20051019Application.pdf

mm"""'."""""'"- ,CEi\fED-Corporate Tax Depa"""" ~nt1801 California Street, 25tL ,,,"~o,., Denver, Colorado 80202?..f'N-:; , \.~-' f L. E' 'fJiD~\i--iO F~UBLICUT fL! r~ES COr:i:'t11-$,:'SJlJ'Spirit at Serviee, '"'q ~fl_"'" C.Pf,~ A D):."! '1'" t: nt on;; ~tJ~ -0 -l ~,September 2 , 2005:MY. Doug CooleyTelecommunications Anal ystIdaho Public Utilities- Commission472 West WashingtonBoise, Idaho 83720 QL0 E -()-5 -I IiRe: Application for Determination of Qualified Broadband Equipment (2003)Dear Mr. Cooley:Pursuant to Commission Order No. 28784 , in Case No. GNR-OI-, QwestCorporation ("Qwest") hereby submits the following infonnation in support of its request thatthe Idaho Public Utilities Commission ("PUC") determine that the machinery and equipmentlisted in Tab C constitutes "qualified broadband equipment" as defined in Idaho Code Sec. 63-30291.
1. 2003 Qualified investment , reported by general broadband, dedicated line and inter-
office facilities (Tab A)
2. 2003 retirements of 2002 and 200 1 investment, along with an explanation of how the
retirements were calculated (Tab B)
3. Explanation of how we differentiate 2003 from 2002 and 2001 investment and insure
that no equipment is reported more than once (Tab C)4. Capitalization policy (Tab D)
...
5. Certification Statement (Tab E)
Total Investment for 2003 , net of retirements is as follows:
General Broadband Services
Dedicated Line Services
Inter-Office Facilities
Total 2003 Investment
Retirements of 200 1 Investment
Retirements of 2002 Investment
2003 Net Investment
$ 5 394 299
966 003
911,243
$ 9 271 545
863 845
56,559
$ 8 351 141
.- ''" i -I am enclosing four copies , two in binders and two unbound copies. I am also enclosing a diskwith the investment data information as it would be unreadable if scaled down to fit on 8 Yz" x11" paper. Please contact me on 303-308-5619 if you have questions or require additionalinformation regarding this submission. Stephanie L. JacksonStaff Tax AnalystResearch and Planningcc: John Souba , Qwest Corporation
; t ," r". ; -" ":' -~"' "",.. ,",Li~J.,....-~t,..,",," \:.. i::', E~ \ \/ E D ",., ',...-~""';- , D~,;\. "~ I- ," fiC 'C:' '(,- ~... - ,\ 4 1 V /Jj u u 0L,. ";';;:)j~;::;ti tJ j- \" \; U i U t,.).. ~-:t , ,"1,'" .J l "Ii.~TH \1\('5 v rtl - 'Qwest CorporatIonLv E. -1' -06~/~Application To the Idaho Public UtilitiesCommission for Certification of 2003Qualified Broadband Equipment
September 2 , 2005
General Broadband Services
SEE CASE FILE FO SPREADSHEETS
Dedicated Line Services. .
SEE CASE FILE FORSPREADSHEETS
Inter-Office Facilities
SEE CASE FILE FORSPREADSHEETS
Explanation of Retirement CalculationRetirements related to broadband investment made in 2001 and 2002 were determined bymeans of retirement ratios. Because investment data is provided at a summary levelrather than an individual asset basis , it would be extremely time-consuming to attempt toidentify retirements of individual assets. For certain types of plant accounts, it would beimpossible because tables are used in order to develop retirements.Retirement ratios were developed taking total retirements by year and plant account as apercentage of total investment for that year and plant account. These ratios were thenapplied to the Idaho broadband investment by year and plant account Using thisapproach, the total retirements of vintage y;ears 2001 and 2002 are $863,845 and $56,559respectively. Retirements of investment made in the immediately preceding year aregenerally less than one percent.The method of calculating retirements described above meets the applicable provisions ofthe Internal Revenue Code and has been accepted by the Internal Revenue Service.See the charts of the following pages for a summary of total retirements and detail byplant account.
Owest Corporation .. Idaho CentralBroadband Retirement Ratios .. Vintage 2001Tax Year 2003 Retirement Curr YrFRGInvestmentRatioRetires21700005344830000816O. 000045C7351670017 1 ,23685G3710260477680157C51 t O. 0000257C533,436 O. 0478 407 533357C965,516 0 .0487 436,368377C2112740007878845C2084700000852C60,400 0025 150862C3730 . 0000Total20,798,303 863 , 845Source: 2003 Acufile Book Basis Report forIdaho Central for Vintage 2001.Note: (1) Retirement Ratio calculated at VintagePlant Account Level
(2) Calculation = Total Book Basis of
Retirements for Vintage Plant
Account divided by Total Book
Basis of Investment for Vintage
Plant Account.
Qwest Corporation - Idaho CentralBroadband Retirement Ratios - Vintage 2002Tax Year 2003 R eti rementFAGInvestmentRatio Current Yr Retires123 0034230,73335C45C382176 0014 54852C16362C85G331915110C254209257C391538005518,643357C761,467 0114 588377C412,204 0002510C450845C2076080274 679852C19,539862C935Total049156 559Source:2003 Acufile Book Basis Report for Idaho Central for Vintage 2002.Note:(1) Retirement Ratio calculated at Vintage
Plant Account Level
(2) Calculation = Total Book Basis of Retirements for Vintage Plant
Account divided by Total Book Basis of Investment for Vintage
Plant Account.
