Source: https://www.federalregister.gov/documents/2004/03/17/04-5015/jurisdictional-separations-reform-and-referral-to-the-federal-state-joint-board
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Federal Register :: Jurisdictional Separations Reform and Referral to the Federal-State Joint Board
Jurisdictional Separations Reform and Referral to the Federal-State Joint Board
A Rule by the Federal Communications Commission on 03/17/2004
69 FR 12548
12548-12553 (6 pages)
FCC 04-11
04-5015
Plant Specific Expenses
Plant Non-Specific Expenses
https://www.federalregister.gov/d/04-5015 https://www.federalregister.gov/d/04-5015
Start Preamble Start Printed Page 12548
In this document, the Commission adopts modifications to the Commission's Part 36 Jurisdictional Separations Rules to conform those rules to revisions to the Part 32 Uniform System of Accounts adopted in the Commission's 2000 Biennial Regulatory Review. The Part 36 modifications the Commission adopts will not have any effect on the assignment of costs and revenues to the state and interstate, but rather are merely ministerial in nature.
Gary Seigel, Wireline Competition Bureau, Telecommunications Access Policy Division, (202) 418-7400.
This is a summary of the Commission's Report and Order in CC Docket No. 80-286; FCC 04-11, released on January 16, 2004. 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.
1. In this Report and Order, we adopt modifications to the Commission's Part 36 Jurisdictional Separations Rules to conform those rules to revisions to the Part 32 Uniform System of Accounts adopted in the Commission's 2000 Biennial Regulatory Review. The part 36 modifications we adopt will not have any effect on the assignment of costs and revenues to the state and interstate, but rather are merely ministerial in nature.
2. We conclude that it is necessary to adopt modifications to the Commission's part 36 rules consistent with the changes made to the part 32 rules in the Phase 2 Order, 67 FR 5669, February 6, 2002. With regard to the elimination of certain part 32 accounts, we find that modifying the part 36 rules to reflect the elimination of such accounts ensures that the part 32 references contained in part 36 are accurate. Because the costs recorded in the newly created subaccounts continue to be jurisdictionally separated in the part 36 rules at the higher account level, we find that modifications to the part 36 rules are not necessary in connection with these new subaccounts. We therefore modify the Commission's part 36 rules as set forth in Appendix C to reflect the revised part 32 accounting rules as adopted in the Phase 2 Order.
3. We disagree with those commenters who claim that the modifications to part 36 we adopt in this order should have been referred to the Joint Board. As an initial matter, we note that, although the Commission specifically invited comment from the Joint Board in order to identify any substantive impact on part 36, the Joint Board did not file comments. Moreover, contrary to the claims by NARUC and the state of Oregon, the part 32 changes do not require either reinitialization of the frozen category percentages or the identification of new jurisdictional allocators for the newly created subaccounts. The changes we adopt here are purely ministerial in nature and will not have any effect on jurisdictional cost allocations. For example, § 36.352 of the Commission's rules provides that Class A summary Account 6510 (Other Property Plant and Equipment Expenses) shall be separated based on the separation of Account 2001 (Telecommunications Plant in Service). Because the Phase 2 Order eliminated Class A summary Account 6510, § 36.352 is revised to direct Class A carriers to perform jurisdictional separations for detailed Accounts 6511 and 6512, rather than the summary Account 6510. Account 6510 was a summary of Accounts 6511 and 6512. Accounts 6511 and 6512, however, will continue to be separated based on Account 2001 (Telecommunications Plant in Service) as was Account 6510. The basis for conducting separations and the allocation between the jurisdictions remains the same. Similarly, as noted with regard to subaccounts, no part 36 changes are needed because the existing part 36 rules separate costs at the account level, not the subaccount level. We therefore conclude that referral to the Federal-State Joint Board on Separations was not necessary in this instance.
