Rule2024-27480
Jurisdictional Separations and Referral to the Federal-State Joint Board
Primary source
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Published
November 25, 2024
Effective
November 25, 2024
Issuing agencies
Federal Communications Commission
Abstract
In this document, the Federal Communications Commission (Commission) extends, for up to an additional six years, the freeze of the jurisdictional separations category relationships and cost allocation factors (together, separations rules) for rate-of-return incumbent local exchange carriers (LECs). Further extending the freeze, which is set to expire on December 31, 2024, will enable the Commission to continue to work with the Federal-State Joint Board on Jurisdictional Separations (Joint Board) to determine the future of these rules. The Commission declines to provide carriers an opportunity to unfreeze their current category relationships and refers to the Joint Board to consider whether comprehensive reform is needed at this time or if the Commission should allow these rules to become obsolete over time and whether a permanent freeze is warranted, and if so, whether carriers still using separations should be given the chance to unfreeze their category relationships every few years.
Full Text
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[Federal Register Volume 89, Number 227 (Monday, November 25, 2024)]
[Rules and Regulations]
[Pages 92840-92845]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-27480]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 36
[WCB: CC Docket No. 80-286; FCC 24-118; FR ID 262275]
Jurisdictional Separations and Referral to the Federal-State
Joint Board
AGENCY: Federal Communications Commission.
ACTION: Final rule.
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SUMMARY: In this document, the Federal Communications Commission
(Commission) extends, for up to an additional six years, the freeze of
the jurisdictional separations category relationships and cost
allocation factors (together, separations rules) for rate-of-return
incumbent local exchange carriers (LECs). Further extending the freeze,
which is set to expire on December 31, 2024, will enable the Commission
to continue to work with the Federal-State Joint Board on
Jurisdictional Separations (Joint Board) to determine the future of
these rules. The Commission declines to provide carriers an opportunity
to unfreeze their current category relationships and refers to the
Joint Board to consider whether comprehensive reform is needed at this
time or if the Commission should allow these rules to become obsolete
over time and whether a permanent freeze is warranted, and if so,
whether carriers still using separations should be given the chance to
unfreeze their category relationships every few years.
DATES: Effective November 25, 2024.
FOR FURTHER INFORMATION CONTACT: Marv Sacks, Pricing Policy Division of
the Wireline Communications Bureau, at (202) 418-2017 or via email at
<a href="/cdn-cgi/l/email-protection#5a373b282c333474293b3931291a3c3939743d352c"><span class="__cf_email__" data-cfemail="d6bbb7a4a0bfb8f8a5b7b5bda596b0b5b5f8b1b9a0">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report
and Order, in CC Docket No. 80-286, FCC 24-118, adopted and released on
November 13, 2024. The full text of this document may be obtained from
the following internet address: <a href="https://docs.fcc.gov/public/attachments/FCC-24-118A1.pdf">https://docs.fcc.gov/public/attachments/FCC-24-118A1.pdf</a>. To request materials in accessible
formats for people with disabilities (Braille, large print, electronic
files, audio format), send an email to <a href="/cdn-cgi/l/email-protection#395f5a5a0c090d795f5a5a175e564f"><span class="__cf_email__" data-cfemail="cfa9acacfafffb8fa9acace1a8a0b9">[email protected]</span></a>, or call the
Consumer and Governmental Affairs Bureau at (202) 418-0530 (voice) or
(202) 418-0432 (TTY). This action arises from a Further Notice of
Proposed Rulemaking and Order, FCC 24-71, released on July 1, 2024; 89
FR 58692 (July 19, 2024).
Synopsis
I. Introduction
1. In this Report and Order, the Commission extends, for up to an
additional six years, the freeze of the separations rules for rate-of-
return incumbent LECs. In light of sweeping technological and
regulatory changes in the marketplace and the resulting ongoing
transition from traditional telephone service to broadband-based voice
services, the separations rules play a substantially diminished role in
allocating costs between the interstate and intrastate jurisdictions.
This extension of the separations rules freeze will enable the
Commission to continue to work with the Joint Board to determine the
future of these rules, which were last revised more than 35
[[Page 92841]]
years ago in a vastly different telecommunications marketplace. We
decline, however, to provide carriers an opportunity to change their
current category relationships.
