(Reference)

[Outline of Designated Telecommunications Facilities Interconnection Accounting Regulations]

[Purpose]

The purpose of these Accounting Regulations is to specify the accounting methods used for interconnection to designated telecommunications facilities and to clarify revenues and expenses, etc., concerning this interconnection, thereby contributing to the calculation of appropriate interconnection charges.

* With respect to the expenses of telecommunications facilities that are attributed to the Designated Facilities Management Business, data are totaled and classified per equipment category unit, such as switches and transmission lines, in order to provide a basis for calculating interconnection charges for each unbundled element.


[Regulations]

The accounting procedures adopted by Type I telecommunications carriers that install designated telecommunications facilities are separated into the business to manage and operate designated telecommunications facilities (Designated Facilities Management Business) and the business to use such facilities to provide service to users (Designated Facilities Usage Business), and the Designated Facilities Management Business provides these facilities to the Designated Facilities Usage Business and other carriers on equal conditions (charges).

[Statements Included]

(1) Profit and Loss Statement
Profit (loss) of the Designated Facilities Management Business and Designated Facilities Usage Business

(2)
Statement of Mean Capital Employed and Rate of Return
Mean capital employed (rate base) by the Designated Facilities Management Business and Designated Facilities Usage Business, and the rate of return on that employed by the Management Business (pre-tax basis).

(3)
Detailed Statement of Fixed Assets (Designated Facilities Management Business)
Fixed assets attributed to the Designated Facilities Management Business

(4)
Detailed Statement of Fixed Asset Attribution
Breakdown of fixed assets attributed to the Designated Facilities Management Business and Designated Facilities Usage Business

(5)
Detailed Statement of Expenses by Equipment Category
Breakdown of expenses by equipment category for the Designated Facilities Management Business and Designated Facilities Usage Business


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