Sec. 36.377  Category 1-- Local business office expense.

    (a) The expense in this category for the area under study is first 
segregated on the basis of an analysis of job functions into the 
following subcategories: End user service order processing; end user 
payment and collection; end user billing inquiry; interexchange carrier 
service order processing; interexchange carrier payment and collection; 
interexchange carrier billing inquiry; and coin collection and 
administration.
    (1) End-user service order processing includes expenses related to 
the receipt and processing of end users' orders for service and 
inquiries concerning service. This subcategory does not include any 
service order processing expenses for services provided to the 
interexchange carriers. End user service order processing expenses are 
first segregated into the following subcategories based on the relative 
number of actual contacts which are weighted, if appropriate, to reflect 
differences in the average work time per contact: Local service order 
processing; presubscription; directory advertising; State private line 
and special access; interstate private line and special access; other 
State message toll including WATS; other interstate message toll 
including WATS; and TWX.
    (i) Local service order processing expense (primarily local 
telephone service orders) is assigned to the State jurisdiction.
    (ii) Presubscription service order processing expense is assigned to 
the interstate jurisdiction.
    (iii) Directory advertising service order processing expense is 
assigned to the State jurisdiction.
    (iv) State private line and special access service order processing 
expense is assigned to the State jurisdiction.
    (v) Interstate private line and special access service order 
processing expense is assigned to the interstate jurisdiction.
    (vi) Other State message toll including WATS service order 
processing expense is assigned to the State jurisdiction.
    (vii) Other Interstate message toll including WATS service order 
processing expense is assigned to the interstate jurisdiction.
    (viii) TWX service order processing expense is allocated between the 
jurisdictions based on relative State and interstate billed TWX 
revenues.
    (2) End User payment and collection includes expenses incurred in 
relation to the payment and collection of amounts billed to end users. 
It also includes commissions paid to payment agencies (which receive 
payment on customer accounts) and collection agencies. This category 
does not include any payment or collection expenses for services 
provided to interexchange carriers. End user payment and collection 
expenses are first segregated into the following subcategories based on 
relative total state and interstate billed revenues (excluding revenues 
billed to interexchange carriers and/or revenues deposited in coin 
boxes) for services for which end user payment and collection is 
provided: State private line and special access; interstate private line 
and special access; State message toll including WATS; interstate 
message toll including WATS, and interstate subscriber line charge; 
local, including directory advertising; and TWX.
    (i) State private line and special access payment and collection 
expense is assigned to the State jurisdiction.
    (ii) Interstate private line and special access payment and 
collection expense