4. Finally, we take this opportunity to correct certain typographical errors in part 36 of our rules. We change the reference at the end of § 36.126(e)(2) from § 36.156 to § 36.155 and remove two references to “@@Q02” from § 36.321(a). We also modify §§ 36.631(a), (c) and (d) to correct typographical errors in the dates that these provisions became applicable.
5. The decision herein has been analyzed with respect to the Paperwork Reduction Act of 1995, Public Law 104-13. This order merely modifies account references in part 36 to conform to the part 32 revisions adopted in the Phase 2 Order to ensure that all account references in part 36 are consistent with the Uniform System of Accounts. We find, therefore, that the modifications to part 36 adopted in this order do not impose new or modified recordkeeping requirements or burdens on the public.
7. In this Order, we adopt modifications to Part 36 Jurisdictional Separations Rules to conform those rules to the revisions to the Part 32 Uniform System of Accounts adopted in our 2000 Biennial Regulatory Review. As indicated in our Initial Regulatory Analysis, our modifications to part 36 are due to the consolidation of several accounts that are also used in part 36. The alternative to not making these modifications would be that part 36 would reference part 32 accounts that are eliminated effective January 1, 2003. The modifications of part 36 to conform to the revised part 32 are necessary to eliminate the potential for confusion that may occur as a result of inconsistent account references. The conforming amendments to the Part 36 jurisdictional rules are a result of the consolidation of Part 32 accounts.
8. The modifications we adopt are ministerial in nature and merely Start Printed Page 12549conform Part 36 account references to the Part 32 Uniform System of Accounts. These ministerial modifications do not have a significant economic effect on any entities and only clarify existing Commission rules. Therefore, we certify that the requirements of this Report and Order will not have a significant economic impact on a substantial number of small entities.
9. The Commission will send a copy of this Report and Order, including a copy of this Final Regulatory Flexibility Certification, in a report to Congress pursuant to the Congressional Review Act. In addition, the Report and Order and this final certification will be sent to the Chief Counsel for Advocacy of the SBA and will be published in the Federal Register.
10. Pursuant to sections 1, 4, 201-205, 215, and 218-220 of the Communications Act of 1934, as amended, 47 CFR part 36, is amended as described.
11. Pursuant to 5 U.S.C. 553(d) and § 1.427(a) of the Commission's rules, Part 36 of the Commission's rules, is amended as set forth effective April 16, 2004. We will, however, permit carriers to implement Part 36 changes as of January 1, 2003.
12. The Commission's Consumer and Governmental Affairs Bureau, Reference Information Center, shall send a copy of this Report and Order, including the Final Regulatory Flexibility Certification, to the Chief Counsel for Advocacy of the Small Business Administration.
For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR part 36 as follows:
Authority: 47 U.S.C. Secs. 151, 154(i), and (j), 205, 221(c), 254, 403 and 410.
2. Amend § 36.112 by revising paragraph (a) to read as follows:
§ 36.112
Apportionment procedures.
(a) The costs of the general support facilities of Class A Companies (which are defined in part 32 of the Commission's Rules) are apportioned among the operations on the basis of the separation of the costs of the combined Big Three Expenses which include the following accounts:
Central Office Switching Expenses—Accounts 6211 and 6212
Operators Systems Expenses—Account 6220
Central Office Transmission Expenses—Accounts 6231 and 6232
Information Origination/Termination Expenses—Accounts 6311, 6341, 6351, and 6362
Cable and Wire Facilities Expenses— Accounts 6411, 6421, 6422, 6423, 6424, 6426, 6431, and 6441
Network Operations Expenses—Accounts 6531, 6532, 6533, 6534, and 6535
Marketing—Account 6611 and 6613
Services—Account 6620
3. Amend § 36.121 by revising paragraph (a) to read as follows:
§ 36.121
(a) The costs of central office equipment are carried in the following accounts:
Central Office Switching Account 2210.
Non-digital Switching Account 2211.
Digital Electronic Switching Account 2212.
Operator Systems Account 2220.
Central Office—Transmission Account 2230.