Explanation to Insure Equipment is Reported Only OnceWhen a job is first set up or opened , the planner establishes a targeted date on theCommon Planning Document (CPD) for the job to be in-service and submits it to thebudget tracking system (JETS). Material/equipment purchases with a field reportingcode (FRC) ending in a 7 or 9 code for the job are processed through a system calledBilling Verification Accounts Payable Processing (BV APP). If work is being performedat multiple locations (address Ids), a unique B V APP number is assigned to each location.The date associated with the job (not the BV APP) is the date used for tracking purposesin JETS. Outside plant FRC codes are processed through the NECTAS system.A job remains open until all BV APPs are complete. The completion date for the lastBY APP then becomes the actual in service date for the job in JETS.When a BV APP is complete, the addresslFRC associated with that BV APP is turned upin service individually, even thought the entire job is not complete. For purposes ofIdaho broadband reporting, we include all PRCs/locations in the year that they are turnedup in services. Therefore you will see some jobs that are reported in multiple years.However, when we pull the data for each year , we will by-pass or filter out any address that was previously reported for a job. This insures that we do not duplicate anyaddresses that have been previously reported for ajob.
Capitalization Policy
To:From:Date:Subject:Doug HurstBill MuirJuly 10 , 2002Owest Corporation Capitalization PolicyFor state tax reporting purposes , Qwest Corporation (formerly U S WEST Communications)follows Part 32 of the FCC's Rules and Regulations. Specifically, paragraph 32.2000(c) detailsthe costs of construction rules. In short, the following direct costs may be capitalized:laborEngineeringMateriel and SuppliesTransportationContract WarkProtectionPrivileges, Rights and PermitsTaxesSpecial Machine ServicesInterest (a.a. Allowance for Funds Used During Construction , or AFUDC)Insurance, and
Construction Services.
Qwest is also allowed to capitalize certain indirect costs such as:
General Engineering, and
Supervision and Support (direct and indirect up to but not including executive
officers).
Certain accounts are subject to a capitalization threshold for materiel purchases. Paragraph
32.2000(a)(4) specifies the following thresholds:
000 for vehicles , aircraft , work equipment, furniture and office equipment
$500 for personal computers , and
000 for other general-purpose computers.
Materiel purchases for the remaining capital accounts are classified based on the type of
equipment. Elsewhere in Part 32 , represent lists of capital equipment are listed. I have not
attached those sections due to their volume.
9 32. 1500, .~ 32.1500 Other jurisdictional assets-net.This account shall include the cumu-lative impact on assets of jurisdic~tional ratemaking practices whichvary from those of this Commission.All entries recorded in this accountshall be recorded net of any applicableincome tax effects and shall be sup-ported by subsidiary records where nec-essary as provided for in ~ 32.13(e) ofsubpart B.~ 32.2000 Instructions for tele-communications plant accounts.(a) Purpose of telecommunications plantaccounts. (1) The telecommunicationsplant accounts (2001- to 2007 inclusive)are designed to show the investment inthe company s tangible and intangibletelecommunications plant which ordi-narily has a service life of more thanone year, including such plant whetherused by the company or others in pro-viding telecommunications service,(2) The telecommunications plant ac-
counts shall not include the cost orother value of telecommunications
plant contributed to the company. Con-tributions in the form of money or itsequivalent toward the construction of
telecommunications plant shall
credited to the accounts charged with
the cost of such construction. Amounts
of non-recurring reimbursements basedon the cost of plant or equipment fur-
nished in rendering service to a cus-tomer shall be credited to the accounts
charged with the cost of the plant orequipment. Amounts received for con-
struction which are ultimately to be
repaid wholly or in part, shall be cred-
ited to Account 4360 , Other DeferredCredits; when final determination has
been made as to the amount to be re-
turned . any unrefunded amounts shallbe credited to the accounts chargedwith the cost of such construction.
Amounts received for the constructionof plant, the ownership of which restswith or will revert to others. shall be
credited to the accounts charged withthe cost of such construction. (Note
also Account 7110. Income from Custom
Work.
(3) When telecommunications plant
ordinarily having a service life of more
than one year is installed for tem-
porary use in providing telecommuni-
47 CFR Ch. I (10-1-00 Edition)cations service , it shall be accountedfor in the same manner as plant havinga service life of more than one year.This includes temporary installationsof plant (such as poles. wire and cable)installed to maintain service duringthe progress of highway reconstructionor during interruptions due to stormsor other casualties. equipment used forthe training of operators equipmentused to provide intercepting positionsin central offices to handle traffic for ashort period following extensive sys-tem changes and similar installationsof property used to provide tele-comrnunications service.(4) The cost of the individual items ofequipmentclassifiable to Accounts2112. Motor vehicles; 2113 Aircraft;2114 , Special purpose vehicles; 2115 , Ga-rage work equipment; 2116. Other workequipment; 2122 . Furniture; 2123, Officeequipment; 2124 . General purpose com-puters . costing $2 000 or less or havinga life of less than one year shall
charged to the applicable expense ac-
counts, except for personal computersfalling within Account 2124. Personal
computers classifiable to Account 2124.with a total cost for all components of
$500 or less. shall be charged to the ap-plicable Plant Specific Operations Ex-
pense accounts. If the aggregate invest-
ment in the items is relatively large at
the time of acquisition , such amountsshall be maintained in an applicablematerial and supplies account until
i terns are used.
(b) Telecommunications plant acquired.
(1) Property, plant and equipment ac-quired from an entity. whether or notaffiliated with the accounting com-pany. shall be accounted for at original
cost except that property. plant andequipment acquired from non-affiliated entity shall be accounted forat acquisition cost if the purchaseprice is less than $100 000 for Class
companies or $25 000 for Class B compa-
nies.
