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

   (a) Effective July 1, 2001, through December 31, 2024, 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 December 31, 2024, 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 December 31, 2024, local exchange
   carriers subject to price cap regulation, pursuant to § 61.41 of this
   chapter, shall assign costs from the accounts under part 32 of this
   chapter (part 32 account(s)) 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 December 31, 2024, 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 this paragraph (b). Such election must be made prior to
   July 1, 2001. Any local exchange carrier that is subject to § 69.3(e) of
   this chapter and that elected to be subject to this paragraph (b) may
   withdraw from that election by notifying the Commission by May 1, 2019,
   of its intent to withdraw from that election, and that withdrawal will
   be effective as of July 1, 2019. Any local exchange carrier that
   participates in an Association tariff, pursuant to § § 69.601 through
   69.610 of this chapter, and that elected to be subject to this
   paragraph (b) may withdraw from that election by notifying the
   Association by March 1, 2019, of such intent. Subject to these two
   exceptions, local exchange carriers that previously elected to become
   subject to this paragraph (b) shall not be eligible to withdraw from
   such regulation for the duration of the freeze.

   (c) Effective July 1, 2001, through December 31, 2024, 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
   paragraphs (a) and (b) of this section.

   (d) Effective July 1, 2001, through December 31, 2024, 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 paragraphs (a) and (b) of this section. 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 December
   31, 2024, 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 December 31, 2024, such companies shall utilize the separations
   allocation factors and account categorization subject to the
   requirements of paragraphs (a) and (b) of this section based on the
   category relationships and allocation factors for the twelve months
   subsequent to the conversion to cost company status.

   [ 66 FR 33204 , June 21, 2001, as amended at  79 FR 36235 , June 26, 2014;
    84 FR 4360 , Feb. 15, 2019]

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