[Federal Register Volume 63, Number 199 (Thursday, October 15, 1998)]
[Rules and Regulations]
[Pages 55334-55336]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-27676]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 69

[CC Docket No. 96-262, FCC 98-257]


Access Charge Reform

AGENCY: Federal Communications Commission.

ACTION: Final rule; petition for rulemaking.

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SUMMARY: The ceilings for the presubscribed interexchange carrier 
charge (PICC) are scheduled to increase for all classes of customers on 
January 1, 1999. For the reasons set forth in this Order, we delay this 
increase until July 1, 1999.

EFFECTIVE DATE: November 16, 1998.

FOR FURTHER INFORMATION CONTACT: Tamara Preiss, 418-1505. TTY: (202) 
418-0484.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Third 
Order on Reconsideration, released October 5, 1998. The full text of 
this Order is available for inspection and copying during normal 
business hours in the FCC Public Reference Room (Room 230), 1919 M 
Street, NW., Washington, DC 20554. The complete text of this Order may 
also be purchased from the Commission's copy contractor, International 
Transcription Service, 1231 20th Street, NW., Washington, DC 20036.

Regulatory Flexibility Analysis

    In the Access Charge Reform Order, 62 FR 31040 (June 6, 1997), we 
conducted a Final Regulatory Flexibility Analysis as required by 
Section 604 of the Regulatory Flexibility Act (RFA), as amended by the 
Contract with America Advancement Act of 1996, Public Law 104-121, 110 
Stat. 847 (1996). The RFA requires that a regulatory flexibility 
analysis be prepared for notice-and-

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comment rulemaking proceedings, unless the agency certifies that ``the 
rule will not, if promulgated, have a significant economic impact on a 
substantial number of small entities.'' 5 USC 605(b). In this Third 
Order on Reconsideration we have revised the rules to postpone the 
scheduled increases to PICC ceilings from January 1, 1999, to July 1, 
1999. We hereby certify that this postponement will not have a 
significant economic impact on a substantial number of small entities, 
because the action merely maintains the status quo concerning the 
maximum PICCs that price cap LECs may charge customers. The present 
action also, therefore, does not affect the previous FRFA. The 
Commission will send a copy of this Third Order on Reconsideration, 
including this certification, to the Chief Counsel for Advocacy of the 
Small Business Administration.

Paperwork Reduction Act Analysis

    The decision contained herein has been analyzed with respect to the 
Paperwork Reduction Act of 1995, Pub. L. 104-13, and does not contain 
new and/or modified information collections subject to Office of 
Management and Budget review.

Summary of Report and Order

    1. In the Access Charge Reform Order, 62 FR 31040 (June 6, 1997), 
we adopted common line rate structure modifications that permit price 
cap local exchange carriers (LECs) to shift from a rate structure that 
recovers a significant portion of non-traffic sensitive common line 
costs through per-minute carrier common line charges to one that 
recovers these costs through flat-rated charges. The rate structure we 
adopted retained the existing $3.50 ceiling on the subscriber line 
charge (SLC) for primary residential and single-line business lines and 
increased the SLC ceilings on other lines to permit LECs to recover a 
greater amount of the common line costs through flat-rated charges 
assessed on end users. To the extent that SLC ceilings prevent price 
cap LECs from recovering their allowed common line revenues from end 
users, price cap LECs may recover the shortfall, subject to a maximum 
charge, through PICCs. The PICC is a flat, per-line charge assessed on 
the end user's presubscribed interexchange carrier.
    2. In order to provide price cap LECs, interexchange carriers 
(IXCs), and end users with adequate time to adjust to the new rate 
structure, we adopted an approach that phases in the PICC. We also 
established several different categories of PICCs, setting an initial 
cap for primary residential and single-line business lines at $0.53 per 
month for the first year, equal to the amount assessed IXCs in the past 
for those lines for purposes of the former High Cost Fund. We set 
initial ceilings on the PICCs for non-primary residential lines at 
$1.50 per month and for multi-line business lines at $2.75 per month. 
On January 1, 1999, the PICC ceilings are scheduled to increase by the 
following amounts: $0.50 plus inflation for primary residential and 
single-line business lines, $1.00 plus inflation for non-primary 
residential lines, and $1.50 plus inflation for multi-line business 
lines. See 47 CFR 69.153.
    3. On our own motion, we postpone the scheduled increase of the 
PICC ceilings from January 1, 1999 to July 1, 1999. (The filing of a 
petition for reconsideration tolls the thirty-day period our rules 
provide for sua sponte reconsideration. See 47 CFR 1.108, Central 
Florida Enterprises, Inc. v. FCC, 598 F.2d 37, 48 n.51 (D.C. Cir. 
1978), cert. dismissed, 441 U.S. 957 (1979), cert. denied, 460 U.S. 
1084 (1983); Radio Americana, Inc., 44 F.C.C. 2506, 2510 (1961).) In 
the Access Charge Reform Order, we established a system that enables 
access charges better to reflect the costs underlying those charges. We 
remain convinced that recovery of non-traffic sensitive costs through 
flat charges, rather than minute-of-use charges, on IXCs is the 
appropriate recovery mechanism for these costs. We believe, however, 
that we should postpone implementation of the next round of shifts from 
per-minute charges to PICCs.
    4. Other adjustments to access charges, most notably those 
involving universal service and the reductions associated with the 
annual application of our price cap formula, take effect on July 1, 
1999. Earlier this year, we extended from January 1, 1999 until July 1, 
1999 the implementation date for the revised mechanism for determining 
universal service high cost support for non-rural carriers. Under 
current rules, interstate access charges are to go down at that time to 
reflect the universal service support that incumbent LECs receive 
through the new high cost support mechanism. Also on July 1, 1999, 
price cap LECs' annual access tariffs will become effective. See 47 CFR 
61.43. These new tariffs will reflect a downward adjustment of the 
price cap indices due in large part to the ``X-Factor'' and the low 
inflation experienced in the economy as a whole. See 47 CFR 61.45.
    5. If the scheduled increases in the PICC ceilings were not 
delayed, PICCs that would increase on January 1, 1999 may be reduced 
due to the new universal service support mechanism and the X-Factor 
adjustment both taking effect on July 1, 1999. The imposition of higher 
PICCs on January 1 followed by decreases just six months later will 
increase consumer confusion and frustration. We instead prefer to 
minimize rate churn, and so postpone the scheduled increase to the PICC 
ceilings.

