[Federal Register Volume 78, Number 87 (Monday, May 6, 2013)]
[Rules and Regulations]
[Pages 26261-26269]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-10562]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 51, 54, and 69

[WC Docket No. 10-90, CC Docket No. 01-92, WC Docket No. 12-63, 
Transmittal Nos. 41, 28, and 57; DA 13-564]


Connect America Fund; Developing a Unified Intercarrier 
Compensation Regime

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document, the Federal Communications Commission's 
Wireline Competition Bureau clarifies and corrects certain provisions 
of the Commission's rules in response to recent petitions and other 
requests for clarification or correction of the new rules adopted as 
part of Universal Service Fund intercarrier compensation transformation 
reforms and also grants a limited waiver of the Commission's rules to 
address administrative concerns and rule inconsistencies.

DATES: Effective June 5, 2013.

FOR FURTHER INFORMATION CONTACT: Robin Cohn, Wireline Competition 
Bureau, Pricing Policy Division (202) 418-1520 or (202) 418-0484 (TTY); 
or Christopher S. Koves, Wireline Competition Bureau, Pricing Policy 
Division, (202) 418-1520 or (202) 418-0484 (TTY).

SUPPLEMENTARY INFORMATION: This is a summary of the Wireline 
Competition Bureau's Order in WC Docket No. 10-90, CC Docket No. 01-92, 
WC Docket No. 12-63, Transmittal Nos. 41, 28, and 57, DA 13-564, 
adopted and released on March 27, 2013. The full text of this document 
is available electronically via ECFS at http://fjallfoss.fcc.gov/ecfs/or may be downloaded at http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-13-564A1.pdf. The full text of this document is also 
available for public inspection during regular business hours in the 
FCC Reference Center, 445 12th Street SW., Room CY-A257, Washington, DC 
20554. The complete text may be purchased from the Commission's copy 
contractor, Best Copy and Printing, Inc. (BCPI), 445 12th Street SW., 
Room CY-B402, Washington, DC 20554, (202) 488-5300 (voice) or (202) 
488-5563 (facsimile) or via email at [email protected]. To request 
materials in accessible formats for people with disabilities (e.g. 
braille, large print, electronic files, audio format, etc.) or to 
request reasonable accommodations (e.g. accessible format documents, 
sign language interpreters,

[[Page 26262]]

CART, etc.), send an email to [email protected] or call the Consumer & 
Governmental Affairs Bureau at (202) 418-0530 (voice) or (202) 418-0432 
(TTY).

I. Introduction

    1. In the USF/ICC Transformation Order, 76 FR 81,562 (Dec. 28, 
2011), the Commission delegated to the Wireline Competition Bureau 
(Bureau) the authority to make any rule revisions necessary to ensure 
that the reforms adopted are properly reflected in the rules, including 
correcting any conflicts between the new or revised rules and existing 
rules, as well as addressing any omissions or oversights. In this 
Order, the Bureau acts pursuant to its delegated authority to clarify 
and correct certain rules in response to recent petitions and other 
requests for clarification or correction of the new rules. 
Specifically, the Bureau harmonizes inconsistent Connect America Fund 
intercarrier compensation (ICC) support eligibility certification and 
reporting filing deadlines contained in Parts 51 and 54 of the 
Commission's rules to coincide with the date on which carriers must 
file their annual access tariffs. The Bureau also amends the Part 51 
rules to clarify the effects of the USF/ICC Transformation Order on 
National Exchange Carrier Association (NECA) traffic-sensitive tariff 
(``NECA pool'') pooling when carriers enter or exit the pool. The 
Bureau also addresses a petition for clarification filed by NECA by 
clarifying various NECA pooling requirements adopted in the 2012 Price 
Cap Conversion Order. In addition, the Bureau amends rules governing 
the transition of rate-of-return carriers' intrastate switched access 
rates to correct an omission. The Bureau amends the Part 69 access 
charge rules to clarify the treatment of local switching support (LSS) 
in the calculation of the line-side port costs shift to the Common Line 
category and the allocation of Transport Interconnection Charge costs 
among the various access charge expense categories. The Bureau also 
clarifies the operation of the corporate operations expense limit and 
monthly $250 per-line cap on universal service support contained in 
Part 54. Finally, the Bureau corrects errors in the Part 51 rules 
implementing the Eligible Recovery true-up adjustment mechanism.

