Sec. 36.621  Study area total unseparated loop cost.

    (a) For the purpose of calculating the expense adjustment, the study 
area total unseparated loop cost equals the sum of the following:
    (1) Return component for net unseparated Exchange Line C&WF 
subcategory 1.3 investment and Exchange Line CO Circuit Equipment 
Category 4.13 investment. This amount is calculated by deducting the 
accumulated depreciation and noncurrent deferred Federal income taxes 
attributable to C&WF subcategory 1.3 investment and Exchange Line 
Category 4.13 circuit investment reported pursuant to Sec. 36.611(a)(2) 
from the gross investment in Exchange Line C&WF subcategory 1.3 and CO 
Category 4.13 reported pursuant to Sec. 36.611(a)(1) to obtain the net 
unseparated C&WF subcategory 1.3 investment, and CO Category 4.13 
investment. The net unseparated C&WF subcategory 1.3 investment and CO 
Category 4.13 investment is multiplied by the study area's authorized 
interstate rate of return.
    (2) Depreciation expense attributable to C&WF subcategory 1.3 
investment, and CO Category 4.13 investment as reported in 
Sec. 36.611(a)(3).
    (3) Maintenance expense attributable to C&WF subcategory 1.3 
investment, and CO Category 4.13 investment as reported in 
Sec. 36.611(a)(4).
    (4) Corporate Operations Expenses, Operating Taxes and the benefits 
and rent portions of operating expenses, as reported in 
Sec. 36.611(a)(5) attributable to investment in C&WF Category 1.3 and 
COE Category 4.13. This amount is calculated by multiplying the total 
amount of these expenses and taxes by

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the ratio of the unseparated gross exchange plant investment in C&WF 
Category 1.3 and COE Category 4.13, as reported in Sec. 36.611(a)(1), to 
the unseparated gross telecommunications plant investment, as reported 
in Sec. 36.611(a)(6). Total Corporate Operations Expense, for purposes 
of calculating universal service support payments beginning January 1, 
1998, shall be limited to the lesser of:
    (i) The actual average monthly per-line Corporate Operations 
Expense; or
    (ii) A per-line amount computed according to paragraphs 
(a)(4)(ii)(A), (a)(4)(ii)(B), and (a)(4)(ii)(C) of this section. To the 
extent that some carriers' corporate operations expenses are disallowed 
pursuant to these limitations, the national average unseparated cost per 
loop shall be adjusted accordingly.
    (A) For study areas with 6,000 or fewer working loops; [($27.12 
minus (0.002 times the number of working loops)) times 1.15] or [1.15 x 
$8,266 divided by the number of working loops], whichever is greater.
    (B) For study areas with more than 6,000 but fewer than 17,988 
working loops; [($72,024 divided by the number of working loops0 + 
$3.12)] times 1.15.
    (C) For study areas with 17,988 or more working loops; $7.12 times 
1.15, which equals $8.19.
    (b) [Reserved]
[ 52 FR 17229 , May 6, 1987, as amended at  56 FR 27422 , June 14, 1991;  62 FR 32948 , June 17, 1997;  62 FR 40748 , July 30, 1997]