2. Given the technological and regulatory changes that have
occurred over the past three and a half decades and the compliance
burdens that the separations rules impose on the limited and declining
number of small rural carriers still subject to them, we also refer to
the Joint Board for their consideration the question of whether
comprehensive reform is needed at this time or if the Commission should
allow these rules to become obsolete over time. Because repeated freeze
extensions of the separations rules have yet to produce substantive
changes to these rules and consume limited government and industry
resources, we also refer to the Joint Board the issue of whether a
permanent freeze is warranted and, if so, whether carriers still using
separations should be given the chance to unfreeze their category
relationships every few years.
II. Background
3. Jurisdictional Separations Process. Rate-of-return incumbent
LECs use their networks and other resources to provide both interstate
and intrastate telecommunications and other services. To prevent the
recovery of the same costs from both the interstate and intrastate
jurisdictions, the separations rules require that rate-of-return
incumbent LECs divide their costs and revenues between the respective
jurisdictions. These jurisdictional separations rules were designed to
ensure that rate-of-return incumbent LECs apportion the costs of their
regulated services between the interstate or intrastate jurisdictions
in a manner that reflects the relative use of their networks to provide
interstate or intrastate telecommunications services.
4. Jurisdictional separations is the third step in a four-step
cost-based regulatory rate-making process. First, a rate-of-return
carrier records its costs and revenues in various accounts using the
Uniform System of Accounts prescribed by the Commission's part 32
rules. Second, the carrier divides the costs in these accounts between
regulated and nonregulated activities in accordance with the
Commission's part 64 rules, a step that helps ensure that the costs of
nonregulated activities will not be recovered through regulated
interstate rates. Third, the carrier separates the regulated costs and
revenues between the interstate and intrastate jurisdictions using the
Commission's part 36 jurisdictional separations rules. Finally, the
carrier apportions the interstate regulated costs among the
interexchange services and the rate elements that form the basis for
its cost-based interstate rates. Carriers subject to rate-of-return
regulation perform this apportionment in accordance with the
Commission's part 69 rules.
5. To comply with the Commission's cost-based ratemaking rules,
rate-of-return incumbent LECs must perform annual cost studies that
include jurisdictional separations. The cost studies directly assign or
allocate the regulated costs and revenues to various part 36
categories. Amounts in categories that are used exclusively for either
interstate or intrastate communications are directly assigned to the
appropriate jurisdiction. Costs that fall in categories that support
both interstate and intrastate services are divided between the
jurisdictions using allocation factors developed in accordance with
part 36 that reflect relative use or a fixed percentage.
6. In addition to being used for developing cost-based rates,
separations is also used as part of the process to determine universal
service support. The administrator of the federal universal service
support program, the Universal Service Administrative Company, uses
separations categorization results for calculating high-cost loop
support for certain legacy support carriers. In addition, some states
use separations results to determine the amount of intrastate universal
service support and to calculate regulatory fees, and some states
perform intrastate rate-of-return ratemaking using the assigned or
allocated intrastate costs.
7. Attempts at Separations Reform and Separations Freezes. In 1997,
recognizing that ``changes in the law, technology, and market structure
of the telecommunications industry'' necessitated a thorough
reevaluation of the jurisdictional separations process, the Commission
initiated a proceeding to comprehensively reform the separations rules.
At the same time, pursuant to section 410(c) of the Communications Act
of 1934, as amended (the Communications Act), the Commission referred
the matter of jurisdictional separations reform to the Joint Board for
a recommended decision.
8. In 2000, the Joint Board--comprised of both State and Federal
members--issued a recommendation that the Commission freeze the part 36
category relationships and jurisdictional allocation factors pending
resolution of comprehensive reform. In 2001, the Commission adopted an
order concluding that a freeze would stabilize the separations process
pending reform by minimizing any impact of cost shifts on separations
results due to circumstances--such as the growth of internet usage, new
technologies, and local competition--not contemplated by the rules. The
Commission also determined that a freeze would simplify the separations
process by eliminating the need for many separations cost studies until
separations reform was implemented. Accordingly, the Commission froze
all carriers' part 36 jurisdictional allocation factors at the
percentages the carriers were using at that time, and allowed rate-of-
return carriers to voluntarily freeze their category relationships,
enabling each carrier to determine whether such a freeze would be
beneficial ``based on its own circumstances and investment plans.''