(2) The accounting for property,
plant and equipment to be recorded at
original cost shall be as follows:
0) The amount of money paid (or cur-rent money value of any consideration
other than money exchanged) for theproperty (together with preliminary
expenses incurred in connection with
410
Federal Communications Commissionthe acquisition) shall be charged to Ac-count 1439 . Deferred Charges.(ii) The original cost , estimated not known of telecommunicationsplant. governmental franchises andother similar rights acquired shall becharged to the applicable tele-communications plant accounts , Tele-communications Plant Under Con-struction, and Property Held For Fu-ture Telecommunications Use. as ap-propriate , and credited to Account 1439.When the actual original cost cannotbe determined and estimates are used,the company shall be prepared to fur-nish the Commission with the particu-lars of such estimates.(Hi) Depreciation and amortization ofplant acquired shall be credited to Ac-count 3100, Accumulated Depreciation,or Account 3200, Accumulated Depre-ciation-Held for Future Telecommuni-cations Use, 3400, Accumulated Amorti-zation- Tangible, 3410. AccumulatedAmortization-Capitalized Leases , 3420,
Accumulated Amortization-Leasehold
Improvements, 3500 , Accumulated Am-ortization-Intangibles, and 3600 , Accu-mulated Amortization-Other , and deb-
ited to Account 1439.
(iv) Any amount remaining in Ac-count 1439, applicable to the plant ac-
quired. shall upon completion of the
entries provided in paragraphs (b) (2)(i). (ii) and (iii) of this section, be deb-ited or credited, as applicable , to Ac-count 2007, Goodwill, or to Account
2005. Telecommunications Plant Ad-justment , as appropriate.
(3) A memorandum record shall be
kept showing the amount of contribu-
tions in aid of construction applicable
to the property acquired as shown by
the accounts of the previous owner.
(c) Cost of construction. (1) Tele-communications plant represents an
economic resource which will be used
to provide future services, the cost
which will be allocated in a rational
and systematic manner to the future
periods in which it provides benefits. In
accounting for construction costs, theutility shall charge to the tele-
communications plant accounts , where
applicable all direct and indirect
costs.
(2) Direct and indirect costs shall in-
clude, but not be limited to:
9 32.2000(i) "Labor " includes the wages andexpenses of employees directly engagedin or in direct charge of constructionwork. It includes expenses directly re-lated to an employee s wages, such asworkers compensation insurance, pay-roll taxes, benefits and other similarterns of expense,(ii) "Engineering" includes the por-tion of the wages and expenses of engi-neers, draftsmen . inspectors , and theirdirect supervision applicable to con-struction work. It includes expenses di-rectly related to an employee s wagessuch as worker s compensation insur-ance. payroll taxes . benefits and othersimilar items of expense.(Hi) "Material and supplies" includesthe purchase price of material used atthe point of free delivery plus the costsof inspection , loading and transpor-tation, and an equitable portion of pro-visioning expense. In determining thecost of material used , proper allowanceshall be made for unused material. formaterial recovered from temporary
structures used in perfornling the work
involved. and for discounts allowed and
realized in the purchase of material.This item does not include construc-tion material that is stolen or rendered
unusable due to vandalism. Such mate~rial should be charged to the applicableplant specific operations expense ac-
counts.
(iv) "Transportation includes the
cost of transporting employees, mate-rial and supplies. tools and other work
equipment to and from the physicalconstruction location. It includesamounts paid therefor to other compa-
nies or individuals and the cost of
using the company s own motor vehi-cles or other transportation equip-
ment.(v) "Contract work" includesamounts paid for work performedunder contract or other agreement by
other companies, firms or individuals;
engineering and supervision applicable
to such work; cost incident to the
award of contracts; and the inspection
of such work. The cost of constructionwork performed by affiliated compa-
nies and other details relating theretoshall be available from the work in
progress and supporting records.
(vi) "Protection " includes the cost of
protecting the company property
411
932.2000from fire or other casualties and thecost of preventing damages to others orthe property of others.(vii) "Privileges , Permits. and Rightsof way " includes such costs incurred inobtaining these privileges , permits, orrights of way in connection with con-struction work , such as for use of pri-vate property, streets or highways. Thecost of such privileges and permitsshall be included in the cost of thework for which the privileges or per-mits are obtained. except for costs in-cludable in Account 2111. Land , and Ac-count 2690, Intangibles.(viii) "Taxes " includes taxes properlyincludable in construction costs beforethe facilities are completed for servicewhich taxes are assessed separatelyfrom taxes on operating property orunder conditions that permit separateidentification of the amount charge-able to construction.(ix) "Special machine service in-cludes the cost of labor expended . ma-terials and supplies consumed and
other expenses incurred in the mainte-
nance, operation and use of special andother labor saving machines (otherthan transportation equipment (such
as trenching equipment. cable plows
and pole setting trucks. Also includedare expenditures for rental. mainte-nance and operation of such machines
owned by others. When a constructionjob requires the purchase of specialmachines. the cost thereof. less the ap-
praised or salvage value at the time of
release from the job , shall be included
in the cost of construction.
