[Federal Register Volume 62, Number 109 (Friday, June 6, 1997)]
[Rules and Regulations]
[Pages 31003-31005]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-14649]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 61

[CC Docket No. 92-135, FCC 97-41]


Regulatory Reform for Small and Mid-Size Local Exchange Carriers 
Subject to Rate-of-Return Regulation

AGENCY: Federal Communications Commission.

ACTION: Final rule; petition for reconsideration.

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SUMMARY: In this Order, the Commission considers petitions for 
reconsideration and clarification concerning regulatory reform for 
local exchange carriers subject to rate of return regulations (Small 
Telco Reform Order). In particular, the Order eliminates the two year 
notice period that local exchange carriers must provide before exiting 
the incentive plan, clarifies the rules consistent with the Small Telco 
Reform Order, and amends the rules and clarifies several matters raised 
by the petitioners. The Commission's action is intended to eliminate 
any ambiguities and inconsistencies in the Commission's rules and the 
Small Telco Reform Order.

EFFECTIVE DATE: July 7, 1997.

FOR FURTHER INFORMATION CONTACT: Dan Abeyta, (202) 418-1538.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Order 
On Reconsideration in CC Docket No. 92-135 (FCC 97-41) adopted on 
February 10, 1997 and released on February 18, 1997. The full text of 
this Order on Reconsideration is available for inspection and copying 
during normal business hours in the FCC Reference Center (Room 239), 
1919 M Street, N.W., Washington, D.C. 20037.
    The complete text may also be obtained through the World Wide Web, 
at http:/www.fcc.gov/Bureau/Common/Carrier/Order/fcc9741.wp or may be 
purchased from the Commission's copy contractor, International 
Transcription Services, Inc. (202) 857-3800, 2100 M Street, N.W., Suite 
140, Washington, D.C. 20037.

Regulatory Flexibility Analysis

    No significant impact.

[[Page 31004]]

Paperwork Reduction Act

    No significant impact.

Synopsis of Report and Order

    On February 18, 1997, after reviewing petitions for reconsideration 
and clarification filed by American Telephone and Telegraph Company, 
the National Exchange Carriers Association, and the United States 
Telephone Association (hereinafter, Petitioners), the Commission 
released an Order on Reconsideration in CC Docket No. 92-135. 
Petitioners sought reconsideration and clarification of several issues 
addressed in the Small Telco Reform Order. Petitioners (1) request that 
the Commission reconsider reducing the two year notice period that LECs 
must provide before exiting the incentive plan; (2) argue that the 
prohibition against reentry into the pools violates pool neutrality and 
the voluntary nature of pools; (3) seek reconsideration of the 
provision in the incentive plan that allows LECs rate adjustments of 
10% within each service category over each two-year tariff period 
because Petitioners believe the rule could be interpreted to allow LECs 
using the incentive plan to recover 110% of their costs; (4) request 
that the incentive plan's streamlined filing requirements for new 
services be extended to apply to new services in territories where the 
``geographically closest'' (but not bordering) price cap LEC offers the 
same service; and (5) request that the Commission delete the 
infrastructure reporting requirements for the incentive plan, arguing 
that such reports are not required for voluntary price cap LECs and 
should not be required for incentive plan LECs. In response to these 
requests for revisions, the Commission eliminated the two-year exit 
notice requirement, but otherwise declined to make the requested 
revisions to the Small Telco Reform Order.
    The Petitioners also sought clarification of several issues 
addressed in the Small Telco Reform Order. Petitioners argued that the 
rules embodying the common line rate structures for the incentive plan 
and small company rules are inconsistent with the text of the Small 
Telco Reform Order, and should be clarified. In response, the 
Commission believes the rules are consistent with the Small Telco 
Reform Order, but nonetheless has redrafted the rules as formulae to 
eliminate any inconsistencies in the Small Telco Reform Order's 
application. Petitioners requested that we add a clarifying statement 
concerning the relative burden on incentive plan participants that seek 
to increase their rates by making mid-term corrections to their 
tariffs. The Commission believes the Small Telco Reform Order is clear 
and therefore denies this request for clarification. Petitioners 
requested that the Commission codify the incentive plan's mechanism for 
exogenous cost adjustment. The Commission agrees, and amends its rules 
to codify the Small Telco Reform Order's provisions that incentive plan 
LECs may adjust their rates (either in the biennial tariff filing or 
during the two-year tariff period) to reflect exogenous cost changes 
for costs deemed exogenous for price cap LECs. Finally, Petitioners 
requested that to remove potential ambiguities, the Commission should 
make certain minor, non-substantive revisions to the sections of the 
Small Telco Reform Order concerning voluntary biennial filings, the 
base period for end user common line calculations, and rate change 
indexes. This Order on Reconsideration amends the Small Telco Reform 
Order to clarify those matters.