Thus, at a minimum, rate-of-return carriers' jurisdictional allocation
factors are frozen at the December 31, 2000 level, which allows these
carriers to avoid the considerable burdens associated with conducting
the traffic studies otherwise needed to comply with the rules for
allocating investments and expenses between the intrastate and
interstate jurisdictions.
9. The Commission specified that the 2001 freeze would last five
years or until the Commission completed comprehensive separations
reform, whichever came first. The Commission also concluded that, prior
to the expiration of the five-year period, the Commission would, in
consultation with the Joint Board, determine whether the freeze period
should be extended, explaining that ``the determination of whether the
freeze should be extended at the end of the five-year period shall be
based upon whether, and to what extent, comprehensive reform of
separations has been undertaken by that time.'' Since 2001, the
Commission has extended the separations freeze eight times, for periods
ranging from one year to six years, with the most recent extension
expiring on December 31, 2024.
10. In 2009, the Commission made another referral to the Joint
Board, asking it to consider comprehensive jurisdictional separations
reform as well as ``an interim adjustment of the current jurisdictional
separations freeze.'' In 2018, the Commission referred to the Joint
Board two specific interim issues for consideration pending
comprehensive reform. These issues included exploring the possibility
of amending separations rules to acknowledge that certain carriers are
no longer bound by them, as well as
[[Page 92842]]
updating existing recordkeeping requirements to align with the current
applicability of separations rules. To date, the Joint Board has yet to
submit a recommended decision on any interim adjustments or
comprehensive separations reform.
11. 2024 Further Notice of Proposed Rulemaking and Order. On July
1, 2024, the Commission released a Further Notice of Proposed
Rulemaking (89 FR 58692; July 19, 2024), inviting comment on its
proposal to extend the separations freeze for another six years, given
``the limited options available to the Commission under the current
circumstances.'' The Commission expressed its desire to continue
working with the Joint Board and sought comment on its proposed finding
that the benefits of an extension far outweigh the potential harm
carriers could face if the freeze was not extended, permitting ``the
long-fallow and outdated separations rules to take effect on January 1,
2025.''
12. In the Order (89 FR 58631; July 19, 2024) that accompanied the
Further Notice of Proposed Rulemaking, the Commission renewed the prior
referrals to the Joint Board, including both the 1997 and 2009
comprehensive reform referrals and the 2018 interim reform measures
referral. The Commission explained that it renewed these referrals in
light of the need to achieve reform of the separations rules, given
their declining applicability as a result of substantial
telecommunications market and federal-state regulatory framework
changes since these referrals were first made.
13. Four of the five parties that filed comments or reply comments
in this proceeding unconditionally support a six-year or longer freeze
extension, and the other commenter stated it would support ``a two-year
extension or any longer extension endorsed by the majority of the
members of the Separations Joint Board.'' The four State members, which
make up a majority of the Joint Board, made such an endorsement,
supporting the proposed six-year freeze in an ex parte filing. The
State members explained that ``all three FCC Commissioners on the Joint
Board, including the Chair [Commissioner Starks], voted to propose a
six year extension,'' and the State members ``agree with the federal
members of the board that a six-year extension is appropriate.''
III. Discussion
14. We extend the freeze on Part 36 category relationships and
jurisdictional allocation factors up through December 31, 2030, if
necessary. We find this extension will best serve the public interest.
The record unanimously demonstrates that an extension of the
separations freeze beyond its scheduled December 31, 2024 expiration
date will provide stability to carriers and further the Commission's
ability to work with the Joint Board to consider how best to address
the antiquated separations rules in today's telecommunications
landscape. In determining the extension timeframe, we find that the
record supports an extension of up to six additional years unless,
after receipt of a Joint Board recommended decision on its referrals,
the Commission adopts an order acting on the recommended decision
sooner than December 31, 2030.
15. To fully address the future course of the separations rules, we
also refer to the Joint Board three additional issues for their
consideration in conjunction with the other pending referral issues.
First, we ask the threshold question of whether comprehensive reform is
even necessary any longer given current market conditions and the fact
that the need for separations rules is naturally diminishing while the
burden of complying with any new set of rules, were they to be
reformed, would be substantial. Second, we refer to the Joint Board the
question of whether a permanent freeze is warranted at this time. If
so, we finally ask whether carriers still using separations should be
given an opportunity, offered periodically, to unfreeze their category
relationships.
