[Federal Register Volume 66, Number 120 (Thursday, June 21, 2001)]
[Rules and Regulations]
[Pages 33202-33208]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-15564]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 36

[CC Docket No. 80-286; FCC 01-162]


Jurisdictional Separations Reform and Referral to the Federal-
State Joint Board

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document, the Commission adopts rules to implement a 
five-year interim ``freeze'' of the jurisdictional separations process 
in order to simplify and stabilize the separations process pending more 
comprehensive separations reform. This action is based upon a 
Recommended Decision issued in July 2000 by the Federal-State Joint 
Board on Jurisdictional Separations.

DATES: Effective June 21, 2001 except for Sec. 36.3(b), which contain 
information collection requirements that have not been approved by the 
Office of Management Budget (OMB). The Commission will publish a 
document in the Federal Register announcing the effective date of that 
section.

FOR FURTHER INFORMATION CONTACT: Eric Einhorn or Andrew Firth, Common 
Carrier Bureau, Accounting Policy Division, (202) 418-7400.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report 
and Order in CC Docket No. 80-286 released on May 21, 2001. The full 
text of this document is available for public inspection during regular 
business hours in the FCC Reference Center, Room CY-A257, 445 Twelfth 
Street, SW., Washington, DC, 20554.

[[Page 33203]]

I. Introduction

    1. Jurisdictional separations is the process by which incumbent 
local exchange carriers (ILECs) apportion regulated costs between the 
intrastate and interstate jurisdictions. The first step in the 
separations process requires carriers to assign regulated costs to 
various categories of plant and expenses. In the second step, the costs 
are apportioned between the intrastate and interstate jurisdictions. 
These jurisdictional allocations are based upon either a relative-use 
factor, a fixed allocator, or when specifically allowed in the part 36 
rules, by direct assignment.
    2. In 1997, the Commission initiated a proceeding seeking comment 
on the extent to which legislative changes, technological changes, and 
market changes warranted comprehensive reform of the separations 
process. Jurisdictional Separations Reform and Referral to the Federal-
State Joint Board, Notice of Proposed Rulemaking, CC Docket No. 80-286, 
62 FR 59842, November 5, 1997 (NPRM). In the NPRM, the Commission noted 
that modern network structures are vastly different than the structure 
used to define the part 36 cost categories, and that the separations 
process codified in the current part 36 rules was developed at a time 
when common carrier regulation presumed that interstate and intrastate 
telecommunications service must be provided through a regulated 
monopoly.
    3. In this Report and Order, we adopt rules based on a July 2000 
Recommended Decision of the Federal-State Joint Board (Joint Board) on 
Jurisdictional Separations, 15 FCC Rcd 13160, FCC 00J-2, CC Docket No. 
80-286 (released July 21, 2000). The Commission sought public comment 
on this Recommended Decision. See ``Comment Sought on Recommended 
Decision Issued by Federal-State Joint Board on Jurisdictional 
Separations,'' Public Notice, CC Docket No. 80-286, DA No. 00-2433, 65 
FR 67320, November 9, 2000. In its Recommended Decision, the Joint 
Board recommended that the Commission adopt an interim ``freeze'' of 
the jurisdictional separations process codified at part 36 of the 
Commission's rules, 47 CFR 36 et seq., as a means to simplify and 
stabilize the separations process pending more comprehensive reform. 
Specifically, pending further reform, the Commission adopts a five-year 
freeze of all part 36 category relationships and jurisdictional 
allocation factors for price cap incumbent local exchange carriers 
(ILECs), and a freeze of all allocation factors for rate-of-return 
ILECs. The interim freeze shall be in effect from July 1, 2001 until 
June 30, 2006, or until the Commission completes comprehensive 
separations reform, whichever comes first. We believe that these 
measures will bring simplification and regulatory certainty to the 
separations process in a time of rapid market and technology changes, 
until comprehensive reform is completed.

II. Executive Summary

    4. In this Report and Order, we adopt rules that do the following:
     Impose a five-year interim freeze of the part 36 category 
relationships and jurisdictional allocation factors for price cap 
carriers, and the jurisdictional allocation factors only for rate-of-
return carriers. Rate-of-return carriers, however, will be able to 
elect to freeze their category relationships at the outset of the 
freeze. The frozen category relationships and allocation factors will 
be based on data from the carriers' calendar-year 2000 separations 
studies. The interim freeze will be in effect from July 1, 2001 to June 
30, 2006, or until the Commission has completed comprehensive reform of 
the part 36 separations process, whichever comes first.
     With limited exceptions for the sale and transfer of 
telephone exchanges, no adjustments to the frozen category 
relationships and allocation factors will be allowed during the freeze.
     The Report and Order does not adopt the Joint Board's 
recommendation to reduce local dial equipment minutes (DEM) at the 
outset of the freeze to compensate for the impact of the Internet on 
local calling patterns, because we do not believe that the record 
allows us to quantify with any degree of accuracy the impact of the 
Internet on a nationwide basis.
     Approximately two years after the implementation of the 
interim freeze, the Commission will seek comment on the impact of the 
freeze, including specific comment on the Internet-bound traffic issue. 
Comprehensive review of the separations process will continue during 
the interim freeze, and the Commission will work with the Joint Board 
to address certain specific issues outlined in the Joint Board's 
Recommended Decision.
     The ARMIS 43-04 report, which is used by incumbent LECs 
subject to ARMIS reporting requirements to report separations results, 
will be streamlined to simplify carrier reporting and reduce 
administrative burdens. The Common Carrier Bureau shall seek public 
comment on the content of the proposed streamlined ARMIS 43-04 report. 
This will provide interested parties, including the states, the 
opportunity to provide feedback on which specific accounts are needed 
to evaluate the freeze and consider further separations reform. The 
Commission will adopt specific reporting requirements for ARMIS 43-04 
in a subsequent order.

