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###### Federal Communications Commission

          - 47 CFR Part 36
          - [CC Docket No. 80-286; FCC 01-162]

# AGENCY:

Federal Communications Commission.

# ACTION:

Final rule.

# 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 § 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.                          ( print 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 § 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                           ( print 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 § 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 § 36.3 to subpart A to read as follows: 

§ 36.3

(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 § 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 § 61.41 of this chapter, may elect to be subject to the provisions of § 36.3(b). Such election must be made prior to July 1, 2001. Local exchange carriers electing to become subject to § 36.3(b) shall not be eligible to withdraw from such                                   ( print page 33205)                                regulation for the duration of the freeze. Local exchange carriers participating in Association tariffs, pursuant to § 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 § 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 § 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 §§ 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 §§ 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 § 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 § 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 §§ 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 § 36.123 by adding paragraphs (a)(5) and (a)(6) to read as follows: 

§ 36.123

(a) * * *

(5) Effective July 1, 2001, through June 30, 2006, study areas subject to price cap regulation, pursuant to § 61.41 of this chapter, shall assign the average balance of Account 2220, Operator Systems, to the categories/subcategories, as specified in § 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 § 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 §§ 36.123 (b) through 36.123(e).

* * * * *

4. Amend § 36.124 by adding paragraphs (c) and (d) to read as follows:

§ 36.124

* * * * *

(c) Effective July 1, 2001, through June 30, 2006, study areas subject to price cap regulation, pursuant to § 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 § 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 § 36.125 by adding paragraphs (h), (i), and (j) to read as follows: 

§ 36.125 

* * * * *

(h) Effective July 1, 2001, through June 30, 2006, study areas subject to price cap regulation, pursuant to § 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 § 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 § 36.125(f) and use that factor for the duration of the freeze period.

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

§ 36.126

* * * * *

(b) * * *

(5) Effective July 1, 2001, through June 30, 2006, study areas subject to price cap regulation, pursuant to § 61.41, shall assign the average balances of Accounts 2230 through 2232 to the categories/subcategories as specified in §§ 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) * * *                                  ( print page 33206)    

(4) Effective July 1, 2001, through June 30, 2006, all study areas shall apportion costs in the categories/subcategories, as specified in §§ 36.126(b)(1) through (b)(4), among the jurisdictions using the relative use measurements or factors, as specified in §§ 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 §§ 36.126(e)(1) through (e)(3) among the jurisdictions using relative use measurements or factors, as specified in §§ 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 § 36.126(f)(1) among the jurisdictions using the allocation factor, as specified in § 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 § 36.141 by adding paragraph (c) to read as follows: 

§ 36.141 

* * * * *

(c) Effective July 1, 2001, through June 30, 2006, local exchange carriers subject to price cap regulation, pursuant to § 61.41 of this chapter, shall assign the average balance of Account 2310 to the categories, as specified in § 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 § 36.142 by adding paragraph (c) to read as follows:

§ 36.142

* * * * *

(c) Effective July 1, 2001, through June 30, 2006, all study areas shall apportion costs in the categories, as specified in § 36.141(b), among the jurisdictions using the relative use measurements or factors, as specified in § 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 § 36.152 by adding paragraph (d) to read as follows: 

§ 36.152 

* * * * *

(d) Effective July 1, 2001, through June 30, 2006, study areas subject to price cap regulation, pursuant to § 61.41, shall assign the average balance of Account 2410 to the categories/subcategories, as specified in §§ 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 § 36.154 by adding paragraph (g) to read as follows: 

§ 36.154 

* * * * *

(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 § 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 § 36.154(b).

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

§ 36.155 

* * * * *

(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 § 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 § 36.156 by adding paragraph (c) to read as follows: 

§ 36.156 

* * * * *

(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 § 36.156 (b), during the twelve-month period ending December 31, 2000.

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

§ 36.157

* * * * *

(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 § 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 § 36.191 by adding paragraph (d) to read as follows: 

§ 36.191 

* * * * *

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

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

§ 36.212 

* * * * *

(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 § 36.214 by adding a sentence at the end of paragraph (a) to read as follows: 

§ 36.214

                            (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-                                  ( print page 33207)                                month period ending December 31, 2000.                        

* * * * *

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

§ 36.372 

(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 § 36.372(a), during the twelve-month period ending December 31, 2000.

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

§ 36.374 

* * * * *

(b) Effective July 1, 2001, through June 30, 2006, study areas subject to price cap regulation, pursuant to § 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 § 36.374(c), during the twelve-month period ending December 31, 2000.

19. Amend § 36.375 by adding paragraphs (b)(5) and (b)(6) to read as follows:

§ 36.375

* * * * *

(b) * * *

(5) Effective July 1, 2001, through June 30, 2006, study areas subject to price cap regulation, pursuant to § 61.41, shall assign the balance of Account 6620-Services to the classifications, as specified in §§ 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 §§ 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 § 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:

§ 36.377

(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 § 61.41 of this chapter, shall assign the balance of Account 6620-Services to the subcategories, as specified in § 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 § 61.41 of this chapter, shall assign the balance of Account 6620-Services to the categories/subcategories, as specified in §§ 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 § 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 §§ 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 § 61.41 of this chapter, shall assign the balance of Account 6620-Services to the subcategories, as specified in §§ 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 § 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 §§ 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 § 61.41 of this chapter, shall assign the balance of Account 6620-Services to the subcategories, as specified in §§ 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 § 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 §§ 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 § 61.41 of this chapter, shall assign the balance of Account 6620-Services to the subcategories, as specified in §§ 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 §§ 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 § 61.41 of this chapter, shall assign the balance                                   ( print page 33208)                                of Account 6620-Services to the subcategories, as specified in §§ 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 §§ 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 § 61.41 of this chapter, shall assign the balance of Account 6620-Services to the subcategories, as specified in § 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 §§ 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 § 61.41 of this chapter, shall assign the balance of Account 6620-Services to the subcategories, as specified in § 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 §§ 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 § 36.378 by adding paragraph (b)(1) and adding and reserving paragraph (b)(2) to read as follows:

§ 36.378

* * * * *

(b) * * *

(1) Effective July 1, 2001 through June 30, 2006, study areas subject to price cap regulation, pursuant to § 61.41 of this chapter, shall assign the balance of Account 6620-Services to the classifications, as specified in § 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 § 36.379 by adding paragraphs (b)(1) and (b)(2) to read as follows:

§ 36.379

* * * * *

(b) * * *

(1) Effective July 1, 2001 through June 30, 2006, study areas subject to price cap regulation, pursuant to § 61.41 of this chapter, shall assign the balance of Account 6620-Services to the subcategories, as specified in § 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 § 36.380 by adding paragraphs (d) and (e) to read as follows:

§ 36.380

* * * * *

(d) Effective July 1, 2001 through June 30, 2006, study areas subject to price cap regulation, pursuant to § 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 §§ 36.380(b) or 36.380(c), for the twelve month period ending December 31, 2000.

24. Amend § 36.381 by adding paragraphs (c) and (d) to read as follows:

§ 36.381 

* * * * *

(c) Effective July 1, 2001, through June 30, 2006, study areas subject to price cap regulation, pursuant to § 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 § 36.381(b), for the twelve-month period ending December 31, 2000.

1. Revise § 36.382 to read as follows:

§ 36.382

(a) Effective July 1, 2001, through June 30, 2006, study areas subject to price cap regulation, pursuant to § 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