Sec.  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 equipment 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.

   (1) Local office, as used in  Sec. 36.125, comprises one or more local switching
   entities of the same equipment type (e.g., step-by-step, No. 5 Crossbar) in
   an  individual location. A local switching entity comprises that local
   central office equipment of the same type which has a common intermediate
   distributing frame, market group or other separately identifiable switching
   unit serving one or more prefixes (NNX codes).

   (2) A host/remote local switching complex is composed of an electronic
   analog or digital host office and all of its remote locations. A host/remote
   local  switching  complex  is treated as one local office. The current
   jurisdictional definition of an exchange will apply.

   (3) Dial equipment minutes of use (DEM) is defined as the minutes of holding
   time of the originating and terminating local switching equipment. Holding
   time is defined in the Glossary.

   (4) The interstate allocation factor is the percentage of local switching
   investment apportioned to the interstate jurisdiction.

   (5) The interstate DEM factor is the ratio of the interstate DEM to the
   total DEM. A weighted interstate DEM factor is the product of multiplying a
   weighting  factor, as defined in paragraph (f) of this section, to the
   interstate DEM factor. The state DEM factor is the ratio of the state DEM to
   the total DEM.

   (b) Beginning January 1, 1993, Category 3 investment for study areas with
   50,000 or more access lines is apportioned to the interstate jurisdiction on
   the basis of the interstate DEM factor. Category 3 investment for study
   areas  with  50,000  or  more access lines is apportioned to the state
   jurisdiction on the basis of the state DEM factor.

   (c)–(e) [Reserved]

   (f) Beginning January 1, 1998, for study areas with fewer than 50,000 access
   lines, Category 3 investment is apportioned to the interstate jurisdiction
   by the application of an interstate allocation factor that is the lesser of
   either .85 or the sum of the interstate DEM factor specified in paragraph
   (a)(5) of this section, and the difference between the 1996 interstate DEM
   factor and the 1996 interstate DEM factor multiplied by a weighting factor
   as determined by the table below. The Category 3 investment that is not
   assigned  to the interstate jurisdiction pursuant to this paragraph is
   assigned to the state jurisdiction.
   Number of access lines in service in study area Weighting
   factor
   0–10,000 3.0
   10,001–20,000 2.5
   20,001–50,000 2.0
   50,001–or above 1.0

   (g) For purposes of this section, an access line is a line that does not
   include WATS access lines, special access lines or private lines.

   (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, 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.

   (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.

   [ 52 FR 17229 , May 6, 1987, as amended at  53 FR 33011 , 33012, Aug. 29, 1988;
    62 FR 32946 , June 17, 1997;  63 FR 2124 , Jan. 13, 1998;  66 FR 33205 , June 21,
   2001;  69 FR 12549 , Mar. 17, 2004;  71 FR 65745 , Nov. 9, 2006]