Connect America Fund; Developing a Unified Intercarrier Compensation Regime, 26261-26269 [2013-10562]
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List of Subjects in 40 CFR Part 52
Environmental protection, Air
pollution control, Incorporation by
reference, Intergovernmental relations,
Reporting and recordkeeping
requirements, Volatile organic
compounds.
40 CFR part 52 is amended as follows:
PART 52—APPROVAL AND
PROMULGATION OF
IMPLEMENTATION PLANS
1. The authority citation for part 52
continues to read as follows:
Authority: 42 U.S.C. 7401 et seq.
[Removed and reserved]
2. Remove and reserve § 52.719.
3. Section 52.720 is amended by
revising paragraph (c)(191) to read as
follows:
■
§ 52.720
Identification of plan.
*
*
*
*
*
(c) * * *
(191) On September 14, 2012, Illinois
submitted an amendment to its State
Implementation Plan at 35 Illinois
Administrative Code Part 223, which
adds new consumer product categories
and VOC limits for these products in
Subpart B, and amends Subpart C to
clarify applicability. 35 IAC Part 223
limits the amount of volatile organic
compounds from consumer products
and architectural and industrial
maintenance coatings.
(i) Incorporation by reference.
(A) Illinois Administrative Code; Title
35: Environmental Protection; Subtitle
B: Air Pollution; Chapter I: Pollution
Control Board; Subchapter c: Emission
Standards and Limitation for Stationary
Sources; Part 223: Standards and
Limitations for Organic material
Emissions for Area Sources, effective
May 4, 2012.
(B) Reserved.
*
*
*
*
*
[FR Doc. 2013–09301 Filed 5–3–13; 8:45 am]
BILLING CODE 6560–50–P
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47 CFR Parts 51, 54, and 69
[WC Docket No. 10–90, CC Docket No. 01–
92, WC Docket No. 12–63, Transmittal Nos.
41, 28, and 57; DA 13–564]
Federal Communications
Commission.
ACTION: Final rule.
AGENCY:
In this document, the Federal
Communications Commission’s
Wireline Competition Bureau clarifies
and corrects certain provisions of the
Commission’s rules in response to
recent petitions and other requests for
clarification or correction of the new
rules adopted as part of Universal
Service Fund intercarrier compensation
transformation reforms and also grants a
limited waiver of the Commission’s
rules to address administrative concerns
and rule inconsistencies.
DATES: Effective June 5, 2013.
FOR FURTHER INFORMATION CONTACT:
Robin Cohn, Wireline Competition
Bureau, Pricing Policy Division (202)
418–1520 or (202) 418–0484 (TTY); or
Christopher S. Koves, Wireline
Competition Bureau, Pricing Policy
Division, (202) 418–1520 or (202) 418–
0484 (TTY).
SUPPLEMENTARY INFORMATION: This is a
summary of the Wireline Competition
Bureau’s Order in WC Docket No. 10–
90, CC Docket No. 01–92, WC Docket
No. 12–63, Transmittal Nos. 41, 28, and
57, DA 13–564, adopted and released on
March 27, 2013. The full text of this
document is available electronically via
ECFS at https://fjallfoss.fcc.gov/ecfs/or
may be downloaded at https://
hraunfoss.fcc.gov/edocs_public/
attachmatch/DA-13-564A1.pdf. The full
text of this document is also available
for public inspection during regular
business hours in the FCC Reference
Center, 445 12th Street SW., Room CY–
A257, Washington, DC 20554. The
complete text may be purchased from
the Commission’s copy contractor, Best
Copy and Printing, Inc. (BCPI), 445 12th
Street SW., Room CY–B402,
Washington, DC 20554, (202) 488–5300
(voice) or (202) 488–5563 (facsimile) or
via email at fcc@bcpiweb.com. To
request materials in accessible formats
for people with disabilities (e.g. braille,
large print, electronic files, audio
format, etc.) or to request reasonable
accommodations (e.g. accessible format
documents, sign language interpreters,
SUMMARY:
■
■
FEDERAL COMMUNICATIONS
COMMISSION
Connect America Fund; Developing a
Unified Intercarrier Compensation
Regime
Dated: February 13, 2013.
Susan Hedman,
Regional Administrator, Region 5.
§ 52.719
26261
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CART, etc.), send an email to
fcc504@fcc.gov or call the Consumer &
Governmental Affairs Bureau at (202)
418–0530 (voice) or (202) 418–0432
(TTY).
I. Introduction
1. In the USF/ICC Transformation
Order, 76 FR 81,562 (Dec. 28, 2011), the
Commission delegated to the Wireline
Competition Bureau (Bureau) the
authority to make any rule revisions
necessary to ensure that the reforms
adopted are properly reflected in the
rules, including correcting any conflicts
between the new or revised rules and
existing rules, as well as addressing any
omissions or oversights. In this Order,
the Bureau acts pursuant to its delegated
authority to clarify and correct certain
rules in response to recent petitions and
other requests for clarification or
correction of the new rules. Specifically,
the Bureau harmonizes inconsistent
Connect America Fund intercarrier
compensation (ICC) support eligibility
certification and reporting filing
deadlines contained in Parts 51 and 54
of the Commission’s rules to coincide
with the date on which carriers must
file their annual access tariffs. The
Bureau also amends the Part 51 rules to
clarify the effects of the USF/ICC
Transformation Order on National
Exchange Carrier Association (NECA)
traffic-sensitive tariff (‘‘NECA pool’’)
pooling when carriers enter or exit the
pool. The Bureau also addresses a
petition for clarification filed by NECA
by clarifying various NECA pooling
requirements adopted in the 2012 Price
Cap Conversion Order. In addition, the
Bureau amends rules governing the
transition of rate-of-return carriers’
intrastate switched access rates to
correct an omission. The Bureau
amends the Part 69 access charge rules
to clarify the treatment of local
switching support (LSS) in the
calculation of the line-side port costs
shift to the Common Line category and
the allocation of Transport
Interconnection Charge costs among the
various access charge expense
categories. The Bureau also clarifies the
operation of the corporate operations
expense limit and monthly $250 perline cap on universal service support
contained in Part 54. Finally, the Bureau
corrects errors in the Part 51 rules
implementing the Eligible Recovery
true-up adjustment mechanism.
II. Harmonizing Connect America Fund
ICC Certification Deadlines
2. Background. The USF/ICC
Transformation Order adopted, among
other things, an ICC reform timeline
including rules that require carriers to
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adjust, over a period of years, many of
their legacy interstate and intrastate
switched access charges effective on
July 1 of each of those years, with the
ultimate goal of transitioning to a billand-keep regime. The Commission also
adopted a recovery mechanism to
mitigate the impact of reduced ICC
revenues on carriers and to facilitate
continued investment in broadband
infrastructure, while providing greater
certainty and predictability going
forward than the status quo. The
recovery mechanism allows incumbent
local exchange carriers (LECs) to recover
ICC revenues reduced due to the ICC
reforms, up to a defined baseline, which
is defined as ‘‘Eligible Recovery.’’ A
carrier may recover a limited portion of
its Eligible Recovery from its end users
through a fixed monthly charge called
the Access Recovery Charge (ARC), and
the remainder of its Eligible Recovery, if
it so elects, from Connect America Fund
ICC support.
3. The USF/ICC Transformation Order
also included new certification and
reporting requirements for carriers that
are eligible for and elect to receive
Connect America Fund ICC support. In
particular, sections 51.915(f)(6) and
51.917(f)(3) require price cap and rateof-return carriers, respectively, that elect
to receive Connect America Fund ICC
support to certify to the Commission
with their 2012 annual access tariff
filings, and on April 1 in each
subsequent year, that they properly
calculated their Eligible Recovery and
ARC rates in order to be eligible to
receive Connect America Fund ICC
support. Additionally, sections
54.304(c)(1) and (d)(1) require eligible
price cap and rate-of-return carriers that
elect to receive Connect America Fund
ICC support, pursuant to sections 51.915
and 51.917, to file data with the
Universal Service Administrative
Company (USAC), the Commission, and
relevant state commissions by no later
than June 30, 2012, and by March 31 in
subsequent years, establishing the
carrier’s projected funding eligibility
amounts, including any true-ups, for the
upcoming funding period.
4. In ex parte filings, NECA and the
United States Telecom Association
(USTelecom) requested modification of
certain Commission rules to correct
inconsistencies among the
Commission’s Connect America Fund
ICC support eligibility certification
deadlines. Specifically, NECA asked the
Bureau to change the deadline
contained in section 51.917(f)(3) so that
rate-of-return carriers are required to file
their annual Connect America Fund ICC
support eligibility certifications with
their annual access tariff filings. NECA
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states that this change is necessary
because the April 1 deadline appears to
be ‘‘inconsistent with rules governing
submission of data forecasts and
calculation of Eligible Recovery and
ARC rates associated with the normal
annual access tariff filing process for
rate-of-return carriers.’’ NECA argues
that data used for calculating ARC rates
and monitoring purposes would likely
change between the April 1 Connect
America Fund ICC support eligibility
certification deadline and mid-June,
when annual access tariffs are typically
filed, and that such changes would
‘‘require numerous updates and
revisions to data submitted previously
by carriers, potentially requiring
corrections and re-certification.’’
USTelecom agrees and requests that
‘‘the modification to section 51.917(f)(3)
requested by NECA for rate-of-return
carriers also be made to section
51.915(f)(6), which applies to price cap
carriers.’’
5. Discussion. We agree with NECA
and USTelecom that revising the
Connect America Fund ICC support
eligibility certification deadlines to
coincide with the annual interstate
access tariff filing deadlines is
appropriate. Currently, the rules contain
three separate filing deadlines that
essentially require carriers to develop
the same underlying data: their Eligible
Recovery calculation, their expected
ARC rate levels, and their expected
Connect America Fund ICC support
amounts. We believe that harmonizing
the certification deadlines will remove
unnecessary administrative burdens and
will also remove potential conflicts
within the rules caused by inconsistent
reporting deadlines adopted in the USF/
ICC Transformation Order. Accordingly,
we revise the Connect America Fund
ICC certification filing deadlines
contained in sections 51.915(f)(6) and
51.917(f)(3) so that they coincide with
the annual interstate access tariff filing
dates.
6. In addition to revising the filing
deadlines as requested by NECA and
USTelecom, we also, on our own
motion, make a similar revision to a
Connect America Fund ICC support
eligibility data filing deadline contained
in sections 54.304(c)(1) and (d)(1).
These rule sections require price cap
and rate-of-return carriers seeking
Connect America Fund ICC support
pursuant to sections 51.915 and 51.917,
respectively, to file data with USAC, the
Commission, and relevant state
commissions establishing the amount of
their Connect America Fund ICC
support for the upcoming funding year
by no later than March 31 of each year.
For the same reasons discussed above,
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the March 31 deadline is inconsistent
with rules requiring carriers to submit
Eligible Recovery calculations and ARC
rates in mid-June with their annual
access tariff filing. Accordingly, we
revise the deadlines contained in
sections 54.304(c)(1) and (d)(1) to
coincide with the annual interstate
access tariff filing dates.
7. The rule revisions adopted herein
revise Connect America Fund ICC
support eligibility filing requirements so
that they coincide with carriers’ annual
access charge tariff filings. In the event
that the rule revisions adopted herein
are not effective before March 31, 2013,
we find that good cause exists to waive
applicable 2013 Part 51 and 54 filing
deadlines to the extent described herein
to eliminate the administrative burdens
that would result from inconsistent
reporting deadlines that the rule
revisions we adopt are intended to
remedy. Accordingly, this limited
waiver, if needed, defers price cap and
rate-of-return carriers’ March 31, 2013
and April 1, 2013 Connect America
Fund ICC support eligibility data filing
and certification obligations to the date
on which the 2013 annual access filings
are required.
III. NECA Pooling Switched Access
Rate Cap Adjustments
8. Background. As part of the
transition to bill-and-keep, the rules
adopted in the USF/ICC Transformation
Order capped interstate and certain
intrastate switched access rates for rateof-return carriers at the rates that were
in effect on December 29, 2011. This
approach removed rate-of-return carriers
from rate-of-return cost-based recovery
for interstate switched access services.
However, to the extent that rate-ofreturn carriers offer services other than
interstate switched access service, such
as common line and special access
services, carriers remain subject to rateof-return regulation for those services.
Rate-of-return carriers, thus, must
continue to establish their revenue
requirements and rates for those
services remaining under rate-of-return
regulation.
9. In the USF/ICC Transformation
Order, the Commission established a
non-revenue neutral recovery
mechanism that replaced rate-of-return
cost-based recovery for interstate
switched access services provided by
rate-of-return carriers. The recovery
mechanism carefully balanced carrier
recovery from end users, other users of
the switched access network such as
interexchange carriers, and Connect
America Fund ICC support. As part of
this new recovery mechanism, rate-ofreturn carriers annually establish, as
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‘‘Eligible Recovery,’’ an amount they are
eligible to recover from end users or
Connect America Fund ICC support in
each year of the ICC transition. Eligible
Recovery is determined in subsequent
years by reducing a carrier’s Base Period
Revenue by an annual adjustment factor
and by specified Expected Revenues for
the upcoming tariff period. A rate-ofreturn carrier recovers its Eligible
Recovery first from a capped ARC
assessed on end users and, if it is
eligible, may elect to recover any
remaining amounts from Connect
America Fund ICC support. The rules
also contain a true-up procedure for
rate-of-return carriers to correct for
variances between actual and projected
demand both for access services and the
ARC.
