There are a myriad of complex federal and state rules affecting the structure of regulated telecom carriers with respect to the provision of non-regulated services by separate divisions or affiliates.  Further, the Telecom Act prohibits subsidizing competitive offerings with non-competitive (regulated) services.  ILECs must comply with these rules for accounting and affiliate transactions - e.g. documenting how costs are allocated for the provision of services to their affiliates.  For companies providing management, administrative, or billing and collection services to deregulated affiliates, JSI will customize your agreements to document the terms, conditions, and cost allocation methods that the regulated company uses to provide the services.  For companies with affiliates offering toll, video, and/or data services, JSI can execute agreements governing the terms and conditions under which an affiliate provides billing and collection services to another affiliate(s) providing those services to customers.  To manage the sharing of facilities between affiliates, JSI can develop a lease agreement that prescribes maintenance and repair terms relating to leased services as well as fees and payment for switching capacity and/or fiber transport services for use in an affiliate's voice, data, or video services. 

Areas related to affiliate transactions for which JSI can provide assistance include:

• Assessment of the impact of FCC and state affiliate transaction rules on current and prospective LEC operations;
• Evaluation of optimal or required structure for non-regulated activities;
• Drafting of affiliate contracts;
• Development of affiliate transaction pricing for asset transfers and ongoing services;
• Development of affiliate and non-regulated transaction guidelines; and,
• Development of cost structures and cost allocation manuals

JSI staff can help independent providers document their relationships with affiliates through the use of formal transaction agreements, with the assurance that they are complying with FCC rules when it comes to their ties with their affiliates.  If you have questions or would like additional information on affiliate relationships, please contact John Kuykendall (jkuykendall@jsitel.com) in JSI's Maryland office, at 301-459-7590, Terri Parrilla (tparrilla@jsitel.com) at 318-742-8708, or Craig Cook (ccook@jsitel.com) in JSI's Texas office, at 512-338-0473.