A. Further Extending the Separations Freeze
16. We find that, based on the record and the fast approaching
expiration of the current freeze extension on December 31, 2024, it is
imperative to extend the freeze before it expires. All commenters agree
that a continuation of the freeze is necessary, and the majority
unconditionally support at least a six year extension. Consistent with
precedent, the Commission has determined that freeze extensions--which
essentially maintain the status quo--are within the scope of the
original referral to the Joint Board for a recommended decision in 2001
and has extended the freeze several times without making an additional
referral. Instead, the Commission has typically consulted with and
received letters supporting freeze extensions from State members of the
Joint Board prior to acting. The Commission's actions here are
consistent with NARUC's and the State members' position.
17. Process Considerations. Section 410(c) of the Communications
Act contemplates a Joint Board recommendation on the pending
comprehensive reform referral before the Commission moves forward on
comprehensive separations reform. All parties that submitted filings in
the record, including the Joint Board's new State members, generally
agree with the Commission's assessment that recent changes to the
composition of the Joint Board, the complex nature of the work required
to develop comprehensive recommendations for separations reform, and
the fact that the current freeze expires at the end of this calendar
year have combined to leave limited and insufficient time within which
the Joint Board could develop and advance recommended decisions and the
Commission could act on such recommendations. This Joint Board has
recently seated several new members who are just beginning their
opportunity to delve into the complicated issues inherent in
determining the future of the separations rules. Extending the freeze
will provide the Commission and the Joint Board the additional time
necessary to engage in the work to achieve our goals, and commenters
unanimously agree on the importance of extending the freeze.
18. Benefits Outweigh the Costs. We continue to find, based on the
record here, that an extension of the freeze provides numerous benefits
to carriers and is essential to avoid imposing significant costs and
burdens on carriers that otherwise would be subject to the rules.
Commenters point out that extending the freeze would provide ``a
measure of consistency and reliability of revenues.'' Additionally,
according to commenters, the Commission's regulatory initiatives ``have
changed the way that rural consumers obtain voice and data services, as
they increasingly transition to wholly interstate broadband only
services in place of traditional regulated voice services,'' which
makes reinstating the old separations cost studies for these carriers
difficult to justify. Further, commenters indicate that the allocation
between interstate and intrastate services naturally balances out as
carriers switch to broadband only services, and thus the cost of
continuing the use of frozen category relationships and allocation
factors for those carriers is not significant. In short, maintaining
the current separations regime provides stability to carriers.
19. In contrast, the costs to carriers of complying with part 36
rules if the freeze is allowed to expire are significant. The
Commission has consistently found that letting the freeze expire would
impose considerable
[[Page 92843]]
burdens on carriers, particularly smaller rural carriers, and create
undue instability. In extending the most recent freeze in 2018, the
Commission explained that lifting the freeze and reinstating the
separations rules after an absence of more than two decades, would make
it extremely difficult, if not impossible, for most carriers to perform
all of the studies needed to remain in full compliance. Parties in this
proceeding confirm that is still the case. Commenters confirm that
application of the rules would require substantial training and
investment by rural incumbent LECs, and could cause significant
disruptions to regulated rates, cost recovery, and other operating
conditions when applying the outdated separations rules to today's
operations. Indeed, we agree with NECA that ``[r]emoval of the current
freeze would necessitate . . . resources that would better be utilized
to deploy advanced networks and provide service to consumers.'' Thus,
we continue to find that extension of the freeze is in the public
interest.
20. Length of the Freeze Extension. We find that our proposed
extension of up to six years is most appropriate under the
circumstances and supported by the record. In fact, certain commenters
would support an even longer extension. When the Commission extended
the freeze for six years in 2018, it concluded that this time period
best balances the competing considerations of a longer or shorter
extension period. Commenters support an extension that is sufficient to
``allow the Commission, the Federal-State Joint Board on Separations,
and industry stakeholders time to determine the most effective way to
address future separations issues.'' The Commission has previously
explained that a six-year extension enables the Joint Board to focus on
solving the complex issues versus the Commission's experience in
granting a series of short-term separations extensions in the past. We
find that this is particularly true today. Indeed, as several new
members of the Joint Board are beginning to engage with the question of
how to effectively address separations issues in line with a modern
public communications network, all Federal and State members of the
Joint Board agree that six years is the appropriate timeframe for an
extension.