10. In the USF/ICC Transformation
Order, the Commission stated that
‘‘carriers remain free to make elections
regarding participation in the NECA
pool and tariffing processes during the
transition.’’ Clearly, the USF/ICC
Transformation Order contemplated a
continuation of the pooling process for
switched access services, but it did not
provide procedures governing the
switched access rate caps when carriers
enter or exit the pool. In the Designation
Order, which identified issues for
investigation related to NECA’s 2012
annual access tariff filings, the Bureau
addressed how NECA should allocate
projected switched access revenues
among pooling carriers. In lieu of
NECA’s allocation of projected revenues
entirely to the carrier that collected
them, which would have effectively
ignored the pooling process, the Bureau
stated that it would be reasonable for
NECA to ‘‘allocate projected revenues
for purposes of determining each LEC’s
projected 2012–13 interstate switched
access revenues by allocating the
projected pool revenues in relation to
each LEC’s interstate Base Period
Revenue divided by the projected pool
Base Period Revenue.’’ Subsequently,
NECA filed its direct case employing the
procedure outlined in the Designation
Order.
11. Prior to the USF/ICC
Transformation Order, when carriers
entered or exited the NECA pool, the
pool switched access rates were
adjusted to reflect changes to the pool.
The rate caps codified in section
51.909(a), however, do not contain a
mechanism for the pool switched access
rate caps to increase or decrease when
carriers enter or exit the pool. Absent
such a mechanism, the pool switched
access rates will not realize revenues at
the level that would provide pool
settlements to the remaining pooling
carriers at the level they would have
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received if carriers had not exited the
pool. Furthermore, the Eligible Recovery
for the pooling carriers would increase
or decrease by the revenue difference
between that produced by the
preexisting rate caps and the adjusted
rate caps reflecting the effects of pool
entry or exit. Such funding is outside
the scope of contemplated Connect
America Fund ICC support, which was
intended to help mitigate the effects of
ICC reforms, not to offset the revenue
effects of changes in NECA pool
participation. Thus, without a method
for adjustment to reflect pool entry and
exit, the section 51.909(a) rate caps
result in an unintended shift in recovery
between switched access charges and
Connect America Fund ICC support.
12. Further, prior to the USF/ICC
Transformation Order, just as NECA
revised its rates when a carrier exited
the pool, an exiting carrier was required
to establish rates based on its own costs
under either section 61.38 or 61.39 of
the Commission’s rules. The switched
access rate caps codified in section
51.909(a) do not, however, detail how
an exiting carrier should establish its
switched access rate caps. In the 2012
Price Cap Conversion Order, the
Commission determined that each
exiting pooling carrier had to adjust the
NECA switched access rates it was
charging to reflect the extent of its net
contribution to the pool and to establish
switched access rates that would then
become the capped switched access
rates for that carrier. These
complimentary actions by NECA and an
exiting carrier together further the
policies of the USF/ICC Transformation
Order and 2012 Price Cap Conversion
Order.
13. Discussion. We find that providing
a method for adjusting NECA pool
switched access rate caps to reflect pool
entry and exit corrects an omission in
the rate cap rules. Therefore, we amend
section 51.909(a) to address this
omission, and to avoid creating
unintended burdens on Connect
America Fund ICC support.
14. Specifically, as set forth in the
Appendix, we revise the Commission’s
rules to require NECA, when a carrier
enters the NECA pool, to adjust its
switched access rate caps to account for
the difference between the entering
carrier’s revenues for the preceding
calendar year based on the entering
carrier’s switched access rates and what
the entering carrier’s revenues for the
preceding calendar year would have
been if calculated using NECA switched
access rates. Additionally, we revise the
Commission’s rate cap rules to include
a methodology that NECA must use to
adjust its switched access rate caps
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when carriers exit the NECA pool.
Finally, we revise the Commission’s
rules to clarify how exiting rate-ofreturn carriers will establish their
switched access rate caps to reflect the
amount by which the exiting carrier was
a NECA pool net contributor or net
recipient. These rule revisions effectuate
the Commission’s intent that NECA
pooling remain available during the
transition, consistent with its historical
operation, and ensure that the balance
between interstate switched access
revenues and Connect America Fund
ICC support is maintained and does not
affect a rate-of-return carrier’s decision
to enter or exit the NECA pool. These
rule revisions also ensure that no party
entering or exiting the NECA pool will
receive a windfall as a result of its
election, which advances the
Commission’s pooling neutral policies.
15. Effects of Changes to Interstate
Switched Access Rates on Intrastate
Rates. We also amend the Commission’s
rules as set forth in the Appendix to
clarify the flow-through effects that
interstate switched access rate cap
adjustments resulting from NECA pool
entry or exit will have on intrastate
switched access rates. An underlying
objective of the USF/ICC
Transformation Order was to create a
uniform, national framework for the ICC
transition. The USF/ICC Transformation
Order adopted rules that establish
maximum intrastate switched access
rate levels based on their relationship to
interstate rate levels. In a subsequent
order, the Bureau clarified the treatment
of intrastate switched access rates that
are below interstate levels when the
intrastate composite switched access
rate was higher than the composite
interstate switched access rate. Because
the Commission’s rules require
intrastate switched access rate levels to
be set based on interstate rate levels, we
clarify that if NECA’s interstate
switched access rates decrease, pooling
carriers must also reduce their intrastate
rates, consistent with the framework
established in the USF/ICC
Transformation Order. Similarly, we
clarify that if NECA’s switched access
rates increase, pooling carriers whose
intrastate rates would have been at
parity with interstate rates in 2013 or
that already were at parity with
interstate rates are required to increase
their intrastate rates.
16. We further clarify that carriers
exiting the NECA traffic-sensitive pool
must reduce any intrastate switched
access rates that are higher than their
interstate switched access rates to the
levels established in connection with
exiting the pool pursuant to the rate cap
revisions adopted in this Order. In all
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cases, these new or revised rates will
become the capped switched access
rates set pursuant to 51.909(a)(1) for
purposes of applying other rules relying
on such rates or rate caps. In addition,
the revised rate caps will be used to
establish a carrier’s Eligible Recovery
going forward. Finally, we clarify that,
if a switched access rate is revised as a
result of the NECA pool entry and exit
process, any competitive local exchange
carrier (CLEC) benchmarking to that rate
must benchmark to the revised rate.
IV. NECA Petition for Clarification of
Pooling Issues
17. Background. On December 27,
2012, NECA filed a petition seeking
clarification of several NECA poolingrelated issues flowing from the 2012
Price Cap Conversion Order. In that
order, the Commission granted a waiver
to allow Consolidated Communications,
Inc., Frontier Communications
Corporation and Windstream
Corporation to convert their respective
average schedule study areas from rateof-return regulation to the regulatory
requirements applicable to price cap
carriers. The Commission also granted a
waiver of section 51.909 to the extent
necessary to allow NECA to increase its
switched access rates to reflect the lost
contributions to the switched access
portion of the NECA pool.
18. Discussion. NECA first asks the
Commission to clarify that NECA
pooling carriers do not need to change
their ‘‘Step 1’’ intrastate rates to account
for interstate rate adjustments related to
the converting carriers’ exit from the
NECA pool. The Step 1 intrastate rate
reductions required carriers to reduce
their intrastate access rates, effective on
July 3, 2012, based on one-half of the
difference between the revenue they
would have received from transitional
intrastate access service if it had been
priced at the capped interstate access
rates and the revenue received from
intrastate access rates. NECA notes that
if the Step 1 fifty-percent requirement
were ongoing, the increase in interstate
access rates on January 1, 2013 would
have similarly required an increase in
intrastate rates on January 1, 2013. If
intrastate rates were adjusted in early
2013 to reflect the 2012 Price Cap
Conversion Order, these adjustments
would only be effective until carriers
made their 2013 annual access tariff
filings, which, under the ICC transition
rules, require intrastate switched access
rates subject to the ICC transition to be
no higher than the corresponding
interstate rates as of July 1, 2013. We
believe that adjusting intrastate rates in
this manner would have presented an
unnecessary administrative burden with
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little, if any, offsetting benefit. If the
Commission had intended to require
such adjustments, carriers would have
been precluded from doing so without
further Commission action due to the
prohibition on rate increases. Therefore,
we clarify that the Step 1 reduction was
a one-time calculation that occurred on
July 3, 2012 with no ongoing intrastate
ratemaking obligation as a result of the
waiver. Thus, carriers were not required
to recalculate and re-file intrastate rates
as of January 1, 2013.
19. NECA also requests confirmation
that NECA pooling carriers are not
required to impute differences between
the current intrastate rates and what the
intrastate rates would be if adjusted to
correspond with the increase in
interstate rates required by the 2012
Price Cap Conversion Order. NECA
notes that the Commission has required
carriers to use the ‘‘maximum assessable
rate’’ in projecting 2012–13 intrastate
revenues for purposes of calculating
Eligible Recovery. As we clarified
above, no increase in intrastate rates is
required in this context. Thus, there is
no higher rate to impute, and rate-ofreturn carriers must use the highest
intrastate switched access rates they
could have charged in calculating trueups to their 2012–13 tariff year Eligible
Recovery.
20. Finally, NECA asks the
Commission to clarify whether, when
calculating ‘‘Step 2’’ transitional
intrastate switched access rates, NECA
pooling carriers whose interstate
switched access rates rose as of January
1, 2013 as a result of the 2012 Price Cap
Conversion Order should raise their
intrastate switched access rates to match
their interstate rate levels by July 1,
2013. The rules we clarify in Section III
above, which maintain interstate and
intrastate switched access rate parity
when a rate-of-return carrier enters or
exits the NECA pool, address this
request by clarifying that NECA pooling
carriers must, in the circumstances
described in the NECA Petition, raise
their intrastate switched access rates to
match interstate switched access rate
levels on July 1, 2013, subject to the
same rate structure and all subsequent
rate and rate structure modifications. A
carrier that does not raise its intrastate
rates would be required to impute the
higher rates in projecting its switched
access revenues for the 2013–14 tariff
period when calculating its Eligible
Recovery.
V. ‘‘STEP 2’’ Transitional Intrastate
Access Service Rates
21. Background. The USF/ICC
Transformation Order, among other
things, adopted rules setting forth a
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transition path to bill-and-keep for
certain terminating switched end office
and transport rates, certain originating
and terminating dedicated transport
rates, and certain legacy reciprocal
compensation rates. As part of the ‘‘Step
1’’ transition, beginning July 1, 2012,
price cap and rate-of-return carriers
were required to reduce intrastate
terminating switched end office and
transport rates, originating and
terminating dedicated transport rates,
and reciprocal compensation rates by
fifty percent of the difference between
such rates and each carrier’s interstate
access rates as of December 29, 2011. As
part of the ‘‘Step 2’’ transition,
beginning July 1, 2013, price cap and
rate-of-return carriers are required to
reduce their intrastate switched access
rates, including originating and
terminating dedicated transport
switched access service rates, to parity
with interstate switched access rates.
However, the rules adopted in the USF/
ICC Transformation Order to implement
Step 2 of the transition inadvertently
omitted originating and terminating
dedicated transport switched access
service rates from the list of rate-ofreturn carrier rate elements subject to
the Step 2 reductions that must be
reduced to the interstate level by July 1,
2013.
22. Discussion. We correct this
omission in the Commission’s rules by
amending the rules governing rate-ofreturn carriers’ transitional intrastate
access rates. We revise the transitional
intrastate access service rate schedule in
section 51.909(c)(1) to include
originating and terminating dedicated
transport switched access services rates
within the intrastate rate elements that
must be reduced to parity with
interstate switched access rates
beginning July 1, 2013.
VI. Treatment of Local Switching
Support in Part 69 Calculations
23. Background. In the USF/ICC
Transformation Order, the Commission
eliminated Local Switching Support
(LSS) as a separate universal service
support mechanism for rate-of-return
carriers beginning July 1, 2012.
However, the amount that was
previously recovered through LSS is
now accounted for in a rate-of-return
carrier’s Eligible Recovery. Further, LSS
continues to be listed as a factor in
making certain access charge
calculations pursuant to Part 69 of the
Commission’s rules. Treating LSS as
zero in these circumstances could,
absent clarification, enable rate-ofreturn carriers to claim duplicative
recovery for a portion of the amount
previously recovered through LSS,
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which is contrary to the intent of rules
adopted in the USF/ICC Transformation
Order. Accordingly, we revise and
clarify the Commission’s rules to resolve
a potential conflict that exists between
the calculation of Eligible Recovery
under section 51.917(d) and a potential
reading of sections 69.306(d)(2) and
69.415(c).
24. Section 51.917(d) provides the
method for calculating a rate-of-return
carrier’s Eligible Recovery throughout
the ICC reform transition period.
Section 51.917(d)(1) states that
‘‘[n]otwithstanding any other provision
of the Commission’s rules, a Rate-ofReturn Carrier may recover the amounts
specified in this paragraph [paragraph
(d)] through the mechanisms described
in paragraphs (e) and (f) of this section.’’
