Sec.  36.603   Calculation of rural incumbent local exchange carrier portion of
nationwide loop cost expense adjustment.

   (a) Effective July 1, 2001, the rural incumbent local exchange carrier
   portion  of the annual nationwide loop cost expense adjustment will be
   recomputed  by the fund administrator as if the indexed cap calculated
   pursuant to  Sec. 36.601(c) and the corporate operations expense limitation
   calculated pursuant to  Sec. 36.621 had not been in effect for the calendar year
   2000. For the period July 1, 2001, to December 31, 2001, the annualized
   amount  of  the  rural incumbent local exchange carrier portion of the
   nationwide loop cost expense adjustment calculated pursuant to this subpart
   F shall not exceed the non-capped amount of the total rural incumbent local
   exchange carrier loop cost expense adjustment for the calendar year 2000,
   multiplied times one plus the Rural Growth Factor calculated pursuant to
    Sec. 36.604. For the period January 1, 2002, to December 31, 2002, the annual
   amount  of  the  rural incumbent local exchange carrier portion of the
   nationwide loop cost expense adjustment calculated pursuant to this subpart
   F shall not exceed the non-capped amount of the total rural incumbent local
   exchange  carrier loop cost expense adjustment for calendar year 2000,
   multiplied times one plus the Rural Growth Factor for 2001, which then shall
   be multiplied times one plus the Rural Growth Factor for 2002. Beginning
   January 1, 2003, the annual amount of the rural incumbent local exchange
   carrier portion of the nationwide loop cost expense adjustment calculated
   pursuant to this subpart F shall not exceed the amount of the total rural
   incumbent  local exchange carrier loop cost expense adjustment for the
   immediately preceding calendar year, multiplied times one plus the Rural
   Growth Factor calculated pursuant to  Sec. 36.604.

   (b)  The  annual rural incumbent local exchange carrier portion of the
   nationwide loop cost expense adjustment shall be reduced to reflect the
   transfer of rural incumbent local exchange carrier access lines that are
   eligible for expense adjustments pursuant to  Sec. 36.631. The reduction shall
   equal  the  amount  of the  Sec. 36.631 expense adjustment available to the
   transferred access lines at the time of the transfer and shall be effective
   in the next calendar quarter after the access lines are transferred.

   (c)  Safety  net  additive support calculated pursuant to  Sec. 36.605, and
   transferred high-cost support and safety valve support calculated pursuant
   to  Sec. 54.305 of this chapter shall not be included in the rural incumbent
   local exchange carrier portion of the annual nationwide loop cost expense
   adjustment.

   [ 66 FR 30085 , June 5, 2001, as amended at  67 FR 44083 , July 1, 2002]