Sec. 36.741  Expense adjustment.

    (a) The additional interstate expense allocation shall be calculated 
by adding the following:
    (1) The number of households provided pursuant to Sec. 36.731(a)(1) 
times the dollar amount provided pursuant to Sec. 36.731(a)(2); and
    (2) The number of households provided pursuant to Sec. 36.731(a)(3) 
times the dollar amount provided pursuant to Sec. 36.731(a)(4).
    (b) The expense adjustment calculated pursuant to Sec. 36.741(a) 
shall be adjusted each year to reflect the actual number of lifeline 
recipients and the actual dollar amount of the benefits provided to them 
in the previous year. If the actual benefits provided in a given 
calendar year exceed the estimated benefits for that year calculated 
pursuant to Sec. 36.741(a), this difference shall be added to the amount 
calculated pursuant to Sec. 36.741(a) for the following year. If the 
actual benefits provided in a given year are less than the estimated 
amount for that year calculated pursuant to Sec. 36.741(a), this 
difference shall be subtracted from the amount calculated pursuant to 
Sec. 36.741(a) for the following year.
    (c) The expense adjustment calculated pursuant to Sec. 36.741 (a) 
and (b) shall be subtracted from total intrastate expenses and added to 
total interstate expenses.
[ 52 FR 17229 , May 6, 1987, as amended at  53 FR 33012 , Aug. 29, 1988]

                           Appendix--Glossary

    The descriptions of terms in this glossary are broad and have been 
prepared to assist in understanding the use of such terms in the 
separation procedures. Terms which are defined in the text of this part 
are not included in this glossary.

                               Access Line

    A communications facility extending from a customer's premises to a 
serving central office comprising a subscriber line and, if necessary, a 
trunk facility, e.g., a WATS access line, TWX access line.

                                Book Cost

    The cost of property as recorded on the books of a company.

                            Cable Fill Factor

    The ratio of cable conductor or cable pair kilometers in use to 
total cable conductor or cable pair kilometers available in the plant, 
e.g., the ratio of revenue producing cable pair kilometers in use to 
total cable pair kilometers in plant.

                                Category

    A grouping of items of property or expense to facilitate the 
apportionment of their costs among the operations and to which, 
ordinarily, a common measure of use is applicable.

                             Central Office

    A switching unit, in a telephone system which provides service to 
the general public, having the necessary equipment and operations 
arrangements for terminating and interconnecting subscriber lines and 
trunks or trunks only. There may be more than one central office in a 
building.

[[Page 516]]

                                 Channel

    An electrical path suitable for the transmission of communications 
between two or more points, ordinarily between two or more stations or 
between channel terminations in Telecommunication Company central 
offices. A channel may be furnished by wire, fiberoptics, radio or a 
combination thereof.

                                 Circuit

    A fully operative communications path established in the normal 
circuit layout and currently used for message, WATS access, TWX, or 
private line services.

                           Circuit Kilometers

    The route kilometers or revenue producing circuits in service, 
determined by measuring the length in terms of kilometers, of the actual 
path followed by the transmission medium.

                    Common Channel Network Signaling

    Channels between switching offices used to transmit signaling 
information independent of the subscribers' communication paths or 
transmission channels.

                          Complement (of cable)

    A group of conductors of the same general type (e.g., quadded, 
paired) within a single cable sheath.

                                 Complex

    All groups of operator positions, wherever located, associated with 
the same call distribution and/or stored program control unit.

                        Concentrating Unit (TWX)

    An arrangement of central office equipment wherein traffic over a 
number of TWX circuits is automatically concentrated onto a lesser 
number of circuits between the concentrating unit and its associated TWX 
switching office.

                         Concentration Equipment

    Central office equipment whose function is to concentrate traffic 
from subscriber lines onto a lesser number of circuits between the 
remotely located concentration equipment and the serving central office 
concentration equipment. This concentration equipment is connected to 
the serving central office line equipment.

                           Connection--Minute

    The product of (a) the number of messages and, (b) the average 
minutes of connection per message.

                          Conversation--Minute

    The product of (a) the number of messages and, (b) the average 
minutes of conversation per message.