We read ‘‘notwithstanding’’ in this
context to mean that other rules that are
inconsistent with the requirements of
paragraph (d), or that would produce a
result inconsistent with the policies of
the USF/ICC Transformation Order,
must be interpreted consistent with
section 51.917. Broadly speaking,
section 51.917 establishes a rate-ofreturn carrier’s Base Period Revenue. A
rate-of-return carrier’s Base Period
Revenue includes, among other things,
its projected 2011 Interstate Switched
Access Revenue Requirement. A rate-ofreturn carrier’s projected 2011 Interstate
Switched Access Revenue Requirement,
in turn, includes the revenue
requirement that the rate-of-return
carrier projected to recover through LSS
in the 2011–12 tariff period.
Accordingly, the amount previously
recovered through LSS has been moved
into a rate-of-return carrier’s revenue
requirement, and is accounted for in the
calculation of a rate-of-return carrier’s
Eligible Recovery.
25. Section 69.306(d)(2) Line-Side
Port Costs Calculations. Some parties
have questioned whether the
elimination of LSS as a separate
universal service support mechanism
could be interpreted as altering the
section 69.306(d)(2) access charge
calculation that shifts line-side port
costs to the Common Line category.
Section 69.306(d)(2) provides that ‘‘lineside port costs shall be assigned to the
Common Line category. Such amount
shall be determined after any Local
Switching support has been removed
from the interstate Local Switching
revenue requirement.’’ One possible
interpretation of this provision is that
because LSS has been eliminated, there
is no amount by which to reduce the
Local Switching revenue requirement
for purposes of determining the lineside port costs to shift to the Common
Line category. Absent clarification, rate-
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of-return carriers might apply the
section 69.306(d)(2) thirty percent
default factor for calculating line-side
port costs to the entire, unreduced,
Local Switching revenue requirement in
order to determine the amount to be
shifted to the Common Line category.
26. We clarify that reading section
69.306(d)(2) to allow rate-of-return
carriers to apply the thirty percent
default factor to the entire Local
Switching revenue requirement would
conflict with section 51.917 because the
revenue recovery provided for what was
formerly LSS is already accounted for in
a rate-of-return carrier’s Base Period
Revenue. In essence, such an
interpretation would allow a carrier to
recover thirty percent of its former LSS
amount through higher Subscriber Line
Charges, or, more likely, through higher
Interstate Common Line Support (ICLS),
without reducing the amount of Eligible
Recovery it would be entitled to receive
under section 51.917(d). Such a result,
where rate-of-return carriers recover
thirty percent of what was formerly LSS
through a multi-million dollar line-port
cost shift to the Common Line category,
was not anticipated by the USF/ICC
Transformation Order.
27. Furthermore, duplicative recovery
is inconsistent with the policy goals of
the USF/ICC Transformation Order.
Specifically, section 51.917(d)(1)(vii)
provides that ‘‘[i]f a Rate-of-Return
Carrier recovers any costs or revenues
that are already being recovered as
Eligible Recovery through Access
Recovery Charges or the Connect
America Fund from another source, that
carrier’s ability to recover reduced
switched access revenue from Access
Recovery Charges or the Connect
America Fund shall be reduced to the
extent it receives duplicative recovery.’’
To avoid the potential for duplicative
recovery and the need to adjust future
Eligible Recovery calculations to
account for such duplicative recovery,
we revise section 69.306(d).
Specifically, we clarify that a rate-ofreturn carrier shall assign line-side port
costs to the Common Line category
equal to the line-side port costs it
shifted in its 2011 Interstate Switched
Access Revenue Requirement
calculation. The Bureau found this
approach reasonable in the development
of the average schedule formulas. This
approach is consistent with capping
switched access rates and avoids
requiring carriers to make unnecessary
calculations in the cost allocation
process.
28. Section 69.415 Transport
Interconnection Charge Calculations.
Similar to section 69.306(d)(2), section
69.415 includes LSS in calculations to
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determine the allocation of the
Transport Interconnection Charge (TIC)
among the various access charge
expense categories. The potential for
including a LSS value of zero in the
calculation specified in section 69.415
could affect the calculation of Eligible
Recovery in a manner contrary to the
Commission’s intent and similar to that
described in the preceding paragraph.
Therefore, we revise section 69.415 to
clarify that the amount of a rate-ofreturn carrier’s TIC costs to be
reallocated to each category must equal
the amount of TIC costs the carrier
shifted to each category in its 2011
Interstate Switched Access Revenue
Requirement calculation. The Bureau
found this approach reasonable in the
development of the average schedule
formulas, and we likewise utilize it
here.
VII. Corporate Operations Expense
Limit and Monthly $250 per Line Cap
29. Background. In the USF/ICC
Transformation Order, the Commission
adopted limits on the recovery of certain
costs through universal service
mechanisms. Specifically, the rules
adopted in the USF/ICC Transformation
Order limited the amount of corporate
operations expenses that a rate-of-return
carrier could recover through ICLS in
section 54.901(c). The Commission also
adopted a presumptive monthly $250
per-line cap on the amount of total highcost universal service support, which
would reduce the amount of ICLS
received by certain carriers. Several
parties have questioned the extent to
which disallowed expenses or reduced
ICLS may be recovered through the
NECA pooling processes.
30. Discussion. In this Order, we
clarify that the recovery limitations for
corporate operations expenses adopted
in the USF/ICC Transformation Order
shall operate as limits on a rate-of-return
carrier’s ability to recover the
disallowed amounts through the NECA
pooling processes. Permitting carriers to
receive increased pool settlements to
offset such reductions to ICLS would
effectively create an implicit support
flow to replace the disallowed explicit
support. This treatment is also
comparable to the effect that a nonpooling rate-of-return carrier would
experience because it cannot look to
other carriers to recover amounts it does
not receive as a result of the recovery
limitations. Therefore, it is appropriate
for NECA to modify its procedures such
that the effect of the corporate
operations expense limit and the
monthly $250 per-line cap are not
shifted to common line NECA pooling
carriers. In addition to clarifying the
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scope of the limitations, we revise
section 54.901(c) to clarify operation of
the limitations discussed above as they
relate to interstate corporate operations
expenses allocated to the Common Line
category, consistent with the USF/ICC
Transformation Order.
VIII. True-Up Adjustment Mechanisms
31. Background. In the USF/ICC
Transformation Order, the Commission
required rate-of-return carriers to project
ICC revenues for use in determining
Eligible Recovery. Because projected
demand, an input needed in order to
project ICC revenues, likely differs from
actual demand, the Commission
adopted a true-up procedure for rate-ofreturn carriers to adjust their Eligible
Recovery to account for any difference
between projected and actual switched
access revenues resulting from demand
variations. The Commission also
adopted true-up procedures for price
cap and rate-of-return carriers to adjust
their Eligible Recovery to account for
any difference between projected and
actual ARC revenues resulting from
ARC demand variations. Under these
true-up procedures, a carrier’s Eligible
Recovery for the period reflecting the
true-up would be reduced if the carrier’s
actual demand exceeded projected
demand; likewise a carrier’s Eligible
Recovery would be increased if the
carrier’s actual demand was less than
projected demand.
32. Discussion. The rules
implementing the true-up adjustments
do not properly calculate the difference
between projected and actual revenues
resulting from the difference in
projected and actual demand consistent
with the USF/ICC Transformation
Order. By not correctly accounting for
actual revenues, true-up revenue is
incorrectly calculated and is, therefore,
not correctly reflected in the steps for
calculating Eligible Recovery each year
as intended by the USF/ICC
Transformation Order. Revising the
rules is necessary in order for price cap
and rate-of-return carriers to correctly
implement the true-up procedures
adopted in the USF/ICC Transformation
Order. Therefore, we amend sections
51.915 and 51.917 so that they correctly
set out the method for determining the
amount of any true-up consistent with
the USF/ICC Transformation Order.
IX. Procedural Matters
A. Paperwork Reduction Act
33. This document does not contain
new or modified information collection
requirements subject to the Paperwork
Reduction Act of 1995 (PRA). Therefore,
the Order does not contain any new or
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modified information collection
burdens for small businesses with fewer
than 25 employees, pursuant to the
Small Business Paperwork Relief Act of
2002.
B. Final Regulatory Flexibility Act
Certification
34. The Regulatory Flexibility Act of
1980, as amended (RFA), requires
agencies to prepare a regulatory
flexibility analysis for rulemaking
proceedings, unless the agency certifies
that ‘‘the rule will not have a significant
economic impact on a substantial
number of small entities.’’ The RFA
generally defines ‘‘small entity’’ as
having the same meaning as the terms
‘‘small business,’’ ‘‘small organization,’’
and ‘‘small governmental jurisdiction.’’
In addition, the term ‘‘small business’’
has the same meaning as the term
‘‘small business concern’’ under the
Small Business Act. A small business
concern is one which: (1) Is
independently owned and operated; (2)
is not dominant in its field of operation;
and (3) satisfies any additional criteria
established by the Small Business
Administration (SBA).
35. We hereby certify that the rule
revisions adopted in this Order will not
have a significant economic impact on
a substantial number of small entities.
This Order amends rules adopted in the
USF/ICC Transformation Order by
correcting conflicts between the new or
revised rules and existing rules, as well
as addressing omissions or oversights.
These revisions do not create any
burdens, benefits, or requirements that
were not addressed by the Final
Regulatory Flexibility Analysis attached
to the USF/ICC Transformation Order.
The Commission will send a copy of
this Order, including a copy of this final
certification, to the Chief Counsel for
Advocacy of the Small Business
Administration. In addition, the Order
(or a summary thereof) and certification
will be published in the Federal
Register.
C. Congressional Review Act
36. The Commission will send a copy
of this Order to Congress and the
Government Accountability Office
pursuant to the Congressional Review
Act.
X. Ordering Clauses
37. Accordingly, it is ordered,
pursuant to the authority contained in
sections 1, 2, 4(i), 201–203, 220, 251,
252, 254, 303(r), and 403 of the
Communications Act of 1934, as
amended, 47 U.S.C. 151, 152, 154(i),
201–203, 220, 251, 254, 252, 303(r), and
403, and pursuant to sections 0.91,
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0.201(d), 0.291, 1.3, and 1.427 of the
Commission’s rules, 47 CFR 0.91,
0.201(d), 0.291, 1.3, and 1.427 and
pursuant to the delegation of authority
in paragraph 1404 of 26 FCC Rcd 17663
(2011), that this Order is adopted,
effective thirty (30) days after
publication of the text or summary
thereof in the Federal Register.
38. It is further ordered that Parts 51,
54 and 69 of the Commission’s rules, 47
CFR 51.909, 51.915, 51.917, 54.304,
69.306, and 69.415 are amended as set
forth in the Appendix, and such rule
amendments shall be effective 30 days
after the date of publication of the rule
amendments in the Federal Register.
39. It is further ordered that, pursuant
to section 1.3 of the Commission’s rules,
47 CFR 1.3, and pursuant to the
authority delegated in sections 0.91 and
0.291 of the Commission’s rules, 47 CFR
0.91, 0.291, sections 51.915(f)(6),
51.917(f)(3), 54.304(c)(1), (d)(1), 47 CFR
51.915(f)(6), 51.917(f)(3), 54.304(c)(1),
and (d)(1), are waived effective upon
release of this Order for the limited
purpose specified in paragraph 7, supra,
of this Order.
40. It is further ordered, pursuant to
the authority contained in sections 1–4
of the Communications Act of 1934, as
amended, 47 U.S.C. 151–154, and the
authority delegated in sections 0.91 and
0.291 of the Commission’s rules, 47 CFR
0.91 and 0.291, that the National
Exchange Carrier Association, Inc.
Petition for Clarification or Waiver, WC
Docket No. 12–63, Transmittal Nos. 41,
28, 57 (filed Dec. 27, 2012) is granted to
the extent provided herein and
dismissed as moot to the extent
provided herein.
41. It is further ordered that the
Commission shall send a copy of this
Order to Congress and the Government
Accountability Office pursuant to the
Congressional Review Act.
42. It is further ordered that the
Commission’s Consumer and
Governmental Affairs Bureau, Reference
Information Center, shall send a copy of
this Order, including the Final
Regulatory Flexibility Certification, to
the Chief Counsel for Advocacy of the
Small Business Administration.
List of Subjects in 47 CFR Parts 51, 54,
and 69
Communications common carriers,
Reporting and recordkeeping
requirements, Telecommunications,
Telephone.
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Federal Communications Commission.
Deena Shetler,
Associate Bureau Chief, Wireline Competition
Bureau.
Final Rule
For the reasons discussed in the
preamble, the Federal Communications
Commission amends 47 CFR parts 51,
54 and 69 as follows:
PART 51—INTERCONNECTION
1. The authority citation for part 51
continues to read as follows:
■
Authority: Sections 1–5, 7, 201–05, 207–
09, 218, 220, 225–27, 251–54, 256, 271,
303(r), 332, 706 of the Telecommunication
Act of 1996, 48 Stat. 1070, as amended, 1077;
47 U.S.C. 151–55, 157, 201–05, 207–09, 218,
220, 225–27, 251–54, 256, 271, 303(r), 332,
1302, 47 U.S.C. 157 note, unless otherwise
noted.
2. Amend § 51.909 by adding
paragraphs (a)(4) through (6) and
revising paragraphs (a)(3) and (c)(1) to
read as follows:
■
§ 51.909 Transition of rate-of-return carrier
access charges.
