Thanks for taking the time to unravel this release, Sam. I appreciate the analysis and the thought behind it.
The FASB and the FCC may have made strides in the past to govern how IRU accounting practices implemented, but in the end, when two entities sign on the bottom line, and only then, are the terms of a contract between those two parties hard and fast. Complying with an approved accounting practice then becomes a matter of seeing what fits best, and hopefully the choice of what fits best for the parties involved will also be a lawful one, too ;)
The GAAP guidelines that you cited, however, took on a life form of their own and soon became a one-size-fits-all remedy for dark fiber and other 'unusual' forms of fiber sales. I say this because IRU deals are subject to wide variations of what is sought and delivered by an acquiring entity and its supplier.
I track IRUs back to the time of the fifties, and had personal involvement with them in the sixties, when the earliest ones (in a telecommunications context) that I am aware of were channels on transatlantic cables and satellite systems. As such, these were swaths of bandwidth commonly called voice frequency grade channels that were multiplexed using FDM techniques on coaxial and RF systems, and measured from 2700 to 3200 Hz in girth, depending on their conditioning grade.
A complete IRU channel, of course, extended from one international gateway office to another international gateway office - one on each side of the pond. Electively, it could also be carried by the International Record Carrier (RCA, IT&T, WUI and French Cable, at the time) directly to the subscriber's premises, too, for an added fee. So, it was more than a bandwidth assignment or merely a slice of FDM spectrum, rather, it was an entire assembly, or system.
I mention this bit of historical trivia because, unlike whole fibers that have been leased under the terms of indefeasible right of use, or IRU terms, the former voice frequency channels were treated as though they were real property, and OWNED OUTRIGHT by the purchasing entity, even though they were merely assigned frequency slots on a larger bandwidth system being carried over a piece of coax or satellite system.
Is this not just like what lambdas are today in optical fiber systems?
What do you think? A lambda is only a potential wavelength in its dormant state, of course, and only comes to life if it is lit by a laser and then nourished periodically through amplification, and, if a great enough distance exists, then it is further helped along through regeneration and reshaping, too. This makes it an *assembly* of sorts, very much like the voice frequency example I cited above, as opposed to a singular, hard form of real property like a pair of wires or a strand of glass would be considered.
So, we'll call a lambda, as we once might have called the 3KHz channel, an IRU assembly. Can a lambda assembly, then, be regarded as a form of real property, as would be applicable under the interpretation of the laws of property ownership?
FAC
frank@fttx.org |