                     Conversation-Minute-Kilometers

    The product of (a) the number of messages, (b) the average minutes 
of conversation per message and (c) the average route kilometers of 
circuits involved.

                                  Cost

    The cost of property owned by the Telephone Company whose property 
is to be apportioned among the operations. This term applies either to 
property costs recorded on the books of the company or property costs 
determined by other evaluation methods.

                             Current Billing

    The combined amount of charges billed, excluding arrears.

                     Customer Dialed Charge Traffic

    Traffic which is both (a) handled to completion through pulses 
generated by the customer and (b) for which either a message unit 
change, bulk charge or message toll charge is except for that traffic 
recorded by means of message registers.

                       Customer Premises Equipment

    Items of telecommunications terminal equipment in Accounts 2310 
referred to as CPE in Sec. 64.702 of the Federal Communication 
Commission's Rules adopted in the Second Computer Inquiry such as 
telephone instruments, data sets, dialers and other supplemental 
equipment, and PBX's which are provided by common carriers and

[[Page 517]]

located on customer premises and inventory included in these accounts to 
be used for such purposes. Excluded from this classification are similar 
items of equipment located on telephone company premises and used by the 
company in the normal course of business as well as over voltage 
protection equipment, customer premises wiring, coin operated public or 
pay telephones, multiplexing equipment to deliver multiple channels to 
the customer, mobile radio equipment and transmit earth stations.

                         Customer Premises Wire

    The segment of wiring from the customer's side of the protector to 
the customer premises equipment.

                                DSA Board

    A local dial office switchboard at which are handled assistance 
calls, intercepted calls and calls from miscellaneous lines and trunks. 
It may also be employed for handling certain toll calls.

                                DSB Board

    A switchboard of a dial system for completing incoming calls 
received from manual offices.

                        Data Processing Equipment

    Office equipment such as that using punched cards, punched tape, 
magnetic or other comparable storage media as an operating vehicle for 
recording and processing information. Includes mechines for transcribing 
raw data into punched cards, etc., but does not include such items as 
key-operated, manually or electrically driven adding, calculating, 
bookkeeping or billing machines, typewriters or similar equipment.

                        Dial Switching Equipment

    Switching equipment actuated by electrical impulses generated by a 
dial or key pulsing arrangement.

                           Equal Access Costs

    Include only initial incremental presubscription costs and initial 
incremental expenditures for hardware and software related directly to 
the provision of equal access which would not be required to upgrade the 
switching capabilities of the office involved absent the provisions of 
equal access.

                            Equivalent Gauge

    A standard cross section of cable conductors for use in equating the 
metallic content of cable conductors of all gauge to a common base.

                    Equivalent Kilometers of 104 Wire

    The basic units employed in the allocation of pole lines costs for 
determining the relative use made of poles by aerial cables and by 
aerial wire conductors of various sizes. This unit reflects the relative 
loads of such cable and wire carried on poles.

                       Equivalent Pair Kilometers

    The product of sheath Kilometers and the number of equivalent gauge 
pairs of conductors in a cable.

                      Equivalent Sheath Kilometers

    The product of (a) the length of a section of cable in kilometers 
(sheath kilometers) and (b) the ratio of the metallic content applicable 
to a particular group of conductors in the cable (e.g., conductors 
assigned to a category) to the metallic content of all conductors in the 
cable.

                       Exchange Transmission Plant

    This is a combination of (a) exchange cable and wire facilties (b) 
exchange central office circuit equipment, including associated land and 
buildings and (c) information origination/termination equipment which 
forms a complete channel.

                              Holding Time

    The time in which an item of telephone plant is in actual use either 
by a customer or an operator. For example, on a completed telephone 
call, holding time includes conversation time as well as other time in 
use. At local dial offices any measured minutes which result from other 
than customer attempts to place calls (as evidenced by the dialing of at 
least one digit) are not treated as holding time.

[[Page 518]]

                           Host Central Office

    An electronic analog or digital base switching unit containing the 
central call processing functions which service the host office and its 
remote locations.

              Information Origination/Termination Equipment

    Equipment used to input into or receive output from the 
telecommunications network.

                          Interexchange Channel

    A circuit which is included in the interexchange transmission 
equipment.