Ordering Clauses

    6. Accordingly, it is ordered that, pursuant to sections 4(i), and 
201-205 of the Communications Act, 47 USC 154(i), and 201-205, and 
Sec. 1.108 of the Commission's rules, 47 CFR 1.108, we hereby amend 
Sec. 69.153 as set forth below.
    7. It is further ordered that the provisions of this Order will be 
effective November 11, 1998.

List of Subjects in 47 CFR Part 69

    Communications common carriers.

Federal Communications Commission.
Magalie Roman Salas,
Secretary.

Rule Changes

PART 69--ACCESS CHARGES

    1. The authority citation for part 69 continues to read as follows:

    Authority: 47 U.S.C. 154, 201, 202, 203, 205, 218, 254, 403.

    2. Section 69.153 is amended by revising paragraphs (c) 
introductory text, (c)(2), (d)(1) introductory text, (d)(1)(ii), (d)(2) 
introductory text, (d)(2)(ii), and (e) to read as follows:


Sec. 69.153  Presubscribed interexchange carrier charge (PICC).

* * * * *
    (c) The maximum monthly PICC for primary residential subscriber 
lines and single-line business subscriber lines shall be the lower of:
    (1) * * *
    (2) $0.53. On July 1, 1999, this amount shall be adjusted by the 
inflation factor computed under paragraph (e) of this section, and 
increased by $0.50. On July 1, 2000, and in each subsequent year, this 
amount shall be adjusted by the inflation factor computed under 
paragraph (e) of this section, and increased by $0.50.
    (d) * * *
    (1) The maximum monthly PICC for non-primary residential subscriber 
lines shall be the lower of:
    (i) * * *
    (ii) $1.50. On July 1, 1999, this amount shall be adjusted by the 
inflation factor computed under

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paragraph (e) of this section, and increased by $1.00. On July 1, 2000, 
and in each subsequent year, this amount shall be adjusted by the 
inflation factor computed under paragraph (e) of this section, and 
increased by $1.00.
    (2) If the maximum monthly PICC for non-primary residential 
subscriber lines is determined using paragraph (d)(1)(i) of this 
section, the maximum monthly PICC for multi-line business subscriber 
lines shall equal the maximum monthly PICC of non-primary residential 
subscriber lines. Otherwise, the maximum monthly PICC for multi-line 
business lines shall be the lower of:
    (i) * * *
    (ii) $2.75. On July 1, 1999, this amount shall be adjusted by the 
inflation factor computed under paragraph (e) of this section, and 
increased by $1.50. On July 1, 2000, and in each subsequent year, this 
amount shall be adjusted by the inflation factor computed under 
paragraph (e) of this section, and increased by $1.50.
    (e) For the PICC ceiling for primary residential subscriber lines 
and single-line business subscriber lines under paragraph (c)(2) of 
this section, non-primary residential subscriber lines under paragraph 
(d)(1)(ii) of this section, and multi-line business subscriber lines 
under paragraph (d)(2)(ii) of this section:
    (1) On July 1, 1999, the ceiling will be adjusted to reflect 
inflation as measured by the change in GDP-PI for the 18 months ending 
March 31, 1999.
    (2) On July 1 of each subsequent year, the ceiling will be adjusted 
to reflect inflation as measured by the change in GDP-PI for the 12 
months ending on March 31 of the year the adjustment is made.
    (3) On July 1 of each subsequent year, the ceiling will be adjusted 
to reflect inflation as measured by the change in GDP-PI for the 12 
months ending on March 31 of the year the adjustment is made.
* * * * *
[FR Doc. 98-27676 Filed 10-14-98; 8:45 am]
BILLING CODE 6712-01-P