§272 Separate Affiliate; Safeguards

Summary

Local Bell telephone companies that must follow section 251(c) must offer certain activities only through one or more separate affiliates. Those activities cover three groups: manufacturing activities; starting long‑distance telephone services that begin in their region (with a few narrow exceptions); and long‑distance information services (but not electronic publishing or alarm monitoring). The affiliate must be run independently. It must keep separate books and records, have its own officers and staff, borrow money without letting creditors go after the parent company’s assets, and make any deals with the parent into written, arm’s‑length contracts that are available for public inspection. The Bell company must treat the affiliate the same as any other company for buying or selling goods, services, facilities, and information, and must follow the Commission’s accounting rules. Each covered company must pay for a joint Federal/State audit every two years by an independent auditor. Audit reports go to the Federal Commission and the State commissions and are open to public comment. The companies must provide non‑affiliated carriers the same service, information, timing, and prices that they give themselves or their affiliate. An affiliate may not market the parent’s local phone service unless the parent lets others do the same. The other rules here stop applying after set times: most rules end three years after the Bell company or any affiliate is allowed under section 271(d) to offer long‑distance services, and the rules about long‑distance information services end four years after February 8, 1996, unless extended. Companies that were doing these activities on February 8, 1996 had one year from that date to comply.