§ 36.125   Local switching equipment—Category 3.

   (a) Local switching equipment is included in account 2210. 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 § 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 December 31, 2024, study areas
   subject to price cap regulation, pursuant to § 61.41 of this chapter,
   shall assign the average balance of Account 2210 to Category 3, Local
   Switching Equipment, based on the relative percentage assignment of the
   average balance of Account 2210 (or, if Accounts 2211, 2212, and 2215
   were required to be maintained at the applicable time, the average
   balances of Accounts 2211, 2212, and 2215) to Category 3, during the
   twelve-month period ending December 31, 2000.

   (i) Effective July 1, 2001, through December 31, 2024, 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 the number of a study area's access lines increases such that,
   under paragraph (f) of this section, the weighted interstate DEM factor
   for 1997 or any successive year would be reduced, that lowered weighted
   interstate DEM factor shall be applied to the study area's 1996
   unweighted interstate DEM factor to derive a new local switching
   support factor. If the number of a study area's access lines decreases
   or has decreased such that, under paragraph (f) of this section, the
   weighted interstate DEM factor for 2010 or any successive year would be
   raised, that higher weighted interstate DEM factor shall be applied to
   the study area's 1996 unweighted interstate DEM factor to derive a new
   local switching support factor.

   [ 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;  75 FR 17874 , Apr. 8, 2010;  75 FR 30301 , June 1, 2010;  76 FR 30841 , May 27, 2011;  79 FR 36236 , June 26, 2014;  83 FR 63585 , Dec. 11,
   2018]

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