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During 1980 and 1981, the Commission made changes to its methods and practices for setting depreciation rates. These changes, allowing faster capital recovery, have been largely in response to the rapid changes in technology and reflect the Commission's overall thrust for a more competitive environment.
In implementing its changes, however, the Commission has not resolved questions regarding the methods and procedures needed to set new depreciation rates. For example, the proper method for allocating the depreciation reserve account to individual plant accounts has not been determined and requirements for setting depreciation rates for that part of the depreciable plant from the telephone pole to the customer's premises have not been developed.
Before proceeding to set revised depreciation rates, GAO recommends the Commission address these and other questions. Doing so will place the Commission in a position to avoid accepting and approving depreciation rates with less than the rigorous review needed. (See p. 159.)
Commission action is also needed before implementing that part of its Computer II Decision relating to customer premises equipment-telephones, computer terminals, and other equipment which may be located at the customer's premises and attached to the communications network. The Commission has proposed to deregulate as of March 1, 1982, new customer premises equipment and to continue to regulate existing customer premises equipment. (See p. 160.)
ENSURING FAIR, NON-
Since competition was first allowed in interstate telecommunications services, the Commission has required that all carriers offering authorized interstate communications services be allowed access to local exchange facilities on a nondiscriminatory basis. Such access is virtually the only means for local distribution of interstate telephone services. The Commission and the courts have, however, continued to identify access discrimination problems involving both
the types of access services provided and the
During recent years, the local exchange costs assigned to interstate services have also gradually increased, giving rise to the allegation that rates for such services subsidize intrastate rates. The existence and magnitude of any such subsidy, however, is unclear.
The Commission is addressing the problem of access discrimination. Neither the Commission's past actions nor its present proposals, however, resolve the following questions.
--What types of interconnection should telephone
companies be required to provide to new carriers?
--What rates should be charged to new carriers
for access to local exchanges?
--What are the effects of competition on any
subsidies which may have been provided between interstate services and intrastate services?
--Can nondiscriminatory access conditions be
assured without major changes in telephone
GAO recommends that the Congress address
On June 30, 1981, GAO requested Commission
return/rate base regulatory program
Recommendations to the Chairman, FCC
Recommendation to the Congress