Sec. 36.154  Exchange Line Cable and Wire Facilities (C&WF)--Category 
          1--apportionment procedures.

    (a) Exchange Line C&WF--Category 1. The first step in apportioning 
the cost of exchange line cable and wire facilities among the operations 
is the determination of an average cost per working loop. This average 
cost per working loop is determined by dividing the total cost of 
exchange line cable and wire Category 1 in the study area by the sum of 
the working loops described in subcategories listed below. The 
subcategories are:
    Subcategory 1.1--State private lines and state WATS lines. This 
subcategory shall include all private lines and WATS lines carring 
exclusively state traffic as well as private lines and WATS lines 
carrying exclusively interstate traffic as well as private lines and 
WATS lines carrying both state and interstate traffic if the interstate 
traffic on the line involved constitutes ten percent or less of the 
total traffic on the line.
    Subcategory 1.2--Interstate private lines and interstate WATS lines. 
This subcategory shall include all private lines and WATS lines that 
carry exclusively interstate traffic as well as private lines and WATS 
lines carrying both state and interstate traffic if the interstate 
traffic on the line involved constitutes more than ten percent of the 
total traffic on the line.
    Subcategory 1.3--Subscriber or common lines that are jointly used 
for local exchange service and exchange access for state and interstate 
interexchange services.
    (b) The costs assigned to subcategories 1.1 and 1.2 shall be 
directly assigned to the appropriate jurisdication.
    (c) Except as provided in Sec. 36.154 (d) through (f), effective 
January 1, 1986, 25

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percent of the costs assigned to subcategory 1.3 shall be allocated to 
the interstate jurisdiction.
    (d) Except as provided in Sec. 36.154(f), the interstate allocation 
of subcategory 1.3 costs for the years 1988, 1989, 1990, 1991 and 1992 
will be as follows:
    (1) 1988--The Sec. 36.154(e) allocation factor multiplied by .625 
plus .09375.
    (2) 1989--The Sec. 36.154(e) allocation factor multiplied by .5 plus 
.125.
    (3) 1990--The Sec. 36.154(e) allocation factor multiplied by .375 
plus .15625.
    (4) 1991--The Sec. 36.154(e) allocation factor multiplied by .25 
plus .1875.
    (5) 1992--The Sec. 36.154(e) allocation factor multiplied by .125 
plus .21875.
    (e) For purposes of the transitional allocations described in 
Sec. 36.154 (d) and (f) an allocation factor known as the subscriber 
plant factor or SPF that is the sum of the following shall be computed:
    (1) Annual average interstate subscriber line use (SLU), for the 
calendar year 1981.\2\ representing the interstate use of the subscriber 
plant as measured by the ratio of interstate holding time minutes of use 
to total holding time minutes of use applicable to traffic originating 
and terminating in the study area, multiplied by .85, the nationwide 
ratio of subscriber plant costs assignable to the exchange operation per 
minute of exchange use to total subscriber plant cost per total minute 
of use of subscriber plant, plus
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    \2\ In the case of a company that cannot calculate the average 
interstate subscriber line usage (SLU) ratio for the calendar year 1981, 
the average interstate SLU for the customarily used 12-month study 
period ending in 1981 may be utilized. In the case of a company for 
which no such 1981 annual average SLU exists, the annual average 
interstate SLU for the initial study period will be utilized.
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    (2) Twice the annual average interstate subscriber line use ratio 
for the study area for the calendar year 1981, multiplied by the annual 
average composite station rate ratio used for the calendar year 1981 
(ratio of the nationwide, industry-wide average interstate initial 3-
minute station charge at the study area average interstate length of 
haul to the nationwide, industry-wide average total toll initial 3-
minute station charge at the nationwide average length of haul for all 
toll traffic for the total telephone industry).
    (f) Limit on Change in Interstate Allocation. (1) No study area's 
percentage interstate allocation for Subcategory 1.3 Exchange Line C&WF 
and COE, Exchange Line Circuit Equipment Excluding Wideband--Category 
4.13 investment as well as associated maintenance and depreciation shall 
decrease by a total of more than five percentage points from one 
calendar year to the next as a result of the combined operations of 
Secs. 36.154(d) and 36.641 (a) and (b).
    (2) The determination of whether the decrease in the interstate 
allocation for a given study area resulting from the operation of 
Secs. 36.154(d) and 36.641(a) through 36.641(b) exceeds five percentage 
points shall be made by calculating a percentage interstate allocation 
for both of the years involved. This shall be done by dividing the 
interstate allocation of subcategory 1.3 Exchange Line C&WF and COE 
exchange Line circuit Equipment Excluding Wideband Category 4.13 and 
associated expenses for each year as calculated pursuant to 
Sec. 36.154(f)(4) by the total unseparated investment in Exchange Line 
C&WF subcategory 1.3 and COE Category 4.13 and associated expenses for 
the corresponding year as calculated pursuant to Sec. 36.154(f)(5).
    (3) If the resulting percentage for the more recent of the two years 
is more than five percentage points less than the percentage for the 
earlier year, the decrease in the interstate allocations shall be 
reduced pro rata for plant investment, maintenance and depreciation so 
that the difference between the two percentages does not equal more than 
five percentage points.
    (4) The sum of the following:
    (i) The net interstate allocation of Exchange Line C&WF--subcategory 
1.3 investment calculated pursuant to Sec. 36.154(d) and (e) multiplied 
by the authorized interstate rate of return.
    (ii) The net interstate allocation of COE Exchange Line Circuit 
Equipment--Category 4.13 investment calculated purusant to Sec. 36.154 
(d) and (e) multiplied by the authorized interstate rate of return.

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    (iii) The interstate allocation of maintenance and depreciation 
attributable to Exchange Line C&WF subcategory 1.3 customer premises 
wire and COE Exhange Line Circuit Equipment--Category 4.13 calculated 
pursuant to Sec. 36.154 (d) and (e).
    (iv) The amount of the additional interstate expense allocation 
calculated pursuant to Sec. 36.641.
    (5) The sum of the following:
    (i) The net unseparated Exchange Line C&WF subcategory 1.3 
investment multiplied by the authorized interstate rate of return.
    (ii) The net unseparated COE Exchange Line Circuit--Category 4.13 
investment multiplied by the authorized interstate rate of return.
    (iii) The unseparated maintenance and depreciation attributable to 
Exchange Line C&WF subcategory 1.3 investment, customer premises wiring 
investment and COE Exhange Line Circuit Equipment--Category 4.13 
investment.
[ 52 FR 17229 , May 6, 1987, as amended at  53 FR 33012 , Aug. 29, 1988;  54 FR 31033 , July 26, 1989]