(a) * * *
(3) Except as provided in paragraphs
(a)(6) and (b)(4) of this section, nothing
in this section obligates or allows a
Rate-of-Return Carrier that has intrastate
rates lower than its functionally
equivalent interstate rates to make any
intrastate tariff filing or intrastate tariff
revisions raising such rates.
(4) Notwithstanding the requirements
of paragraph (a)(1) of this section, if a
Rate-of-Return Carrier enters or exits the
National Exchange Carrier Association
(Association), as defined in § 69.2(d) of
this chapter, traffic-sensitive tariff
pursuant to the provisions of § 69.3(e)(6)
of this chapter, the Association shall
adjust its switched access rate caps
referenced in paragraph (a)(1) of this
section.
(i) For each entering Rate-of-Return
Carrier, the Association shall:
(A) Determine each entering Rate-ofReturn Carrier’s interstate switched
access revenues for the preceding
calendar year;
(B) Determine the revenues that
would have been realized by the
entering Rate-of-Return Carrier in the
preceding calendar year if it had used
the Association’s switched access rates
(employing the rates for the appropriate
bands) as of December 31 of the
preceding year and the entering Rate-ofReturn Carrier’s switched access
demand used to determine switched
access revenues under paragraph
(a)(4)(i)(A) of this section; and
(C) Subtract the sum of the revenues
determined pursuant to paragraph
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(a)(4)(i)(B) of this section from the sum
of the revenues determined pursuant to
paragraph (a)(4)(i)(A) of this section.
(ii) The Association shall determine
the amount by which each exiting Rateof-Return Carrier is a net contributor or
net recipient to or from the switched
access segment of the Association pool
as follows:
(A) The Association shall calculate
the difference between each exiting
Rate-of-Return Carrier’s 2011–2012 tariff
year projected interstate switched access
revenues excluding Local Switching
Support and the Rate-of-Return Carrier’s
projected switched access pool
settlements excluding Local Switching
Support for the same period with a net
contribution amount being treated as a
positive amount and a net recipient
amount being treated as a negative
amount. The Association shall divide
the calculated difference by the Rate-ofReturn Carrier’s 2011–2012 tariff year
projected interstate switched access
revenues excluding Local Switching
Support to produce a percent net
contribution or net receipt factor.
(B) The Association shall multiply the
factor calculated in paragraph
(a)(4)(ii)(A) of this section by the Rateof-Return Carrier’s switched access
revenues for the preceding calendar year
to yield the amount of the Rate-ofReturn Carrier’s net contribution or net
receipts for the calendar year.
(iii) To determine the Association’s
adjusted switched access rate caps, the
Association shall:
(A) Add the amounts calculated under
paragraphs (a)(4)(i) and (a)(4)(ii) of this
section;
(B) Divide the amount determined in
paragraph (a)(4)(iii)(A) of this section by
the preceding year’s switched access
revenues of the Rate-of-Return Carriers
that will participate in the Association
traffic-sensitive tariff for the next annual
tariff period;
(C) The Association shall
proportionately adjust its June 30
switched access rate caps by the
percentage amount determined in
paragraph (a)(4)(iii)(B) of this section.
(iv) The interstate switched access
rate caps determined pursuant to
paragraph (a)(4)(iii)(C) of this section
shall be the new capped interstate
switched access rates for purposes of
§ 51.909(a). The Association shall
provide support in its annual access
tariff filing to justify the revised
interstate switched access rate caps, the
Access Recovery Charges that will be
assessed, and the amount of Connect
America Fund ICC support each carrier
will be eligible to receive.
(5) A Rate-of-Return Carrier exiting
the Association traffic-sensitive tariff
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pursuant to § 69.3(e)(6) of this chapter
must establish new switched access rate
caps as follows:
(i) The Rate-of-Return Carrier shall
multiply the factor determined in
paragraph (a)(4)(ii)(A) of this section by
negative one and then proportionately
adjust the Association’s capped
switched access rates as of the date
preceding the effective date of the
exiting Rate-of-Return Carrier’s next
annual tariff filing by this percentage. A
Rate-of-Return Carrier that was a net
contributor to the pool will have rate
caps that are lower than the
Association’s switched access rate caps,
while a net recipient will have switched
access rate caps that are higher than the
Association’s switched access rate caps;
(ii) The interstate switched access rate
caps determined pursuant to paragraph
(a)(5)(i) of this section shall be the new
capped interstate switched access rates
of the exiting Rate-of-Return Carrier for
purposes of § 51.909(a). An exiting Rateof-Return Carrier shall provide support
in its annual access tariff filing to justify
the revised interstate switched access
rate caps, the Access Recovery Charges
that will be assessed, and the amount of
Connect America Fund ICC support the
carrier will be eligible to receive.
(6) If the Association revises its
interstate switched access rate caps
pursuant to paragraph (a)(4) of this
section, each Rate-of-Return Carrier
participating in the upcoming annual
Association traffic-sensitive tariff shall:
(i) Revise any of its intrastate
switched access rates that would have
reached parity with its interstate
switched access rates in 2013 to parity
with the revised interstate switched
access rate levels;
(ii) The Association shall provide
Rate-of-Return Carriers that are
participating in the Association trafficsensitive pool with notice of any
revisions the Association proposes
under paragraph (a)(4) of this section no
later than May 1.
*
*
*
*
*
(c) * * *
(1) Transitional Intrastate Access
Service rates shall be no higher than the
Rate-of-Return Carrier’s interstate
Terminating End Office Access Service,
Terminating Tandem-Switched
Transport Access Service, and
Originating and Terminating Dedicated
Transport Access Service rates and
subject to the same rate structure and all
subsequent rate and rate structure
modifications. Except as provided in
paragraph (c)(2) of this section, nothing
in this section obligates or allows a
Rate-of-Return Carrier that has intrastate
rates lower than its functionally
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equivalent interstate rates to make any
intrastate tariff filing or intrastate tariff
revisions to increase such rates.
*
*
*
*
*
■ 3. Amend § 51.915 by revising
paragraphs (b)(13), (d)(1)(iii)(F),
(d)(1)(iv)(F), (d)(1)(v)(F), (d)(1)(vi)(G),
(d)(1)(vii)(H), (d)(1)(viii) and (f)(6) to
read as follows:
with its annual access tariff filing that
it has complied with paragraphs (d) and
(e) of this section, and, after doing so,
is eligible to receive the CAF ICC
support requested pursuant to
paragraph (f) of this section.
■ 4. Amend § 51.917 by revising
paragraphs (b)(5), (b)(6), (d)(1)(iii)(D)
and (f)(3) to read as follows:
§ 51.915 Recovery mechanism for price
cap carriers.
§ 51.917 Revenue recovery for Rate-ofReturn Carriers.
*
*
*
*
*
*
(b) * * *
(13) True-up Revenues for Access
Recovery Charge. True-up revenues for
Access Recovery Charge are equal to
(projected demand minus actual
realized demand for Access Recovery
Charges) times the tariffed Access
Recovery Charge. This calculation shall
be made separately for each class of
service and shall be adjusted to reflect
any changes in tariffed rates for the
Access Recovery Charge. Realized
demand is the demand for which
payment has been received by the time
the true-up is made.
*
*
*
*
*
(d) * * *
(1) * * *
(iii) * * *
(F) An amount equal to True-up
Revenues for Access Recovery Charges
for the year beginning July 1, 2012.
(iv) * * *
(F) An amount equal to True-up
Revenues for Access Recovery Charges
for the year beginning July 1, 2013.
(v) * * *
(F) An amount equal to True-up
Revenues for Access Recovery Charges
for the year beginning July 1, 2014.
(vi) * * *
(G) An amount equal to True-up
Revenues for Access Recovery Charges
for the year beginning July 1, 2015.
(vii) * * *
(H) An amount equal to True-up
Revenues for Access Recovery Charges
for the year beginning July 1, 2016.
(viii) Beginning July 1, 2019, and in
subsequent years, a Price Cap Carrier’s
eligible recovery will be equal to the
amount calculated in paragraph
(d)(1)(vii)(A) through (d)(1)(vii)(H) of
this section before the application of the
Price Cap Carrier Traffic Demand Factor
applicable in 2018 multiplied by the
appropriate Price Cap Carrier Traffic
Demand Factor for the year in question,
and then adding an amount equal to
True-up Revenues for Access Recovery
Charges for the year beginning July 1
two years earlier.
*
*
*
*
*
(f) * * *
(6) A Price Cap Carrier that elects to
receive CAF ICC support must certify
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*
*
*
*
(b) * * *
(5) True-up Adjustment. The True-up
Adjustment is equal to the True-up
Revenues for any particular service for
the period in question.
(6) True-up Revenues. True-up
Revenues from an access service are
equal to (projected demand minus
actual realized demand for that service)
times the default transition rate for that
service specified by § 51.909. True-up
Revenues from a non-access service are
equal to (projected demand minus
actual realized net demand for that
service) times the default transition rate
for that service specified by § 20.11(b) of
this chapter or § 51.705. Realized
demand is the demand for which
payment has been received, or has been
made, as appropriate, by the time the
true-up is made.
*
*
*
*
*
(d) * * *
(1) * * *
(iii) * * *
(D) An amount equal to True-up
Revenues for Access Recovery Charges
for the year beginning July 1, 2012.
*
*
*
*
*
(f) * * *
(3) A Rate-of-Return Carrier that elects
to receive CAF ICC support must certify
with its annual access tariff filing that
it has complied with paragraphs (d) and
(e), and, after doing so, is eligible to
receive the CAF ICC support requested
pursuant to paragraph (f) of this section.
*
*
*
*
*
PART 54—UNIVERSAL SERVICE
5. The authority citation for part 54
continues to read as follows:
■
Authority: Secs. 5, 48 Stat. 1068, as
amended; 47 U.S.C. 155.
6. Amend § 54.304 by revising
paragraphs (c)(1) and (d)(1) to read as
follows:
■
§ 54.304 Administration of Connect
America Fund Intercarrier Compensation
Replacement.
*
*
*
*
*
(c) * * *
(1) A Price Cap Carrier seeking CAF
ICC support pursuant to § 51.915 of this
E:\FR\FM\06MYR1.SGM
06MYR1
Federal Register / Vol. 78, No. 87 / Monday, May 6, 2013 / Rules and Regulations
chapter shall file data with the
Administrator, the Commission, and the
relevant state commissions no later than
June 30, 2012, for the first year, and on
the date it files its annual access tariff
filing with the Commission, in
subsequent years, establishing the
amount of the Price Cap Carrier’s
eligible CAF ICC funding during the
upcoming funding period pursuant to
§ 51.915 of this chapter. The amount
shall include any true-ups, pursuant to
§ 51.915 of this chapter, associated with
an earlier funding period.
*
*
*
*
*
(d) * * *
(1) A Rate-of-Return Carrier seeking
CAF ICC support shall file data with the
Administrator, the Commission, and the
relevant state commissions no later than
June 30, 2012, for the first year, and on
the date it files its annual access tariff
filing with the Commission, in
subsequent years, establishing the Rateof-Return Carrier’s projected eligibility
for CAF ICC funding during the
upcoming funding period pursuant to
§ 51.917 of this chapter. The projected
amount shall include any true-ups,
pursuant to § 51.917 of this chapter,
associated with an earlier funding
period.
*
*
*
*
*
■ 7. Amend § 54.901 by revising
paragraphs (c) introductory text and
(c)(2) to read as follows:
§ 54.901 Calculation of Interstate Common
Line Support.
*
*
*
*
*
(c) Beginning January 1, 2012, for
purposes of calculating the amount of
Interstate Common Line Support
determined pursuant to paragraph (a) of
this section that a non-price cap carrier
may receive, the corporate operations
expense allocated to the Common Line
Revenue Requirement, pursuant to
§ 69.409 of this chapter, shall be limited
to the lesser of:
*
*
*
*
*
(2) The portion of the monthly perloop amount computed pursuant to
§ 36.621(a)(4)(iii) of this chapter that
would be allocated to the interstate
Common Line Revenue Requirement
pursuant to § 69.409 of this chapter.
*
*
*
*
*
pmangrum on DSK3VPTVN1PROD with RULES
PART 69—ACCESS CHARGES
8. The authority citation for part 69
continues to read as follows:
■
Authority: 47 U.S.C. 154, 201, 202, 203,
205, 218, 220, 254, 403.
§ 69.306
Central office equipment (COE).
*
*
*
*
*
(d) * * *
(2) Until June 30, 2012, for non-price
cap local exchange carriers, line-side
port costs shall be assigned to the
Common Line rate element. Such
amount shall be determined after any
local switching support has been
removed from the interstate Local
Switching revenue requirement. Nonprice cap local exchange carriers may
use thirty percent of the interstate Local
Switching revenue requirement, minus
any local switching support, as a proxy
for allocating line port costs to the
Common Line category.
(3) Beginning July 1, 2012, a non-price
cap local exchange carrier shall assign
line-side port costs to the Common Line
rate element equal to the amount of lineside port costs it shifted in its 2011
projected Interstate Switched Access
Revenue Requirement.
*
*
*
*
*
10. Amend § 69.415 by revising
paragraphs (b) and (c) introductory text
and adding paragraph (d) to read as
follows:
■
§ 69.415 Reallocation of certain transport
expenses.
*
*
*
*
*
(b) Until June 30, 2012, the amount to
be reallocated is limited to the total
revenues recovered through the
interconnection charge assessed
pursuant to § 69.124 for the 12–month
period ending June 30, 2001.
