Current through Register Vol. 35, No. 18, September 24, 2024
A.
Formula. The forward-looking economic cost of an element shall be calculated as
the sum of:
(1) the total element long-run
incremental cost (TELRIC) of the element; and
(2) a reasonable allocation of
forward-looking common costs.
B. Calculation of TELRIC.
(1) Least cost technology. An ILEC shall
calculate TELRIC on the basis of the most economically efficient choice of
technology, or mix of technologies, in the long run, provided that such choice
shall be:
(a) restricted to technologies that
are currently available on the market and for which vendor prices can be
obtained;
(b) consistent with the
level of output necessary to satisfy current demand levels for all services
using the UNE in question; and
(c)
consistent with overall network design and topology requirements.
(2) Forward-looking cost of
capital. In calculating the TELRIC of an element, an ILEC shall use the
forward-looking cost of capital.
(3) Depreciation rates. In calculating
forward-looking economic costs of elements, an ILEC shall use depreciation
rates for capital assets that reflect changes in the economic value of those
assets over time.
C.
Reasonable allocation of forward-looking common costs. The commission shall
consider an allocation of forward-looking common costs to an element to be
reasonable if the ILEC demonstrates that:
(1)
the sum of the allocation of forward-looking common costs plus the TELRIC of
the element does not exceed the stand-alone costs associated with the element;
in this context, stand-alone costs are the total forward-looking costs,
including corporate costs, that would be incurred to produce a given element if
that element were provided by an efficient firm that produced nothing but the
given element; and
(2) the sum of
the allocation of forward-looking common costs for all elements and services
equals the total forward-looking common costs, exclusive of retailing costs,
attributable to operating the ILEC's total network so as to provide all the
elements and services offered.
D. Factors that may not be considered. In
calculating the forward-looking economic cost of an element, an ILEC shall not
consider embedded costs, retailing costs, opportunity costs, revenues
associated with elements or telecommunications service offerings other than the
element for which a rate is being established.
E. Units. The forward-looking economic cost
per unit of an element equals the forward-looking economic cost of the element,
calculated as prescribed in 17.11.18.15 NMAC, divided by a reasonable
projection of the sum of the total number of units of the element the ILEC is
likely to provide to requesting LECs and the total number of units of the
element the ILEC is likely to use in offering its own services, during a
reasonable measuring period.
(1) For elements
an ILEC offers on a flat-rate basis, the number of units shall be the discrete
number of UNEs the ILEC uses or provides (e.g., local loops or local switch
ports).
(2) For elements an ILEC
offers on a usage-sensitive basis, the number of units shall be the unit used
to measure usage of the element (e.g., minutes of use or number of call-related
database queries).