(x) Allowance for funds used during
construction ("AFUDC") provides for
- the cost of financing the construction
of telecommunications plant. AFUDC
shall be charged to Account 2003 , Tele-
communications Plant Under Con-
struction, and credited to Account 7340.The rate for calculating AFUDC shall
be determined as follows: If financingplans associate a specific new bor-rowing with an asset , the rate on that
borrowing may be used for the asset;
no specific new borrowing is associated
with an asset or if the average accumu-
lated expenditures for the asset exceed
the amounts of specific new borrowingassociated with it , the capitalization
rate to be applied to such excess shall
be weighted average of the rates appli-
47 CFR Ch. I (10-00 Edition)cable to other borrowing of the enter-prise. The amount of interest cost cap-italized in an accounting period shallnot exceed the total amount of interestcost incurred by the company in thatperiod.(xi) "Insurance includes premiumspaid specifically for protection againstloss and damage in connection with theconstruction of telecommunicationsplant due to fire or other casualty, in-jury to or death of employees or oth-ers , damages to property of others. de-falcations of employees and agents andthe non-performance of contractual ob~liga tions of others.(xii) "Construction services " includethe cost of telephone electricity,power , construction quarters officespace and equipment directly relatedto the construction project.(xiii) "Indirect construction costsshall include indirect costs such general engineering, supervision andsupport. Such costs , in addition to di-rect supervision , shall include indirectplant operations and engineering su-
pervision up to, but not including, su-pervision by executive officers whose
pay and expenses are chargeable to Ac-count 6711, Executive. The records sup-porting the entries for indirect con-
struction costs shall be kept so as to
show the nature of the expenditures.the individual jobs and accounts
charged , and the bases of the distribu-tion. The amounts charged to each
plant account for indirect costs shall
be readily determinable. The instruc-
tions contained herein shall not be in-terpreted as permitting the addition to
plant of amounts to cover indirect
costs based on arbitrary allocations.
(xiv) The cost of construction shall
not include any amounts classifiable as
Corporate Operations Expense.
(d) Telecommunications plant retjred.
(1) Telecommunications plant accounts
shall at all times disclose the original
cost of all property in service. Whenany item of property subject to plantretirement accounting is worn out
lost . sold, destroyed. abandoned , sur-rendered upon lapse of title, becomespermanently unserviceable, is with-
drawn or for any other reason is retired
from service. the plant accounts appli-
cable to that item shall be credited
412
Federal Communications Commissionwith the original cost of the plant re-tired whether replaced or not (exceptas provided for minor items in para-graph (d) (2) (ii) of this section). Nor-mally, these retirement credits withrespect to such plant as entire build-ings, entire central offices , all plantabandoned and any large sections ofplant withdrawn from service . shall entered in the accounts for the monthin which use of the property ceased,For any other plant withdrawn fromservice, the retirement credits shall entered no later than the next suc-ceeding month. Literal compliancewith the provision for timing of entrieswith respect to property amounting toless than $50 000 retired under any oneproject is not required if an unreason-able amount of recordkeeping and esti-mating of quantities , original costs andsalvage is necessary. The retiremententry shall refer to the continuingproperty record. or records supple-Inental thereto from which the costwas obtained (note also paragraph
(d)(3) of this section). Every companyshall establish procedures which will
ensure compliance with these require~
ments.
(2) To avoid undue refinement, depre-
ciable telecommunications plant shall
be accounted for as follows:
(i) Retirement units: This group in-cludes major items of property, a rep-resentative list of which shall be pre-
scribed by this Commission. In lieu of
the retirement units prescribed with
respect to a particular account , a com-
pany may. after obtaining specific ap-
proval by this Commission , establishand maintain its own list of retirement
units for a portion or all of the plant in
any such account. For items includedon the retirement units list. the origi-
nal cost of any such items retired shall
be credited to the plant account and
charged to Account 3100, Accumulated
Depreciation . whether or not replaced.The original cost of retirement unitsinstalled in place of property retired
shall be charged to the applicable tele-
communications plant account.
(ii) Minor items: This group includes
any part or element of plant which is
not designated as a retirement unit.
The original cost of a minor item of
property when included in the specific
or average cost for a retirement unit or
9 32.2000units requires no separate credit to thetelecommunications plant accountwhen such a minor item is retired. Thecost of replacement shall be charged tothe account applicable for the cost ofrepairs of the property. However , if thereplacement effects a substantial bet-terment (the primary aim of which isto make the property affected moreuseful, of greater durability, of greatercapacity or more economical in oper-ation) , the excess cost of such a re-placement . over the estimated cost atthe then current prices of replacementwithout betterment of the minor itemsbeing retired . shall be charged to theapplicable telecommunications plantaccount.(3) The cost of property to be retiredshall be the amount at which propertyis included in the telecommunicationsplant accounts. However . when it is im-practicable to determine the cost ofeach item due to the relatively largenumber or small cost of such items , the
average cost of all the items covered byan appropriate subdivision of the ac-count shall be used in determining the
cost to be assigned to such items whenretired. The method used in deter-
mining average cost must give due re-
gard to the quantity. vintage . size and
kind of items , the area in which they
\vere installed and their classification
in other respects. Average cost may
applied in retirement of such items as
poles, wire, cable. cable terminals. con-duit and booths. Any company may useaverage cost of property installed in a
year or band of years as approved by
the Commission. It should be under-
stood , however , that the use of averagecosts shall not relieve the company of
the requirement for maintaining its
continuing property records to show
where practicable. dates of installation
and removal for purposes of mortality
studies. (See ~ 32.2000(f) of this subpartStandard Practices for Establishingand Maintaining Continuing Property
Records,
(4) The accounting for the retirement
of property. plant and equipment shall
be as provided above except:
(i) Amoun~s included in Account 2005,
Telecommunications Plant Adjust-
ment; Account 2680 . Amortizable Tan-gible Assets: Account 2681 , Capital
413
932.2000Leases; Account 2682 , Leasehold Im-provements; Account 2690, Intangibles;and any amounts associated with am-ortizable leaseholds . easements . andsimilar rights in land included in Ac-count 2111, Land . shall be debited , asappropriate, to Account 3400 . 3410. 3420,3500. or 3600 , and credited to the appli-cable accounts.(ii) Amounts in Account 2111. Land.and amounts for works of art recordedin Account 2122 , Furniture . shall betreated at disposition as a gain or lossand shall be credited or debited to Ac-count 7150. Gains and Losses from Dis-position of Land and Artwork , as appli-cable. If land or artwork is retained bythe company and held for sale, the costshall be charged to Account 2006 , Non-operating Plant.(5) When the telecommunicationsplant is sold together with traffic asso-ciated therewith, the original cost ofthe property shaH be credited to theapplicable plant accounts and the esti-
mated amounts carried with respect
thereto in the accumulated deprecia-
tion and amortization accounts shall
be charged to such accumulated ac-
counts. The difference, if any. between
the net amount of such debit and credit
items and the consideration received
(less commissions and other expensesof making the sale) for the propertyshall be included in Account 7350
Gains and Losses from Disposition of
Certain Property. The accounting for
depreciable telecommunications plantsold without the traffic associatedtherewith shall be in accordance with
the accounting provided in ~ 32.3100(c)
of this subpart.