(c) Until June 30, 2012, the
reallocation of the amount in paragraph
(b) of this section shall be based on each
access element’s projected revenue
requirement divided by the total
revenue requirement of all the access
elements, provided that:
*
*
*
*
*
(d) Beginning July 1, 2012, the
amount of the Transport
Interconnection Charges to be
reallocated to each category shall be
equal to the amount of Transport
Interconnection Charge costs the nonprice cap local exchange carrier was
projected to shift to each category in
projecting its 2011 Interstate Switched
Access Revenue Requirement.
*
*
*
*
*
[FR Doc. 2013–10562 Filed 5–3–13; 8:45 am]
BILLING CODE 6712–01–P
9. Amend § 69.306 by revising
paragraph (d)(2) and adding paragraph
(d)(3) to read as follows:
■
VerDate Mar<15>2010
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26269
FEDERAL COMMUNICATIONS
COMMISSION
47 CFR Part 54
[WC Docket Nos. 10–90, 05–337; DA 13–
807]
Connect America Fund; High-Cost
Universal Service Support
Federal Communications
Commission.
ACTION: Final rule.
AGENCY:
In this document, the Federal
Communications Commission
(Commission) primarily addresses the
model platform, which is the basic
framework for the model consisting of
key assumptions about the design of the
network and network engineering. The
Commission also addresses certain
framework issues relating to inputs.
DATES: Effective June 5, 2013.
FOR FURTHER INFORMATION CONTACT:
Katie King, Wireline Competition
Bureau, (202) 418–7491 or TTY: (202)
418–0484.
SUPPLEMENTARY INFORMATION: This is a
summary of the Commission’s Report
and Order in WC Docket Nos. 10–90,
05–337; DA 13–807, adopted on April
22, 2013 and released on April 22, 2013.
The full text of this document is
available for public inspection during
regular business hours in the FCC
Reference Center, Room CY–A257, 445
12th Street SW., Washington, DC 20554.
Or at the following Internet address:
https://hraunfoss.fcc.gov/edocs_public/
attachmatch/DA-13-807A1.pdf.
SUMMARY:
I. Introduction
1. In the USF/ICC Transformation
Order, 76 FR 73830, November 29, 2011,
the Commission comprehensively
reformed and modernized the universal
service and intercarrier compensation
systems to maintain voice service and
extend broadband-capable
infrastructure. As part of the reform, the
Commission adopted a framework for
providing support to areas served by
price cap carriers known as Phase II of
the Connect America Fund. An
estimated eighty-five percent of the
approximately 6.3 million locations in
the nation that lack access today to
terrestrial fixed broadband at or above
the Commission’s broadband speed
benchmark live in areas served by price
cap carriers. The Connect America Fund
will maintain voice service and expand
broadband availability to millions of
unserved Americans living in these
areas within the next five years, and
aims to close this gap entirely within a
decade. Through Phase II, the
E:\FR\FM\06MYR1.SGM
06MYR1
Agencies
[Federal Register Volume 78, Number 87 (Monday, May 6, 2013)]
[Rules and Regulations]
[Pages 26261-26269]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-10562]
=======================================================================
-----------------------------------------------------------------------
FEDERAL COMMUNICATIONS COMMISSION
47 CFR Parts 51, 54, and 69
[WC Docket No. 10-90, CC Docket No. 01-92, WC Docket No. 12-63,
Transmittal Nos. 41, 28, and 57; DA 13-564]
Connect America Fund; Developing a Unified Intercarrier
Compensation Regime
AGENCY: Federal Communications Commission.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: In this document, the Federal Communications Commission's
Wireline Competition Bureau clarifies and corrects certain provisions
of the Commission's rules in response to recent petitions and other
requests for clarification or correction of the new rules adopted as
part of Universal Service Fund intercarrier compensation transformation
reforms and also grants a limited waiver of the Commission's rules to
address administrative concerns and rule inconsistencies.
DATES: Effective June 5, 2013.
FOR FURTHER INFORMATION CONTACT: Robin Cohn, Wireline Competition
Bureau, Pricing Policy Division (202) 418-1520 or (202) 418-0484 (TTY);
or Christopher S. Koves, Wireline Competition Bureau, Pricing Policy
Division, (202) 418-1520 or (202) 418-0484 (TTY).
SUPPLEMENTARY INFORMATION: This is a summary of the Wireline
Competition Bureau's Order in WC Docket No. 10-90, CC Docket No. 01-92,
WC Docket No. 12-63, Transmittal Nos. 41, 28, and 57, DA 13-564,
adopted and released on March 27, 2013. The full text of this document
is available electronically via ECFS at https://fjallfoss.fcc.gov/ecfs/or may be downloaded at https://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-13-564A1.pdf. The full text of this document is also
available for public inspection during regular business hours in the
FCC Reference Center, 445 12th Street SW., Room CY-A257, Washington, DC
20554. The complete text may be purchased from the Commission's copy
contractor, Best Copy and Printing, Inc. (BCPI), 445 12th Street SW.,
Room CY-B402, Washington, DC 20554, (202) 488-5300 (voice) or (202)
488-5563 (facsimile) or via email at fcc@bcpiweb.com. To request
materials in accessible formats for people with disabilities (e.g.
braille, large print, electronic files, audio format, etc.) or to
request reasonable accommodations (e.g. accessible format documents,
sign language interpreters,
[[Page 26262]]
CART, etc.), send an email to fcc504@fcc.gov or call the Consumer &
Governmental Affairs Bureau at (202) 418-0530 (voice) or (202) 418-0432
(TTY).
I. Introduction
1. In the USF/ICC Transformation Order, 76 FR 81,562 (Dec. 28,
2011), the Commission delegated to the Wireline Competition Bureau
(Bureau) the authority to make any rule revisions necessary to ensure
that the reforms adopted are properly reflected in the rules, including
correcting any conflicts between the new or revised rules and existing
rules, as well as addressing any omissions or oversights. In this
Order, the Bureau acts pursuant to its delegated authority to clarify
and correct certain rules in response to recent petitions and other
requests for clarification or correction of the new rules.
Specifically, the Bureau harmonizes inconsistent Connect America Fund
intercarrier compensation (ICC) support eligibility certification and
reporting filing deadlines contained in Parts 51 and 54 of the
Commission's rules to coincide with the date on which carriers must
file their annual access tariffs. The Bureau also amends the Part 51
rules to clarify the effects of the USF/ICC Transformation Order on
National Exchange Carrier Association (NECA) traffic-sensitive tariff
(``NECA pool'') pooling when carriers enter or exit the pool. The
Bureau also addresses a petition for clarification filed by NECA by
clarifying various NECA pooling requirements adopted in the 2012 Price
Cap Conversion Order. In addition, the Bureau amends rules governing
the transition of rate-of-return carriers' intrastate switched access
rates to correct an omission. The Bureau amends the Part 69 access
charge rules to clarify the treatment of local switching support (LSS)
in the calculation of the line-side port costs shift to the Common Line
category and the allocation of Transport Interconnection Charge costs
among the various access charge expense categories. The Bureau also
clarifies the operation of the corporate operations expense limit and
monthly $250 per-line cap on universal service support contained in
Part 54. Finally, the Bureau corrects errors in the Part 51 rules
implementing the Eligible Recovery true-up adjustment mechanism.
II. Harmonizing Connect America Fund ICC Certification Deadlines
2. Background. The USF/ICC Transformation Order adopted, among
other things, an ICC reform timeline including rules that require
carriers to adjust, over a period of years, many of their legacy
interstate and intrastate switched access charges effective on July 1
of each of those years, with the ultimate goal of transitioning to a
bill-and-keep regime. The Commission also adopted a recovery mechanism
to mitigate the impact of reduced ICC revenues on carriers and to
facilitate continued investment in broadband infrastructure, while
providing greater certainty and predictability going forward than the
status quo. The recovery mechanism allows incumbent local exchange
carriers (LECs) to recover ICC revenues reduced due to the ICC reforms,
up to a defined baseline, which is defined as ``Eligible Recovery.'' A
carrier may recover a limited portion of its Eligible Recovery from its
end users through a fixed monthly charge called the Access Recovery
Charge (ARC), and the remainder of its Eligible Recovery, if it so
elects, from Connect America Fund ICC support.
3. The USF/ICC Transformation Order also included new certification
and reporting requirements for carriers that are eligible for and elect
to receive Connect America Fund ICC support. In particular, sections
51.915(f)(6) and 51.917(f)(3) require price cap and rate-of-return
carriers, respectively, that elect to receive Connect America Fund ICC
support to certify to the Commission with their 2012 annual access
tariff filings, and on April 1 in each subsequent year, that they
properly calculated their Eligible Recovery and ARC rates in order to
be eligible to receive Connect America Fund ICC support. Additionally,
sections 54.304(c)(1) and (d)(1) require eligible price cap and rate-
of-return carriers that elect to receive Connect America Fund ICC
support, pursuant to sections 51.915 and 51.917, to file data with the
Universal Service Administrative Company (USAC), the Commission, and
relevant state commissions by no later than June 30, 2012, and by March
31 in subsequent years, establishing the carrier's projected funding
eligibility amounts, including any true-ups, for the upcoming funding
period.
4. In ex parte filings, NECA and the United States Telecom
Association (USTelecom) requested modification of certain Commission
rules to correct inconsistencies among the Commission's Connect America
Fund ICC support eligibility certification deadlines. Specifically,
NECA asked the Bureau to change the deadline contained in section
51.917(f)(3) so that rate-of-return carriers are required to file their
annual Connect America Fund ICC support eligibility certifications with
their annual access tariff filings. NECA states that this change is
necessary because the April 1 deadline appears to be ``inconsistent
with rules governing submission of data forecasts and calculation of
Eligible Recovery and ARC rates associated with the normal annual
access tariff filing process for rate-of-return carriers.'' NECA argues
that data used for calculating ARC rates and monitoring purposes would
likely change between the April 1 Connect America Fund ICC support
eligibility certification deadline and mid-June, when annual access
tariffs are typically filed, and that such changes would ``require
numerous updates and revisions to data submitted previously by
carriers, potentially requiring corrections and re-certification.''
USTelecom agrees and requests that ``the modification to section
51.917(f)(3) requested by NECA for rate-of-return carriers also be made
to section 51.915(f)(6), which applies to price cap carriers.''
5. Discussion. We agree with NECA and USTelecom that revising the
Connect America Fund ICC support eligibility certification deadlines to
coincide with the annual interstate access tariff filing deadlines is
appropriate. Currently, the rules contain three separate filing
deadlines that essentially require carriers to develop the same
underlying data: their Eligible Recovery calculation, their expected
ARC rate levels, and their expected Connect America Fund ICC support
amounts. We believe that harmonizing the certification deadlines will
remove unnecessary administrative burdens and will also remove
potential conflicts within the rules caused by inconsistent reporting
deadlines adopted in the USF/ICC Transformation Order. Accordingly, we
revise the Connect America Fund ICC certification filing deadlines
contained in sections 51.915(f)(6) and 51.917(f)(3) so that they
coincide with the annual interstate access tariff filing dates.
6. In addition to revising the filing deadlines as requested by
NECA and USTelecom, we also, on our own motion, make a similar revision
to a Connect America Fund ICC support eligibility data filing deadline
contained in sections 54.304(c)(1) and (d)(1). These rule sections
require price cap and rate-of-return carriers seeking Connect America
Fund ICC support pursuant to sections 51.915 and 51.917, respectively,
to file data with USAC, the Commission, and relevant state commissions
establishing the amount of their Connect America Fund ICC support for
the upcoming funding year by no later than March 31 of each year. For
the same reasons discussed above,
[[Page 26263]]
the March 31 deadline is inconsistent with rules requiring carriers to
submit Eligible Recovery calculations and ARC rates in mid-June with
their annual access tariff filing. Accordingly, we revise the deadlines
contained in sections 54.304(c)(1) and (d)(1) to coincide with the
annual interstate access tariff filing dates.
7. The rule revisions adopted herein revise Connect America Fund
ICC support eligibility filing requirements so that they coincide with
carriers' annual access charge tariff filings. In the event that the
rule revisions adopted herein are not effective before March 31, 2013,
we find that good cause exists to waive applicable 2013 Part 51 and 54
filing deadlines to the extent described herein to eliminate the
administrative burdens that would result from inconsistent reporting
deadlines that the rule revisions we adopt are intended to remedy.
Accordingly, this limited waiver, if needed, defers price cap and rate-
of-return carriers' March 31, 2013 and April 1, 2013 Connect America
Fund ICC support eligibility data filing and certification obligations
to the date on which the 2013 annual access filings are required.
III. NECA Pooling Switched Access Rate Cap Adjustments
8. Background. As part of the transition to bill-and-keep, the
rules adopted in the USF/ICC Transformation Order capped interstate and
certain intrastate switched access rates for rate-of-return carriers at
the rates that were in effect on December 29, 2011. This approach
removed rate-of-return carriers from rate-of-return cost-based recovery
for interstate switched access services. However, to the extent that
rate-of-return carriers offer services other than interstate switched
access service, such as common line and special access services,
carriers remain subject to rate-of-return regulation for those
services. Rate-of-return carriers, thus, must continue to establish
their revenue requirements and rates for those services remaining under
rate-of-return regulation.
