Sec. 53.203  Structural and transactional requirements.

    (a) Operational independence.
    (1) A section 272 affiliate and the BOC of which it is an affiliate 
shall not jointly own transmission and switching facilities or the land 
and buildings where those facilities are located.
    (2) A section 272 affiliate shall not perform any operating, 
installation, or maintenance functions associated with facilities owned 
by the BOC of which it is an affiliate.
    (3) A BOC or BOC affiliate, other than the section 272 affiliate 
itself, shall not perform any operating, installation, or maintenance 
functions associated with facilities that the BOC's section 272 
affiliate owns or leases from a provider other than the BOC.
    (b) Separate books, records, and accounts. A section 272 affiliate 
shall maintain books, records, and accounts, which shall be separate 
from the books, records, and accounts maintained by the BOC of which it 
is an affiliate.
    (c) Separate officers, directors, and employees. A section 272 
affiliate shall have separate officers, directors, and employees from 
the BOC of which it is an affiliate.
    (d) Credit arrangements. A section 272 affiliate shall not obtain 
credit under any arrangement that would permit a creditor, upon default, 
to have recourse to the assets of the BOC of which it is an affiliate.
    (e) Arm's-length transactions. A section 272 affiliate shall conduct 
all transactions with the BOC of which it is an affiliate on an arm's 
length basis, pursuant to the accounting rules described in Sec. 32.27 
of this chapter, with any such transactions reduced to writing and 
available for public inspection.

    Effective Date Note: At  62 FR 2967 , Jan. 21, 1997, Sec. 53.203 was 
added. Paragraphs (b) and (e) of this section contain information 
collection requirements and will not become effective until approval is 
given by the office of management and Budget.