II. Harmonizing Connect America Fund ICC Certification Deadlines

    2. Background. The USF/ICC Transformation Order adopted, among 
other things, an ICC reform timeline including rules that require 
carriers to adjust, over a period of years, many of their legacy 
interstate and intrastate switched access charges effective on July 1 
of each of those years, with the ultimate goal of transitioning to a 
bill-and-keep regime. The Commission also adopted a recovery mechanism 
to mitigate the impact of reduced ICC revenues on carriers and to 
facilitate continued investment in broadband infrastructure, while 
providing greater certainty and predictability going forward than the 
status quo. The recovery mechanism allows incumbent local exchange 
carriers (LECs) to recover ICC revenues reduced due to the ICC reforms, 
up to a defined baseline, which is defined as ``Eligible Recovery.'' A 
carrier may recover a limited portion of its Eligible Recovery from its 
end users through a fixed monthly charge called the Access Recovery 
Charge (ARC), and the remainder of its Eligible Recovery, if it so 
elects, from Connect America Fund ICC support.
    3. The USF/ICC Transformation Order also included new certification 
and reporting requirements for carriers that are eligible for and elect 
to receive Connect America Fund ICC support. In particular, sections 
51.915(f)(6) and 51.917(f)(3) require price cap and rate-of-return 
carriers, respectively, that elect to receive Connect America Fund ICC 
support to certify to the Commission with their 2012 annual access 
tariff filings, and on April 1 in each subsequent year, that they 
properly calculated their Eligible Recovery and ARC rates in order to 
be eligible to receive Connect America Fund ICC support. Additionally, 
sections 54.304(c)(1) and (d)(1) require eligible price cap and rate-
of-return carriers that elect to receive Connect America Fund ICC 
support, pursuant to sections 51.915 and 51.917, to file data with the 
Universal Service Administrative Company (USAC), the Commission, and 
relevant state commissions by no later than June 30, 2012, and by March 
31 in subsequent years, establishing the carrier's projected funding 
eligibility amounts, including any true-ups, for the upcoming funding 
period.
    4. In ex parte filings, NECA and the United States Telecom 
Association (USTelecom) requested modification of certain Commission 
rules to correct inconsistencies among the Commission's Connect America 
Fund ICC support eligibility certification deadlines. Specifically, 
NECA asked the Bureau to change the deadline contained in section 
51.917(f)(3) so that rate-of-return carriers are required to file their 
annual Connect America Fund ICC support eligibility certifications with 
their annual access tariff filings. NECA states that this change is 
necessary because the April 1 deadline appears to be ``inconsistent 
with rules governing submission of data forecasts and calculation of 
Eligible Recovery and ARC rates associated with the normal annual 
access tariff filing process for rate-of-return carriers.'' NECA argues 
that data used for calculating ARC rates and monitoring purposes would 
likely change between the April 1 Connect America Fund ICC support 
eligibility certification deadline and mid-June, when annual access 
tariffs are typically filed, and that such changes would ``require 
numerous updates and revisions to data submitted previously by 
carriers, potentially requiring corrections and re-certification.'' 
USTelecom agrees and requests that ``the modification to section 
51.917(f)(3) requested by NECA for rate-of-return carriers also be made 
to section 51.915(f)(6), which applies to price cap carriers.''
    5. Discussion. We agree with NECA and USTelecom that revising the 
Connect America Fund ICC support eligibility certification deadlines to 
coincide with the annual interstate access tariff filing deadlines is 
appropriate. Currently, the rules contain three separate filing 
deadlines that essentially require carriers to develop the same 
underlying data: their Eligible Recovery calculation, their expected 
ARC rate levels, and their expected Connect America Fund ICC support 
amounts. We believe that harmonizing the certification deadlines will 
remove unnecessary administrative burdens and will also remove 
potential conflicts within the rules caused by inconsistent reporting 
deadlines adopted in the USF/ICC Transformation Order. Accordingly, we 
revise the Connect America Fund ICC certification filing deadlines 
contained in sections 51.915(f)(6) and 51.917(f)(3) so that they 
coincide with the annual interstate access tariff filing dates.
    6. In addition to revising the filing deadlines as requested by 
NECA and USTelecom, we also, on our own motion, make a similar revision 
to a Connect America Fund ICC support eligibility data filing deadline 
contained in sections 54.304(c)(1) and (d)(1). These rule sections 
require price cap and rate-of-return carriers seeking Connect America 
Fund ICC support pursuant to sections 51.915 and 51.917, respectively, 
to file data with USAC, the Commission, and relevant state commissions 
establishing the amount of their Connect America Fund ICC support for 
the upcoming funding year by no later than March 31 of each year. For 
the same reasons discussed above,

[[Page 26263]]

the March 31 deadline is inconsistent with rules requiring carriers to 
submit Eligible Recovery calculations and ARC rates in mid-June with 
their annual access tariff filing. Accordingly, we revise the deadlines 
contained in sections 54.304(c)(1) and (d)(1) to coincide with the 
annual interstate access tariff filing dates.
    7. The rule revisions adopted herein revise Connect America Fund 
ICC support eligibility filing requirements so that they coincide with 
carriers' annual access charge tariff filings. In the event that the 
rule revisions adopted herein are not effective before March 31, 2013, 
we find that good cause exists to waive applicable 2013 Part 51 and 54 
filing deadlines to the extent described herein to eliminate the 
administrative burdens that would result from inconsistent reporting 
deadlines that the rule revisions we adopt are intended to remedy. 
Accordingly, this limited waiver, if needed, defers price cap and rate-
of-return carriers' March 31, 2013 and April 1, 2013 Connect America 
Fund ICC support eligibility data filing and certification obligations 
to the date on which the 2013 annual access filings are required.