9. In the USF/ICC Transformation Order, the Commission established
a non-revenue neutral recovery mechanism that replaced rate-of-return
cost-based recovery for interstate switched access services provided by
rate-of-return carriers. The recovery mechanism carefully balanced
carrier recovery from end users, other users of the switched access
network such as interexchange carriers, and Connect America Fund ICC
support. As part of this new recovery mechanism, rate-of-return
carriers annually establish, as ``Eligible Recovery,'' an amount they
are eligible to recover from end users or Connect America Fund ICC
support in each year of the ICC transition. Eligible Recovery is
determined in subsequent years by reducing a carrier's Base Period
Revenue by an annual adjustment factor and by specified Expected
Revenues for the upcoming tariff period. A rate-of-return carrier
recovers its Eligible Recovery first from a capped ARC assessed on end
users and, if it is eligible, may elect to recover any remaining
amounts from Connect America Fund ICC support. The rules also contain a
true-up procedure for rate-of-return carriers to correct for variances
between actual and projected demand both for access services and the
ARC.
10. In the USF/ICC Transformation Order, the Commission stated that
``carriers remain free to make elections regarding participation in the
NECA pool and tariffing processes during the transition.'' Clearly, the
USF/ICC Transformation Order contemplated a continuation of the pooling
process for switched access services, but it did not provide procedures
governing the switched access rate caps when carriers enter or exit the
pool. In the Designation Order, which identified issues for
investigation related to NECA's 2012 annual access tariff filings, the
Bureau addressed how NECA should allocate projected switched access
revenues among pooling carriers. In lieu of NECA's allocation of
projected revenues entirely to the carrier that collected them, which
would have effectively ignored the pooling process, the Bureau stated
that it would be reasonable for NECA to ``allocate projected revenues
for purposes of determining each LEC's projected 2012-13 interstate
switched access revenues by allocating the projected pool revenues in
relation to each LEC's interstate Base Period Revenue divided by the
projected pool Base Period Revenue.'' Subsequently, NECA filed its
direct case employing the procedure outlined in the Designation Order.
11. Prior to the USF/ICC Transformation Order, when carriers
entered or exited the NECA pool, the pool switched access rates were
adjusted to reflect changes to the pool. The rate caps codified in
section 51.909(a), however, do not contain a mechanism for the pool
switched access rate caps to increase or decrease when carriers enter
or exit the pool. Absent such a mechanism, the pool switched access
rates will not realize revenues at the level that would provide pool
settlements to the remaining pooling carriers at the level they would
have received if carriers had not exited the pool. Furthermore, the
Eligible Recovery for the pooling carriers would increase or decrease
by the revenue difference between that produced by the preexisting rate
caps and the adjusted rate caps reflecting the effects of pool entry or
exit. Such funding is outside the scope of contemplated Connect America
Fund ICC support, which was intended to help mitigate the effects of
ICC reforms, not to offset the revenue effects of changes in NECA pool
participation. Thus, without a method for adjustment to reflect pool
entry and exit, the section 51.909(a) rate caps result in an unintended
shift in recovery between switched access charges and Connect America
Fund ICC support.
12. Further, prior to the USF/ICC Transformation Order, just as
NECA revised its rates when a carrier exited the pool, an exiting
carrier was required to establish rates based on its own costs under
either section 61.38 or 61.39 of the Commission's rules. The switched
access rate caps codified in section 51.909(a) do not, however, detail
how an exiting carrier should establish its switched access rate caps.
In the 2012 Price Cap Conversion Order, the Commission determined that
each exiting pooling carrier had to adjust the NECA switched access
rates it was charging to reflect the extent of its net contribution to
the pool and to establish switched access rates that would then become
the capped switched access rates for that carrier. These complimentary
actions by NECA and an exiting carrier together further the policies of
the USF/ICC Transformation Order and 2012 Price Cap Conversion Order.
13. Discussion. We find that providing a method for adjusting NECA
pool switched access rate caps to reflect pool entry and exit corrects
an omission in the rate cap rules. Therefore, we amend section
51.909(a) to address this omission, and to avoid creating unintended
burdens on Connect America Fund ICC support.
14. Specifically, as set forth in the Appendix, we revise the
Commission's rules to require NECA, when a carrier enters the NECA
pool, to adjust its switched access rate caps to account for the
difference between the entering carrier's revenues for the preceding
calendar year based on the entering carrier's switched access rates and
what the entering carrier's revenues for the preceding calendar year
would have been if calculated using NECA switched access rates.
Additionally, we revise the Commission's rate cap rules to include a
methodology that NECA must use to adjust its switched access rate caps
[[Page 26264]]
when carriers exit the NECA pool. Finally, we revise the Commission's
rules to clarify how exiting rate-of-return carriers will establish
their switched access rate caps to reflect the amount by which the
exiting carrier was a NECA pool net contributor or net recipient. These
rule revisions effectuate the Commission's intent that NECA pooling
remain available during the transition, consistent with its historical
operation, and ensure that the balance between interstate switched
access revenues and Connect America Fund ICC support is maintained and
does not affect a rate-of-return carrier's decision to enter or exit
the NECA pool. These rule revisions also ensure that no party entering
or exiting the NECA pool will receive a windfall as a result of its
election, which advances the Commission's pooling neutral policies.
15. Effects of Changes to Interstate Switched Access Rates on
Intrastate Rates. We also amend the Commission's rules as set forth in
the Appendix to clarify the flow-through effects that interstate
switched access rate cap adjustments resulting from NECA pool entry or
exit will have on intrastate switched access rates. An underlying
objective of the USF/ICC Transformation Order was to create a uniform,
national framework for the ICC transition. The USF/ICC Transformation
Order adopted rules that establish maximum intrastate switched access
rate levels based on their relationship to interstate rate levels. In a
subsequent order, the Bureau clarified the treatment of intrastate
switched access rates that are below interstate levels when the
intrastate composite switched access rate was higher than the composite
interstate switched access rate. Because the Commission's rules require
intrastate switched access rate levels to be set based on interstate
rate levels, we clarify that if NECA's interstate switched access rates
decrease, pooling carriers must also reduce their intrastate rates,
consistent with the framework established in the USF/ICC Transformation
Order. Similarly, we clarify that if NECA's switched access rates
increase, pooling carriers whose intrastate rates would have been at
parity with interstate rates in 2013 or that already were at parity
with interstate rates are required to increase their intrastate rates.
16. We further clarify that carriers exiting the NECA traffic-
sensitive pool must reduce any intrastate switched access rates that
are higher than their interstate switched access rates to the levels
established in connection with exiting the pool pursuant to the rate
cap revisions adopted in this Order. In all cases, these new or revised
rates will become the capped switched access rates set pursuant to
51.909(a)(1) for purposes of applying other rules relying on such rates
or rate caps. In addition, the revised rate caps will be used to
establish a carrier's Eligible Recovery going forward. Finally, we
clarify that, if a switched access rate is revised as a result of the
NECA pool entry and exit process, any competitive local exchange
carrier (CLEC) benchmarking to that rate must benchmark to the revised
rate.
IV. NECA Petition for Clarification of Pooling Issues
17. Background. On December 27, 2012, NECA filed a petition seeking
clarification of several NECA pooling-related issues flowing from the
2012 Price Cap Conversion Order. In that order, the Commission granted
a waiver to allow Consolidated Communications, Inc., Frontier
Communications Corporation and Windstream Corporation to convert their
respective average schedule study areas from rate-of-return regulation
to the regulatory requirements applicable to price cap carriers. The
Commission also granted a waiver of section 51.909 to the extent
necessary to allow NECA to increase its switched access rates to
reflect the lost contributions to the switched access portion of the
NECA pool.
18. Discussion. NECA first asks the Commission to clarify that NECA
pooling carriers do not need to change their ``Step 1'' intrastate
rates to account for interstate rate adjustments related to the
converting carriers' exit from the NECA pool. The Step 1 intrastate
rate reductions required carriers to reduce their intrastate access
rates, effective on July 3, 2012, based on one-half of the difference
between the revenue they would have received from transitional
intrastate access service if it had been priced at the capped
interstate access rates and the revenue received from intrastate access
rates. NECA notes that if the Step 1 fifty-percent requirement were
ongoing, the increase in interstate access rates on January 1, 2013
would have similarly required an increase in intrastate rates on
January 1, 2013. If intrastate rates were adjusted in early 2013 to
reflect the 2012 Price Cap Conversion Order, these adjustments would
only be effective until carriers made their 2013 annual access tariff
filings, which, under the ICC transition rules, require intrastate
switched access rates subject to the ICC transition to be no higher
than the corresponding interstate rates as of July 1, 2013. We believe
that adjusting intrastate rates in this manner would have presented an
unnecessary administrative burden with little, if any, offsetting
benefit. If the Commission had intended to require such adjustments,
carriers would have been precluded from doing so without further
Commission action due to the prohibition on rate increases. Therefore,
we clarify that the Step 1 reduction was a one-time calculation that
occurred on July 3, 2012 with no ongoing intrastate ratemaking
obligation as a result of the waiver. Thus, carriers were not required
to recalculate and re-file intrastate rates as of January 1, 2013.
19. NECA also requests confirmation that NECA pooling carriers are
not required to impute differences between the current intrastate rates
and what the intrastate rates would be if adjusted to correspond with
the increase in interstate rates required by the 2012 Price Cap
Conversion Order. NECA notes that the Commission has required carriers
to use the ``maximum assessable rate'' in projecting 2012-13 intrastate
revenues for purposes of calculating Eligible Recovery. As we clarified
above, no increase in intrastate rates is required in this context.
Thus, there is no higher rate to impute, and rate-of-return carriers
must use the highest intrastate switched access rates they could have
charged in calculating true-ups to their 2012-13 tariff year Eligible
Recovery.
20. Finally, NECA asks the Commission to clarify whether, when
calculating ``Step 2'' transitional intrastate switched access rates,
NECA pooling carriers whose interstate switched access rates rose as of
January 1, 2013 as a result of the 2012 Price Cap Conversion Order
should raise their intrastate switched access rates to match their
interstate rate levels by July 1, 2013. The rules we clarify in Section
III above, which maintain interstate and intrastate switched access
rate parity when a rate-of-return carrier enters or exits the NECA
pool, address this request by clarifying that NECA pooling carriers
must, in the circumstances described in the NECA Petition, raise their
intrastate switched access rates to match interstate switched access
rate levels on July 1, 2013, subject to the same rate structure and all
subsequent rate and rate structure modifications. A carrier that does
not raise its intrastate rates would be required to impute the higher
rates in projecting its switched access revenues for the 2013-14 tariff
period when calculating its Eligible Recovery.
V. ``STEP 2'' Transitional Intrastate Access Service Rates
21. Background. The USF/ICC Transformation Order, among other
things, adopted rules setting forth a
[[Page 26265]]
transition path to bill-and-keep for certain terminating switched end
office and transport rates, certain originating and terminating
dedicated transport rates, and certain legacy reciprocal compensation
rates. As part of the ``Step 1'' transition, beginning July 1, 2012,
price cap and rate-of-return carriers were required to reduce
intrastate terminating switched end office and transport rates,
originating and terminating dedicated transport rates, and reciprocal
compensation rates by fifty percent of the difference between such
rates and each carrier's interstate access rates as of December 29,
2011. As part of the ``Step 2'' transition, beginning July 1, 2013,
price cap and rate-of-return carriers are required to reduce their
intrastate switched access rates, including originating and terminating
dedicated transport switched access service rates, to parity with
interstate switched access rates. However, the rules adopted in the
USF/ICC Transformation Order to implement Step 2 of the transition
inadvertently omitted originating and terminating dedicated transport
switched access service rates from the list of rate-of-return carrier
rate elements subject to the Step 2 reductions that must be reduced to
the interstate level by July 1, 2013.
22. Discussion. We correct this omission in the Commission's rules
by amending the rules governing rate-of-return carriers' transitional
intrastate access rates. We revise the transitional intrastate access
service rate schedule in section 51.909(c)(1) to include originating
and terminating dedicated transport switched access services rates
within the intrastate rate elements that must be reduced to parity with
interstate switched access rates beginning July 1, 2013.
VI. Treatment of Local Switching Support in Part 69 Calculations
23. Background. In the USF/ICC Transformation Order, the Commission
eliminated Local Switching Support (LSS) as a separate universal
service support mechanism for rate-of-return carriers beginning July 1,
2012. However, the amount that was previously recovered through LSS is
now accounted for in a rate-of-return carrier's Eligible Recovery.
Further, LSS continues to be listed as a factor in making certain
access charge calculations pursuant to Part 69 of the Commission's
rules. Treating LSS as zero in these circumstances could, absent
clarification, enable rate-of-return carriers to claim duplicative
recovery for a portion of the amount previously recovered through LSS,
which is contrary to the intent of rules adopted in the USF/ICC
Transformation Order. Accordingly, we revise and clarify the
Commission's rules to resolve a potential conflict that exists between
the calculation of Eligible Recovery under section 51.917(d) and a
potential reading of sections 69.306(d)(2) and 69.415(c).
