Sec.  69.603   Association functions.

   (a) The Association shall not engage in any activity that is not related to
   the preparation of access charge tariffs or the collection and distribution
   of access charge revenues or the operation of a billing and collection pool
   on an untariffed basis unless such activity is expressly authorized by order
   of the Commission.

   (b) Participation in Commission or court proceedings relating to access
   charge  tariffs,  the  billing  and  collection of access charges, the
   distribution of access charge revenues, or the operation of a billing and
   collection pool on an untariffed basis shall be deemed to be authorized
   association activities.

   (c)–(e) [Reserved]

   (f) The association shall also prepare and file an access charge tariff
   containing terms and conditions for access service and form for the filing
   of rate schedules by telephone companies that choose to reference these
   terms and conditions while filing their own access rates.

   (g) The association shall divide the expenses of its operations into two
   categories. The first category (“Category I Expenses”) shall consist of
   those  expenses that are associated with the preparation, defense, and
   modification of association tariffs, those expenses that are associated with
   the administration of pooled receipts and distributions of exchange carrier
   revenues  resulting  from association tariffs, those expenses that are
   associated with association functions pursuant to  Sec. 69.603 (c)–(g), and those
   expenses that pertain to Commission proceedings involving subpart G of part
   69 of the Commission's rules. The second category (“Category II Expenses”)
   shall consist of all other association expenses. Category I Expenses shall
   be  sub-divided  into  three  components in proportion to the revenues
   associated  with  each  component.  The first component (“Category I.A
   Expenses”) shall be in proportion to the Universal Service Fund and Lifeline
   Assistance revenues. The second component (“Category I.B Expenses”) shall be
   in proportion to the sum of the association End User Common Line revenues,
   the association Carrier Common Line revenues, the association Special Access
   Surcharge revenues, the Long Term Support payments and the Transitional
   Support payments. Beginning July 1, 2002, Interstate Common Line Support
   revenues shall be included in the allocation base for Category I.B expenses.
   The third component (“Category I.C Expenses”) shall be in proportion to the
   revenues from all other association interstate access charges.

   (h)(1) The revenue requirement for association tariffs filed pursuant to
    Sec. 69.4(c) shall not include any association expenses other than Category I.A
   Expenses.

   (2) The revenue requirement for association tariffs filed pursuant to  Sec. 69.4
   (a)  and  (b)(2) shall not include any Association expenses other than
   Category I.B Expenses.

   (3)  The revenue requirement for association tariffs filed pursuant to
    Sec. 69.4(b) (1) and (3)–(7) shall not include any association expenses other
   than Category I.C Expenses.

   (4) No distribution to an exchange carrier of Universal Service Fund and
   Lifeline Assistance revenues shall include adjustments for association
   expenses other than Category I.A Expenses.

   (5) No distribution to an exchange carrier of revenues from association End
   User Common Line or Carrier Common Line charges, Special Access Surcharges
   or  Long  Term  Support or Transitional Support payments shall include
   adjustments for association expenses other than Category I.B Expenses.
   Beginning July 1, 2002, Interstate Common Line Support shall be subject to
   this provision.

   (6) No distribution to an exchange carrier of revenues from association
   interstate access charges other than End User Common Line and Carrier Common
   Line charges and Special Access Surcharges shall include adjustments for
   association expenses other than Category I.C Expenses.

   (7) The association shall separately identify all Category I.A, I.B and I.C
   expenses in cost support materials filed with each annual association access
   tariff filing.

   [ 54 FR 8197 , Feb. 27, 1989, as amended at  54 FR 8199 , Feb. 27, 1989;  62 FR 41306 , Aug. 1, 1997;  63 FR 70578 , Dec. 21, 1998;  66 FR 59733 , Nov. 30, 2001]