Radio Systems Account 2231.
Circuit Equipment Account 2232.
4. Amend § 36.124 by revising paragraphs (a) introductory text and (c) to read as follows:
§ 36.124
Tandem switching equipment—Category 2.
(a) Tandem switching equipment is contained in Accounts 2210, 2211, and 2212. It includes all switching equipment in a tandem central office, including any associated tandem switchboard positions and any intertoll switching equipment. Intertoll switching equipment includes switching equipment used for the interconnection of message toll telephone circuits with each other or with local or tandem telephone central office trunks, intertoll dial selector equipment, or intertoll trunk equipment in No. 5 type electronic offices. Equipment, including switchboards used for recording of calling telephone numbers and other billing information in connection with customer dialed charge traffic is included with Local Switching Equipment—Category 3.
(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, and 2212 to 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.
5. Amend § 36.125 by revising paragraphs (a) introductory text and (h) to read as follows:
§ 36.125
Local switching equipment—Category 3.
(a) Local switching equipment is included in accounts 2210, 2211, and 2212. It comprises all central office switching equipment not assigned other categories. Examples of local switching equipment are basic switching train, toll connecting trunk equipment, interlocal trunks, tandem trunks, terminating senders used for toll completion, toll completing train, call reverting equipment, weather and time of day service equipment, and switching Start Printed Page 12550equipment at electronic analog or digital remote line locations. Equipment used for the identification, recording and timing of customer dialed charge traffic, or switched private line traffic (e.g. transmitters, recorders, call identity indexers, perforators, ticketers, detectors, mastertimes) switchboards used solely for recording of calling telephone numbers in connection with customer dialed charge traffic, or switched private line traffic (or both) is included in this local switching category. Equipment provided and used primarily for operator dialed toll or customer dialed charge traffic except such equipment included in Category 2 Tandem Switching Equipment is also included in this local switching category. This includes such items as directors translators, sender registers, out trunk selectors and facilities for toll intercepting and digit absorption. Special services switching equipment which primarily performs the switching function for special services (e.g. switching equipment, TWX concentrators and switchboards) is also included in this local switching category.
(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, and 2212 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.
6. Amend § 36.126 by revising paragraph (e)(2) to read as follows:
(2) Interexchange Circuit Equipment Used for Wideband Service—Category 4.22—This category includes the circuit equipment portion of interexchange channels used for wideband services. The cost of interexchange circuit equipment in this category is determined separately for each wideband channel and is segregated between message and private line services on the basis of the use of the channels provided. The respective costs are allocated to the appropriate operation in the same manner as the related interexchange cable and wire facilities described in § 36.155.
7. In § 36.172, revise the section heading to read as follows:
§ 36.172
Other noncurrent assets—Account 1410.
8. Revise § 36.201 to read as follows:
§ 36.201
Section arrangement.
(a) This subpart is arranged in sections as follows:
General 36.202
Operating Revenues 36.211
Basic local services revenue—Account 5000 (Class B telephone companies); Basic area revenue—Account 5001 (Class A telephone companies) 36.212
Network Access Revenues—Accounts 5081 thru 5083 36.213
Long Distance Message Revenue—Account 5100 36.214
Miscellaneous Revenue—Account 5200 36.215
Uncollectible Revenue—Account 5300 36.216
Certain Income Accounts:
Other Operating Income and Expenses—Account 7100 36.221
Nonoperating Income and Expenses—Account 7300 36.222
Interest and Related Items—Account 7500 36.223
Extraordinary Items—Account 7600 36.224
Income Effect of Jurisdictional Ratemaking Differences—Account 7910 36.225
9. Amend § 36.202 by revising paragraph (b) to read as follows:
§ 36.202
(b) Except for the Network Access Revenues, subsidiary record categories are maintained for all revenue accounts in accordance with the requirements of part 32. These subsidiary records identify services for the appropriate jurisdiction and will be used in conjunction with apportionment procedures stated in this manual.
