product trials); Wireline Competition Bureau Approves Compliance Plans,
WC Docket Nos. 07-21, 07-204, 07-273, Public Notice, 23 FCC Rcd 18417 (Wireline Comp. Bur. 2008).
12 47 U.S.C. § 154(i).
13 47 C.F.R. §§ 0.111, 0.311.

Federal Communications Commission

DA 12-1728



that a copy of this Order shall be sent by first class mail and
certified mail, return receipt requested, to Jacquelyne Flemming, AVP – External Affairs/Federal
Regulatory, AT&T Services, Inc., 1120 20th Street, N.W., Suite 1000, Washington, D.C. 20005.
P. Michele Ellison
Enforcement Bureau

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