Sec. 36.125  Local switching equipment--Category 3.

    (a) Local switching equipment is included in accounts 2210, 2211, 
2212 and 2215. 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

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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 facilites 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 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, 1993 and ending December 31, 1997, 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 
product of the interstate DEM factor specified in paragraph (a)(5) of 
this section multiplied by a weighting factor, as determined by the 
table below. 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 weighted interstated DEM factor and the 1996 interstate 
DEM factor. The Category 3 investment that is not assigned to the 
interstate jurisdiction pursuant to this paragraph is assigned to the 
state jurisdiction.

                                                                        
------------------------------------------------------------------------
                                                               Weighting
         No. of access lines in service in study area            factor 
------------------------------------------------------------------------
0-10,000.....................................................        3.0
10,001-20,000................................................        2.5
20,001-50,000................................................        2.0
50,001-or above..............................................        1.0

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    (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.
[ 52 FR 17229 , May 6, 1987, as amended at  53 FR 33011 , 33012, Aug. 29, 
1988;  62 FR 32946 , June 17, 1997]