Current through Register Vol. 35, No. 18, September 24, 2024
A.
Unless otherwise ordered by the Commission upon specific request by the
applicant containing ample justification for the request and why none of the
pricing methodologies discussed below are applicable to the petition, the
information provided with or contained in a petition shall be such that it will
provide the Commission with the minimum price or the range of prices for a
competitive public telecommunications service developed through one of the
following pricing methodologies:
(1) Direct
Cost Pricing:
(a) This methodology shall
start with the total current cost of the investments involved with the
competitive service and develop the broad categories of service, including
interstate if applicable, that are using that investment.
(b) It shall further develop for the
categories of service, current maintenance expenses using maintenance to
investment ratios, current overhead administrative expenses using overhead
administrative expenses to investment ratios and current ad valorum taxes using
ad valorum taxes to investment ratios.
(c) Where investment is shared with
non-competitive service or services, it shall in the calculation of spearate
[separate] competitive service costs develop the dollar amount of usage
sensitive investment to be used by the competitive service through allocations
based on usage by the board categories of service, and apply the factors from
subparagraph A.2 [1 (b)] of this section to obtain a reasonable allocation of
shared costs and allocated costs of the competitive service.
(2) Fully Allocated Cost Pricing:
This methodology shall utilize a "Stand Alone Cost Study" which uses a basic
building block approach to develop the investments for competitive services. It
shall develop, for the competitive service, expenses for maintenance
activities, installation activities and other support activities as applicable.
It shall reflect current labor rates, all expenses common to the investment
shared between competitive and non-competitive services fairly prorated between
such services, apply an expected return to investments, and utilize an
appropriate tax factor applied to return.
(3) Incremental Cost Pricing: This
methodology identifies the incremental forward-looking cost caused by placing
one or more additional units in service. The general categories or direct costs
included in an incremental cost study include annual capital costs and
operating expenses. The capital costs are the annual costs of depreciation,
cost of money, and income taxes. The operating expenses are the annual costs of
maintenance, administration, ad valorem and other taxes.
(4) Avoidable Cost Pricing: This methodology
is applicable to services associated with items of equipment that are
restricted. The avoidable cost study identifies the costs which can be avoided
if the equipment is eliminated or removed from service.
B. After filing of a petition, the Commission
may order that the applicant file another cost study utilizing a pricing
methodology of the Commission's choice if the Commission decides that the cost
study originally filed does not meet the circumstances of the petition. The
applicant shall continue to have the burden of establishing that a service is
subject to competition and that it is in the public interest for the Commission
to establish a minimum rate or range of rates.
C. Upon request by the Commission, prior to
or during hearing upon the petition, applicant shall submit such additional
data, information, or exhibits, as may be specified by the
Commission.
D. If an applicant
files with the Commission in its petition a cost methodology which differs from
the cost methodology employed to allocate costs for the same or similar service
in a prior proceeding, the applicant shall file with the petition a summary
description of how the costing methodology differs and why it differs from the
cost methodology employed to allocate costs for the same or similar service in
the prior proceeding.