III. NECA Pooling Switched Access Rate Cap Adjustments

    8. Background. As part of the transition to bill-and-keep, the 
rules adopted in the USF/ICC Transformation Order capped interstate and 
certain intrastate switched access rates for rate-of-return carriers at 
the rates that were in effect on December 29, 2011. This approach 
removed rate-of-return carriers from rate-of-return cost-based recovery 
for interstate switched access services. However, to the extent that 
rate-of-return carriers offer services other than interstate switched 
access service, such as common line and special access services, 
carriers remain subject to rate-of-return regulation for those 
services. Rate-of-return carriers, thus, must continue to establish 
their revenue requirements and rates for those services remaining under 
rate-of-return regulation.
    9. In the USF/ICC Transformation Order, the Commission established 
a non-revenue neutral recovery mechanism that replaced rate-of-return 
cost-based recovery for interstate switched access services provided by 
rate-of-return carriers. The recovery mechanism carefully balanced 
carrier recovery from end users, other users of the switched access 
network such as interexchange carriers, and Connect America Fund ICC 
support. As part of this new recovery mechanism, rate-of-return 
carriers annually establish, as ``Eligible Recovery,'' an amount they 
are eligible to recover from end users or Connect America Fund ICC 
support in each year of the ICC transition. Eligible Recovery is 
determined in subsequent years by reducing a carrier's Base Period 
Revenue by an annual adjustment factor and by specified Expected 
Revenues for the upcoming tariff period. A rate-of-return carrier 
recovers its Eligible Recovery first from a capped ARC assessed on end 
users and, if it is eligible, may elect to recover any remaining 
amounts from Connect America Fund ICC support. The rules also contain a 
true-up procedure for rate-of-return carriers to correct for variances 
between actual and projected demand both for access services and the 
ARC.
    10. In the USF/ICC Transformation Order, the Commission stated that 
``carriers remain free to make elections regarding participation in the 
NECA pool and tariffing processes during the transition.'' Clearly, the 
USF/ICC Transformation Order contemplated a continuation of the pooling 
process for switched access services, but it did not provide procedures 
governing the switched access rate caps when carriers enter or exit the 
pool. In the Designation Order, which identified issues for 
investigation related to NECA's 2012 annual access tariff filings, the 
Bureau addressed how NECA should allocate projected switched access 
revenues among pooling carriers. In lieu of NECA's allocation of 
projected revenues entirely to the carrier that collected them, which 
would have effectively ignored the pooling process, the Bureau stated 
that it would be reasonable for NECA to ``allocate projected revenues 
for purposes of determining each LEC's projected 2012-13 interstate 
switched access revenues by allocating the projected pool revenues in 
relation to each LEC's interstate Base Period Revenue divided by the 
projected pool Base Period Revenue.'' Subsequently, NECA filed its 
direct case employing the procedure outlined in the Designation Order.
    11. Prior to the USF/ICC Transformation Order, when carriers 
entered or exited the NECA pool, the pool switched access rates were 
adjusted to reflect changes to the pool. The rate caps codified in 
section 51.909(a), however, do not contain a mechanism for the pool 
switched access rate caps to increase or decrease when carriers enter 
or exit the pool. Absent such a mechanism, the pool switched access 
rates will not realize revenues at the level that would provide pool 
settlements to the remaining pooling carriers at the level they would 
have received if carriers had not exited the pool. Furthermore, the 
Eligible Recovery for the pooling carriers would increase or decrease 
by the revenue difference between that produced by the preexisting rate 
caps and the adjusted rate caps reflecting the effects of pool entry or 
exit. Such funding is outside the scope of contemplated Connect America 
Fund ICC support, which was intended to help mitigate the effects of 
ICC reforms, not to offset the revenue effects of changes in NECA pool 
participation. Thus, without a method for adjustment to reflect pool 
entry and exit, the section 51.909(a) rate caps result in an unintended 
shift in recovery between switched access charges and Connect America 
Fund ICC support.
    12. Further, prior to the USF/ICC Transformation Order, just as 
NECA revised its rates when a carrier exited the pool, an exiting 
carrier was required to establish rates based on its own costs under 
either section 61.38 or 61.39 of the Commission's rules. The switched 
access rate caps codified in section 51.909(a) do not, however, detail 
how an exiting carrier should establish its switched access rate caps. 
In the 2012 Price Cap Conversion Order, the Commission determined that 
each exiting pooling carrier had to adjust the NECA switched access 
rates it was charging to reflect the extent of its net contribution to 
the pool and to establish switched access rates that would then become 
the capped switched access rates for that carrier. These complimentary 
actions by NECA and an exiting carrier together further the policies of 
the USF/ICC Transformation Order and 2012 Price Cap Conversion Order.
    13. Discussion. We find that providing a method for adjusting NECA 
pool switched access rate caps to reflect pool entry and exit corrects 
an omission in the rate cap rules. Therefore, we amend section 
51.909(a) to address this omission, and to avoid creating unintended 
burdens on Connect America Fund ICC support.
    14. Specifically, as set forth in the Appendix, we revise the 
Commission's rules to require NECA, when a carrier enters the NECA 
pool, to adjust its switched access rate caps to account for the 
difference between the entering carrier's revenues for the preceding 
calendar year based on the entering carrier's switched access rates and 
what the entering carrier's revenues for the preceding calendar year 
would have been if calculated using NECA switched access rates. 
Additionally, we revise the Commission's rate cap rules to include a 
methodology that NECA must use to adjust its switched access rate caps