(e) Basic property records. (1) The
basic property records are that portion
of the total property accounting sys-
tem which preserves the following de-
tailed information:(i) The identity. vintage . location
and original cost of units of property;
(ii) Original and ongoing trans-
actional data (plant account activity)
in terms of such units; and
(Hi) Any other specific financial and
cost accounting information not prop-
erly warranting separate disclosure as
an account or subaccount but which is
needed to support regulatory. cost . taxmanagement and other specific ac-
47 CFR Ch. I (10-1-00 Edition)counting information needs and re-quirements.(2) The basic property records mustbe: (j) Subject to internal accountingcontrols, (ii) auditable, (iH) equal inthe aggregate to the total investmentreflected in the financial property con-trol accounts as well as the total of thecost allocations supporting the deter-mination of cost-or-service at any par-ticular point in time. and (iv) main-tained throughout the life of the prop-erty.(3) The basic property records shallconsist of (i) continuing propertyrecords and (ii) records supplementalthereto which together reveal clearly.by accounting area. the detailed andsystematically summarized informa-tion necessary to meet fully the re-quirements of paragraphs (e) (1) and(e) (2) of this section.(4) Companies shall establish andmaintain basic property records foreach class of property recorded in theseveral plant accounts which comprise
the balance sheet Account 2001. Tele-
communications Plant In Service , Ac-
count 2002. Property Held for Future
Telecommunications Use, and Account
2006. Nonoperating Plant.(5) The company shall notify the
Commission of plan for the basic
property record as follows:
(i) Not later than June 30 of the year
following that in which it becomes sub-ject to this system of accounts. the
company shall file with the Commis-sion two (2) copies of a complete plan
of the method to be used in the com-
pilation of a basic property record withrespect to each class of property. The
plan shall include a list of proposed ac-counting areas accompanied by de-
scription of the boundaries of each area
as defined in accordance with the re-
quirements of 9 32.2000(f) (1) (i) and (ii)
of this subpart. The plan shall also in-
clude a list of property record units
proposed for use under each regulatedplant account. These property record
units shall be selected such that the re-
quirements of 332.2000(f)(2) (i). (ii) and
(iii) of this subpart can be satisfied.
(H) The company shall submit to the
Commission one copy of any major pro-
posed changes in its basic property
record plan at least 30 days before the
effective date of the proposed changes.
414
Federal Communications Commission(6) The company shall prepare andmaintain the basic property record asfollows:0) Not later than June 30 of the yearfollowing that in which the companybecomes subject to this system of ac-counts , begin the preparation of a basicproperty record.(ii) Complete within two years of theprescribed beginning date. basic prop-erty records for all property as of theend of the preceding calendar year.(iii) Promptly process in the basicproperty records all property changesaffecting periods subsequent to initialestablishment of the basic propertyrecord.(7) The basic property record compo-nents (see paragraph (c) of this section)shall be arranged in conformity withthe regulated plant accounts prescribedin this section of accounts as follows:(i) The continuing property recordsshall be compiled on the bas is of origi-nal cost (or other book cost consistentwith this system of accounts). The con-tinuing property records shall be main-
tained as prescribed in 3 32.2000(t) (2) (iii)
of this subpart in such manner as will
meet the following basic objectives:
(A) Provide for the verification of
property record units by physical ex-
amination.
(B) Provide for accurate accounting
for retirements.
(C) Provide data for use in connec-
tion with depreciation studies.
(ii) The records supplemental to thecontinuing property records shall dis-
close such service designations. usagemeasurement criteria. apportionment
factors, or other data as may be pre-
scribed by the Commission in this partor other parts of its Rules and Regula-tions, Such data are subject to the
same general controls and standardsfor auditability and support as are all
other elements of the basic property
records.
(f) Standard practices for establishingand maintaining continuing property
records-(1) Accounting area. (i) The
continuing property record. as related
to each primary plant account , shall be
established and maintained by sub-accounts for each accounting area. An
accounting area is the smallest terri-
tory of the company for which account-
ing records of investment are main-
~ 32.2000rained for all plant accounts wi thin thearea. Areas already established for ad-ministrative. accounting. valuation, orother purposes may be adopted for thispurpose when appropriate. In no caseshall the boundaries of accountingareas cross either State lines or bound-aries prescribed by the Commission.(ii) In determining the limit of eacharea. consideration shall be given tothe quantities of property, construc-tion conditions, operating districts,county and township lines. taxing dis-trict boundaries, city limits, and otherpolitical or geographical limits. order that the area adopted may havemaximum adaptability, within the con-fines of practicability. for both thecompanys purpose and those of Fed-eral. State, and municipal authorities.(2) Property record units, (i) In each ofthe established accounting areas. theproperty record units " which are tobe maintained in the continuing prop-erty record shall be set forth sepa-rately. classified by size and type withthe amount of original cost (or other
appropriate book cost) associated withsuch units. When a list of property
record units has been accepted by the
Commission , they shall become the
units referred to in this statement ofstandard practices. Such units shall
apply to only the regulated portion of
this system of accounts.
