7
the change is explained by the Senate Finance Committee as
follows:
The committee believes that the performance by a
telephone cooperative of call-completion services
involving calls to or from members of the cooperative
is substantially related to the cooperative's
performance of its statutory exempt function, and hence
that actual or constructive "payments" from another
telephone company for such services should not
disqualify otherwise eligible telephone cooperatives
from tax-exempt status.
The committee understands that the approach set
forth in the Service's ruling, described above, might
well make the statutory exemption provision into a
"dead letter," since few, if any, telephone
cooperatives could prove that the constructive
"payments" hypothesized by the Service do not cause the
telephone cooperative to fail the 85-percent member-
income test.
S. Rept. 95-762 (1978) at 2-3, 1978-2 C.B. 357, 358. Prior to
the 1984 AT&T divestiture, "call-completion services" included
B & C services.3
In 1986, the FCC issued a decision, In the Matter of
Detariffing of Billing & Collection Servs., 102 FCC2d 1150 (1986)
(1986 Detariffing Order), which resulted in the detariffing of
B & C services under Title II of the Communications Act of 1934,
ch. 652, tit. I, sec. 1, 48 Stat. 1064, 47 U.S.C. sec. 151 et
seq. (1937). In the 1986 Detariffing Order, the FCC concluded
that B & C services performed for a non-member long-distance
company were not a "communication service", but were instead a
3 There is no explanation for the use of the term
"communication services" rather than "call-completion services"
in sec. 501(c)(12)(B).
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