Before the
                FEDERAL COMMUNICATIONS COMMISSION
                      Washington, D.C. 20554


In the Matter of                )
                                )
Southwestern Bell Telephone     )       ASD 99-25
Company's Permanent Cost Allocation)
Manual for the Separation of    )
Regulated and Nonregulated Costs)
                                 
                                 
                                 
                             ORDER


Adopted:  September 29, 1999            Released:  September 29, 1999 

By the Chief, Accounting Safeguards Division:

     1.   On March 29, 1999, SBC Telecommunications, Inc. filed revisions to Southwestern Bell
Telephone Company's (SWBT's) cost allocation manual (CAM) to reflect changes to SWBT's time reporting
procedures from positive time reporting to statistical time reporting known as technician activity statistical
sampling (TASS).  Included in the filing are revisions to Section VI, Cost Apportionment Table, and Section
VII, Time Reporting Procedures.

     2.   Absent action by the Commission, revisions to time reporting procedures proposed in a
CAM filing become effective 15 days following the submission of the filing.  We believe, however, that
SWBT's proposed CAM revisions raise serious concerns, not only as to how technicians' labor costs are to
be allocated between regulated and nonregulated activities, but also as to how these costs are to be assigned
initially to the appropriate Part 32 accounts.  Therefore on April 12, 1999, we issued an order staying the
effective date of these revisions until October 12, 1999, to allow additional time to review whether the
revisions comply with our accounting and cost allocation rules and policies.  

     3.   As part of the review process, we required SWBT to provide assurance that the results of
using TASS are as accurate as the results achievable by using positive time reporting.  Additionally, we
required SWBT to have an independent audit of TASS.  SWBT is in the process of completing the required
independent audit.  We will further stay the effective date of SWBT's revision until April 9, 2000, pending
completion of the required audit and our review of the audit report and workpapers. 

          4..  Accordingly, IT IS ORDERED THAT  the revisions to SWBT's CAM pertaining to Section
VI, Cost Apportionment Table and Section VII, Time Reporting Procedures, filed March 29, 1999 ARE
STAYED until April 9, 2000. 



                              FEDERAL COMMUNICATIONS COMMISSION



                    

                              Kenneth P. Moran
                              Chief, Accounting Safeguards Division