(ii) When it is found necessary to re-
vise this list because of the addition ofunits used in providing new types of
service, or new units resulting from
improvements in technology, or be-
cause of the grouping or elimination of
units which no longer merit separate
recognition as property record units.
one copy of such changes shall be sub-
mitted to the Commission. Upon appro-
priate showing by the company. the
Commission may specifically exempt
the company from these filing require-
ments.
(iii) The continuing property record
shall reveal the description . location.
date of placement. the essential details
of construction and the original cost
(note also ~ 32.2000(f) (3) of this subpart)
of the property record units. The con-
tinuing property record and other un-
derlying records of construction costs
shall be so maintained that upon re-
tirement of one or more retirement
415
932.2000units or of minor items without re-placement when not included in thecosts of retirement units, the actualcost or a reasonably accurate estimateof the cost of the plant retired can bedetermined.(3) Methods of determining original costof property record units. The originalcost of the property record units shallbe determined by analyses of the con~struction costs incurred as shown bycompletion reports and other data. ac-cumulated in the respective construc-tion work orders or authorizations.Costs shall be allocated to and associ-ated with the property record units facilitate accounting for retirements.The original cost of property recordunits shall be determined by unit iden-tification or averaging as described inparagraphs (f) (3) (i) and (ii) of this sec-tion.(i) Unit identification. Cost shall identified and maintained by specificlocation for property record units con-
tained within certain regulated plant
accounts or account groupings such as
Land. Buildings . Central Office Assets
l'v1otor Vehicles, Garage Work Equip-
ment, and Furniture. In addition, units
involved in any unusual or special type
of construction shall be recorded
their specific location costs (note also
932.2000 (0 (3) (ii) (B) of this subpart.
(ii) A veraging. (A) Average costs may
be developed for plant consisting of a
large number of similar units such as
terminal equipment , poles , wire . cable
cable terminals , conduit , furniture , and
work equipment. Units of similar size
and type within each specified account-ing area and regulated plant accountmay be grouped. Each such averagecost shall be set forth in the con-
tinuing property record of the units
with which it is associated,
(B) The averaging of costs permitted
under the provisions of the foregoing
paragraph is restricted to plant in-
stalled in a particular vintage or band
of years incurred within an accountingarea. This paragraph does not permit
the inclusion of the cost of units in-
volved in any unusual or special type
of construction, The units involved in
such unusual or special type of con-
struction shall be recorded at cost
location.
47 CFR Ch. I (10-1-00 Edition)(4) Estimates. In cases where the ac-tual original cost of property cannot beascertained. such as pricing an inven-tory for the initial entry of a con-tinuing property record or the pricingof an 'acquisition for which a con-tinuing property record has not beenmaintained. the original cost may estimated. Any estimated original costshall be consistent with the accountingpractices in effect at the time the prop-erty was constructed.(5) Identification of property recordunits. There shall be shown in the con-tinuing property record or in recordsupplements thereof. a complete de-scription of the property records unitsin such detail as to identify such units.The description shall include the iden-tification of the work order underwhich constructed, the year of installa-tion (unless not determinable per932" 2000(f) (4) of this subpart . specific lo-cation of the property within each ac~counting area in such manner that
can be readily spot-checked for proof ofphysical existence, the accounting
company s number or designation, and
any other description used in connec-tion with the determination of theoriginal cost. Descriptions of units of
similar size and type shall follow pre-
scribed groupings.
(6) Reinstalled units. When units
which average costs are not applied
Le.. specific and fixed location units
are removed or retired and subse-
quently reinstalled. the date when theunit was first charged to the appro-
priate plant account shall, when re-
quired for adequate service life studies
and reasonably accurate retirement ac-
counting, be shown in addition to the
date of reinstallation.
(7) Age and service life of property. The
continuing property record shall dis-
close the age of existing property andthe supporting records shall disclose
the service life of property retired. Ex-
ceptions from this requirement for any
property record unit shall be submitted
to the Commission for approval.
(8) Reference to sources of information.
There shall be shown by appropriate
reference the source of all entries. All
drawings , computations, and other de-
tailed records which support quantitiesand costs or estimated costs shall be
416
Federa I Co mm uni cations Com m issi , .retained as. a part of or in support ofthe continuing property record.(9) Jojntly owned property. (i) With re-spect to jointly owned property. thereshall be shown in the continuing prop-erty record or records supplementalthereto:(A) The identity of all joint owners.(8) The percentage owned by the ac-counting company.(ii) When regulated plant is con-structed under arrangements for jointownership. the amount received by theconstructing company from the otherjoint owner or owners shall be creditedas a reduction of the gross cost of theplant in place.(iii) When a sale of a part interest inregulated plant is made , the fractionalinterest sold shall be treated as a re-tirement and the amount received shallbe treated as salvage. The continuingproperty record or records supple-mental thereto shall be so maintainedas to identify separately retirements ofthis nature from physical retirements
of jointly owned plant.
(iv) If jointly owned regulated prop-erty is substantial in relation to thetotal of the same kind of regulated
property o'vvned wholly by the com-pany, such jointly owned regulated
property shall be appropriately seg-
regated in the continuing property
record.