V. Procedural Matters

A. Effective Date

    5. We conclude that the effective date of the rules promulgated in 
this Report and Order shall be the June 20, 2001 except for 
Sec. 36.3(b), which contain information collection requirements that 
have not been approved by the Office of Management Budget (OMB). The 
Commission will publish a document in the Federal Register announcing 
the effective date of that section. Although the Administrative 
Procedure Act normally requires 30 days notice before rules become 
effective, the Commission, for good cause, may make rules effective 
with less than 30 days notice. We find such good cause based on the 
July 1, 2001 start of the new tariff year.

B. Paperwork Reduction Act

    6. The action contained herein has been analyzed with respect to 
the Paperwork Reduction Act of 1995 (PRA) and found to impose new or 
modified reporting and/or recordkeeping requirements or burdens on the 
public. Implementation of these new or modified reporting and/or 
recordkeeping requirements will be subject to approval by the Office of 
Management and Budget (OMB). The Commission will publish a document in 
the Federal Register announcing the effective date.

C. Final Regulatory Flexibility Analysis

    7. The Regulatory Flexibility Act of 1980, as amended (RFA), 
requires that an RFA analysis be prepared for notice-and-comment 
rulemaking proceedings, unless the agency certifies that ``the rule 
will not, if promulgated, have a significant economic impact on a 
substantial number of small entities.'' The RFA generally defines 
``small entity'' as having the same meaning as the terms ``small 
business,'' ``small organization,'' and ``small governmental 
jurisdiction.'' In addition, the term ``small business'' has the same 
meaning as the term ``small business concern'' under the Small Business 
Act. A small business concern is one which: (1) Is independently owned 
and operated; (2) is not dominant in its field of operation; and (3) 
satisfies any additional criteria established by the Small Business 
Administration (SBA). Section 121.201

[[Page 33204]]

of the Small Business Administration regulations defines a small 
telecommunications entity in SIC code 4813 (Telephone Companies Except 
Radio Telephone) as any entity with 1,500 or fewer employees at the 
holding company level. As we described in the previous IRFA analysis in 
this proceeding, we recognize that proposals such as a freeze of the 
part 36 separations process will affect all incumbent local exchange 
carriers providing interstate services, including some entities 
employing 1500 or fewer employees at the holding company level.
    8. In the instant Report and Order, we amend part 36 of our rules 
to adopt a variation of the freeze proposals set forth in the NPRM. 
Specifically, the Commission adopts a five-year freeze of the part 36 
category relationships and allocation factors for price cap carriers 
and a freeze of the allocation factors only for rate-of-return 
carriers. The objectives of the modified rules adopted in this Report 
and Order are to freeze the separations process in order to ease the 
administrative burden of regulatory compliance and to provide greater 
regulatory certainty for all local exchange carriers subject to the 
Commission's part 36 rules, including small incumbent local exchange 
carriers (ILECs). For the reasons described, we certify, pursuant to 
the RFA, that the rules adopted in this Report and Order will not have 
a significant economic impact on a substantial number of small 
entities. The interim freeze will eliminate the need for all ILECs, 
including ILECs with 1500 employees or fewer, to complete certain 
annual studies formerly required by the Commission's rules; if this 
action can be said to have any affect under the RFA, it is to reduce a 
regulatory compliance burden for small ILECs by eliminating the 
aforementioned separations studies and providing these carriers with 
greater regulatory certainty.
    9. We note that we specifically considered the impact of the freeze 
on small ILECs (in general, rate-of-return carriers) in this Report and 
Order and provided them with the option to freeze their category 
relationships at the onset of the freeze. We recognized that some small 
ILECs may be harmed if subject to a categories freeze, as it may reduce 
their ability to recover investment and receive sufficient universal 
service support, while other small ILECs may benefit from the added 
regulatory simplification and stability provided by a categories 
freeze. Our action, therefore, either retains the status quo for small 
ILECs choosing to freeze their category relationships, or results in 
less regulatory burden for those opting for the categories freeze. 
Furthermore, we have committed to addressing the impact of Internet 
traffic on the separations results of all carriers, including small 
ILECs, in the context of the Commission's comprehensive separations 
reform, as we do not believe carriers are harmed by the current 
separations treatment of Internet traffic and will not be harmed as a 
result of the freeze.
    10. The Commission will send a copy of this Report and Order, 
including this final certification, in a report to Congress pursuant to 
the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A). In addition, 
the Report and Order and this certification will be sent to the Chief 
Counsel for Advocacy of the Small Business Administration, and will be 
published in the Federal Register. See 5 U.S.C. 605(b).