10. Revise § 36.211 to read as follows:
§ 36.211
(a) Operating revenues are included in the following accounts:
Basic local service revenue (Class B telephone companies) 5000
Basic Area Revenue (Class A telephone companies) 5001
Network Access Revenues:
End User Revenue 5081
Switched Access Revenue 5082
Special Access Revenue 5083
Long Distance Message Revenue 5100
Miscellaneous Revenue 5200
Uncollectible Revenue 5300
11. In § 36.212, revise the section heading to read as follows:
§ 36.212
Basic local services revenue—Account 5000 (Class B telephone companies); Basic area revenue—Account 5001 (Class A telephone companies).
12. Amend § 36.213 by revising paragraphs (a), (b), and (c) and by removing paragraphs (d) and (e) to read as follows:
Start Printed Page 12551
§ 36.213
Network access revenues.
(a) End User Revenue—Account 5081. Revenues in this account are directly assigned on the basis of analysis and studies.
(b) Switched Access Revenue—Account 5082. Revenues in this account are directly assigned on the basis of analysis and studies.
(c) Special Access Revenue—Account 5083. Revenues in this account are directly assigned on the basis of analysis and studies.
13. Revise § 36.216 to read as follows:
§ 36.216
Uncollectible revenue—Account 5300.
The amounts in this account are apportioned among the operations on the basis of analysis during a representative period of the portion of Account 1171, Allowance for doubtful accounts, related to telecommunications billing.
14. Revise § 36.301 to read as follows:
§ 36.301
General 36.301 and 36.302.
Plant Specific Operations Expenses:
General 36.310.
Network Support/General Support Expenses—Accounts 6110 and 6120 (Class B Telephone Companies); Accounts 6112, 6113, 6114, 6121, 6122, 6123, and 6124 (Class A Telephone Companies) 36.311.
Central Office Expenses—Accounts 6210, 6220, 6230 (Class B Telephone Companies); Accounts 6211, 6212, 6220, 6231, and 6232 (Class A Telephone Companies) 36.321
Information Origination/Termination Expenses—Account 6310 (Class B Telephone Companies); Accounts 6311, 6341, 6351, and 6362 (Class A Telephone Companies) 36.331.
Cable and Wire Facilities Expenses—Account 6410 (Class B Telephone Companies); Accounts 6411, 6421, 6422, 6423, 6424, 6426, 6431, and 6441 (Class A Telephone Companies) 36.341.
Plant Nonspecific Operations Expenses:
General 36.351.
Other Property Plant and Equipment Expenses—Account 6510 (Class B Telephone Companies); Accounts 6511 and 6512 (Class A Telephone Companies) 36.352.
Network Operations Expenses—Account 6530 (Class B Telephone Companies); Accounts 6531, 6532, 6533, 6534, and 6535 (Class A Telephone Companies) 36.353.
Access Expenses—Account 6540 36.354.
Depreciation and Amortization Expenses—Account 6560 36.361.
Customer Operations Expenses:
General 36.371.
Marketing—Account 6610 (Class B Telephone Companies); Accounts 6611 and 6613 (Class A Telephone Companies) 36.372.
Services—Account 6620 36.373.
Telephone Operator Services 36.374.
Published Directory Listing 36.375.
All Other 36.376.
Category 1—Local Bus. Office Expense 36.377.
Category 2—Customer Services (Revenue Accounting) 36.378.
Message Processing Expense 36.379.
Other Billing and Collecting Expense 36.380.
Carrier Access Charge Billing and Collecting Expense 36.381.
Category 3—All other Customer Service Expense 36.382.
Corporate Operations Expenses:
General 36.391.
General and Administrative Expenses—Account 6720 36.392.
Operating Taxes—Account 7200 (Class B Telephone Companies); Accounts 7210, 7220, 7230, 7240, and 7250 (Class A Telephone Companies) 36.411 and 36.412.