24. Section 51.917(d) provides the method for calculating a rate-
of-return carrier's Eligible Recovery throughout the ICC reform
transition period. Section 51.917(d)(1) states that ``[n]otwithstanding
any other provision of the Commission's rules, a Rate-of-Return Carrier
may recover the amounts specified in this paragraph [paragraph (d)]
through the mechanisms described in paragraphs (e) and (f) of this
section.'' We read ``notwithstanding'' in this context to mean that
other rules that are inconsistent with the requirements of paragraph
(d), or that would produce a result inconsistent with the policies of
the USF/ICC Transformation Order, must be interpreted consistent with
section 51.917. Broadly speaking, section 51.917 establishes a rate-of-
return carrier's Base Period Revenue. A rate-of-return carrier's Base
Period Revenue includes, among other things, its projected 2011
Interstate Switched Access Revenue Requirement. A rate-of-return
carrier's projected 2011 Interstate Switched Access Revenue
Requirement, in turn, includes the revenue requirement that the rate-
of-return carrier projected to recover through LSS in the 2011-12
tariff period. Accordingly, the amount previously recovered through LSS
has been moved into a rate-of-return carrier's revenue requirement, and
is accounted for in the calculation of a rate-of-return carrier's
Eligible Recovery.
25. Section 69.306(d)(2) Line-Side Port Costs Calculations. Some
parties have questioned whether the elimination of LSS as a separate
universal service support mechanism could be interpreted as altering
the section 69.306(d)(2) access charge calculation that shifts line-
side port costs to the Common Line category. Section 69.306(d)(2)
provides that ``line-side port costs shall be assigned to the Common
Line category. Such amount shall be determined after any Local
Switching support has been removed from the interstate Local Switching
revenue requirement.'' One possible interpretation of this provision is
that because LSS has been eliminated, there is no amount by which to
reduce the Local Switching revenue requirement for purposes of
determining the line-side port costs to shift to the Common Line
category. Absent clarification, rate-of-return carriers might apply the
section 69.306(d)(2) thirty percent default factor for calculating
line-side port costs to the entire, unreduced, Local Switching revenue
requirement in order to determine the amount to be shifted to the
Common Line category.
26. We clarify that reading section 69.306(d)(2) to allow rate-of-
return carriers to apply the thirty percent default factor to the
entire Local Switching revenue requirement would conflict with section
51.917 because the revenue recovery provided for what was formerly LSS
is already accounted for in a rate-of-return carrier's Base Period
Revenue. In essence, such an interpretation would allow a carrier to
recover thirty percent of its former LSS amount through higher
Subscriber Line Charges, or, more likely, through higher Interstate
Common Line Support (ICLS), without reducing the amount of Eligible
Recovery it would be entitled to receive under section 51.917(d). Such
a result, where rate-of-return carriers recover thirty percent of what
was formerly LSS through a multi-million dollar line-port cost shift to
the Common Line category, was not anticipated by the USF/ICC
Transformation Order.
27. Furthermore, duplicative recovery is inconsistent with the
policy goals of the USF/ICC Transformation Order. Specifically, section
51.917(d)(1)(vii) provides that ``[i]f a Rate-of-Return Carrier
recovers any costs or revenues that are already being recovered as
Eligible Recovery through Access Recovery Charges or the Connect
America Fund from another source, that carrier's ability to recover
reduced switched access revenue from Access Recovery Charges or the
Connect America Fund shall be reduced to the extent it receives
duplicative recovery.'' To avoid the potential for duplicative recovery
and the need to adjust future Eligible Recovery calculations to account
for such duplicative recovery, we revise section 69.306(d).
Specifically, we clarify that a rate-of-return carrier shall assign
line-side port costs to the Common Line category equal to the line-side
port costs it shifted in its 2011 Interstate Switched Access Revenue
Requirement calculation. The Bureau found this approach reasonable in
the development of the average schedule formulas. This approach is
consistent with capping switched access rates and avoids requiring
carriers to make unnecessary calculations in the cost allocation
process.
28. Section 69.415 Transport Interconnection Charge Calculations.
Similar to section 69.306(d)(2), section 69.415 includes LSS in
calculations to
[[Page 26266]]
determine the allocation of the Transport Interconnection Charge (TIC)
among the various access charge expense categories. The potential for
including a LSS value of zero in the calculation specified in section
69.415 could affect the calculation of Eligible Recovery in a manner
contrary to the Commission's intent and similar to that described in
the preceding paragraph. Therefore, we revise section 69.415 to clarify
that the amount of a rate-of-return carrier's TIC costs to be
reallocated to each category must equal the amount of TIC costs the
carrier shifted to each category in its 2011 Interstate Switched Access
Revenue Requirement calculation. The Bureau found this approach
reasonable in the development of the average schedule formulas, and we
likewise utilize it here.
VII. Corporate Operations Expense Limit and Monthly $250 per Line Cap
29. Background. In the USF/ICC Transformation Order, the Commission
adopted limits on the recovery of certain costs through universal
service mechanisms. Specifically, the rules adopted in the USF/ICC
Transformation Order limited the amount of corporate operations
expenses that a rate-of-return carrier could recover through ICLS in
section 54.901(c). The Commission also adopted a presumptive monthly
$250 per-line cap on the amount of total high-cost universal service
support, which would reduce the amount of ICLS received by certain
carriers. Several parties have questioned the extent to which
disallowed expenses or reduced ICLS may be recovered through the NECA
pooling processes.
30. Discussion. In this Order, we clarify that the recovery
limitations for corporate operations expenses adopted in the USF/ICC
Transformation Order shall operate as limits on a rate-of-return
carrier's ability to recover the disallowed amounts through the NECA
pooling processes. Permitting carriers to receive increased pool
settlements to offset such reductions to ICLS would effectively create
an implicit support flow to replace the disallowed explicit support.
This treatment is also comparable to the effect that a non-pooling
rate-of-return carrier would experience because it cannot look to other
carriers to recover amounts it does not receive as a result of the
recovery limitations. Therefore, it is appropriate for NECA to modify
its procedures such that the effect of the corporate operations expense
limit and the monthly $250 per-line cap are not shifted to common line
NECA pooling carriers. In addition to clarifying the scope of the
limitations, we revise section 54.901(c) to clarify operation of the
limitations discussed above as they relate to interstate corporate
operations expenses allocated to the Common Line category, consistent
with the USF/ICC Transformation Order.
VIII. True-Up Adjustment Mechanisms
31. Background. In the USF/ICC Transformation Order, the Commission
required rate-of-return carriers to project ICC revenues for use in
determining Eligible Recovery. Because projected demand, an input
needed in order to project ICC revenues, likely differs from actual
demand, the Commission adopted a true-up procedure for rate-of-return
carriers to adjust their Eligible Recovery to account for any
difference between projected and actual switched access revenues
resulting from demand variations. The Commission also adopted true-up
procedures for price cap and rate-of-return carriers to adjust their
Eligible Recovery to account for any difference between projected and
actual ARC revenues resulting from ARC demand variations. Under these
true-up procedures, a carrier's Eligible Recovery for the period
reflecting the true-up would be reduced if the carrier's actual demand
exceeded projected demand; likewise a carrier's Eligible Recovery would
be increased if the carrier's actual demand was less than projected
demand.
32. Discussion. The rules implementing the true-up adjustments do
not properly calculate the difference between projected and actual
revenues resulting from the difference in projected and actual demand
consistent with the USF/ICC Transformation Order. By not correctly
accounting for actual revenues, true-up revenue is incorrectly
calculated and is, therefore, not correctly reflected in the steps for
calculating Eligible Recovery each year as intended by the USF/ICC
Transformation Order. Revising the rules is necessary in order for
price cap and rate-of-return carriers to correctly implement the true-
up procedures adopted in the USF/ICC Transformation Order. Therefore,
we amend sections 51.915 and 51.917 so that they correctly set out the
method for determining the amount of any true-up consistent with the
USF/ICC Transformation Order.
IX. Procedural Matters
A. Paperwork Reduction Act
33. This document does not contain new or modified information
collection requirements subject to the Paperwork Reduction Act of 1995
(PRA). Therefore, the Order does not contain any new or modified
information collection burdens for small businesses with fewer than 25
employees, pursuant to the Small Business Paperwork Relief Act of 2002.
B. Final Regulatory Flexibility Act Certification
34. The Regulatory Flexibility Act of 1980, as amended (RFA),
requires agencies to prepare a regulatory flexibility analysis for
rulemaking proceedings, unless the agency certifies that ``the rule
will not have a significant economic impact on a substantial number of
small entities.'' The RFA generally defines ``small entity'' as having
the same meaning as the terms ``small business,'' ``small
organization,'' and ``small governmental jurisdiction.'' In addition,
the term ``small business'' has the same meaning as the term ``small
business concern'' under the Small Business Act. A small business
concern is one which: (1) Is independently owned and operated; (2) is
not dominant in its field of operation; and (3) satisfies any
additional criteria established by the Small Business Administration
(SBA).
35. We hereby certify that the rule revisions adopted in this Order
will not have a significant economic impact on a substantial number of
small entities. This Order amends rules adopted in the USF/ICC
Transformation Order by correcting conflicts between the new or revised
rules and existing rules, as well as addressing omissions or
oversights. These revisions do not create any burdens, benefits, or
requirements that were not addressed by the Final Regulatory
Flexibility Analysis attached to the USF/ICC Transformation Order. The
Commission will send a copy of this Order, including a copy of this
final certification, to the Chief Counsel for Advocacy of the Small
Business Administration. In addition, the Order (or a summary thereof)
and certification will be published in the Federal Register.
C. Congressional Review Act
36. The Commission will send a copy of this Order to Congress and
the Government Accountability Office pursuant to the Congressional
Review Act.
X. Ordering Clauses
37. Accordingly, it is ordered, pursuant to the authority contained
in sections 1, 2, 4(i), 201-203, 220, 251, 252, 254, 303(r), and 403 of
the Communications Act of 1934, as amended, 47 U.S.C. 151, 152, 154(i),
201-203, 220, 251, 254, 252, 303(r), and 403, and pursuant to sections
0.91,
[[Page 26267]]
0.201(d), 0.291, 1.3, and 1.427 of the Commission's rules, 47 CFR 0.91,
0.201(d), 0.291, 1.3, and 1.427 and pursuant to the delegation of
authority in paragraph 1404 of 26 FCC Rcd 17663 (2011), that this Order
is adopted, effective thirty (30) days after publication of the text or
summary thereof in the Federal Register.
38. It is further ordered that Parts 51, 54 and 69 of the
Commission's rules, 47 CFR 51.909, 51.915, 51.917, 54.304, 69.306, and
69.415 are amended as set forth in the Appendix, and such rule
amendments shall be effective 30 days after the date of publication of
the rule amendments in the Federal Register.
39. It is further ordered that, pursuant to section 1.3 of the
Commission's rules, 47 CFR 1.3, and pursuant to the authority delegated
in sections 0.91 and 0.291 of the Commission's rules, 47 CFR 0.91,
0.291, sections 51.915(f)(6), 51.917(f)(3), 54.304(c)(1), (d)(1), 47
CFR 51.915(f)(6), 51.917(f)(3), 54.304(c)(1), and (d)(1), are waived
effective upon release of this Order for the limited purpose specified
in paragraph 7, supra, of this Order.
40. It is further ordered, pursuant to the authority contained in
sections 1-4 of the Communications Act of 1934, as amended, 47 U.S.C.
151-154, and the authority delegated in sections 0.91 and 0.291 of the
Commission's rules, 47 CFR 0.91 and 0.291, that the National Exchange
Carrier Association, Inc. Petition for Clarification or Waiver, WC
Docket No. 12-63, Transmittal Nos. 41, 28, 57 (filed Dec. 27, 2012) is
granted to the extent provided herein and dismissed as moot to the
extent provided herein.
41. It is further ordered that the Commission shall send a copy of
this Order to Congress and the Government Accountability Office
pursuant to the Congressional Review Act.
42. It is further ordered that the Commission's Consumer and
Governmental Affairs Bureau, Reference Information Center, shall send a
copy of this Order, including the Final Regulatory Flexibility
Certification, to the Chief Counsel for Advocacy of the Small Business
Administration.
List of Subjects in 47 CFR Parts 51, 54, and 69
Communications common carriers, Reporting and recordkeeping
requirements, Telecommunications, Telephone.
Federal Communications Commission.
Deena Shetler,
Associate Bureau Chief, Wireline Competition Bureau.
Final Rule
For the reasons discussed in the preamble, the Federal
Communications Commission amends 47 CFR parts 51, 54 and 69 as follows:
PART 51--INTERCONNECTION
0
1. The authority citation for part 51 continues to read as follows:
Authority: Sections 1-5, 7, 201-05, 207-09, 218, 220, 225-27,
251-54, 256, 271, 303(r), 332, 706 of the Telecommunication Act of
1996, 48 Stat. 1070, as amended, 1077; 47 U.S.C. 151-55, 157, 201-
05, 207-09, 218, 220, 225-27, 251-54, 256, 271, 303(r), 332, 1302,
47 U.S.C. 157 note, unless otherwise noted.
0
2. Amend Sec. 51.909 by adding paragraphs (a)(4) through (6) and
revising paragraphs (a)(3) and (c)(1) to read as follows:
Sec. 51.909 Transition of rate-of-return carrier access charges.
(a) * * *
(3) Except as provided in paragraphs (a)(6) and (b)(4) of this
section, nothing in this section obligates or allows a Rate-of-Return
Carrier that has intrastate rates lower than its functionally
equivalent interstate rates to make any intrastate tariff filing or
intrastate tariff revisions raising such rates.