V. Ordering Clauses

    11. Pursuant to sections 1, 2, 4, 201-205, 215, 218, 220, 229, 254, 
and 410 of the Communications Act of 1934, as amended, that the 
amendments to part 36 of the Commission's rules, 47 CFR Part 36, as 
described in this Report and Order are adopted.
    12. Part 36 of the Commission's rules, 47 CFR part 36, is amended 
as set forth, effective June 21, 2001 except for Sec. 36.3(b), which 
contain information collection requirements that have not been approved 
by the Office of Management Budget (OMB). The Commission will publish a 
document in the Federal Register announcing the effective date of that 
section.

List of Subjects 47 CFR Part 36

    Jurisdictional separations, Reporting and recordkeeping 
requirements, Telecommunications, Telephone.

Federal Communications Commission.
Magalie Roman Salas,
Secretary.

Final Rules

    For the reasons discussed in the preamble, the Federal 
Communications Commission amends 47 CFR part 36 as follows:

PART 36--JURISDICTIONAL SEPARATIONS PROCEDURES; STANDARD PROCEDURES 
FOR SEPARATING TELECOMMUNICATIONS PROPERTY COSTS, REVENUES, 
EXPENSES, TAXES AND RESERVES FOR TELECOMMUNICATIONS COMPANIES

    1. The authority citation for part 36 continues to read as follows:

    Authority: 47 U.S.C. 151, 154(i) and (j), 205, 221(c), 254, 403 
and 410.

Subpart A--General

    2. Add Sec. 36.3 to subpart A to read as follows:


Sec. 36.3  Freezing of jurisdictional separations category 
relationships and/or allocation factors.

    (a) Effective July 1, 2001, through June 30, 2006, all local 
exchange carriers subject to part 36 rules shall apportion costs to the 
jurisdictions using their study area and/or exchange specific 
jurisdictional allocation factors calculated during the twelve month 
period ending December 31, 2000, for each of the categories/sub-
categories as specified herein. Direct assignment of private line 
service costs between jurisdictions shall be updated annually. Other 
direct assignment of investment, expenses, revenues or taxes between 
jurisdictions shall be updated annually. Local exchange carriers that 
invest in telecommunications plant categories during the period July 1, 
2001, through June 30, 2006, for which it had no separations allocation 
factors for the twelve month period ending December 31, 2000, shall 
apportion that investment among the jurisdictions in accordance with 
the separations procedures in effect as of December 31, 2000 for the 
duration of the freeze.
    (b) Effective July 1, 2001, through June 30, 2006, local exchange 
carriers subject to price cap regulation, pursuant to Sec. 61.41, shall 
assign costs from the part 32 accounts to the separations categories/
sub-categories, as specified herein, based on the percentage 
relationships of the categorized/sub-categorized costs to their 
associated part 32 accounts for the twelve month period ending December 
31, 2000. If a part 32 account for separations purposes is categorized 
into more than one category, the percentage relationship among the 
categories shall be utilized as well. Local exchange carriers that 
invest in types of telecommunications plant during the period July 1, 
2001, through June 30, 2006, for which it had no separations category 
investment for the twelve month period ending December 31, 2000, shall 
assign such investment to separations categories in accordance with the 
separations procedures in effect as of December 31, 2000. Local 
exchange carriers not subject to price cap regulation, pursuant to 
Sec. 61.41 of this chapter, may elect to be subject to the provisions 
of Sec. 36.3(b). Such election must be made prior to July 1, 2001. 
Local exchange carriers electing to become subject to Sec. 36.3(b) 
shall not be eligible to withdraw from such

[[Page 33205]]

