View all text of Part III [§ 271 - § 276]
§ 272. Separate affiliate; safeguards
(a) Separate affiliate required for competitive activities
(1) In generalA Bell operating company (including any affiliate) which is a local exchange carrier that is subject to the requirements of section 251(c) of this title may not provide any service described in paragraph (2) unless it provides that service through one or more affiliates that—
(A) are separate from any operating company entity that is subject to the requirements of section 251(c) of this title; and
(B) meet the requirements of subsection (b).
(2) Services for which a separate affiliate is requiredThe services for which a separate affiliate is required by paragraph (1) are:
(A) Manufacturing activities (as defined in section 273(h) of this title).
(B) Origination of interLATA telecommunications services, other than—
(i) incidental interLATA services described in paragraphs (1), (2), (3), (5), and (6) of section 271(g) of this title;
(ii) out-of-region services described in section 271(b)(2) of this title; or
(iii) previously authorized activities described in section 271(f) of this title.
(C) InterLATA information services, other than electronic publishing (as defined in section 274(h) of this title) and alarm monitoring services (as defined in section 275(e) of this title).
(b) Structural and transactional requirementsThe separate affiliate required by this section—
(1) shall operate independently from the Bell operating company;
(2) shall maintain books, records, and accounts in the manner prescribed by the Commission which shall be separate from the books, records, and accounts maintained by the Bell operating company of which it is an affiliate;
(3) shall have separate officers, directors, and employees from the Bell operating company of which it is an affiliate;
(4) may not obtain credit under any arrangement that would permit a creditor, upon default, to have recourse to the assets of the Bell operating company; and
(5) shall conduct all transactions with the Bell operating company of which it is an affiliate on an arm’s length basis with any such transactions reduced to writing and available for public inspection.
(c) Nondiscrimination safeguardsIn its dealings with its affiliate described in subsection (a), a Bell operating company—
(1) may not discriminate between that company or affiliate and any other entity in the provision or procurement of goods, services, facilities, and information, or in the establishment of standards; and
(2) shall account for all transactions with an affiliate described in subsection (a) in accordance with accounting principles designated or approved by the Commission.
(d) Biennial audit
(1) General requirement
(2) Results submitted to Commission; State commissions
(3) Access to documentsFor purposes of conducting audits and reviews under this subsection—
(A) the independent auditor, the Commission, and the State commission shall have access to the financial accounts and records of each company and of its affiliates necessary to verify transactions conducted with that company that are relevant to the specific activities permitted under this section and that are necessary for the regulation of rates;
(B) the Commission and the State commission shall have access to the working papers and supporting materials of any auditor who performs an audit under this section; and
(C) the State commission shall implement appropriate procedures to ensure the protection of any proprietary information submitted to it under this section.
(e) Fulfillment of certain requestsA Bell operating company and an affiliate that is subject to the requirements of section 251(c) of this title—
(1) shall fulfill any requests from an unaffiliated entity for telephone exchange service and exchange access within a period no longer than the period in which it provides such telephone exchange service and exchange access to itself or to its affiliates;
(2) shall not provide any facilities, services, or information concerning its provision of exchange access to the affiliate described in subsection (a) unless such facilities, services, or information are made available to other providers of interLATA services in that market on the same terms and conditions;
(3) shall charge the affiliate described in subsection (a), or impute to itself (if using the access for its provision of its own services), an amount for access to its telephone exchange service and exchange access that is no less than the amount charged to any unaffiliated interexchange carriers for such service; and
(4) may provide any interLATA or intraLATA facilities or services to its interLATA affiliate if such services or facilities are made available to all carriers at the same rates and on the same terms and conditions, and so long as the costs are appropriately allocated.
(f) Sunset
(1) Manufacturing and long distance
(2) InterLATA information services
(3) Preservation of existing authority
(g) Joint marketing
(1) Affiliate sales of telephone exchange services
(2) Bell operating company sales of affiliate services
(3) Rule of construction
(h) Transition
(June 19, 1934, ch. 652, title II, § 272, as added Pub. L. 104–104, title I, § 151(a), Feb. 8, 1996, 110 Stat. 92.)