[Federal Register Volume 71, Number 100 (Wednesday, May 24, 2006)]
[Rules and Regulations]
[Pages 29843-29844]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-4768]


-----------------------------------------------------------------------

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 36

[CC Docket No. 80-286; FCC 06-70]


Jurisdictional Separations and Referral to the Federal-State 
Joint Board

AGENCY: Federal Communications Commission.

ACTION: Interim rule.

-----------------------------------------------------------------------

SUMMARY: Jurisdictional separations is the process by which incumbent 
local exchange carriers (incumbent LECs) apportion regulated costs 
between the intrastate and interstate jurisdictions. In this document, 
the Commission extends, on an interim basis, the current freeze of part 
36 category relationships and jurisdictional cost allocation factors, 
which would otherwise expire on June 30, 2006. Extending the freeze 
will allow the Commission to provide stability for carriers that must 
comply with the Commission's separations rules while the Commission 
considers issues relating to comprehensive reform of the jurisdictional 
separations process.

DATES: Effective June 23, 2006.

FOR FURTHER INFORMATION CONTACT: Ted Burmeister, Attorney Advisor, at 
(202) 418-7389 or Michael Jacobs, at (202) 418-2859, Telecommunications 
Access Policy Division, Wireline Competition Bureau, TTY (202) 418-
0484.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Order 
in CC Docket No. 80-286, FCC 06-70, released on May 16, 2006. The full 
text of this document is available for public inspection during regular 
business hours in the FCC Reference Center, Room CY-A257, 445 12th 
Street, SW., Washington, DC 20554.
    1. Jurisdictional separations is the process by which incumbent 
LECs apportion regulated costs between the intrastate and interstate 
jurisdictions. The Order extends, on an interim basis, the current 
freeze of part 36 category relationships and jurisdictional cost 
allocation factors, which would otherwise expire on June 30, 2006. 
Specifically, the duration of such extension shall be no longer than 
three years from the initial date of this extension or until 
comprehensive reform of the jurisdictional separations process can be 
completed by the Commission and Federal-State Joint Board on 
Jurisdictional Separations (Joint Board), whichever is sooner. 
Extending the freeze will allow the Commission to provide stability for 
carriers that must comply with the Commission's separations rules while 
the Commission considers issues relating to comprehensive separations 
reform.
    2. In the 2001 Separations Freeze Order, 66 FR 33202, June 21, 
2001, that established the current freeze, the Commission concluded 
that it had the authority to adopt an interim separations freeze to 
preserve the status quo pending reform and provide for a reasonable 
allocation of costs. The analysis performed there remains applicable 
here.
    3. In addition, under the Administrative Procedure Act, 5 U.S.C. 
553(b)(3)(B), an administrative agency may implement a rule without 
public notice and comment ``when the agency for good cause finds * * * 
that notice and public procedure thereon are impracticable, 
unnecessary, or contrary to the public interest.'' The Commission finds 
that good cause exists in this instance. Extending the freeze will 
prevent the wasteful expenditure of significant resources by carriers 
to develop the ability to perform separations in a manner that likely 
would only be relevant for a relatively short time while the Commission 
considers comprehensive separations reform. The Commission finds, as it 
did in the 2001 Separations Freeze Order, that avoiding a sudden cost 
shift will provide regulatory certainty that offsets the concern that 
there may be a temporary misallocation of costs between the 
jurisdictions.
    4. The Commission also finds that an interim extension of the 
separations freeze without public notice and comment is consistent with 
Mid-Tex Electric Cooperative, Inc. v. FERC, 822 F.2d 1123 (DC Cir. 
1987). Here, too, the interim extension of the separations freeze is 
limited, and the concurrent adoption of the companion Further Notice of 
Proposed Rulemaking should allow for a timely resolution of the 
underlying issues. In addition, the Commission finds that the interim 
extension of the separations freeze does not require a referral to the 
Joint Board, because it is temporary in scope and

[[Page 29844]]

because the issue of extension was within the scope of the Joint 
Board's earlier recommended decision. The Commission has continued to 
receive valuable comments, analysis, and expertise from the Joint Board 
on this matter during the current separations freeze.
    5. The extended freeze will be implemented as described in the 2001 
Separations Freeze Order. Specifically, price-cap carriers will use the 
same relationships between categories of investment and expenses within 
Part 32 accounts and the same jurisdictional allocation factors that 
have been in place since the inception of the current freeze on July 1, 
2001. Rate-of-return carriers will use the same frozen jurisdictional 
allocation factors, and will use the same frozen category relationships 
if they had opted previously to freeze those as well.