[[Page 26264]]

when carriers exit the NECA pool. Finally, we revise the Commission's 
rules to clarify how exiting rate-of-return carriers will establish 
their switched access rate caps to reflect the amount by which the 
exiting carrier was a NECA pool net contributor or net recipient. These 
rule revisions effectuate the Commission's intent that NECA pooling 
remain available during the transition, consistent with its historical 
operation, and ensure that the balance between interstate switched 
access revenues and Connect America Fund ICC support is maintained and 
does not affect a rate-of-return carrier's decision to enter or exit 
the NECA pool. These rule revisions also ensure that no party entering 
or exiting the NECA pool will receive a windfall as a result of its 
election, which advances the Commission's pooling neutral policies.
    15. Effects of Changes to Interstate Switched Access Rates on 
Intrastate Rates. We also amend the Commission's rules as set forth in 
the Appendix to clarify the flow-through effects that interstate 
switched access rate cap adjustments resulting from NECA pool entry or 
exit will have on intrastate switched access rates. An underlying 
objective of the USF/ICC Transformation Order was to create a uniform, 
national framework for the ICC transition. The USF/ICC Transformation 
Order adopted rules that establish maximum intrastate switched access 
rate levels based on their relationship to interstate rate levels. In a 
subsequent order, the Bureau clarified the treatment of intrastate 
switched access rates that are below interstate levels when the 
intrastate composite switched access rate was higher than the composite 
interstate switched access rate. Because the Commission's rules require 
intrastate switched access rate levels to be set based on interstate 
rate levels, we clarify that if NECA's interstate switched access rates 
decrease, pooling carriers must also reduce their intrastate rates, 
consistent with the framework established in the USF/ICC Transformation 
Order. Similarly, we clarify that if NECA's switched access rates 
increase, pooling carriers whose intrastate rates would have been at 
parity with interstate rates in 2013 or that already were at parity 
with interstate rates are required to increase their intrastate rates.
    16. We further clarify that carriers exiting the NECA traffic-
sensitive pool must reduce any intrastate switched access rates that 
are higher than their interstate switched access rates to the levels 
established in connection with exiting the pool pursuant to the rate 
cap revisions adopted in this Order. In all cases, these new or revised 
rates will become the capped switched access rates set pursuant to 
51.909(a)(1) for purposes of applying other rules relying on such rates 
or rate caps. In addition, the revised rate caps will be used to 
establish a carrier's Eligible Recovery going forward. Finally, we 
clarify that, if a switched access rate is revised as a result of the 
NECA pool entry and exit process, any competitive local exchange 
carrier (CLEC) benchmarking to that rate must benchmark to the revised 
rate.

IV. NECA Petition for Clarification of Pooling Issues

    17. Background. On December 27, 2012, NECA filed a petition seeking 
clarification of several NECA pooling-related issues flowing from the 
2012 Price Cap Conversion Order. In that order, the Commission granted 
a waiver to allow Consolidated Communications, Inc., Frontier 
Communications Corporation and Windstream Corporation to convert their 
respective average schedule study areas from rate-of-return regulation 
to the regulatory requirements applicable to price cap carriers. The 
Commission also granted a waiver of section 51.909 to the extent 
necessary to allow NECA to increase its switched access rates to 
reflect the lost contributions to the switched access portion of the 
NECA pool.
    18. Discussion. NECA first asks the Commission to clarify that NECA 
pooling carriers do not need to change their ``Step 1'' intrastate 
rates to account for interstate rate adjustments related to the 
converting carriers' exit from the NECA pool. The Step 1 intrastate 
rate reductions required carriers to reduce their intrastate access 
rates, effective on July 3, 2012, based on one-half of the difference 
between the revenue they would have received from transitional 
intrastate access service if it had been priced at the capped 
interstate access rates and the revenue received from intrastate access 
rates. NECA notes that if the Step 1 fifty-percent requirement were 
ongoing, the increase in interstate access rates on January 1, 2013 
would have similarly required an increase in intrastate rates on 
January 1, 2013. If intrastate rates were adjusted in early 2013 to 
reflect the 2012 Price Cap Conversion Order, these adjustments would 
only be effective until carriers made their 2013 annual access tariff 
filings, which, under the ICC transition rules, require intrastate 
switched access rates subject to the ICC transition to be no higher 
than the corresponding interstate rates as of July 1, 2013. We believe 
that adjusting intrastate rates in this manner would have presented an 
unnecessary administrative burden with little, if any, offsetting 
benefit. If the Commission had intended to require such adjustments, 
carriers would have been precluded from doing so without further 
Commission action due to the prohibition on rate increases. Therefore, 
we clarify that the Step 1 reduction was a one-time calculation that 
occurred on July 3, 2012 with no ongoing intrastate ratemaking 
obligation as a result of the waiver. Thus, carriers were not required 
to recalculate and re-file intrastate rates as of January 1, 2013.
    19. NECA also requests confirmation that NECA pooling carriers are 
not required to impute differences between the current intrastate rates 
and what the intrastate rates would be if adjusted to correspond with 
the increase in interstate rates required by the 2012 Price Cap 
Conversion Order. NECA notes that the Commission has required carriers 
to use the ``maximum assessable rate'' in projecting 2012-13 intrastate 
revenues for purposes of calculating Eligible Recovery. As we clarified 
above, no increase in intrastate rates is required in this context. 
Thus, there is no higher rate to impute, and rate-of-return carriers 
must use the highest intrastate switched access rates they could have 
charged in calculating true-ups to their 2012-13 tariff year Eligible 
Recovery.
    20. Finally, NECA asks the Commission to clarify whether, when 
calculating ``Step 2'' transitional intrastate switched access rates, 
NECA pooling carriers whose interstate switched access rates rose as of 
January 1, 2013 as a result of the 2012 Price Cap Conversion Order 
should raise their intrastate switched access rates to match their 
interstate rate levels by July 1, 2013. The rules we clarify in Section 
III above, which maintain interstate and intrastate switched access 
rate parity when a rate-of-return carrier enters or exits the NECA 
pool, address this request by clarifying that NECA pooling carriers 
must, in the circumstances described in the NECA Petition, raise their 
intrastate switched access rates to match interstate switched access 
rate levels on July 1, 2013, subject to the same rate structure and all 
subsequent rate and rate structure modifications. A carrier that does 
not raise its intrastate rates would be required to impute the higher 
rates in projecting its switched access revenues for the 2013-14 tariff 
period when calculating its Eligible Recovery.