regulation for the duration of the freeze. Local exchange carriers 
participating in Association tariffs, pursuant to Sec. 69.601 of this 
chapter et seq., shall notify the Association prior to July 1, 2001, of 
such intent to be subject to the provisions of Sec. 36.3(b). Local 
exchange carriers not participating in Association tariffs shall notify 
the Commission prior to July 1, 2001, of such intent to be subject to 
the provisions of Sec. 36.3(b).
    (c) Effective July 1, 2001, through June 30, 2006, any local 
exchange carrier that sells or otherwise transfers exchanges, or parts 
thereof, to another carrier's study area shall continue to utilize the 
factors and, if applicable, category relationships as specified in 
Secs. 36.3(a) and (b).
    (d) Effective July 1, 2001, through June 30, 2006, any local 
exchange carrier that buys or otherwise acquires exchanges or part 
thereof, shall calculate new, composite factors and, if applicable, 
category relationships based on a weighted average of both the seller's 
and purchaser's factors and category relationships calculated pursuant 
to Secs. 36.3(a) and 36.3(b). This weighted average should be based on 
the number of access lines currently being served by the acquiring 
carrier and the number of access lines in the acquired exchanges.
    (1) To compute the composite allocation factors and, if applicable, 
the composite category percentage relationships of the acquiring 
company, the acquiring carrier shall first sum its existing (pre-
purchase) access lines (A) with the total access lines acquired from 
selling company (B). Then, multiply its factors and category 
relationship percentages by (A/(A+B)) and those of the selling company 
by (B/(A+B)) and sum the results.
    (2) For carriers subject to a freeze of category relationships, the 
acquiring carrier should remove all categories of investment from the 
selling carrier's list of frozen category relationships where no such 
category investment exists within the sold exchange(s). The seller's 
remaining category relationships must then be increased proportionately 
to total 100 percent. Then, the adjusted seller's category 
relationships must be combined with those of the acquiring carrier as 
specified in Sec. 36.3(d)(1) to determine the category relationships 
for the acquiring carrier's post-transfer study area.
    (e) Any local exchange carrier study area converting from average 
schedule company status, as defined in Sec. 69.605(c) of this chapter, 
to cost company status during the period July 1, 2001, through June 30, 
2006, shall, for the first twelve months subsequent to conversion 
categorize the telecommunications plant and expenses and develop 
separations allocation factors in accordance with the separations 
procedures in effect as of December 31, 2000. Effective July 1, 2001 
through June 30, 2006, such companies shall utilize the separations 
allocation factors and account categorization subject to the 
requirements of Secs. 36.3(a) and (b) based on the category 
relationships and allocation factors for the twelve months subsequent 
to the conversion to cost company status.

    3. Amend Sec. 36.123 by adding paragraphs (a)(5) and (a)(6) to read 
as follows:


Sec. 36.123  Operator systems equipment--Category 1.

    (a) * * *
    (5) Effective July 1, 2001, through June 30, 2006, study areas 
subject to price cap regulation, pursuant to Sec. 61.41 of this 
chapter, shall assign the average balance of Account 2220, Operator 
Systems, to the categories/subcategories, as specified in 
Sec. 36.123(a)(1), based on the relative percentage assignment of the 
average balance of Account 2220 to these categories/subcategories 
during the twelve month period ending December 31, 2000.
    (6) Effective July 1, 2001 through June 30, 2006, all study areas 
shall apportion the costs assigned to the categories/subcategories, as 
specified in Sec. 36.123(a)(1), among the jurisdictions using the 
relative use measurements for the twelve month period ending December 
31, 2000 for each of the categories/subcategories specified in 
Secs. 36.123 (b) through 36.123(e).
* * * * *
    4. Amend Sec. 36.124 by adding paragraphs (c) and (d) to read as 
follows:


Sec. 36.124  Tandem switching equipment--Category 2.

* * * * *
    (c) Effective July 1, 2001, through June 30, 2006, study areas 
subject to price cap regulation, pursuant to Sec. 61.41 of this 
chapter, shall assign the average balances of Accounts 2210, 2211, 2212 
and 2215, to the Category 2, Tandem Switching Equipment based on the 
relative percentage assignment of the average balances of Account 2210, 
2211, 2212 and 2215 to Category 2, Tandem Switching Equipment during 
the twelve month period ending December 31, 2000.
    (d) Effective July 1, 2001, through June 30, 2006, all study areas 
shall apportion costs in Category 2, Tandem Switching Equipment, among 
the jurisdictions using the relative number of study area minutes of 
use, as specified in Sec. 36.124(b), for the twelve month period ending 
December 31, 2000. Direct assignment of any subcategory of Category 2 
Tandem Switching Equipment between jurisdictions shall be updated 
annually.

    5. Amend Sec. 36.125 by adding paragraphs (h), (i), and (j) to read 
as follows:


Sec. 36.125  Local switching equipment--Category 3.

* * * * *
    (h) Effective July 1, 2001, through June 30, 2006, study areas 
subject to price cap regulation, pursuant to Sec. 61.41 of this 
chapter, shall assign the average balances of Accounts 2210, 2211, 
2212, and 2215 to Category 3, Local Switching Equipment, based on the 
relative percentage assignment of the average balances of Account 2210, 
2211, 2212 and 2215 to Category 3, during the twelve month period 
ending December 31, 2000.
    (i) Effective July 1, 2001, through June 30, 2006, all study areas 
shall apportion costs in Category 3, Local Switching Equipment, among 
the jurisdictions using relative dial equipment minutes of use for the 
twelve month period ending December 31, 2000.
    (j) If during the period from January 1, 1997, through June 30, 
2006, the number of a study area's access lines increased or will 
increase such that, under Sec. 36.125(f) the weighting factor would be 
reduced, that lower weighting factor shall be applied to the study 
area's 1996 unweighted interstate DEM factor to derive a new local 
switching support factor. The study area will restate its Category 3, 
Local Switching Equipment factor under Sec. 36.125(f) and use that 
factor for the duration of the freeze period.