List of Subjects in 47 CFR Part 61

    Communications common carriers, Reporting and recordkeeping 
requirements.

Federal Communications Commission.
Shirley S. Suggs,
Chief, Publications Branch.

Rule Changes

    Accordingly part 61 of title 47 is amended as follows:

PART 61--TARIFFS

    1. The authority citation for part 61 continues to read as follows:

    Authority: Secs. 1, 4(i), 4(j), 201-205, and 403 of the 
Communications Act of 1934, as amended; 47 U.S.C. 151, 154(i), 
154(j), 210-205, and 403, unless otherwise noted.

    2. Section 61.39 is amended by revising paragraphs (b)(3)(i), 
(b)(3)(ii), (b)(4)(i) and (b)(4)(ii) to read as follows:


Sec. 61.39  Optional supporting information to be submitted with 
letters of transmittal for Access Tariff filings effective on or after 
April 1, 1989, by local exchange carriers serving 50,000 or fewer 
access lines in a given study area that are described as subset 3 
carriers in Sec. 69.602.

* * * * *
    (b) * * *
    (3) * * *
    (i) For the first biennial filing, the common line revenue 
requirement shall be determined by a cost of service study for the most 
recent 12-month period. Subscriber line charges shall be based on cost 
and demand data for the same period. Carrier common line rates shall be 
determined by the following formula: 
[GRAPHIC] [TIFF OMITTED] TR06JN97.008

where: 
[GRAPHIC] [TIFF OMITTED] TR06JN97.009

And where:

CCL Rev Req = carrier common line revenue requirement for the most 
recent 12-month period;
CCL MOUb = carrier common line minutes of use for the most 
recent 12-month period;
CCL MOU1 = CCL MOUb; and
CCL MOU0 = carrier common line minutes of use for the 12-
month period preceding the most recent 12-month period.

    (ii) For subsequent biennial filings, the common line revenue 
requirement shall be determined by a cost of service study for the most 
recent 24-month period. Subscriber line charges shall be based on cost 
and demand data for the same period. Carrier common line rates shall be 
determined by the following formula: 
[GRAPHIC] [TIFF OMITTED] TR06JN97.010

Where: 
[GRAPHIC] [TIFF OMITTED] TR06JN97.011

And where:

CCL Rev Req = carrier common line revenue requirement for the most 
recent 24-month period;
CCL MOUb = carrier common line minutes of use for the most 
recent 24-month period;
CCL MOU1 = carrier common line minutes of use for the 12-
month period; and
CCL MOU0 = carrier common line minutes of use for the 12-
month period preceding the most recent 12-month period.

    (4) * * *
    (i) For the first biennial filings, the common line revenue 
requirement shall be determined by the local exchange carrier's most 
recent annual Common Line settlement from the National Exchange Carrier 
Association. Subscriber line charges shall be based on cost and demand 
data for the same period. Carrier common line rates shall be determined 
by the following formula: 
[GRAPHIC] [TIFF OMITTED] TR06JN97.012

Where: 

[[Page 31005]]

[GRAPHIC] [TIFF OMITTED] TR06JN97.013


And where:

CCL Rev Req = carrier common line settlement for the most recent 12-
month period;
CCL MOUb = carrier common line minutes of use for the most 
recent 12-month period;
CCL MOU1 = CCL MOUb; and
CCL MOU0 = carrier common line minutes of use for the 12-
month period preceding the most recent 12-month period.