V. ``STEP 2'' Transitional Intrastate Access Service Rates

    21. Background. The USF/ICC Transformation Order, among other 
things, adopted rules setting forth a

[[Page 26265]]

transition path to bill-and-keep for certain terminating switched end 
office and transport rates, certain originating and terminating 
dedicated transport rates, and certain legacy reciprocal compensation 
rates. As part of the ``Step 1'' transition, beginning July 1, 2012, 
price cap and rate-of-return carriers were required to reduce 
intrastate terminating switched end office and transport rates, 
originating and terminating dedicated transport rates, and reciprocal 
compensation rates by fifty percent of the difference between such 
rates and each carrier's interstate access rates as of December 29, 
2011. As part of the ``Step 2'' transition, beginning July 1, 2013, 
price cap and rate-of-return carriers are required to reduce their 
intrastate switched access rates, including originating and terminating 
dedicated transport switched access service rates, to parity with 
interstate switched access rates. However, the rules adopted in the 
USF/ICC Transformation Order to implement Step 2 of the transition 
inadvertently omitted originating and terminating dedicated transport 
switched access service rates from the list of rate-of-return carrier 
rate elements subject to the Step 2 reductions that must be reduced to 
the interstate level by July 1, 2013.
    22. Discussion. We correct this omission in the Commission's rules 
by amending the rules governing rate-of-return carriers' transitional 
intrastate access rates. We revise the transitional intrastate access 
service rate schedule in section 51.909(c)(1) to include originating 
and terminating dedicated transport switched access services rates 
within the intrastate rate elements that must be reduced to parity with 
interstate switched access rates beginning July 1, 2013.