                  Interexchange Transmission Equipment

    The combination of (a) interexchange cable and wire facilities, (b) 
interexchange circuit equipment and, (c) associated land and buildings.

                            Interlocal Trunk

    A circuit between two local central office units, either manual or 
dial. Interlocal trunks may be used for either exchange or toll traffic 
or both.

                           Intertoll Circuits

    Circuits between toll centers and circuits between a toll center and 
a tandem system in a different toll center area.

                              Local Channel

    The portion of a private line circuit which is included in the 
exchange transmission plant. However, common usage of this term usually 
excludes information origination/termination equipment.

                              Local Office

    A central office serving primarily as a place of termination for 
subscriber lines and for providing telephone service to the subscribers 
on these lines.

                                  Loop

    A pair of wires, or its equivalent, between a customer's station and 
the central office from which the station is served.

                                 Message

    A completed call, i.e., a communication in which a conversation or 
exchange of information took place between the calling and called 
parties.

                 Message Service or Message Toll Service

    Switched service furnished to the general public (as distinguished 
from private line service). Except as otherwise provided, this includes 
exchange switched services and all switched services provided by 
interexchange carriers and completed by a local telephone company's 
access services, e.g., MTS, WATS, Execunet, open-end FX and CCSA/ONALs.

                              Message Units

    Unit of measurement used for charging for measured message telephone 
exchange traffic within a specified area.

                        Metropolitan Service Area

    The area around and including a relatively large city and in which 
substantially all of the message telephone traffic between the city and 
the suburban points within the area is classified as exchange in one or 
both directions.

                             Minutes-of-Use

    A unit of measurement expressed as either holding time or 
conversation time.

                        Minutes-of-Use-Kilometers

    The product of (a) the number of minutes-of-use and (b) the average 
route kilometers of circuits involved.

                          Multi-Center Exchange

    An exchange area in which are located two or more local central 
office buildings or wire centers.

                               Operations

    The term denoting the general classifications of services rendered 
to the public for which separate tariffs are filed, namely exchange, 
state toll and interstate toll.

                             Operator Trunks

    A general term, ordinarily applied to trunks between manually 
operated

[[Page 519]]

switchboard positions and local dial central offices in the same wire 
center.

                          Private Line Service

    A service for communications between specified locations for a 
continuous period or for regularly recurring periods at stated hours.

                           Remote Access Line

    An access line (e.g., for WATS or TWX service) between a 
subscriber's premises in one toll rate center and a serving central 
office located in a different toll rate center.

                          Remote Line Location

    A remotely located subscriber line access unit which is normally 
dependent upon the central processor of the host office for call 
processing functions.

                     Remote Trunk Arrangement (RTA)

    Arrangement that permits the extension of TSPS functions to remote 
locations.

                               Reservation

    That amount or quantity of property kept or set apart for a specific 
use.

                                Reserved

    Kept or set apart for a specific use.

                               Separations

    The process by which telecommunication property costs, revenues, 
expenses, taxes and reserves are apportioned among the operations.

                         Service Observing Unit

    A unit of work measurement which is used as the common denominator 
to express the relative time required for handling the various work 
functions at service observing boards.

                            Sheath Kilometers

    The actual length of cable in route kilometers.

                            Special Services

    All services other than message telephones, e.g., teletypewriter 
exchange service (TWX), private line services.

                        Station-to-Station Basis

    The term applied to the basis of toll rate making which contemplates 
that the message toll service charge (telephone or TWX) covers the use 
made of all facilities between the originating station and the 
terminating station, including the stations, and the services rendered 
in connection therewith.

                               Study Area

    Study area boundaries shall be frozen as they are on November 15, 
1984

                    Subscriber Line or Exchange Line

    A communication channel between a telephone station, PBX or TWX 
station and the central office which serves it.

                           Subtributary Office

    A class of tributary office which does not have direct access to its 
toll center, but which is connected to its toll center office by means 
of circuits which are switched through to the toll center at another 
tributary office.

                               Tandem Area

    The general areas served by the local offices having direct trunks 
to or from the tandem office. This area may consist of one or more 
communities or may include only a portion of a relatively large city.

                         Tandem Circuit or Trunk

    A general classification of circuits or trunks between a tandem 
central office unit and any other central office or switchboard.