21. The only commenter, NARUC, that proposed a shorter than six-
year extension did so with the caveat that it would also support ``any
longer extension endorsed by the majority members'' of the Joint Board.
The State members of the Joint Board, which constitute the majority of
the Joint Board, have endorsed a six-year extension, thus satisfying
NARUC's caveat, and making support in the record to a six-year freeze
extension unanimous. As the State members note, ``all three FCC
Commissioners [that are also members of] the Joint Board, including the
Chair, voted to propose a six year extension.''
B. Declining To Allow a One-Time Category Relationships Unfreeze
22. We decline to grant carriers another one-time option to
unfreeze category relationships. Unfreezing category relationships
would allow carriers to allocate regulated investments and expenses
among the part 36 separations categories/sub-categories based on fresh
cost studies. Relatedly, we also decline to grant carriers an option to
freeze category relationships. We find that there is insufficient basis
in the record to support a need to modify the separations freeze by
providing carriers with either of these additional options. Only two
commenters proposed possible modifications to the freeze. In 2018, the
Commission granted rate-of-return carriers with frozen category
relationships a one-time opportunity to unfreeze them going forward.
Only three carriers took advantage of that opportunity then and the
limited record here suggests a similar result would occur were we to
adopt that same option now.
23. We are not persuaded, based on the record, that there is a need
to provide an unfreeze option at this time, particularly in light of
other opportunities the Commission has provided over the past several
years that enabled rate-of-return carriers to opt out of the
separations process partially or altogether. For example, since 2018,
348 rate-of return carriers have accepted the Commission's offers to
receive model-based Alternative Connect America Cost Model (A-CAM) or
fixed high cost universal service support and transition certain
business data services (BDS) from rate-of-return to incentive
regulation. More generally, as a result of the Commission's
intercarrier compensation and universal service reforms, many carriers
are no longer subject to cost-based regulation or the separations rules
for any of their services. To the extent rate-of-return carriers
believe they have a need to address problems or inaccuracies caused by
frozen category relationships based on old data, they may seek a waiver
of the category relationships freeze rules, as carriers have in the
past.
24. As for adopting a new freeze option, either alone or coupled
with an unfreeze option, we would also require a more developed record
before determining whether to permit carriers that did not freeze their
category relationships in 2001 to freeze them or permit carriers that
elected to freeze category relationships in 2001 to unfreeze and then
refreeze them. In 2001, ``[f]ewer than 100 rate-of-return incumbent
carriers elected to freeze their category relationships.'' In 2018, the
Commission declined to allow companies to unfreeze and then refreeze
their category relationships, explaining that, based on the record at
that time, this option risked the possibility of gamesmanship. Although
one commenter suggests procedures that possibly could prevent
gamesmanship or double-recovery, the record lacks sufficient
information to accurately assess the benefits and drawbacks of adopting
these options today.
25. In any event, our referral below to the Joint Board includes
the question of whether periodic opportunities to unfreeze category
relationships are necessary in conjunction with our referral regarding
a potential permanent freeze. The Joint Board's recommendation on this
issue will provide valuable input to taking future action that give
carriers opportunities to recalibrate their category relationships.
C. Joint Board Referrals
26. Both the Commission and commenters have acknowledged that
comprehensive reform is an arduous undertaking that would involve
revising complex ratemaking rules and numerous Universal Service Fund
(USF) programs that rely on the current separations framework. This
task is further complicated by the fact that, after more than two
decades since the Commission made the original referral of
comprehensive reform to the Joint Board, regulatory agencies and the
industry have substantially reduced personnel and resources with the
expertise to conduct and evaluate full-scale cost studies. In the
meantime, regulatory changes and consumer demand have transformed the
telecommunications industry from one that was largely reliant on cost-
based ratemaking to one where only a small and declining fraction of
small rural carriers are still required to use separations to set their
rates and calculate USF support. A small subset of rate-of-return
carriers are the only remaining carriers required to comply with these
rules. As a result of the Commission's intercarrier compensation rate
reforms, offers of fixed model-based
[[Page 92844]]
A-CAM support programs, and the ongoing technological transition from
traditional voice services to broadband, the number of rate-of-return
carriers subject to the separations rules have been ever decreasing.