    6. Amend Sec. 36.126 by adding paragraphs (b)(5), (c)(4), (e)(4), 
(f)(1)(ii), and (f)(2) to read as follows:


Sec. 36.126  Circuit equipment--Category 4.

* * * * *
    (b) * * *
    (5) Effective July 1, 2001, through June 30, 2006, study areas 
subject to price cap regulation, pursuant to Sec. 61.41, shall assign 
the average balances of Accounts 2230 through 2232 to the categories/
subcategories as specified in Secs. 36.126(b)(1) through (b)(4) based 
on the relative percentage assignment of the average balances of 
Accounts 2230 through 2232 costs to these categories/subcategories 
during the twelve month period ending December 31, 2000.
    (c) * * *

[[Page 33206]]

    (4) Effective July 1, 2001, through June 30, 2006, all study areas 
shall apportion costs in the categories/subcategories, as specified in 
Secs. 36.126(b)(1) through (b)(4), among the jurisdictions using the 
relative use measurements or factors, as specified in 
Secs. 36.126(c)(1) through (c)(3) for the twelve month period ending 
December 31, 2000. Direct assignment of any subcategory of Category 4.1 
Exchange Circuit Equipment to the jurisdictions shall be updated 
annually.
* * * * *
    (e) * * *
    (4) Effective July 1, 2001, through June 30, 2006, all study areas 
shall apportion costs in the categories/subcategories specified in 
Secs. 36.126(e)(1) through (e)(3) among the jurisdictions using 
relative use measurements or factors, as specified in 
Secs. 36.126(e)(1) through (e)(3) for the twelve month period ending 
December 31, 2000. Direct assignment of any subcategory of Category 4.2 
Interexchange Circuit Equipment to the jurisdictions shall be updated 
annually.
    (f) * * *
    (ii) [Reserved]
    (2) Effective July 1, 2001, through June 30, 2006, all study areas 
shall apportion costs in the subcategory specified in Sec. 36.126(f)(1) 
among the jurisdictions using the allocation factor, as specified in 
Sec. 36.126(f)(1)(i), for this subcategory for the twelve month period 
ending December 31, 2000. Direct assignment of any Category 4.3 Host/
Remote Message Circuit Equipment to the jurisdictions shall be updated 
annually.

    7. Amend Sec. 36.141 by adding paragraph (c) to read as follows:


Sec. 36.141  General.

* * * * *
    (c) Effective July 1, 2001, through June 30, 2006, local exchange 
carriers subject to price cap regulation, pursuant to Sec. 61.41 of 
this chapter, shall assign the average balance of Account 2310 to the 
categories, as specified in Sec. 36.141(b), based on the relative 
percentage assignment of the average balance of Account 2310 to these 
categories during the twelve month period ending December 31, 2000.
    8. Amend Sec. 36.142 by adding paragraph (c) to read as follows:


Sec. 36.142  Categories and apportionment procedures.

* * * * *
    (c) Effective July 1, 2001, through June 30, 2006, all study areas 
shall apportion costs in the categories, as specified in 
Sec. 36.141(b), among the jurisdictions using the relative use 
measurements or factors, as specified in Sec. 36.142(a), for the twelve 
month period ending December 31, 2000. Direct assignment of any 
category of Information Origination/Termination Equipment to the 
jurisdictions shall be updated annually.

    9. Amend Sec. 36.152 by adding paragraph (d) to read as follows:


Sec. 36.152  Categories of Cable and Wire Facilities (C&WF).

* * * * *
    (d) Effective July 1, 2001, through June 30, 2006, study areas 
subject to price cap regulation, pursuant to Sec. 61.41, shall assign 
the average balance of Account 2410 to the categories/subcategories, as 
specified in Secs. 36.152(a) through (c), based on the relative 
percentage assignment of the average balance of Account 2410 to these 
categories/subcategories during the twelve month period ending December 
31, 2000.

    10. Amend Sec. 36.154 by adding paragraph (g) to read as follows:


Sec. 36.154  Exchange Line Cable and Wire Facilities (C&WF)--Category 
1--apportionment.

* * * * *
    (g) Effective July 1, 2001, through June 30, 2006, all study areas 
shall apportion Subcategory 1.3 Exchange Line C&WF among the 
jurisdictions as specified in Sec. 36.154(c). Direct assignment of 
subcategory Categories 1.1 and 1.2 Exchange Line C&WF to the 
jurisdictions shall be updated annually as specified in Sec. 36.154(b).

    11. Amend Sec. 36.155 by adding paragraph (b) to read as follows:


Sec. 36.155  Wideband and exchange trunk C&WF--Category 2--
apportionment procedures.

* * * * *
    (b) Effective July 1, 2001, through June 30, 2006, all study areas 
shall apportion Category 2 Wideband and exchange trunk C&WF among the 
jurisdictions using the relative number of minutes of use, as specified 
in Sec. 36.155(a), for the twelve-month period ending December 31, 
2000. Direct assignment of any Category 2 equipment to the 
jurisdictions shall be updated annually.