(g)
Depreciation accounting-(1) Com-
putation of depreciation rates. (i) Unless
otherwise provided by the Commission.
either through prior approval or upon
prescription by the Cornmission, depre-
ciation percentage rates shall be com-
puted in conformity with a group planof accounting for depreciation andshall be such that the loss in service
value of the property, except for losses
excluded under the definition of depre-
ciation , may be distributed under the
straight-line method during the service
life of the property.(ii) In the event any composite per-
centage rate becomes no longer appli-cable, revised composite percentagerates shall be computed in accordance
with paragraph (g) (1) (i) of this section.(iii) The company shall keep such
records of property and property retire-
ments as will allow the determination
of the service life of property which has
been retired , or facilitate the deter-
932.2000Inination of service life indications bymortality. turnover . or other appro-priate methods. Such records will alsoallow the determination of the percent-age of salvage value and cost of re-moval for property retired from eachclass of depreciable plant.(2) Depreciation charges. (i) A separateannual percentage rate for each depre-ciation category of telecommuni-cations plant shall be used in com-puting depreciation charges.(ii) Companies upon receiving priorapproval from this Commission. or.upon prescription by this Commissionshall apply such depreciation rate. ex-cept where provisions of paragraph(g) (2) (iv) of this section apply. as willratably distribute on a straight linebasis the difference between the netbook cost of a class or subclass of plantand its estimated net salvage duringthe known or estimated remainingservice life of the plant.(Hi) Charges for currently accruing
depreciation shall be made monthly to
the appropriate depreciation accountsand corresponding credits shall bemade to the appropriate depreciationreserve accounts. Current monthly
charges shall normally be computed bythe application of one-tvvelfth of the
annual depreciation rate to the month-
ly average balance of the associated
category of plant. The average month-
ly balance shall be computed using the
balance as of the first and last days of
the current month.(iv) In certain circumstances andupon prior approval of this Commis-
sion monthly charges may be deter-mined in total or in part through theuse of other methods whereby selected
plant balances or portions thereof areratably distributed over periods pre-
scribed by this Commission. Such cir-
cumstances could include but not
limited to factors such as the existenceof reserve deficiencies or surpluses.
types of plant that will be completely
retired in the near future. and changes
in the accounting for plant. Where al-ternative methods have been used in
accordance with this subparagraph.such amounts shall be applied sepa-
rately or in combination with rates de-
termined in accordance with paragraph
(g) (2) (ii) of this section.
417
932.2000(3) Acquired depreciable plant. Whenacquired depreciable plant carried inAccount 1439 . Deferred Charges , is dis-tributed to the appropriate plant ac-counts, adjusting entries shall be madecovering the depreciation charges ap-plicable to such plant for the periodduring which it was carried in Account1439.(4) Plant Retired for NonrecurringFactors not Recognized in DepreciationRates.(i) A retirement will be considered asnonrecurring (extraordinary) only the following criteria are met:(A) The impending retirement wasnot adequately considered in settingpast depreciation rates.(B) The charging of the retirementagainst the reserve will unduly depletethat reserve.(C) The retirement is unusual suchthat similar retirements are not likelyto recur in the future,(5) Upon direction or approval fromthis Commission. the company shallcredit Account 3100. Accumulated De-preciation. and charge Account 1438.Deferred Maintenance and Retire-
ments, with the unprovided-for loss in
service value. Such amounts shall distributed from Account ) 438 to Ac-count 6561. Depreciation Expense-
Telecommunications Plant in Service,or Account 6562, Depreciation Ex-pense-Property Held for Future Tele-communications Use, over such periodas this Commission may direct or ap-
prove.
(h) Amortization accounting. (1) Unlessotherwise provided by this Commis-
sion , either through approval. or upon
prescription by this Commission , amor-tization shall be computed on thestraight-line method, Le.. equal annual
amounts shall be applied, The cost of
each type asset shall be amortized onthe basis the estimated life of that
asset and shall not be written off in the
accounting period in which the asset
acquired. A reasonable estimate of theuseful life may be based on the upper
or lower limits even though a fixed ex-
istence is not determinable. However
the period of amortization shall not ex-
ceed forty years.
(2) In the event any estimated useful
life becomes no longer applicable. a re-
vised estimated useful life shall be de-
47 CFR Ch~ I (10-1-00 Edition)termined in accordance with paragraph(h) (1) of this section.(3) Amortization charges shall made monthly to the appropriate am-ortization expense accounts and cor-responding credits shall be made to theappropriate amortization reserve ac-counts. Monthly charges shall be com-puted by the application of one-twelfthto the annual amortization amount.(4) The company shall keep suchrecords as will allow the determinationof the useful life of the asset.(i) Accounting for software. The origi-nal cost of initial operating systemsoftware for computers shall be classi-fied to the same account as the associ-ated hardware whether acquired sepa-rately or in conjunction with the asso-ciated hardware.(j) Plant Accounts to be Maintainedby Class A and Class B telephone com~panies as indicated:Account title Class Aaccount Class Baccount
REGULATED PLANT
Property, plant and equipment:
Telecommunications plant
service
....'.','...................,...,...
Property held for future tefe~
communications use
""'.,..,"'.,.
Telecommunications plant under
con struction-short term...,..".
Telecommunications plant under
construction-long term ..........
Telecommunications plant ad-
justment -
---...
..,.......".....,h.....,
Nonoperating plant .....................
Goodwill ...oo
.,.... '.. ........ ... .............
TELECOMMUNICATIONS PLANT IN
SERVICE (TPIS)
1 2001 1 200 1
2002 2002
2003 2003
2004 2004
2005 2005
2006 2006
2007 2007
TP!S-General support assets:
land and support assets .m,...-land
...............,..........'.............,..
Motor vehicles
""".,.""""",,"'.,..
Aircraft. ...,. ......n. ......... ..... ........,..
Tools and other work equipment
Buildings .",..... "..oo......,..oooo...... .,.
Furniture ""h......................,...,....