Based on internal staff analysis, there are currently, out of
approximately 1,107 rate-of-return carriers, only about 247 carriers
that receive cost-based USF support and make the full use of
separations to set end-user common line, BDS, and Consumer Broadband-
Only Loop service rates, as well as to determine the level of USF
support.
27. To save carriers, particularly small carriers, from the burden
of having to conduct all of the cost studies needed for full compliance
with the separations rules, the separations freeze has been extended
eight times over the past 23 years. However, these small carriers may
face the same, if not a heavier, burden of complying with any
potentially revised cost allocation methodology if the Joint Board were
to develop a recommended decision on comprehensive reform and the
Commission were to adopt it. We agree with concerns in the record by
present and past commenters that compliance with comprehensive reform
would ``necessitate the hiring or retraining of staff--assuming
commercial expertise can even be found to do so--and revising of
internal procedures in ways that could overwhelm [the small carriers']
operations.'' Thus, there is evidence in the record indicating that the
expediency of comprehensively reforming the separations rules may have
lost its urgency or value over the past 23 years.
28. Some commenters suggest that the Joint Board should assess
whether ``the separations framework . . . is better viewed as
transitioning itself organically toward an eventual sunset, rather than
something in need of fundamental reform and revision.'' Other
commenters also question ``the relevance and need for jurisdictional
separations processes and rules.'' NECA asserts that ``[i]n this
environment [of naturally transitioning to broadband only services], it
makes little sense to reinstate traditional separations rules.'' NTCA
believes that technological transitions, consumer demand and regulatory
reforms have ``moot[ed] the need for sweeping separations reform by
enacting changes of their own accord.'' We agree that the current
separations rules may have the effect of promoting and encouraging the
transition from traditional voice-only telephone lines to standalone
broadband or VoIP services. In fact, we also acknowledge that revamped,
comprehensive reform of separations rules may actually encourage
carriers to cling to the old technology.
29. Clarifying the Scope of the Prior Comprehensive Reform
Referral. Although the scope of the 1997 referral is quite broad--
asking the Joint Board to explore questions ranging from specific
comprehensive reform proposals to questions on ``whether separations
rules are still needed during the transition from a regulated to a
competitive marketplace''--we find it appropriate to specifically
reiterate a prior referral question and ask the Joint Board to
consider, in particular, whether it should still pursue comprehensive
reform especially given the diminishing relevance of the separations
rules. Accordingly, we ask the Joint Board for a recommended decision
on whether comprehensive reform is still in the public interest when
the industry is naturally transitioning away from legacy technologies
and cost-based ratemaking, and the burdens of compliance with any
revised separations rules would be significant for the limited number
of small carriers still subject to the separations rules.
30. Referral of Considering a Permanent Freeze Extension. Given the
record emphasis by commenters advocating for a longer than six-year
freeze or even a freeze of unlimited duration, we refer to the Joint
Board the question of whether a permanent freeze of the separations
rules is appropriate at this time. As we have explained, over the past
23 years, the Commission has gone through eight full rulemaking cycles
to continually extend the freeze; this current proceeding is its ninth
such rulemaking. The Commission has never permitted the freeze to
expire because allowing it to lapse would reinstate overnight obsolete
rules, and would impose undue instability, disruption, and
administrative burdens on affected carriers. We agree with commenters
that these ``repeated short-term extensions consume valuable and
limited government and industry resources.'' Accordingly, we find that
exploring the possibility of a permanent freeze is warranted.
31. This referral to the Joint Board to consider a permanent freeze
is particularly relevant in light of our referral to the Joint Board on
whether the separation rules still need to be reformed. If the Joint
Board decides that comprehensive reform of the separations rules is no
longer necessary, and the separations rules should be allowed to become
obsolete through technological transitions and regulatory reforms, then
a permanent freeze appears to be prudent. Accordingly, we ask the Joint
Board for a recommended decision on whether it would be in the public
interest to adopt a permanent freeze of the separations rules while it
considers the future course of the separations rules and framework.
