Current through Register Vol. 39, No. 6, September 16, 2024
(a) Purpose. This rule is intended to further
the public interest through the establishment of a set of consistent general
guidelines, standards, practices, and procedures for the filing, acceptance,
and processing of requests for extended area service (EAS) in North
Carolina.
(b) Definitions. For
purposes of this rule, the following definitions shall apply:
(1) Extended Area Service. - EAS is a
switching and trunking arrangement which provides for nonoptional, unlimited,
two-way, flat rate calling service between two or more telephone exchanges,
provided at either the applicable local exchange rate or the applicable local
exchange rate plus an EAS increment rather than at the toll message
rate.
(2) Incremental EAS Cost
Study. - An incremental EAS cost study shall be deemed to include all
additional incremental equipment costs applicable to the EAS arrangement plus
those embedded costs supporting investments which have previously been used to
provide toll services, but which will, upon approval of EAS, be utilized for
EAS rather than toll service. Lost toll revenues will generally not be
considered a proper cost to be included in an incremental EAS cost
study.
(3) Community of Interest
Factor (CIF). - Number of customer calls (messages) divided by the total number
of local customer lines/trunks. For the purpose of Rule R9-7, customer calls
shall consist of: 1-plus and operator-assisted MTS toll calls and optional toll
calling plan calls generated over Key, PBX trunks, Centrex trunks, ESSX trunks,
ISDN, simple business and residence customer lines/trunks.
(4) Percentage Making Calls (PMC). - Number
of access lines making calls divided by the total number of local customer
lines/trunks.
(c)
Community of Interest, Public Hearings, and Geographical Boundaries.
(1) Any entity or group requesting the
Commission to open a formal docket to investigate the need for EAS in a
particular area shall be required to demonstrate to the initial satisfaction of
the Public Staff and subsequently to the Commission that the subscribers in
each affected exchange have demonstrated broad-based support for the requested
EAS. Such support may be demonstrated by resolutions and letters from civic
groups, institutions, local governments, elected officials and petitions signed
by the affected subscribers. The Commission retains the flexibility to
determine whether the demonstrated support is sufficient to justify further
pursuit of the request for EAS.
(2)
The Commission may hold a public hearing, if necessary, to consider issues such
as whether the public interest is sufficient to proceed, whether a poll should
be conducted, and to determine the applicable rate increases for EAS at each
exchange. The Commission may decide to conduct an EAS poll of affected
subscribers without first holding a public hearing where the particular facts
and circumstances of a case do not necessitate a hearing prior to
polling.
(3) While consideration
may be given to the geographical nature of an EAS proposal, it is not
appropriate to limit EAS arrangements based solely on geographical location. So
long as a significant community of interest and support for the EAS can be
demonstrated, the Commission will consider each request for EAS on a
case-by-case basis. A chief consideration in any request for EAS is the public
interest and need for EAS, which is not necessarily constrained by geographical
boundaries.
(d) Toll
Calling Studies.
(1) All proposals for EAS
shall be accompanied by toll calling studies concerning the affected exchanges.
(a) Toll calling studies shall be for
thirty-day periods, unless circumstances are shown to warrant a longer study
period and shall be broken down into residential and business categories. Toll
calling studies shall include information concerning community of interest
factors (CIFs) and percentage of access lines making one or more calls
(percentage making calls or PMCs) in the relevant time period.
(b) Upon request from the local exchange
company, an interexchange carrier shall provide appropriate toll calling
information for affected interLATA routes.
(c) When a telephone membership corporation
(TMC) is involved in an EAS proposal, the TMC shall be requested to provide
toll calling studies.
(2) Absent special circumstances, an EAS
proposal shall generally not be approved for polling unless all the affected
exchanges in the proposal meet the relevant CIF and PMC standards on at least a
one-way basis as set out below:
(a) For
intra-county, county-seat EAS proposals, a CIF of 1.0 or greater in the
residential category or a CIF of 2.0 or greater in the residential and business
categories combined.
(b) For other
intra-county EAS proposals, a CIF of 2.0 or greater in the residential category
or a CIF of 2.5 or greater in the residential and business categories combined
and a PMC of 25% or greater.
(c)
For inter-county EAS proposals between exchanges with a common boundary, a CIF
of 2.5 or greater in the residential and business categories combined and a PMC
of 45% or greater.
(d) For
inter-county EAS proposals between exchanges without a common boundary, a CIF
of 3.0 or greater in the residential and business categories combined and a PMC
of 50% or greater.
(3)
Notwithstanding Rule R9-7(d)(2), the Commission may approve, disapprove,
narrow, or limit an EAS proposal for polling if special circumstances require
such action.
