4 Colo. Code Regs. § 723-2-2413
Current through Register Vol. 47, No. 20, October 25, 2024
Section 4 CCR 723-2-2413 - Affiliate Transactions - Local Exchange Providers(a) Transactions with affiliates involving asset transfers or provision of services into or out of the regulated accounts shall be recorded by the provider in its regulated accounts as provided in paragraphs (b) through (e).(b) Transfer of assets: (I) Assets sold or transferred between a provider and its affiliate pursuant to a tariff shall be recorded in the appropriate revenue accounts at the tariff rate. Non-tariffed assets sold or transferred between a provider and its affiliate that qualify for prevailing price valuation as defined in paragraph (d) shall be recorded at the prevailing price.(II) All other assets sold by or transferred from a provider to its affiliate shall be recorded at either fair market value or net book cost, whichever is higher. All other assets purchased by or transferred to a provider from its affiliate shall be recorded at either fair market value or net book cost, whichever is lower. For purposes of this subparagraph, providers shall make a good faith determination of fair market value.(c) Valuation of services provided to or by an affiliate: (I) Services provided between a provider and its affiliate pursuant to a tariff shall be recorded in the appropriate revenue accounts at the tariff rate. Non-tariff services provided between a provider and its affiliate pursuant to publicly-filed agreements submitted to the Commission pursuant to section 252(e) of the Communications Act of 1934 or statements of generally available terms pursuant to section 252(f) shall be recorded using the charges appearing in such publicly-filed agreements or statements. Non-tariff services provided between a provider and its affiliate that qualify for prevailing price valuation, as defined in paragraph (d), shall be recorded at the prevailing price.(II) All other services provided to an affiliate shall be recorded at the greater of fair market value or FDC. All other services received by a provider from its affiliate shall be recorded at either fair market value or FDC, whichever is lower, except that services received by a provider from an affiliate which exists solely for the purpose of providing services to members of the provider's corporate family shall be recorded at FDC. For purposes of this subparagraph, providers shall make a good faith determination of fair market value.(d) In order to qualify for prevailing price valuation, sales of a particular asset or service to third parties shall be greater than 50 percent of all such products or services sold by an entity. Providers shall apply this 50 percent threshold on an asset-by-asset, service-by-service basis, rather than on a product line or service line basis. In the case of transactions for assets and services subject to § 272 of the Communications Act of 1934, a RBOC may record such transactions at prevailing price regardless of whether the 50 percent threshold has been satisfied.(e) Income taxes shall be allocated among the regulated activities of the provider, its non-regulated divisions, and members of affiliated groups. If income taxes are determined on a consolidated basis by the provider and other members of an affiliated group, the income tax expense to be recorded by the provider shall be the same as if determined for the provider separately for all time periods, except that the tax effect of carry-back and carry-forward operating losses, investment tax credits, or other tax credits generated by operations of the provider shall be recorded by the provider during the period they are applied in settlement of the taxes otherwise attributable to any member, or combination of members, of the affiliated group.(f) All providers, except rural telecommunications providers and interexchange providers, shall provide a statement identifying all affiliates that engage in transactions with the provider and describing the nature, terms and frequency of those transactions as defined below.(I) Nature of transactions. The provider shall state, for each service transaction, whether the service involves the provision of services or asset transfers and how such transactions are accomplished.(II) Terms of affiliate transactions. The provider shall state the terms at which the service is provided (i.e., at a tariff rate, the prevailing market price, or at the FDC).(III) Frequency of affiliate transactions. The provider shall state the frequency with which the service is rendered.39 CR 21, November 10, 2016, effective 12/1/201640 CR 15, August 10, 2017, effective 9/1/201741 CR 03, February 10, 2018, effective 3/2/201842 CR 02, January 25, 2019, effective 2/14/201942 CR 07, April 10, 2019, effective 4/30/201943 CR 02, January 25, 2020, effective 2/14/202043 CR 17, September 10, 2020, effective 8/17/202044 CR 17, September 10, 2021, effective 8/11/202144 CR 18, September 25, 2021, effective 10/15/202145 CR 03, February 10, 2022, effective 12/29/202145 CR 01, January 10, 2022, effective 1/30/202246 CR 05, March 10, 2023, effective 3/30/2023