    (ii) For subsequent biennial filings, the common line revenue 
requirement shall be an amount calculated to reflect the average 
schedule pool settlements the carrier would have received if the 
carrier had continued to participate in the carrier common line pool, 
based upon the average schedule Common Line formulas developed by the 
National Exchange Carrier Association for the most recent 24-month 
period. Subscriber line charges shall be based on cost and demand data 
for the same period. Carrier common line rates shall be determined by 
the following formula: 
[GRAPHIC] [TIFF OMITTED] TR06JN97.014

Where: 
[GRAPHIC] [TIFF OMITTED] TR06JN97.015

And where:

CCL Rev Req = carrier common line settlement for the most recent 24-
month period;
CCL MOUb = carrier common line minutes of use for the most 
recent 24-month period;
CCL MOU1 = carrier common line minutes of use for the most 
recent 12-month period; and
CCL MOU0 = carrier common line minutes of use for the 12-
month period preceding the most recent 12-month period.

* * * * *
    3. Section 61.50 is amended by revising paragraphs (h)(1) and (k) 
and adding new paragraphs (h)(3) and (i)(3) to read as follows:


Sec. 61.50  Scope: Optional incentive regulation for rate of return 
local exchange carriers.

* * * * *
    (h)(1) In connection with any optional incentive plan tariff filing 
proposing rate changes, the carrier must calculate an index for each 
affected basket as determined by the Common Carrier Bureau.
* * * * *
    (3) Local exchange carriers subject to this section shall file 
tariff revisions that reflect rate changes due to exogenous costs, as 
defined in Sec. 61.45(d)(1), either in the biennial tariff filing or at 
the time the event causing the exogenous costs occurs during the two-
year period.
    (i) * * *
    (3) All filings for new services other than those described in 
paragraph (i) shall be supported using prospective data, as required by 
Sec. 61.38 of these rules.
* * * * *
    (k) For a tariff change, a local exchange carrier that is a cost 
schedule carrier must propose Common Line rates based on the following:
    (1) For the first biennial filing, the common line revenue 
requirement shall be determined by a cost of service study for the most 
recent 12-month period. Subscriber line charges shall be based on cost 
and demand data for the same period. Carrier common line rates shall be 
determined by the following formula: 
[GRAPHIC] [TIFF OMITTED] TR06JN97.016

Where: 
[GRAPHIC] [TIFF OMITTED] TR06JN97.017

And where:

CCL Rev Req = carrier common line settlement for the most recent 12-
month period;
CCL MOUb = carrier common line minutes of use for the most 
recent 12-month period;
CCL MOU1 = CCL MOUb; and
CCL MOU0 = carrier common line minutes of use for the 12-
month period preceding the most recent 12-month period.

    (2) For the subsequent biennial filings, the common line revenue 
requirement shall be determined by a cost of service study for the most 
recent 24-month period. Subscriber line charges shall be based on cost 
and demand data for the same period. Carrier common line rates shall be 
determined by the following formula:
[GRAPHIC] [TIFF OMITTED] TR06JN97.018

where:
[GRAPHIC] [TIFF OMITTED] TR06JN97.019

and where:

CCL Rev Req = carrier common line revenue requirement for the most 
recent 24-month period;
CCL MOUb = carrier common line minutes of use for the most 
recent 24-month period;
CCL MOU1 = carrier common line minutes of use for the most 
recent 12-month period; and
CCL MOU0 = carrier common line minutes of use for the 12-
month period preceding the most recent 12-month period.
    (3) For End User Common Line charges included in a tariff pursuant 
to this section, the local exchange carrier must provide supporting 
information for the two-year historical period with its letter of 
transmittal in accordance with Sec. 61.38.

[FR Doc. 97-14649 Filed 6-5-97; 8:45 am]
BILLING CODE 6712-01-P