VI. Treatment of Local Switching Support in Part 69 Calculations

    23. Background. In the USF/ICC Transformation Order, the Commission 
eliminated Local Switching Support (LSS) as a separate universal 
service support mechanism for rate-of-return carriers beginning July 1, 
2012. However, the amount that was previously recovered through LSS is 
now accounted for in a rate-of-return carrier's Eligible Recovery. 
Further, LSS continues to be listed as a factor in making certain 
access charge calculations pursuant to Part 69 of the Commission's 
rules. Treating LSS as zero in these circumstances could, absent 
clarification, enable rate-of-return carriers to claim duplicative 
recovery for a portion of the amount previously recovered through LSS, 
which is contrary to the intent of rules adopted in the USF/ICC 
Transformation Order. Accordingly, we revise and clarify the 
Commission's rules to resolve a potential conflict that exists between 
the calculation of Eligible Recovery under section 51.917(d) and a 
potential reading of sections 69.306(d)(2) and 69.415(c).
    24. Section 51.917(d) provides the method for calculating a rate-
of-return carrier's Eligible Recovery throughout the ICC reform 
transition period. Section 51.917(d)(1) states that ``[n]otwithstanding 
any other provision of the Commission's rules, a Rate-of-Return Carrier 
may recover the amounts specified in this paragraph [paragraph (d)] 
through the mechanisms described in paragraphs (e) and (f) of this 
section.'' We read ``notwithstanding'' in this context to mean that 
other rules that are inconsistent with the requirements of paragraph 
(d), or that would produce a result inconsistent with the policies of 
the USF/ICC Transformation Order, must be interpreted consistent with 
section 51.917. Broadly speaking, section 51.917 establishes a rate-of-
return carrier's Base Period Revenue. A rate-of-return carrier's Base 
Period Revenue includes, among other things, its projected 2011 
Interstate Switched Access Revenue Requirement. A rate-of-return 
carrier's projected 2011 Interstate Switched Access Revenue 
Requirement, in turn, includes the revenue requirement that the rate-
of-return carrier projected to recover through LSS in the 2011-12 
tariff period. Accordingly, the amount previously recovered through LSS 
has been moved into a rate-of-return carrier's revenue requirement, and 
is accounted for in the calculation of a rate-of-return carrier's 
Eligible Recovery.
    25. Section 69.306(d)(2) Line-Side Port Costs Calculations. Some 
parties have questioned whether the elimination of LSS as a separate 
universal service support mechanism could be interpreted as altering 
the section 69.306(d)(2) access charge calculation that shifts line-
side port costs to the Common Line category. Section 69.306(d)(2) 
provides that ``line-side port costs shall be assigned to the Common 
Line category. Such amount shall be determined after any Local 
Switching support has been removed from the interstate Local Switching 
revenue requirement.'' One possible interpretation of this provision is 
that because LSS has been eliminated, there is no amount by which to 
reduce the Local Switching revenue requirement for purposes of 
determining the line-side port costs to shift to the Common Line 
category. Absent clarification, rate-of-return carriers might apply the 
section 69.306(d)(2) thirty percent default factor for calculating 
line-side port costs to the entire, unreduced, Local Switching revenue 
requirement in order to determine the amount to be shifted to the 
Common Line category.
    26. We clarify that reading section 69.306(d)(2) to allow rate-of-
return carriers to apply the thirty percent default factor to the 
entire Local Switching revenue requirement would conflict with section 
51.917 because the revenue recovery provided for what was formerly LSS 
is already accounted for in a rate-of-return carrier's Base Period 
Revenue. In essence, such an interpretation would allow a carrier to 
recover thirty percent of its former LSS amount through higher 
Subscriber Line Charges, or, more likely, through higher Interstate 
Common Line Support (ICLS), without reducing the amount of Eligible 
Recovery it would be entitled to receive under section 51.917(d). Such 
a result, where rate-of-return carriers recover thirty percent of what 
was formerly LSS through a multi-million dollar line-port cost shift to 
the Common Line category, was not anticipated by the USF/ICC 
Transformation Order.
    27. Furthermore, duplicative recovery is inconsistent with the 
policy goals of the USF/ICC Transformation Order. Specifically, section 
51.917(d)(1)(vii) provides that ``[i]f a Rate-of-Return Carrier 
recovers any costs or revenues that are already being recovered as 
Eligible Recovery through Access Recovery Charges or the Connect 
America Fund from another source, that carrier's ability to recover 
reduced switched access revenue from Access Recovery Charges or the 
Connect America Fund shall be reduced to the extent it receives 
duplicative recovery.'' To avoid the potential for duplicative recovery 
and the need to adjust future Eligible Recovery calculations to account 
for such duplicative recovery, we revise section 69.306(d). 
Specifically, we clarify that a rate-of-return carrier shall assign 
line-side port costs to the Common Line category equal to the line-side 
port costs it shifted in its 2011 Interstate Switched Access Revenue 
Requirement calculation. The Bureau found this approach reasonable in 
the development of the average schedule formulas. This approach is 
consistent with capping switched access rates and avoids requiring 
carriers to make unnecessary calculations in the cost allocation 
process.
    28. Section 69.415 Transport Interconnection Charge Calculations. 
Similar to section 69.306(d)(2), section 69.415 includes LSS in 
calculations to

[[Page 26266]]

determine the allocation of the Transport Interconnection Charge (TIC) 
among the various access charge expense categories. The potential for 
including a LSS value of zero in the calculation specified in section 
69.415 could affect the calculation of Eligible Recovery in a manner 
contrary to the Commission's intent and similar to that described in 
the preceding paragraph. Therefore, we revise section 69.415 to clarify 
that the amount of a rate-of-return carrier's TIC costs to be 
reallocated to each category must equal the amount of TIC costs the 
carrier shifted to each category in its 2011 Interstate Switched Access 
Revenue Requirement calculation. The Bureau found this approach 
reasonable in the development of the average schedule formulas, and we 
likewise utilize it here.

VII. Corporate Operations Expense Limit and Monthly $250 per Line Cap

    29. Background. In the USF/ICC Transformation Order, the Commission 
adopted limits on the recovery of certain costs through universal 
service mechanisms. Specifically, the rules adopted in the USF/ICC 
Transformation Order limited the amount of corporate operations 
expenses that a rate-of-return carrier could recover through ICLS in 
section 54.901(c). The Commission also adopted a presumptive monthly 
$250 per-line cap on the amount of total high-cost universal service 
support, which would reduce the amount of ICLS received by certain 
carriers. Several parties have questioned the extent to which 
disallowed expenses or reduced ICLS may be recovered through the NECA 
pooling processes.
    30. Discussion. In this Order, we clarify that the recovery 
limitations for corporate operations expenses adopted in the USF/ICC 
Transformation Order shall operate as limits on a rate-of-return 
carrier's ability to recover the disallowed amounts through the NECA 
pooling processes. Permitting carriers to receive increased pool 
settlements to offset such reductions to ICLS would effectively create 
an implicit support flow to replace the disallowed explicit support. 
This treatment is also comparable to the effect that a non-pooling 
rate-of-return carrier would experience because it cannot look to other 
carriers to recover amounts it does not receive as a result of the 
recovery limitations. Therefore, it is appropriate for NECA to modify 
its procedures such that the effect of the corporate operations expense 
limit and the monthly $250 per-line cap are not shifted to common line 
NECA pooling carriers. In addition to clarifying the scope of the 
limitations, we revise section 54.901(c) to clarify operation of the 
limitations discussed above as they relate to interstate corporate 
operations expenses allocated to the Common Line category, consistent 
with the USF/ICC Transformation Order.