(e) Cost
Studies.
(1) It is appropriate to utilize cost
studies in order to establish the applicable local rate increases which should
apply to requests for EAS if ultimately approved by the Commission. Except
under unusual and extenuating circumstances, cost studies generally will not be
required for those telephone companies who have had EAS matrix plans approved
by the Commission. Past Commission practice in developing applicable rate
increases has generally allowed consideration of only the incremental equipment
costs necessary to provide the EAS in question. As a general rule, the
Commission has not authorized telephone companies to consider lost toll
revenues in developing applicable EAS charges. The Commission will continue to
follow this general policy in future EAS cases unless it can be clearly
demonstrated in a particular case that a failure to consider lost toll revenues
will in fact result in serious financial distress to the LEC and, in turn, to
its remaining local customers. However, in all cases, the toll revenue losses
may be computed and included in the analysis as information to the
Commission.
(2) In EAS cases
involving non-matrix telephone companies, the affected company or companies
will be required to conduct cost studies based upon incremental costs exclusive
of toll losses. Such incremental cost studies shall be deemed to include all
additional incremental equipment costs applicable to the EAS arrangement plus
those embedded costs supporting investments which have previously been used to
provide toll services, but which will, upon approval of EAS, be utilized for
EAS rather than toll service. The Commission recognizes that these latter
specified facilities will have generally been included in a previously
established test year period and that rates were likely set to produce revenues
necessary to cover expenses and capital costs associated with these facilities.
Therefore, to the extent that there would be a double recovery of expenses
associated with these facilities, a deferred account shall be established to
eliminate such recovery and the monies placed in the deferred account shall be
returned to the general body of ratepayers, with interest, upon further order
of the Commission.
(f)
Matrix Rating Plans. For telephone companies which have an approved EAS matrix
plan in effect, the applicable customer charge(s), which shall be used for
polling purposes, will be determined by application of said matrix
plan.
(g) Regrouping Charges. A
cost study based on incremental costs as defined above will be the basis for
any rate increase(s) associated with implementation of EAS for non-matrix
companies. At the time of the next general rate case following the
implementation of EAS, the affected exchange(s) will be placed in the proper
rate group(s) and a determination of whether the EAS differential(s) should be
eliminated will be made at that time. If applicable, the customer notice used
for EAS polling purposes shall state that a regrouping charge of the given
amount will apply at the time of the company's next general rate
case.
(h) Polling Procedures.
(1) When the Commission determines that the
public interest and need for EAS involving two exchanges is dominant in one
direction, which is generally the case when the EAS request involves a large
exchange and a small exchange, the Commission will determine on a case-by-case
basis whether to poll both exchanges. In cases where only one exchange is
polled, the Commission will make a determination based on the results of the
poll of that one exchange. As a general rule, the EAS will be approved if a
simple majority of the ballots returned by subscribers vote in favor of the
proposal. In cases where only minimal or de minimis rate increases would result
to subscribers in the large exchange, the Commission will impose those charges
on customers in the larger exchange without a poll if the polling results of
customers in the other exchange are favorable.
(2) In cases where dominant interest does not
exist at one exchange, both exchanges will generally be polled using rate
increases based upon incremental costs as described in subparagraph (e) of this
rule, except where the increase in one of the exchanges is minimal or de
minimis, in which case no poll will be conducted in that exchange, but the EAS
rate increase shall apply at the time the EAS, if approved, is
implemented.
(3) In proposals where
EAS is being considered among several exchanges, the Commission will determine,
in its discretion, whether or not all or only some of the affected exchanges
will be polled and what rate increases shall apply at the time the EAS, if
approved, is implemented.
(4) The
customer notice which is used in conjunction with an EAS poll shall specify
that if the subscriber wishes to have a voice in the decision, he must return
his marked ballot.
(i)
Polling Results. EAS polling results shall be reported broken down by
residential and business categories. All decisions regarding EAS poll results
will be based on the valid ballots returned. A subscriber shall be entitled to
as many votes as that subscriber has access lines. Generally, a simple majority
of those valid ballots returned voting in favor of the EAS will constitute a
positive vote for EAS as to that exchange. An EAS proposal will be approved if
each of the polled exchanges is in favor of the EAS proposal. When two or more
exchanges are polled and mixed results occur, the approval or disapproval of
the request will be based on the individual poll results as well as other
factors that may be reflective of any unique circumstances affecting the
request, including valid public policy considerations such as economic
development and county-seat calling. In making a final decision, the Commission
will exercise its discretion in considering all relevant factors.
NCUC Docket No. P-100,
Sub 89, 10/28/87; 12/16/87; 5/5/92; 3/25/93;
6/14/93.