    12. Amend Sec. 36.156 by adding paragraph (c) to read as follows:


Sec. 36.156  Interexchange Cable and Wire Facilities (C&WF)--Category 
3--apportionment procedures.

* * * * *
    (c) Effective July 1, 2001, through June 30, 2006, all study areas 
shall directly assign Category 3 Interexchange Cable and Wire 
Facilities C&WF where feasible. All study areas shall apportion the 
non-directly assigned costs in Category 3 equipment to the 
jurisdictions using the relative use measurements, as specified in 
Sec. 36.156 (b), during the twelve-month period ending December 31, 
2000.

    13. Amend Sec. 36.157 by adding paragraph (b) to read as follows:


Sec. 36.157  Host/Remote message Cable and Wire Facilities (C&WF)--
Category 4--apportionment procedures.

* * * * *
    (b) Effective July 1, 2001, through June 30, 2006, all study areas 
shall apportion Category 4 Host/Remote message Cable and Wire 
Facilities C&WF among the jurisdictions using the relative number of 
study area minutes-of-use kilometers applicable to such facilities, as 
specified in Sec. 36.157(a)(1), for the twelve month period ending 
December 31, 2000. Direct assignment of any Category 4 equipment to the 
jurisdictions shall be updated annually.

    14. Amend Sec. 36.191 by adding paragraph (d) to read as follows:


Sec. 36.191  Equal access equipment.

* * * * *
    (d) Effective July 1, 2001, through June 30, 2006, all study areas 
shall apportion Equal Access Equipment, as specified in Sec. 36.191(a), 
among the jurisdictions using the relative state and interstate equal 
access traffic, as specified in Sec. 36.191(c), for the twelve month 
period ending December 31, 2000.

    15. Amend Sec. 36.212 by adding a sentence at the end of paragraph 
(c) to read as follows:


Sec. 36.212  Basic local services revenue--Account 5000.

* * * * *
    (c) * * * Effective July 1, 2001, through June 30, 2006, all study 
areas shall apportion Wideband Message Service and TWX revenues among 
the jurisdictions using the relative number of TWX minutes of use for 
the twelve-month period ending December 31, 2000.
* * * * *

    16. Amend Sec. 36.214 by adding a sentence at the end of paragraph 
(a) to read as follows:


Sec. 36.214  Long distance message revenue--Account 5100.141.

    (a) * * * Effective July 1, 2001 through June 30, 2006, all study 
areas shall apportion Wideband Message Service and TWX revenues among 
the jurisdictions using the relative number of TWX minutes of use for 
the twelve-

[[Page 33207]]

month period ending December 31, 2000.
* * * * *

    17. Amend Sec. 36.372 by removing the paragraph designation and by 
adding a sentence at the end of the section to read as follows:


Sec. 36.372  Marketing--Account 6610.

    (a) * * * Effective July 1, 2001 through June 30, 2006, all study 
areas shall apportion expenses in this account among the jurisdictions 
using the analysis, as specified in Sec. 36.372(a), during the twelve-
month period ending December 31, 2000.

    18. Amend Sec. 36.374 by revising paragraph (b) and by adding 
paragraphs (c) and (d) to read as follows:


Sec. 36.374  Telephone operator expenses.

* * * * *
    (b) Effective July 1, 2001, through June 30, 2006, study areas 
subject to price cap regulation, pursuant to Sec. 61.41 of this 
chapter, shall assign the balance of Account 6620-Services to the 
Telephone operator expense classification based on the relative 
percentage assignment of the balance of Account 6620 to this 
classification during the twelve month period ending December 31, 2000.
    (c) Expenses in this classification are apportioned among the 
operations on the basis of the relative number of weighted standard 
work seconds as determined by analysis and study for a representative 
period.
    (d) Effective July 1, 2001, through June 30, 2006, all study areas 
shall apportion Telephone operator expenses among the jurisdictions 
using the relative number of weighted standard work seconds, as 
specified in Sec. 36.374(c), during the twelve-month period ending 
December 31, 2000.
    19. Amend Sec. 36.375 by adding paragraphs (b)(5) and (b)(6) to 
read as follows:


Sec. 36.375  Published directory listing.

* * * * *
    (b) * * *
    (5) Effective July 1, 2001, through June 30, 2006, study areas 
subject to price cap regulation, pursuant to Sec. 61.41, shall assign 
the balance of Account 6620-Services to the classifications, as 
specified in Secs. 36.375(b)(1) through 36.375(b)(4), based on the 
relative percentage assignment of the balance of Account 6620 to these 
classifications during the twelve month period ending December 31, 
2000.
    (6) Effective July 1, 2001 through June 30, 2006, all study areas 
shall apportion Published directory listing expenses using the 
underlying relative use measurements, as specified in 
Secs. 36.375(b)(1) through 36.375(b)(4), during the twelve-month period 
ending December 31, 2000. Direct assignment of any Publishing directory 
listing expense to the jurisdictions shall be updated annually.
    20. Amend Sec. 36.377 by revising paragraph (a) introductory text 
and by adding paragraphs (a)(1)(ix), (a)(2)(vii), (a)(3)(vii), 
(a)(4)(vii), (a)(5)(vii), (a)(6)(vii), (a)(7)(i), and (a)(7)(ii) to 
read as follows:


Sec. 36.377  Category 1--Local business office expense.