32. In addition, if the Joint Board recommends a permanent
separations freeze, we ask the Joint Board to assess whether the
Commission should allow carriers to unfreeze their category
relationships, and if so, consider related questions--such as whether
this should be a one-time opportunity or an option that is extended
every few years, and whether or not these carriers should be permitted
to refreeze their category relationships. We recognize that if the
Joint Board recommends, and the Commission adopts, a permanent
separations freeze, some carriers may have a greater need to adjust
their category relationships to provide more accurate data for
categorizing their investments, and we look forward to the Joint
Board's input.
IV. Procedural
33. Paperwork Reduction Act. This document does not contain
proposed information collection requirements subject to the Paperwork
Reduction Act of 1995, Public Law 104-13. In addition, therefore, it
does not contain any new or modified information collection burden for
small business concerns with fewer than 25 employees pursuant to the
Small Business Paperwork Relief Act of 2002, Public Law 107-198.
34. Congressional Review Act. The Commission has determined, and
the Administrator of the Office of Information and Regulatory Affairs,
Office of Management and Budget, concurs, that this rule is non-major
under the Congressional Review Act, 5 U.S.C. 804(2). The Commission
will send a copy of this Report and Order to Congress and the
Government Accountability Office pursuant to 5 U.S.C. 801(a)(1)(A).
35. Final Regulatory Flexibility Certification (FRFC). The
Regulatory Flexibility Act of 1980 (RFA) requires that an agency
prepare a regulatory flexibility analysis for notice and comment
rulemakings, unless the agency certifies that ``the rule will not, if
promulgated, have a significant economic impact on a substantial number
of small entities.'' The two statutorily mandated criteria to be
applied in determining the need for RFA analysis are (1) whether the
adopted rules would have a significant economic effect, and (2) if so,
whether the economic effect would directly affect a substantial number
of small entities. In this FRFC, the Commission has determined that
extending the
[[Page 92845]]
separations rules freeze will not have a significant economic impact on
a substantial number of small entities.
36. The purpose of the current extension of the freeze is to allow
the Commission and the Joint Board additional time to consider the
future course of the separations rules and process in light of changes
in the law, technology, and market structure of the telecommunications
industry without creating the undue instability and administrative
burdens that would occur were the Commission to eliminate the freeze.
Implementation of the freeze extension will ease the administrative
burden of regulatory compliance for LECs, including small incumbent
LECs. The freeze has eliminated the need for all incumbent LECs,
including incumbent LECs with 1500 employees or fewer, to complete
certain annual studies formerly required by the Commission's rules. The
effect of the freeze extension is to reduce a regulatory compliance
burden for small incumbent LECs, by abating the aforementioned
separations studies and providing these carriers with greater
regulatory certainty.
37. Accordingly, based on our application of the two statutorily
mandated criteria to the new extension of the freeze adopted in this
Order, which essentially maintains the status quo, we certify that the
rules and/or policy changes adopted in this Order will not have a
significant economic impact on a substantial number of small entities.
38. The Commission will send a copy of this document, including a
copy of this Final Regulatory Flexibility Certification, in a report to
Congress pursuant to the Congressional Review Act. In addition, this
document and final certification will be sent to the Chief Counsel for
Advocacy of the SBA, and will be published in the Federal Register.
39. Contact Person. For further information regarding this
proceeding, please contact Marv Sacks, Pricing Policy Division,
Wireline Competition Bureau, 45 L Street NE, Washington, DC 20554,
(202) 418-2017, or <a href="/cdn-cgi/l/email-protection#6f020e1d190601411c0e0c041c2f090c0c41080019"><span class="__cf_email__" data-cfemail="c6aba7b4b0afa8e8b5a7a5adb586a0a5a5e8a1a9b0">[email protected]</span></a>.
40. Effective Date. We find good cause to make the extension of the
separations freeze effective immediately upon publication of a summary
of this Report and Order in the Federal Register. The current freeze is
scheduled to expire on December 31, 2024, and making the freeze
extension effective immediately upon publication is necessary to ensure
that the separations freeze remains in place without interruption.
Further, as the rules we adopt in this Report and Order maintain the
current status quo for all affected parties, we find that ensuring the
separations freeze remains uninterrupted outweighs any benefit that
might accrue from an effective date later than the date of publication
in the Federal Register.