VIII. True-Up Adjustment Mechanisms

    31. Background. In the USF/ICC Transformation Order, the Commission 
required rate-of-return carriers to project ICC revenues for use in 
determining Eligible Recovery. Because projected demand, an input 
needed in order to project ICC revenues, likely differs from actual 
demand, the Commission adopted a true-up procedure for rate-of-return 
carriers to adjust their Eligible Recovery to account for any 
difference between projected and actual switched access revenues 
resulting from demand variations. The Commission also adopted true-up 
procedures for price cap and rate-of-return carriers to adjust their 
Eligible Recovery to account for any difference between projected and 
actual ARC revenues resulting from ARC demand variations. Under these 
true-up procedures, a carrier's Eligible Recovery for the period 
reflecting the true-up would be reduced if the carrier's actual demand 
exceeded projected demand; likewise a carrier's Eligible Recovery would 
be increased if the carrier's actual demand was less than projected 
demand.
    32. Discussion. The rules implementing the true-up adjustments do 
not properly calculate the difference between projected and actual 
revenues resulting from the difference in projected and actual demand 
consistent with the USF/ICC Transformation Order. By not correctly 
accounting for actual revenues, true-up revenue is incorrectly 
calculated and is, therefore, not correctly reflected in the steps for 
calculating Eligible Recovery each year as intended by the USF/ICC 
Transformation Order. Revising the rules is necessary in order for 
price cap and rate-of-return carriers to correctly implement the true-
up procedures adopted in the USF/ICC Transformation Order. Therefore, 
we amend sections 51.915 and 51.917 so that they correctly set out the 
method for determining the amount of any true-up consistent with the 
USF/ICC Transformation Order.

IX. Procedural Matters

A. Paperwork Reduction Act

    33. This document does not contain new or modified information 
collection requirements subject to the Paperwork Reduction Act of 1995 
(PRA). Therefore, the Order does not contain any new or modified 
information collection burdens for small businesses with fewer than 25 
employees, pursuant to the Small Business Paperwork Relief Act of 2002.

B. Final Regulatory Flexibility Act Certification

    34. The Regulatory Flexibility Act of 1980, as amended (RFA), 
requires agencies to prepare a regulatory flexibility analysis for 
rulemaking proceedings, unless the agency certifies that ``the rule 
will not have a significant economic impact on a substantial number of 
small entities.'' The RFA generally defines ``small entity'' as having 
the same meaning as the terms ``small business,'' ``small 
organization,'' and ``small governmental jurisdiction.'' In addition, 
the term ``small business'' has the same meaning as the term ``small 
business concern'' under the Small Business Act. A small business 
concern is one which: (1) Is independently owned and operated; (2) is 
not dominant in its field of operation; and (3) satisfies any 
additional criteria established by the Small Business Administration 
(SBA).
    35. We hereby certify that the rule revisions adopted in this Order 
will not have a significant economic impact on a substantial number of 
small entities. This Order amends rules adopted in the USF/ICC 
Transformation Order by correcting conflicts between the new or revised 
rules and existing rules, as well as addressing omissions or 
oversights. These revisions do not create any burdens, benefits, or 
requirements that were not addressed by the Final Regulatory 
Flexibility Analysis attached to the USF/ICC Transformation Order. The 
Commission will send a copy of this Order, including a copy of this 
final certification, to the Chief Counsel for Advocacy of the Small 
Business Administration. In addition, the Order (or a summary thereof) 
and certification will be published in the Federal Register.

C. Congressional Review Act

    36. The Commission will send a copy of this Order to Congress and 
the Government Accountability Office pursuant to the Congressional 
Review Act.