                            Tandem Connection

    A call switched at a tandem office.

                              Tandem Office

    A central office unit used primarily as an intermediate switching 
point for traffic between local central offices within the tandem area. 
Where qualified by a modifying expression, or other explanation, this 
term may be applied to an office employed for both the interconnection 
of local central offices within the tandem area and for

[[Page 520]]

the interconnection of these local offices with other central offices, 
e.g., long haul tandem office.

                               Toll Center

    An office (or group of offices) within a city which generally 
handles the originating and incoming toll traffic for that city to or 
from other toll center areas and which handles through switched traffic. 
The toll center normally handles the inward toll traffic for its 
tributary exchanges and, in general, either handles the outward traffic 
originating at its tributaries or serves as the outlet to interexchange 
circuits for outward traffic ticketed and timed at its tributaries. Toll 
centers are listed as such in the Toll Rate and Route Guide.

                            Toll Center Area

    The areas served by a toll center, including the toll center city 
and the communities served by tributaries of the toll center.

                         Toll Center Toll Office

    A toll office (as contrasted to a local office) in a toll center 
city.

                              Toll Circuit

    A general term applied to interexchange trunks used primarily for 
toll traffic.

                          Toll Connecting Trunk

    A general classification of trunks carrying toll traffic and 
ordinarily extending between a local office and a toll office, except 
trunks classified as tributary circuits. Examples of toll connecting 
trunks include toll switching trunks, recording trunks and recording-
completing trunks.

                               Toll Office

    A central office used primarily for supervising and switching toll 
traffic.

                        Traffic Over First Routes

    A term applied to the routing of traffic and denoting routing via 
principal route for traffic between any two points as distinguished from 
alternate routes for such traffic.

                             Operator System

    A stored program electronic system associated with one or more toll 
switching systems which provides centralized traffic service position 
functions for several local offices at one location.

                            Tributary Circuit

    A circuit between a tributary office and a toll switchboard or 
intertoll dialing equipment in a toll center city.

                            Tributary Office

    A local office which is located outside the exchange in which a toll 
center is located, which has a different rate center from its toll 
center and which usually tickets and times only a part of its 
originating toll traffic, but which may ticket or time all or none, of 
such traffic. The toll center handles all outward traffic not ticketed 
and timed at the tributary and normally switches all inward toll traffic 
from outside the tributary's toll center to the tributary. Tributary 
offices are indicated as such in the Toll Rate and Route Guide.

                                 Trunks

    Circuit between switchboards or other switching equipment, as 
distinguished from circuits which extend between central office 
switching equipment and information origination/termination equipment.

                              TSPS Complex

    All groups of operator positions, wherever located, associated with 
the same TSPS stored program control units.

                                   TWX

    Teletypewriter Exchange Service.

                             TWX Connection

    A completed TWX call, i.e., a call on which a TWX communication was 
passed between the calling and called stations.

[[Page 521]]

                    TWX Connection-Minute-Kilometers

    The product of (a) the number of TWX connections, (b) the average 
minutes per TWX connection and (c) the average route kilometers of 
circuits involved.

                       TWX Switching Plant Trunks

    Interexchange circuits, excluding remote access lines, which handle 
100 word per minute TWX traffic only.

                      Weighted Standard Work Second

    A measurement of traffic operating work which is used to express the 
relative time required to handle the various kinds of calls or work 
functions, and which is weighted to reflect appropriate degrees of 
waiting to serve time.

                    Wide Area Telephone Service WATS

    A toll service offering for customer dial type telecommunications 
between a given customer station and stations within specified 
geographic rate areas employing a single access line between the 
customer location and the serving central office. Each access line may 
be arranged for either outward (OUT-WATS) or inward (IN-WATS) service or 
both.

                            Wideband Channel

    A communication channel of a bandwidth equivalent to twelve or more 
voice grade channels.

                              Working Loop

    A revenue producing pair of wires, or its equivalent, between a 
customer's station and the central office from which the station is 
served.
[ 52 FR 17229 , May 6, 1987, as amended at  53 FR 33012 , Aug. 29, 1988;  53 FR 39095 , Oct. 5, 1989;  58 FR 44905 , Aug. 25, 1993]