
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 23, 2000]
[Document not affected by Public Laws enacted between
  January 23, 2000 and December 4, 2001]
[CITE: 47USC272]

 
          TITLE 47--TELEGRAPHS, TELEPHONES, AND RADIOTELEGRAPHS
 
                 CHAPTER 5--WIRE OR RADIO COMMUNICATION
 
                     SUBCHAPTER II--COMMON CARRIERS
 
    Part III--Special Provisions Concerning Bell Operating Companies
 
Sec. 272. Separate affiliate; safeguards


(a) Separate affiliate required for competitive activities

                           (1) In general

        A 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) of this section.

       (2) Services for which a separate affiliate is required

        The 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 requirements

    The 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 safeguards

    In its dealings with its affiliate described in subsection (a) of 
this section, 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) of this section in accordance with 
    accounting principles designated or approved by the Commission.

(d) Biennial audit

                       (1) General requirement

        A company required to operate a separate affiliate under this 
    section shall obtain and pay for a joint Federal/State audit every 2 
    years conducted by an independent auditor to determine whether such 
    company has complied with this section and the regulations 
    promulgated under this section, and particularly whether such 
    company has complied with the separate accounting requirements under 
    subsection (b) of this section.

       (2) Results submitted to Commission; State commissions

        The auditor described in paragraph (1) shall submit the results 
    of the audit to the Commission and to the State commission of each 
    State in which the company audited provides service, which shall 
    make such results available for public inspection. Any party may 
    submit comments on the final audit report.

                       (3) Access to documents

        For 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 requests

    A 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) of this section 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) of 
    this section, 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

        The provisions of this section (other than subsection (e) of 
    this section) shall cease to apply with respect to the manufacturing 
    activities or the interLATA telecommunications services of a Bell 
    operating company 3 years after the date such Bell operating company 
    or any Bell operating company affiliate is authorized to provide 
    interLATA telecommunications services under section 271(d) of this 
    title, unless the Commission extends such 3-year period by rule or 
    order.

                 (2) InterLATA information services

        The provisions of this section (other than subsection (e) of 
    this section) shall cease to apply with respect to the interLATA 
    information services of a Bell operating company 4 years after 
    February 8, 1996, unless the Commission extends such 4-year period 
    by rule or order.

               (3) Preservation of existing authority

        Nothing in this subsection shall be construed to limit the 
    authority of the Commission under any other section of this chapter 
    to prescribe safeguards consistent with the public interest, 
    convenience, and necessity.

(g) Joint marketing

         (1) Affiliate sales of telephone exchange services

        A Bell operating company affiliate required by this section may 
    not market or sell telephone exchange services provided by the Bell 
    operating company unless that company permits other entities 
    offering the same or similar service to market and sell its 
    telephone exchange services.

       (2) Bell operating company sales of affiliate services

        A Bell operating company may not market or sell interLATA 
    service provided by an affiliate required by this section within any 
    of its in-region States until such company is authorized to provide 
    interLATA services in such State under section 271(d) of this title.

                      (3) Rule of construction

        The joint marketing and sale of services permitted under this 
    subsection shall not be considered to violate the nondiscrimination 
    provisions of subsection (c) of this section.

(h) Transition

    With respect to any activity in which a Bell operating company is 
engaged on February 8, 1996, such company shall have one year from 
February 8, 1996, to comply with the requirements of this section.

(June 19, 1934, ch. 652, title II, Sec. 272, as added Pub. L. 104-104, 
title I, Sec. 151(a), Feb. 8, 1996, 110 Stat. 92.)

                  Section Referred to in Other Sections

    This section is referred to in section 271 of this title.