    (a) The expense in this category for the area under study is first 
segregated on the basis of an analysis of job functions into the 
following subcategories: End user service order processing; end user 
payment and collection; end user billing inquiry; interexchange carrier 
service order processing; interexchange carrier payment and collection; 
interexchange carrier billing inquiry; and coin collection and 
administration. Effective July 1, 2001, through June 30, 2006, study 
areas subject to price cap regulation, pursuant to Sec. 61.41 of this 
chapter, shall assign the balance of Account 6620-Services to the 
subcategories, as specified in Sec. 36.377(a), based on the relative 
percentage assignment of the balance of Account 6620 to these 
categories/subcategories during the twelve month period ending December 
31, 2000.
    (1) * * *
    (ix) Effective July 1, 2001, through June 30, 2006, study areas 
subject to price cap regulation, pursuant to Sec. 61.41 of this 
chapter, shall assign the balance of Account 6620-Services to the 
categories/subcategories, as specified in Secs. 36.377(a)(1)(i) through 
36.77(a)(1)(viii), based on the relative percentage assignment of the 
balance of Account 6620 to these categories/subcategories during the 
twelve month period ending December 31, 2000. Effective July 1, 2001 
through June 30, 2006, all study areas shall apportion TWX service 
order processing expense, as specified in Sec. 36.377(a)(1)(viii) among 
the jurisdictions using relative billed TWX revenues for the twelve-
month period ending December 31, 2000. All other subcategories of End-
user service order processing expense, as specified in 
Secs. 36.377(a)(1)(i) through 36.377(a)(1)(viii), shall be directly 
assigned.
    (2) * * *
    (vii) Effective July 1, 2001, through June 30, 2006, study areas 
subject to price cap regulation, pursuant to Sec. 61.41 of this 
chapter, shall assign the balance of Account 6620-Services to the 
subcategories, as specified in Secs. 36.377(a)(2)(i) through 
36.377(a)(2)(vi), based on the relative percentage assignment of the 
balance of Account 6620 to these categories/subcategories during the 
twelve month period ending December 31, 2000. Effective July 1, 2001 
through June 30, 2006, all study areas shall apportion TWX payment and 
collection expense, as specified in Sec. 36.377(2)(vi) among the 
jurisdictions using relative billed TWX revenues for the twelve-month 
period ending December 31, 2000. All other subcategories of End User 
payment and collection expense, as specified in Secs. 36.377(a)(2)(i) 
through 36.377(a)(2)(vi), shall be directly assigned.
    (3) * * *
    (vii) Effective July 1, 2001, through June 30, 2006, study areas 
subject to price cap regulation, pursuant to Sec. 61.41 of this 
chapter, shall assign the balance of Account 6620-Services to the 
subcategories, as specified in Secs. 36.377(a)(3)(i) through 
36.377(a)(3)(vi), based on the relative percentage assignment of the 
balance of Account 6620 to these subcategories during the twelve month 
period ending December 31, 2000. Effective July 1, 2001 through June 
30, 2006, all study areas shall apportion TWX billing inquiry expense, 
as specified in Sec. 36.377(a)(3)(v) among the jurisdictions using 
relative billed TWX revenues for the twelve-month period ending 
December 31, 2000. All other subcategories of End user billing inquiry 
expense, as specified in Secs. 36.377(a)(3)(i) through 
36.377(a)(3)(vi), shall be directly assigned.
    (4) * * *
    (vii) Effective July 1, 2001 through June 30, 2006, study areas 
subject to price cap regulation, pursuant to Sec. 61.41 of this 
chapter, shall assign the balance of Account 6620-Services to the 
subcategories, as specified in Secs. 36.377(a)(4)(i) through 
36.377(a)(4)(vi), based on the relative percentage assignment of the 
balance of Account 6620 to these subcategories during the twelve month 
period ending December 31, 2000. All subcategories of Interexchange 
carrier service order processing expense, as specified in 
Secs. 36.377(a)(4)(i) through 36.377(a)(4)(vi), shall be directly 
assigned.
    (5) * * *
    (vii) Effective July 1, 2001 through June 30, 2006, study areas 
subject to price cap regulation, pursuant to Sec. 61.41 of this 
chapter, shall assign the balance