I. Procedural Matters

A. Final Regulatory Flexibility Certification

    6. The Regulatory Flexibility Act of 1980, as amended (RFA), 
requires that a regulatory flexibility analysis be prepared for 
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.'' 5 U.S.C. 605(b). The RFA 
generally defines ``small entity'' as having the same meaning as the 
terms ``small business,'' ``small organization,'' and ``small 
governmental jurisdiction.'' 5 U.S.C. 601(6). In addition, the term 
``small business'' has the same meaning as the term ``small business 
concern'' under section 3 of the Small Business Act. 5 U.S.C. 601(3). 
Under the Small Business Act, a small business concern is one that: (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). 15 U.S.C. 632.
    7. In the instant Order, we extend the current freeze of the part 
36 category relationships and jurisdictional cost allocation factors 
for price cap carriers, and of the allocation factors only for rate-of-
return carriers. Among the underlying objectives of the freeze are 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 some entities employing 1500 
or fewer employees. The extension of the freeze will continue the 
status quo that has existed since July 1, 2001, when the freeze 
originally became effective. Moreover, the freeze has eliminated the 
need for all incumbent LECs, including incumbent LECs with 1500 
employees or fewer (small incumbent LECs), to complete certain annual 
studies formerly required by the Commission's rules.
    8. The Order poses no additional regulatory burden on incumbent 
LECs, including small incumbent LECs. If this extended action can be 
said to have any effect under the RFA, it is to reduce a regulatory 
compliance burden for small incumbent LECs, by eliminating the 
aforementioned separations studies and providing these carriers with 
greater regulatory certainty. Furthermore, we note that the Commission 
specifically considered the impact of the freeze on small incumbent 
LECs (in general, rate-of-return carriers) in the 2001 Separations 
Freeze Order, and provided them with the option to freeze their 
category relationships at the onset of the freeze. Our action, 
therefore, does nothing more than temporarily extend the status quo, 
which itself was certified in the 2001 Separations Freeze Order not to 
have a significant economic impact on a substantial number of small 
entities.
    9. Therefore, we certify that the requirements of the Order will 
not have a significant economic impact on a substantial number of 
entities. The Commission will send a copy of the Order, including a 
copy of this final certification, in a report to Congress and the 
Government Accountability Office pursuant to the Congressional Review 
Act. In addition, the 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.

B. Paperwork Reduction Act Analysis

    10. The Order does not contain any new, modified, or proposed 
information collections subject to the Paperwork Reduction Act of 1995 
(PRA), Public Law 104-13. In addition, therefore, it does not contain 
any new, modified, or proposed ``information collection burden for 
small business concerns with fewer than 25 employees,'' pursuant to the 
Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 
U.S.C. 3506(c)(4).

C. Congressional Review Act

    11. The Commission will send a copy of the Order in a report to be 
sent to Congress and the Government Accountability Office pursuant to 
the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).

II. Ordering Clauses

    12. Pursuant to the authority contained in sections 1, 2, 4, 201-
205, 215, 218, 220, 229, 254, and 410 of the Communications Act of 
1934, as amended, 47 U.S.C. 151, 152, 154, 201-205, 215, 218, 220, 229, 
254 and 410, this Order is adopted.
    13. The Order shall be effective June 23, 2006.
    14. The Commission's Consumer and Governmental Affairs Bureau, 
Reference Information Center, shall send a copy of the Order, including 
the Final Regulatory Flexibility Certification, to the Chief Counsel 
for Advocacy of the Small Business Administration.

List of Subjects in 47 CFR Part 36

    Communications common carriers.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 06-4768 Filed 5-23-06; 8:45 am]
BILLING CODE 6712-01-P