Status of FCC Efforts To Allocate Costs Between Telephone Companies' Regulated and Unregulated Activities

RCED-83-235: Published: Sep 2, 1983. Publicly Released: Sep 2, 1983.

Additional Materials:


Office of Public Affairs
(202) 512-4800

In response to a congressional request, GAO reviewed efforts by the Federal Communications Commission (FCC) to ensure that regulated telephone ratepayers do not bear a disproportionate share of the costs of telephone carriers' unregulated activities.

FCC is aware that, when a firm engages in regulated and nonregulated activities, it has the potential for anticompetitive practices, and FCC maintains that establishing a separate subsidiary has advantages over accounting requirements alone in forestalling anticompetitive behavior. Others hold the view that operating companies should choose for themselves whether to establish subsidiaries, rather than have FCC impose that requirement. FCC is revising the uniform system of accounts (USOA); however, implementation is not scheduled until 1986, and adherence to revised USOA standards may not be sufficient to keep companies from engaging in anticompetitive practices. GAO found that, although FCC is making progress, much work remains to be done before adequate accounting systems and cost allocation procedures are adopted. While FCC has given conditional approval to American Telephone and Telegraph Company cost allocation procedures, it continues to review their use. FCC is currently considering cost allocation procedures for other telephone companies. GAO commented that the effectiveness of these efforts will depend upon resources dedicated to monitoring compliance with accounting requirements. GAO suggested that FCC consider the use of independent auditing firms to evaluate carriers' auditing procedures.

Jul 18, 2018

Jul 17, 2018

Jul 16, 2018

Jun 28, 2018

May 31, 2018

May 24, 2018

May 10, 2018

Apr 17, 2018

Apr 5, 2018

Looking for more? Browse all our products here