[[Page 33208]]

of Account 6620-Services to the subcategories, as specified in 
Secs. 36.377(a)(5)(i) through 36.377(a)(5)(vi), based on the relative 
percentage assignment of the balance of Account 6620 to these 
subcategories during the twelve month period ending December 31, 2000. 
All subcategories of Interexchange carrier payment expense, as 
specified in Secs. 36.377(a)(5)(i) through 36.377(a)(5)(vi), shall be 
directly assigned.
    (6) * * *
    (vii) Effective July 1, 2001 through June 30, 2006, study areas 
subject to price cap regulation, pursuant to Sec. 61.41 of this 
chapter, shall assign the balance of Account 6620-Services to the 
subcategories, as specified in Sec. 36.377(a)(6)(i) through 
36.377(a)(6)(vi), based on the relative percentage assignment of the 
balance of Account 6620 to these subcategories during the twelve month 
period ending December 31, 2000. All subcategories of Interchange 
carrier billing inquiry expense, as specified in Secs. 36.377(a)(6)(i) 
through 36.377(a)(6)(vi), shall be directly assigned.
    (7) * * *
    (i) Effective July 1, 2001 through June 30, 2006, study areas 
subject to price cap regulation, pursuant to Sec. 61.41 of this 
chapter, shall assign the balance of Account 6620-Services to the 
subcategories, as specified in Sec. 36.377(a)(7), based on the relative 
percentage assignment of the balance of Account 6620 to these 
subcategories during the twelve month period ending December 31, 2000.
    (ii) Effective July 1, 2001 through June 30, 2006, all study areas 
shall apportion Coin collection and administration expense among the 
jurisdictions using the relative state and interstate revenues 
deposited in the public and semi-public telephones, as specified in 
Secs. 36.377(a)(7), for the twelve month period ending December 31, 
2000. Direct assignment of any Coin collection and administration 
expense among the jurisdictions shall be updated annually.
    21. Amend Sec. 36.378 by adding paragraph (b)(1) and adding and 
reserving paragraph (b)(2) to read as follows:


Sec. 36.378  Category 2--Customer services (revenue accounting).

* * * * *
    (b) * * *
    (1) Effective July 1, 2001 through June 30, 2006, study areas 
subject to price cap regulation, pursuant to Sec. 61.41 of this 
chapter, shall assign the balance of Account 6620-Services to the 
classifications, as specified in Sec. 36.378(b), based on the relative 
percentage assignment of the balance of Account 6620 to those 
classifications during the twelve month period ending December 31, 
2000.
    (2) [Reserved]
* * * * *
    22. Amend Sec. 36.379 by adding paragraphs (b)(1) and (b)(2) to 
read as follows:


Sec. 36.379  Message processing expense.

* * * * *
    (b) * * *
    (1) Effective July 1, 2001 through June 30, 2006, study areas 
subject to price cap regulation, pursuant to Sec. 61.41 of this 
chapter, shall assign the balance of Account 6620-Services to the 
subcategories, as specified in Sec. 36.379(b), based on the relative 
percentage assignment of the balance of Account 6620 to those 
subcategories during the twelve month period ending December 31, 2000.
    (2) Effective July 1, 2001 through June 30, 2006, all study areas 
shall apportion Toll Ticketing Processing Expense among the 
jurisdictions using the relative number of toll messages for the 
twelve-month period ending December 31, 2000. Local Message Process 
Expense is assigned to the state jurisdiction.
    23. Amend Sec. 36.380 by adding paragraphs (d) and (e) to read as 
follows:


Sec. 36.380  Other billing and collecting expense.

* * * * *
    (d) Effective July 1, 2001 through June 30, 2006, study areas 
subject to price cap regulation, pursuant to Sec. 61.41 of this 
chapter, shall assign the balance of Account 6620-Services to the Other 
billing and collecting expense classification based on the relative 
percentage assignment of the balance of Account 6620 to those 
subcategory during the twelve month period ending December 31, 2000.
    (e) Effective July 1, 2001 through June 30, 2006, all study areas 
shall apportion Other billing and collecting expense among the 
jurisdictions using the allocation factor utilized, pursuant to 
Secs. 36.380(b) or 36.380(c), for the twelve month period ending 
December 31, 2000.
    24. Amend Sec. 36.381 by adding paragraphs (c) and (d) to read as 
follows:


Sec. 36.381  Carrier access charge billing and collecting expense.

* * * * *
    (c) Effective July 1, 2001, through June 30, 2006, study areas 
subject to price cap regulation, pursuant to Sec. 61.41 of this 
chapter, shall assign the balance of Account 6620-Services to the 
Carrier access charge billing and collecting expense classification 
based on the relative percentage assignment of the balance of Account 
6620 to that classification during the twelve month period ending 
December 31, 2000.
    (d) Effective July 1, 2001, through June 30, 2006, all study areas 
shall apportion Carrier access charge billing and collecting expense 
among the jurisdictions using the allocation factor, pursuant to 
Sec. 36.381(b), for the twelve-month period ending December 31, 2000.
    1. Revise Sec. 36.382 to read as follows:


Sec. 36.382  Category 3--All other customer services expense.

    (a) Effective July 1, 2001, through June 30, 2006, study areas 
subject to price cap regulation, pursuant to Sec. 61.41 of this 
chapter, shall assign the balance of Account 6620-Services to this 
category based on the relative percentage assignment of the balance of 
Account 6620 to this category during the twelve month period ending 
December 31, 2000.
    (b) Category 3 is apportioned on the basis of Categories 1 and 2.
[FR Doc. 01-15564 Filed 6-20-01; 8:45 am]
BILLING CODE 6712-01-U