Equal Access Expenses 36.421.
15. Amend § 36.310 by revising paragraph (a) to read as follows:
§ 36.310
(a) Plant specific operations expenses include the following accounts:
Network Support Expenses Account 6110 (Class B Telephone Companies); Accounts 6112, 6113, and 6114 (Class A Telephone Companies)
General Support Expenses Account 6120 (Class B Telephone Companies); Accounts 6121, 6122, 6123, and 6124 (Class A Telephone Companies).
Central Office Switching Expenses Account 6210 (Class B Telephone Companies); Accounts 6211 and 6212 (Class A Telephone Companies)
Operator System Expenses Account 6220
Central Office Transmission Expenses Account 6230 (Class B Telephone Companies); Accounts 6231 and 6232 (Class A Telephone Companies).
Information Origination/Termination Expenses Account 6310 (Class B Telephone Companies); Accounts 6311, 6341, 6351, and 6362 (Class A Telephone Companies).
Cable and Wire Facilities Expenses Account 6410 (Class B Telephone Companies); Accounts 6411, 6421, 6422, 6423, 6424, 6426, 6431, and 6441 (Class A Telephone Companies).
Start Printed Page 12552
16. In § 36.311, revise the section heading to read as follows:
§ 36.311
Network Support/General Support Expenses—Accounts 6110 and 6120 (Class B Telephone Companies); Accounts 6112, 6113, 6114, 6121, 6122, 6123, and 6124 (Class A Telephone Companies).
17. Amend § 36.321 by revising the section heading and paragraph (a) to read as follows:
§ 36.321
Central office expenses—Accounts 6210, 6220, and 6230 (Class B telephone companies); Accounts 6211, 6212, 6220, 6231, and 6232 (Class A telephone companies).
(a) The expenses related to central office equipment are summarized in the following accounts:
Central Office Switching Expense Account 6210 (Class B telephone companies); Accounts 6211 and 6212 (Class A telephone companies).
Operator Systems Expense Account 6220.
Central Office Transmission Expense Account 6230 (Class B telephone companies); Accounts 6231 and 6232 (Class A telephone companies).
18. In § 36.331, revise the section heading to read as follows:
§ 36.331
Information origination/termination expenses—Account 6310 (Class B telephone companies); Accounts 6311, 6341, 6351, and 6362 (Class A telephone companies).
19. In § 36.341, revise the section heading to read as follows:
§ 36.341
Cable and wire facilities expenses—Account 6410 (Class B telephone companies); Accounts 6411, 6421, 6422, 6423, 6424, 6426, 6431, and 6441 (Class A telephone companies).
20. Revise § 36.351 to read as follows:
§ 36.351
(a) Plant nonspecific operations expenses include the following accounts:
Other Property Plant and Equipment Expenses Account 6510 (Class B telephone companies); Accounts 6511 and 6512 (Class A telephone companies).
Network Operations Expenses Account 6530 (Class B telephone companies); Accounts 6531, 6532, 6533, 6534, and 6535 (Class A telephone companies).
Access Expenses Account 6540.
Depreciation and Amortization Expenses Account 6560.
21. In § 36.352, revise the section heading to read as follows:
§ 36.352
Other property plant and equipment expenses—Account 6510 (Class B telephone companies); Accounts 6511 and 6512 (Class A telephone companies).
22. In § 36.353, revise the section heading to read as follows:
§ 36.353
Network operations expenses—Account 6530 (Class B telephone companies); Accounts 6531, 6532, 6533, 6534, and 6535 (Class A telephone companies).
23. Revise § 36.371 to read as follows:
§ 36.371
Customer Operations Expenses are included in the following accounts:
Marketing Account 6610 (Class B telephone companies); Accounts 6611 and 6613 (Class A telephone companies).
Services Account 6620.
24. In § 36.372, revise the section heading to read as follows:
§ 36.372
Marketing—Account 6610 (Class B telephone companies); Accounts 6611 and 6613 (Class A telephone companies).