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is assigned to the interstate jurisdiction.
    (iii) State message toll including WATS payment and collection 
expense is assigned to the State jurisdiction.
    (iv) Interstate message toll including WATS and interstate 
subscriber line charge payment and collection expense is assigned to the 
interstate jurisdiction.
    (v) Local, including directory advertising payment and collection 
expense is assigned to the State jurisdiction.
    (vi) TWX payment and collection expense is allocated between the 
jurisdictions based on relative State and interstate billed TWX revenues 
for service for which end user payment and collection is provided.
    (3) End user billing inquiry includes expenses related to handling 
end users' inquiries concerning their bills. This category does not 
include expenses related to the inquiries of interexchange carriers 
concerning their bills. End user billing inquiry costs are first 
segregated into the following subcategories based on the relative number 
of actual contracts, weighted if appropriate, to reflect differences in 
the average work time per contact: State private line and special 
access; interstate private line and special access; State message toll 
including WATS, interstate message toll including WATS, interstate 
subscriber line charge; TWX; and other.
    (i) State private line and special access billing inquiry expense is 
directly assigned to the State jurisdiction.
    (ii) Interstate private line and special access billing inquiry 
expense is directly assigned to the interstate jurisdiction.
    (iii) State message toll including WATS billing inquiry expense is 
directly assigned to the State jurisdiction.
    (iv) Interstate message toll including WATS, and interstate 
subscriber line charge billing inquiry expense is directly assigned to 
the interstate jurisdiction.
    (v) TWX billing inquiry expense is allocated between the 
jurisdictions based on relative State and interstate billed TWX revenues 
for service for which end user billing inquiry is provided.
    (vi) Other billing inquiry expense (primarily related to local bills 
but also including directory advertising) is directly assigned to the 
State jurisdiction.
    (4) Interexchange carrier service order processing includes expenses 
associated with the receipt and processing of interexchange carrier 
orders for service and inquiries about service. Interexchange carrier 
service order processing expenses are assigned to the following 
subcategories based on the relative number of actual contacts which are 
weighted, if appropriate, to reflect differences in the average work 
time per contact: State special access and private line; interstate 
special access and private line; State switched access and message toll 
including WATS; interstate switched access and message toll including 
WATS; State billing and collection; and interstate billing and 
collection.
    (i) State special access and private line service order processing 
expense is directly assigned to the State jurisdiction.
    (ii) Interstate special access and private line service order 
processing expense is directly assigned to the interstate jurisdiction.
    (iii) State switched access and message toll including WATS service 
order processing expense is directly assigned to the State jurisdiction.
    (iv) Interstate switched access and message toll including WATS 
service order processing expense is directly assigned to the interstate 
jurisdiction.
    (v) State billing and collection service order processing expense is 
directly assigned to the state jurisdiction.
    (vi) Interstate billing and collection service order processing 
expense is directly assigned to the interstate jurisdiction.
    (5) Interexchange carrier payment and collection includes expenses 
associated with the payment and collection of interexchange carrier 
billings, including commissions paid to payment and collection agents. 
Interexchange carrier payment and collection expenses are assigned to 
the following subcategories based on relative total State and interstate 
revenues billed to the interexchange carriers: State special access and 
private line; interstate

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special access and private line; State switched access and message toll 
including WATS; interstate switched access and message toll including 
WATS; State billing and collection; and interstate billing and 
collection.
    (i) State special access and private line payment and collection 
expense is directly assigned to the Interstate jurisdiction.
    (ii) Interstate special access and private line payment and 
collection expense is directly assigned to the interstate jurisdiction.
    (iii) State switched access and message toll including WATS payment 
and collection expense is directly assigned to the State jurisdiction.
    (iv) Interstate switched access and message toll including WATS 
payment and collection expense is directly assigned to the interstate 
jurisdiction.
    (v) State billing and collection payment and collection expense is 
directly assigned to the interstate jurisdiction.
    (vi) Interstate billing and collection payment and collection 
expense is directly assigned to the State jurisdiction.
    (6) Interexchange carrier billing inquiry includes expenses related 
to the handling of interexchange carrier billing inquiries. 
Interexchange carrier billing inquiry expenses are assigned to the 
following subcategories based on the relative number of actual contacts, 
weighted if appropriate, to reflect differences in the average work time 
per contact: State special access and private line; interstate special 
access and private line; State switched access and message toll 
including WATS; interstate switched access and message toll including 
WATS; State billing and collection; and interstate billing and 
collection.
    (i) State special access and private line billing inquiry expenses 
is directly assigned to the State jurisdiction.
    (ii) Interstate special access and private line billing inquiry 
expense is directly assigned to the interstate jurisdiction.
    (iii) State switched access and message toll including WATS billing 
inquiry expense is directly assigned to the State jurisdiction.
    (iv) Interstate switched access and message toll including WATS 
billing inquiry expense is directly assigned to the interstate 
jurisdiction.
    (v) State billing and collection billing inquiry expense is directly 
assigned to the State jurisdiction.
    (vi) Interstate Billing and Collection billing inquiry expense is 
directly assigned to the interstate jurisdiction.
    (7) Coin collection and administration includes expenses for the 
collection and counting of money deposited in public or semi-public 
phones. It also includes expenses incurred for required travel, coin 
security, checking the serviceability of public or semi-public 
telephones, and related functions. These expenses are apportioned 
between the State and interstate jurisdictions in proportion to the 
relative State and interstate revenues deposited in the public and semi-
public telephones.