Obtain supporting documentation

· The Service Provider must obtain copies of supporting documentation (e.g., sales reports) and review documentation with AICO.

· AICO will provide sign-off to the Service Provider as to whether or not the transaction meets PMP requirements.

· The Service Provider maintains copies of PMP support for audit and regulatory purposes.

C. Lower of Fully Distributed Cost or Fair Market Value

When a product or service offering does not meet the pricing criteria for tariff or prevailing market price, a comparison of fully distributed cost to fair market value must be completed to determine the transaction price.

Calculate Fully Distributed Cost (see Section III)

· The Service Provider must determine the pricing assumptions associated with the service to be provided, including identification of direct and indirect cost.

· The Service Provider engages their accounting organization to assist in the development and application of the appropriate indirect costs and loadings. The Service Provider is responsible for the completeness and accuracy of the FDC calculation. The Service Provider retains the FDC calculation and supporting documentation for audit and regulatory purposes.

Obtain Fair Market Value (see Section IV)

· The Service Provider must obtain Fair Market Value and review the supporting documentation with AICO for concurrence that good faith effort requirement has been met.

· The Service Provider maintains FMV supporting documentation for audit and regulatory purposes.

Compare Fully Distributed Cost to Fair Market Value (see Section V)

· The Service Provider will compare results of the Fully Distributed Cost calculation to the Fair Market Value, using the lower result as the transaction price.

· For 272/ASA transactions, Service Provider includes copies of supporting documentation as part of Officer Certification Package.

I. C. Pricing of products or services provided from a Service Company to the ILEC

Service Company transactions are priced at fully distributed cost under FCC requirements. Affiliate Billing and Corporate Reporting oversee the allocation of Service Company costs.

I. D. Pricing the sale of assets between the ILEC and a non-regulated affiliate

1. The Service Provider must engage Asset Accounting to initiate the transaction pricing process.

· Asset Accounting calculates Net Book Value

· Asset Accounting obtains Fair Market Value

· Asset Accounting makes FCC 96-150 pricing assessment

· The Service Provider must provide transaction support as part of Officer Certification Package for 272/ASA transactions.

· Asset Accounting retains transaction support for audit and regulatory purposes.

2. On an annual basis Asset Accounting will provide AICO a transaction report of asset transfers between the ILEC and all non-regulated affiliates .

Section II