Jurisdictional Separations and Referral to the Federal-State Joint Board, 92840-92845 [2024-27480]

Agencies

• FEDERAL COMMUNICATIONS COMMISSION

[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 [www.gpo.gov]
[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 
[email protected].

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: https://docs.fcc.gov/public/attachments/FCC-24-118A1.pdf. To request materials in accessible 
formats for people with disabilities (Braille, large print, electronic 
files, audio format), send an email to [email protected], 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 [email protected].
    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