Section I

A. Pricing of products or services provided by the ILEC to a non-regulated affiliate 3

B. Pricing of products or services provided from a non-regulated affiliate to the ILEC 5

C. Pricing of products or services provided from a Service Company to the ILEC 6

D. Pricing the sale of assets between the ILEC and a non-regulated affiliate 6

Section II

Prevailing Market Price 7

Section III

Development of Fully Distributed Cost 8

Section IV

Obtaining Fair Market Value 9

Section V

FDC to FMV Comparison 10

Overview

The Verizon Affiliate Transaction Policy provides guidance in determining permissible transactions between the Verizon ILECs and their non-regulated affiliates and sets forth the FCC and State pricing requirements for these transactions. The Affiliate Transaction Pricing Guideline also provides direction on determining the applicable transaction price and identifies responsibility ensuring requirements are met.