Sec.  61.41   Price cap requirements generally.

   (a) Sections 61.42 through 61.49 shall apply as follows:

   (1) [Reserved]

   (2) To such local exchange carriers as specified by Commission order, and to
   all local exchange carriers, other than average schedule companies, that are
   affiliated with such carriers; and

   (3) On an elective basis, to local exchange carriers, other than those
   specified in paragraph (a)(2) of this section, that are neither participants
   in any Association tariff, nor affiliated with any such participants, except
   that affiliation with average schedule companies shall not bar a carrier
   from  electing  price cap regulation provided the carrier is otherwise
   eligible.

   (b) If a telephone company, or any one of a group of affiliated telephone
   companies,  files a price cap tariff in one study area, that telephone
   company and its affiliates, except its average schedule affiliates, must
   file price cap tariffs in all their study areas.

   (c) Except as provided in paragraph (e) of this section, the following rules
   in this paragraph (c) apply to telephone companies subject to price cap
   regulation, as that term is defined in  Sec. 61.3(ee), which are involved in
   mergers, acquisitions, or similar transactions.

   (1) Any telephone company subject to price cap regulation that is a party to
   a merger, acquisition, or similar transaction shall continue to be subject
   to price cap regulation notwithstanding such transaction.

   (2) Where a telephone company subject to price cap regulation acquires, is
   acquired by, merges with, or otherwise becomes affiliated with a telephone
   company that is not subject to price cap regulation, the latter telephone
   company shall become subject to price cap regulation no later than one year
   following  the  effective date of such merger, acquisition, or similar
   transaction and shall accordingly file price cap tariffs to be effective no
   later than that date in accordance with the applicable provisions of this
   part 61.

   (3) Notwithstanding the provisions of  Sec. 61.41(c)(2), when a telephone company
   subject to price cap regulation acquires, is acquired by, merges with, or
   otherwise becomes affiliated with a telephone company that qualifies as an
   “average schedule” company, the latter company may retain its “average
   schedule” status or become subject to price cap regulation in accordance
   with  Sec. 69.3(i)(3) of this chapter and the requirements referenced in that
   section.

   (d) Except as provided in paragraph (e) of this section, local exchange
   carriers that become subject to price cap regulation as that term is defined
   in  Sec. 61.3(ee) shall not be eligible to withdraw from such regulation.

   (e) Notwithstanding the requirements of paragraphs (c) and (d) of this
   section, a telephone company subject to rate-of-return regulation may return
   lines acquired from a telephone company subject to price cap regulation to
   rate-of-return regulation, provided that the acquired lines will not be
   subject to average schedule settlements, and provided further that the
   telephone company subject to rate-of-return regulation may not for five
   years elect price cap regulation for itself, or by any means cause the
   acquired lines to become subject to price cap regulation.

   [ 55 FR 42382 , Oct. 19, 1990;  55 FR 50558 , Dec. 7, 1990, as amended at  56 FR 55239 , Oct. 25, 1991;  64 FR 46589 , Aug. 26, 1999;  65 FR 38695 , June 21,
   2000;  65 FR 57741 , Sept. 26, 2000;  69 FR 25336 , May 6, 2004]

   Effective Date Note:   At  69 FR 25336 , May 6, 2004,  Sec. 61.41 was amended by
   revising paragraphs (c) introductory text and (d) and adding a new paragraph
   (e). These paragraphs contain information collection and recordkeeping
   requirements and will not become effective until approval has been given by
   the Office of Management and Budget.