25. Revise § 36.391 to read as follows:
§ 36.391
Corporate Operations Expenses are included in the following account:
General and Administrative Account 6720.
26. Amend § 36.392 by revising the section heading and paragraph (c) to read as follows:
§ 36.392
General and administrative—Account 6720.
(c) The expenses in this account are apportioned among the operations on the basis of the separation of the cost of the combined Big Three Expenses which include the following accounts:
Central Office Switching Expenses—Account 6210 (Class B Telephone Companies); Accounts 6211 and 6212 (Class A Telephone Companies)
Central Office Transmission Expenses—Account 6230 (Class B Telephone Companies); Accounts 6231 and 6232 (Class A Telephone Companies)
Information Origination/Termination Expenses—Account 6310 (Class B Telephone Companies); Accounts 6311, 6341, 6351, and 6362 (Class A Telephone Companies)
Cable and Wire Facilities Expense—Account 6410 (Class B Telephone Companies); Accounts 6411, 6421, 6422, 6423, 6424, 6426, 6431, and 6441 (Class A Telephone Companies) Start Printed Page 12553
Network Operations Expenses—Account 6530 (Class B Telephone Companies); Accounts 6531, 6532, 6533, 6534, and 6535 (Class A Telephone Companies)
Marketing—Account 6610 (Class B Telephone Companies); Accounts 6611 and 6613 (Class A Telephone Companies)
27. In § 36.411, revise the section heading to read as follows:
§ 36.411
Operating taxes—Account 7200 (Class B Telephone Companies); Accounts 7210, 7220, 7230, 7240, and 7250 (Class A Telephone Companies).
28. Revise § 36.501 to read as follows:
§ 36.501
For separations purposes, reserves and deferrals include the following accounts:
Other Jurisdictional Assets—Net Account 1500.
Accumulated Depreciation Account 3100.
Accumulated Depreciation—Property Held for Future Telecommunications Use Account 3200.
Accumulated Amortization—Capital Leases Account 3400 (Class B Telephone Companies); Account 3410 (Class A Telephone Companies).
Net Current Deferred Operating Income Taxes Account 4100.
Net Noncurrent Deferred Operating Income Taxes Account 4340.
Other Jurisdictional Liabilities and Deferred Credits—Net Account 4370.
29. In § 36.505, revise the section heading to read as follows:
§ 36.505
Accumulated amortization—Tangible—Account 3400 (Class B Telephone Companies); Accumulated amortization—Capital Leases—Account 3410 (Class A Telephone Companies).
30. Amend § 36.631 by revising paragraphs (a) introductory text, (c) introductory text, and (d) introductory text to read as follows:
§ 36.631
(a) Until December 31, 1987, for study areas reporting 50,000 or fewer working loops pursuant to § 36.611(h), the expense adjustment (additional interstate expense allocation) is equal to the sum of the following:
(c) Beginning January 1, 1988, for study areas reporting 200,000 or fewer working loops pursuant to § 36.611(h), the expense adjustment (additional interstate expense allocation) is equal to the sum of paragraphs (c)(1) through (2) of this section. After January 1, 2000, the expense adjustment (additional interstate expense allocation) for non-rural telephone companies serving study areas reporting 200,000 or fewer working loops pursuant to § 36.611(h) shall be calculated pursuant to § 54.309 of this chapter or § 54.311 of this chapter (which relies on this part), whichever is applicable.
(d) Beginning January 1, 1988, for study areas reporting more than 200,000 working loops pursuant to § 36.611(h), the expense adjustment (additional interstate expense allocation) is equal to the sum of paragraphs (d)(1) through (4) of this section. After January 1, 2000, the expense adjustment (additional interstate expense allocation) shall be calculated pursuant to § 54.309 of this chapter or § 54.311 of this chapter (which relies on this part), whichever is applicable.
[FR Doc. 04-5015 Filed 3-16-04; 8:45 am]