V. Ordering Clauses
41. Accordingly, it is ordered that, pursuant to the authority
contained in sections 1, 4(i) and (j), 201, 205, 220, 221(c), 254,
303(r), 403, and 410 of the Communications Act of 1934, as amended, 47
U.S.C. 151, 154(i) and (j), 201, 205, 220, 221(c), 254, 303(r), 403,
410, and part 36 of the Commission's rules, 47 CFR part 36, this Report
and Order is adopted.
42. It is further ordered that, pursuant to the authority contained
in sections 1, 4(i) and (j), 201, 205, 220, 221(c), 254, 303(r), 403,
and 410 of the Communications Act of 1934, as amended, 47 U.S.C. 151,
154(i) and (j), 201, 205, 220, 221(c), 254, 303(r), 403, 410, and Part
36 of the Commission's rules, 47 CFR part 36, is amended.
43. It is further ordered that, pursuant to the authority contained
in sections 1, 4(i) and (j), 201, 205, 220, 221(c), 254, 303(r), 403,
and 410 of the Communications Act of 1934, as amended, 47 U.S.C. 151,
154(i) and (j), 201, 205, 220, 221(c), 254, 303(r), 403, 410, the
amendments to 47 CFR part 36 shall be effective on the date of
publication of a summary of this Report and Order in the Federal
Register.
44. It is further ordered that the Commission's Consumer and
Governmental Affairs Bureau, Reference Information Center, shall send a
copy of this Report and Order, including the Final Regulatory
Flexibility Certification, to the Chief Counsel for Advocacy of the
Small Business Administration.
45. It is further ordered that the Office of the Managing Director,
Performance Program Management, shall send a copy of this Report and
Order in a report to be sent to Congress and the Government
Accountability Office pursuant to the Congressional Review Act, 5
U.S.C. 801(a)(1)(A).
List of Subjects in 47 CFR Part 36
Communications common carriers, Reporting and recordkeeping
requirements, Telecommunications, Telephone, Uniform System of
Accounts.
Federal Communications Commission.
Marlene Dortch,
Secretary.
Final Rules
For the reasons discussed in the preamble, the Federal
Communications Commission amends 47 CFR part 36 as follows:
PART 36--JURISDICTIONAL SEPARATIONS PROCEDURES; STANDARD PROCEDURES
FOR SEPARATING TELECOMMUNICATIONS PROPERTY COSTS, REVENUES,
EXPENSES, TAXES AND RESERVES FOR TELECOMMUNICATIONS COMPANIES
0
1. The authority citation for part 36 continues to read as follows:
Authority: 47 U.S.C. 151, 152, 154(i) and (j), 201, 205, 220,
221(c), 254, 303(r), 403, 410, and 1302 unless otherwise noted.
Sec. Sec. 36.3, 36.123 through 36.126, 36.141, 36.142, 36.152, 36.154
through 36.157, 36.191, 36.212, 36.214, 36.372, 36.374, 36.375, and
36.377 through 36.382 [Amended]
0
2. In the following sections, remove the date ``December 31, 2024'' and
add in its place the date ``December 31, 2030'' wherever it appears:
0
a. Section 36.3(a) through (c), (d) introductory text, and (e);
0
b. Section 36.123(a)(5) and (6);
0
c. Section 36.124(c) and (d);
0
d. Section 36.125(h) and (i);
0
e. Section 36.126(b)(5) and (6), (c)(4), (e)(4), and (f)(2);
0
f. Section 36.141(c);
0
g. Section 36.142(c);
0
h. Section 36.152(d);
0
i. Section 36.154(g);
0
j. Section 36.155(b);
0
k. Section 36.156(c);
0
l. Section 36.157(b);
0
m. Section 36.191(d);
0
n. Section 36.212(c);
0
o. Section 36.214(a);
0
p. Section 36.372;
0
q. Section 36.374(b) and (d);
0
r. Section 36.375(b)(4) and (5);
0
s. Section 36.377(a) introductory text, (a)(1)(ix), (a)(2)(vii),
(a)(3)(vii), (a)(4)(vii); (a)(5)(vii), and (a)(6)(vii);
0
t. Section 36.378(b)(1);
0
u. Section 36.379(b)(1) and (2);
0
v. Section 36.380(d) and (e);
0
w. Section 36.381(c) and (d); and
0
x. Section 36.382(a).
[FR Doc. 2024-27480 Filed 11-22-24; 8:45 am]
BILLING CODE 6712-01-P
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This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.