Office equipment ',-.,',,'.m..,
........
General purpose computers "....
TPIS-Central Office assets:
Central Office-Switching ..........
Analog electronic switching ."....,
Digital electronic switching ...,.....
Electro-mechanical switching .,...
Operator systems ....... .........."oo..
Central Office-- Transmission ....
Radio systems ,..,."."...-...,...'....--.
Circuit equipment ",'m,"",""".'"
TPI 8--1 nforma tion origi n ationltermi~
nation assets:
Information origination/termi-
nation ..... """""""" ....
.............
Station apparatus ',",'...'...m...".,
Customer premises wiring .."......
large private branch exchanges
...., ..., .,...",
21102111
..-.............
2112 """"""'00'
2113
.,..............
2114
"".,.'........
2121
.... ....... .....
2122 """
..... .....
2123
......."......,
2124 .....oo..,..u,.
................
22102211
................
2212 ...00...........2215
........,.......
2220 2220
"""""'00'" 22302231 n..".".......2232
.................... ..... .......
23102311
.".............
2321
......,..'......
2341
.'....... .......
418
Federal Communications CommissionAccount title Class Aaccount Class BaccountPublic telephone terminal equip-ment .',............ ........ ......... ........Other terminal equipment ...........TPIS-Cabte and wire facilities as-sets:Cable and wire facilities '............Poles , ........, "'..,. ......... "'" ... ........Aerial cable ".. "....,..... ""o,. .........Underground cable """,..............Buried cable """"""""""."".",Submarine cable "m...........,....."Deep Sea cable ...... ........ '..m.....Intrabuilding network cable ........Aerial wire .........................,........Conduit systems ... ...'....... m..,.....TPIS-Amortizable assets:Amortizable tangible assets h.....Capital leases ....... ....... h ...oo........Leasehold improvements..... no...Intangibles ,."..... .,.." ..... ,........ .....1 Balance sheet summary account only.2351 ,....,.....,....2362 ',".m'",,",'.'.".'...".'.24102411 --...,.....,.."2421 .......".......2422 "., ,...... '.'"2423 .... ..'......'..2424 """"""""2425 ..,.. ,,'n. .....2426 """m.......2431 ........,.......2441 .....,. .........................26802681 'P""""".,.2682 ................2690 2690.:-(51 FR 43499 , Dee. 2, 1986 , as amended at FR 7580, Mar. 12, 1987; 53 FR 30059, Aug. 10.1988; 59 FR 46930 , Sept. 13 , 1994; 60 FR 12138,Mar. 6, 1995; 62 FR 39451 , July 23, 1997; 64 50007 , Sept. 15 , 1999)
EFFECTIVE DATE NOTE: At 64 FR 50007,Sept. 15, 1999, ~ 32.2000 was amended by re-moving paragraph (b)(4) , This section con-
tains information collection requirements
and will not become effective until approved
by the Office of Management and Budget.
932.2001 Telecommunications plant service.
This account shall include the origi-nal cost of the investment included in
Accounts 2110 through 2690.
~ 32.2002 Property held for future tele-communications use.
(a) This account shall include the
original cost of property owned andheld for no longer than two years under
a definite plan for use in telecommuni-cations service. If at the end of two
years the property is not in service, theoriginal cost of the property may re-
main in this account so long as the car-
rier excludes the original cost and as-sociated depreciation from its ratebase
and ratemaking considerations and re-port those amounts in reports filedwith the Commission pursuant
43.21 (e) (1) and 43.21 (e) (2) of this chapter.
(b) Subsidiary records shall be main-tained to show the character of the
aITIOunts carried in this account.
(65 FR 16334 , Mar. 28, 2000)
932.20059 32.2003 Telecommunicationsunder construction.(a) This account shall include theoriginal cost of construction projects(note also 932.2000(c)) of this part andthe cost of software developmentprojects that are not yet ready fortheir intended use,(b) There may be charged directly tothe appropriate plant accounts the costof any construction project which is es-timated to be completed and ready forservice within two months from thedate on which the project was begun.There may also be charged directly tothe plant accounts the cost of any con-struction project for which the grossadditions to plant are estimated toamount to less than $100,000.(c) If a construction project has beensuspended for six months or more, thecost of the project included in this ac-count may remain in this account solong as the carrier excludes the origi-nal cost and associated depreciation
from its ratebase and ratemaking con-
siderations and reports those amounts
in reports filed with the Commission
pursuant to 43.21(e)(l) and 43.21(e)(2) ofthis chapter. If a project is abandoned,
the cost included in this account shall
be charged to Account 7370 . Special
Charges.
(d) When any telecommunications
plant . the cost of which has been in-
cluded in this account , is completed
ready for service, the cost thereof shall
be credited to this account and charged
to the appropriate telecommunications
plant or other accounts.
(51 FR 43499. Dec. 2 , 1986, as amended at
FR 12138 . Mar. 6, 1995; 64 FR 50007, Sept. 15
1999; 65 FR 16335, Mar. 28, 2000)
plant
g 32.2005 Telecommunications
adjustment.
(a) This account shall includeamounts determined in accordance
with 332.2000(b) of this subpart rep-
resenting the difference between (1) thefair market value of the telecommuni-
cations plant acquired, plus prelimi-nary expenses incurred in connection
with the acquisition; and (2) the origi-nal cost of such plant governmental
franchises and similar rights acquired
plan t
419
Certification StatementQwest CorporationStephanie L. Jackson , have read the applicable statutes for broadband investmentincome tax credit and I believe that the subject broadband equipment qualifies for the taxcredit under Idaho Code Sec. 63-30291.Date:Signature:--"Stephanie
Title:Staff Tax Anal yst