(4) Notwithstanding the requirements of paragraph (a)(1) of this
section, if a Rate-of-Return Carrier enters or exits the National
Exchange Carrier Association (Association), as defined in Sec. 69.2(d)
of this chapter, traffic-sensitive tariff pursuant to the provisions of
Sec. 69.3(e)(6) of this chapter, the Association shall adjust its
switched access rate caps referenced in paragraph (a)(1) of this
section.
(i) For each entering Rate-of-Return Carrier, the Association
shall:
(A) Determine each entering Rate-of-Return Carrier's interstate
switched access revenues for the preceding calendar year;
(B) Determine the revenues that would have been realized by the
entering Rate-of-Return Carrier in the preceding calendar year if it
had used the Association's switched access rates (employing the rates
for the appropriate bands) as of December 31 of the preceding year and
the entering Rate-of-Return Carrier's switched access demand used to
determine switched access revenues under paragraph (a)(4)(i)(A) of this
section; and
(C) Subtract the sum of the revenues determined pursuant to
paragraph (a)(4)(i)(B) of this section from the sum of the revenues
determined pursuant to paragraph (a)(4)(i)(A) of this section.
(ii) The Association shall determine the amount by which each
exiting Rate-of-Return Carrier is a net contributor or net recipient to
or from the switched access segment of the Association pool as follows:
(A) The Association shall calculate the difference between each
exiting Rate-of-Return Carrier's 2011-2012 tariff year projected
interstate switched access revenues excluding Local Switching Support
and the Rate-of-Return Carrier's projected switched access pool
settlements excluding Local Switching Support for the same period with
a net contribution amount being treated as a positive amount and a net
recipient amount being treated as a negative amount. The Association
shall divide the calculated difference by the Rate-of-Return Carrier's
2011-2012 tariff year projected interstate switched access revenues
excluding Local Switching Support to produce a percent net contribution
or net receipt factor.
(B) The Association shall multiply the factor calculated in
paragraph (a)(4)(ii)(A) of this section by the Rate-of-Return Carrier's
switched access revenues for the preceding calendar year to yield the
amount of the Rate-of-Return Carrier's net contribution or net receipts
for the calendar year.
(iii) To determine the Association's adjusted switched access rate
caps, the Association shall:
(A) Add the amounts calculated under paragraphs (a)(4)(i) and
(a)(4)(ii) of this section;
(B) Divide the amount determined in paragraph (a)(4)(iii)(A) of
this section by the preceding year's switched access revenues of the
Rate-of-Return Carriers that will participate in the Association
traffic-sensitive tariff for the next annual tariff period;
(C) The Association shall proportionately adjust its June 30
switched access rate caps by the percentage amount determined in
paragraph (a)(4)(iii)(B) of this section.
(iv) The interstate switched access rate caps determined pursuant
to paragraph (a)(4)(iii)(C) of this section shall be the new capped
interstate switched access rates for purposes of Sec. 51.909(a). The
Association shall provide support in its annual access tariff filing to
justify the revised interstate switched access rate caps, the Access
Recovery Charges that will be assessed, and the amount of Connect
America Fund ICC support each carrier will be eligible to receive.
(5) A Rate-of-Return Carrier exiting the Association traffic-
sensitive tariff
[[Page 26268]]
pursuant to Sec. 69.3(e)(6) of this chapter must establish new
switched access rate caps as follows:
(i) The Rate-of-Return Carrier shall multiply the factor determined
in paragraph (a)(4)(ii)(A) of this section by negative one and then
proportionately adjust the Association's capped switched access rates
as of the date preceding the effective date of the exiting Rate-of-
Return Carrier's next annual tariff filing by this percentage. A Rate-
of-Return Carrier that was a net contributor to the pool will have rate
caps that are lower than the Association's switched access rate caps,
while a net recipient will have switched access rate caps that are
higher than the Association's switched access rate caps;
(ii) The interstate switched access rate caps determined pursuant
to paragraph (a)(5)(i) of this section shall be the new capped
interstate switched access rates of the exiting Rate-of-Return Carrier
for purposes of Sec. 51.909(a). An exiting Rate-of-Return Carrier
shall provide support in its annual access tariff filing to justify the
revised interstate switched access rate caps, the Access Recovery
Charges that will be assessed, and the amount of Connect America Fund
ICC support the carrier will be eligible to receive.
(6) If the Association revises its interstate switched access rate
caps pursuant to paragraph (a)(4) of this section, each Rate-of-Return
Carrier participating in the upcoming annual Association traffic-
sensitive tariff shall:
(i) Revise any of its intrastate switched access rates that would
have reached parity with its interstate switched access rates in 2013
to parity with the revised interstate switched access rate levels;
(ii) The Association shall provide Rate-of-Return Carriers that are
participating in the Association traffic-sensitive pool with notice of
any revisions the Association proposes under paragraph (a)(4) of this
section no later than May 1.
* * * * *
(c) * * *
(1) Transitional Intrastate Access Service rates shall be no higher
than the Rate-of-Return Carrier's interstate Terminating End Office
Access Service, Terminating Tandem-Switched Transport Access Service,
and Originating and Terminating Dedicated Transport Access Service
rates and subject to the same rate structure and all subsequent rate
and rate structure modifications. Except as provided in paragraph
(c)(2) of this section, nothing in this section obligates or allows a
Rate-of-Return Carrier that has intrastate rates lower than its
functionally equivalent interstate rates to make any intrastate tariff
filing or intrastate tariff revisions to increase such rates.
* * * * *
0
3. Amend Sec. 51.915 by revising paragraphs (b)(13), (d)(1)(iii)(F),
(d)(1)(iv)(F), (d)(1)(v)(F), (d)(1)(vi)(G), (d)(1)(vii)(H),
(d)(1)(viii) and (f)(6) to read as follows:
Sec. 51.915 Recovery mechanism for price cap carriers.
* * * * *
(b) * * *
(13) True-up Revenues for Access Recovery Charge. True-up revenues
for Access Recovery Charge are equal to (projected demand minus actual
realized demand for Access Recovery Charges) times the tariffed Access
Recovery Charge. This calculation shall be made separately for each
class of service and shall be adjusted to reflect any changes in
tariffed rates for the Access Recovery Charge. Realized demand is the
demand for which payment has been received by the time the true-up is
made.
* * * * *
(d) * * *
(1) * * *
(iii) * * *
(F) An amount equal to True-up Revenues for Access Recovery Charges
for the year beginning July 1, 2012.
(iv) * * *
(F) An amount equal to True-up Revenues for Access Recovery Charges
for the year beginning July 1, 2013.
(v) * * *
(F) An amount equal to True-up Revenues for Access Recovery Charges
for the year beginning July 1, 2014.
(vi) * * *
(G) An amount equal to True-up Revenues for Access Recovery Charges
for the year beginning July 1, 2015.
(vii) * * *
(H) An amount equal to True-up Revenues for Access Recovery Charges
for the year beginning July 1, 2016.
(viii) Beginning July 1, 2019, and in subsequent years, a Price Cap
Carrier's eligible recovery will be equal to the amount calculated in
paragraph (d)(1)(vii)(A) through (d)(1)(vii)(H) of this section before
the application of the Price Cap Carrier Traffic Demand Factor
applicable in 2018 multiplied by the appropriate Price Cap Carrier
Traffic Demand Factor for the year in question, and then adding an
amount equal to True-up Revenues for Access Recovery Charges for the
year beginning July 1 two years earlier.
* * * * *
(f) * * *
(6) A Price Cap Carrier that elects to receive CAF ICC support must
certify with its annual access tariff filing that it has complied with
paragraphs (d) and (e) of this section, and, after doing so, is
eligible to receive the CAF ICC support requested pursuant to paragraph
(f) of this section.
0
4. Amend Sec. 51.917 by revising paragraphs (b)(5), (b)(6),
(d)(1)(iii)(D) and (f)(3) to read as follows:
Sec. 51.917 Revenue recovery for Rate-of-Return Carriers.
* * * * *
(b) * * *
(5) True-up Adjustment. The True-up Adjustment is equal to the
True-up Revenues for any particular service for the period in question.
(6) True-up Revenues. True-up Revenues from an access service are
equal to (projected demand minus actual realized demand for that
service) times the default transition rate for that service specified
by Sec. 51.909. True-up Revenues from a non-access service are equal
to (projected demand minus actual realized net demand for that service)
times the default transition rate for that service specified by Sec.
20.11(b) of this chapter or Sec. 51.705. Realized demand is the demand
for which payment has been received, or has been made, as appropriate,
by the time the true-up is made.
* * * * *
(d) * * *
(1) * * *
(iii) * * *
(D) An amount equal to True-up Revenues for Access Recovery Charges
for the year beginning July 1, 2012.
* * * * *
(f) * * *
(3) A Rate-of-Return Carrier that elects to receive CAF ICC support
must certify with its annual access tariff filing that it has complied
with paragraphs (d) and (e), and, after doing so, is eligible to
receive the CAF ICC support requested pursuant to paragraph (f) of this
section.
* * * * *
PART 54--UNIVERSAL SERVICE
0
5. The authority citation for part 54 continues to read as follows:
Authority: Secs. 5, 48 Stat. 1068, as amended; 47 U.S.C. 155.
0
6. Amend Sec. 54.304 by revising paragraphs (c)(1) and (d)(1) to read
as follows:
Sec. 54.304 Administration of Connect America Fund Intercarrier
Compensation Replacement.
* * * * *
(c) * * *
(1) A Price Cap Carrier seeking CAF ICC support pursuant to Sec.
51.915 of this
[[Page 26269]]
chapter shall file data with the Administrator, the Commission, and the
relevant state commissions no later than June 30, 2012, for the first
year, and on the date it files its annual access tariff filing with the
Commission, in subsequent years, establishing the amount of the Price
Cap Carrier's eligible CAF ICC funding during the upcoming funding
period pursuant to Sec. 51.915 of this chapter. The amount shall
include any true-ups, pursuant to Sec. 51.915 of this chapter,
associated with an earlier funding period.
* * * * *
(d) * * *
(1) A Rate-of-Return Carrier seeking CAF ICC support shall file
data with the Administrator, the Commission, and the relevant state
commissions no later than June 30, 2012, for the first year, and on the
date it files its annual access tariff filing with the Commission, in
subsequent years, establishing the Rate-of-Return Carrier's projected
eligibility for CAF ICC funding during the upcoming funding period
pursuant to Sec. 51.917 of this chapter. The projected amount shall
include any true-ups, pursuant to Sec. 51.917 of this chapter,
associated with an earlier funding period.
* * * * *
0
7. Amend Sec. 54.901 by revising paragraphs (c) introductory text and
(c)(2) to read as follows:
Sec. 54.901 Calculation of Interstate Common Line Support.
* * * * *
(c) Beginning January 1, 2012, for purposes of calculating the
amount of Interstate Common Line Support determined pursuant to
paragraph (a) of this section that a non-price cap carrier may receive,
the corporate operations expense allocated to the Common Line Revenue
Requirement, pursuant to Sec. 69.409 of this chapter, shall be limited
to the lesser of:
* * * * *
(2) The portion of the monthly per-loop amount computed pursuant to
Sec. 36.621(a)(4)(iii) of this chapter that would be allocated to the
interstate Common Line Revenue Requirement pursuant to Sec. 69.409 of
this chapter.
* * * * *
PART 69--ACCESS CHARGES
0
8. The authority citation for part 69 continues to read as follows:
Authority: 47 U.S.C. 154, 201, 202, 203, 205, 218, 220, 254,
403.
0
9. Amend Sec. 69.306 by revising paragraph (d)(2) and adding paragraph
(d)(3) to read as follows:
Sec. 69.306 Central office equipment (COE).
* * * * *
(d) * * *
(2) Until June 30, 2012, for non-price cap local exchange carriers,
line-side port costs shall be assigned to the Common Line rate element.
Such amount shall be determined after any local switching support has
been removed from the interstate Local Switching revenue requirement.
Non-price cap local exchange carriers may use thirty percent of the
interstate Local Switching revenue requirement, minus any local
switching support, as a proxy for allocating line port costs to the
Common Line category.
(3) Beginning July 1, 2012, a non-price cap local exchange carrier
shall assign line-side port costs to the Common Line rate element equal
to the amount of line-side port costs it shifted in its 2011 projected
Interstate Switched Access Revenue Requirement.
* * * * *
0
10. Amend Sec. 69.415 by revising paragraphs (b) and (c) introductory
text and adding paragraph (d) to read as follows:
Sec. 69.415 Reallocation of certain transport expenses.
* * * * *
(b) Until June 30, 2012, the amount to be reallocated is limited to
the total revenues recovered through the interconnection charge
assessed pursuant to Sec. 69.124 for the 12-month period ending June
30, 2001.
(c) Until June 30, 2012, the reallocation of the amount in
paragraph (b) of this section shall be based on each access element's
projected revenue requirement divided by the total revenue requirement
of all the access elements, provided that:
* * * * *
(d) Beginning July 1, 2012, the amount of the Transport
Interconnection Charges to be reallocated to each category shall be
equal to the amount of Transport Interconnection Charge costs the non-
price cap local exchange carrier was projected to shift to each
category in projecting its 2011 Interstate Switched Access Revenue
Requirement.
* * * * *
[FR Doc. 2013-10562 Filed 5-3-13; 8:45 am]
BILLING CODE 6712-01-P