§272 Separate affiliate; safeguards

Summary

A Bell operating company that is a local phone company must sell certain things only through a separate affiliate. The rule covers manufacturing, starting long‑distance (interLATA) phone services (but not some small, out‑of‑region, or previously approved services), and long‑distance information services (but not electronic publishing or alarm monitoring). The separate affiliate must be clearly independent from the phone company. It must keep separate books and records, have its own officers and staff, not let creditors go after the phone company’s assets if it defaults, and make any deals with the phone company in writing and available for the public to see. The phone company must treat its affiliate the same as any other company when it buys or sells goods, services, facilities, or information. It must use FCC‑approved accounting for affiliate transactions. Every two years the company must pay for an independent joint federal/state audit. The audit results go to the FCC and the state commissions and are open to the public. Auditors and regulators can see needed financial records, and states must protect private information. The phone company must give other carriers access and charges no less favorable than it gives its affiliate. Some rules end after set times: most affiliate rules stop 3 years after a company is allowed to offer long‑distance under section 271(d), and rules for long‑distance information services stopped 4 years after February 8, 1996, unless extended. A company doing these activities on February 8, 1996 had one year from that date to comply.