X. Ordering Clauses

    37. Accordingly, it is ordered, pursuant to the authority contained 
in sections 1, 2, 4(i), 201-203, 220, 251, 252, 254, 303(r), and 403 of 
the Communications Act of 1934, as amended, 47 U.S.C. 151, 152, 154(i), 
201-203, 220, 251, 254, 252, 303(r), and 403, and pursuant to sections 
0.91,

[[Page 26267]]

0.201(d), 0.291, 1.3, and 1.427 of the Commission's rules, 47 CFR 0.91, 
0.201(d), 0.291, 1.3, and 1.427 and pursuant to the delegation of 
authority in paragraph 1404 of 26 FCC Rcd 17663 (2011), that this Order 
is adopted, effective thirty (30) days after publication of the text or 
summary thereof in the Federal Register.
    38. It is further ordered that Parts 51, 54 and 69 of the 
Commission's rules, 47 CFR 51.909, 51.915, 51.917, 54.304, 69.306, and 
69.415 are amended as set forth in the Appendix, and such rule 
amendments shall be effective 30 days after the date of publication of 
the rule amendments in the Federal Register.
    39. It is further ordered that, pursuant to section 1.3 of the 
Commission's rules, 47 CFR 1.3, and pursuant to the authority delegated 
in sections 0.91 and 0.291 of the Commission's rules, 47 CFR 0.91, 
0.291, sections 51.915(f)(6), 51.917(f)(3), 54.304(c)(1), (d)(1), 47 
CFR 51.915(f)(6), 51.917(f)(3), 54.304(c)(1), and (d)(1), are waived 
effective upon release of this Order for the limited purpose specified 
in paragraph 7, supra, of this Order.
    40. It is further ordered, pursuant to the authority contained in 
sections 1-4 of the Communications Act of 1934, as amended, 47 U.S.C. 
151-154, and the authority delegated in sections 0.91 and 0.291 of the 
Commission's rules, 47 CFR 0.91 and 0.291, that the National Exchange 
Carrier Association, Inc. Petition for Clarification or Waiver, WC 
Docket No. 12-63, Transmittal Nos. 41, 28, 57 (filed Dec. 27, 2012) is 
granted to the extent provided herein and dismissed as moot to the 
extent provided herein.
    41. It is further ordered that the Commission shall send a copy of 
this Order to Congress and the Government Accountability Office 
pursuant to the Congressional Review Act.
    42. It is further ordered that the Commission's Consumer and 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of this Order, including the Final Regulatory Flexibility 
Certification, to the Chief Counsel for Advocacy of the Small Business 
Administration.

List of Subjects in 47 CFR Parts 51, 54, and 69

    Communications common carriers, Reporting and recordkeeping 
requirements, Telecommunications, Telephone.

Federal Communications Commission.
Deena Shetler,
Associate Bureau Chief, Wireline Competition Bureau.

Final Rule

    For the reasons discussed in the preamble, the Federal 
Communications Commission amends 47 CFR parts 51, 54 and 69 as follows:

PART 51--INTERCONNECTION

0
1. The authority citation for part 51 continues to read as follows:

    Authority:  Sections 1-5, 7, 201-05, 207-09, 218, 220, 225-27, 
251-54, 256, 271, 303(r), 332, 706 of the Telecommunication Act of 
1996, 48 Stat. 1070, as amended, 1077; 47 U.S.C. 151-55, 157, 201-
05, 207-09, 218, 220, 225-27, 251-54, 256, 271, 303(r), 332, 1302, 
47 U.S.C. 157 note, unless otherwise noted.


0
2. Amend Sec.  51.909 by adding paragraphs (a)(4) through (6) and 
revising paragraphs (a)(3) and (c)(1) to read as follows:


Sec.  51.909  Transition of rate-of-return carrier access charges.

    (a) * * *
    (3) Except as provided in paragraphs (a)(6) and (b)(4) of this 
section, nothing in this section obligates or allows a Rate-of-Return 
Carrier that has intrastate rates lower than its functionally 
equivalent interstate rates to make any intrastate tariff filing or 
intrastate tariff revisions raising such rates.
    (4) Notwithstanding the requirements of paragraph (a)(1) of this 
section, if a Rate-of-Return Carrier enters or exits the National 
Exchange Carrier Association (Association), as defined in Sec.  69.2(d) 
of this chapter, traffic-sensitive tariff pursuant to the provisions of 
Sec.  69.3(e)(6) of this chapter, the Association shall adjust its 
switched access rate caps referenced in paragraph (a)(1) of this 
section.
    (i) For each entering Rate-of-Return Carrier, the Association 
shall:
    (A) Determine each entering Rate-of-Return Carrier's interstate 
switched access revenues for the preceding calendar year;
    (B) Determine the revenues that would have been realized by the 
entering Rate-of-Return Carrier in the preceding calendar year if it 
had used the Association's switched access rates (employing the rates 
for the appropriate bands) as of December 31 of the preceding year and 
the entering Rate-of-Return Carrier's switched access demand used to 
determine switched access revenues under paragraph (a)(4)(i)(A) of this 
section; and
    (C) Subtract the sum of the revenues determined pursuant to 
paragraph (a)(4)(i)(B) of this section from the sum of the revenues 
determined pursuant to paragraph (a)(4)(i)(A) of this section.
    (ii) The Association shall determine the amount by which each 
exiting Rate-of-Return Carrier is a net contributor or net recipient to 
or from the switched access segment of the Association pool as follows:
    (A) The Association shall calculate the difference between each 
exiting Rate-of-Return Carrier's 2011-2012 tariff year projected 
interstate switched access revenues excluding Local Switching Support 
and the Rate-of-Return Carrier's projected switched access pool 
settlements excluding Local Switching Support for the same period with 
a net contribution amount being treated as a positive amount and a net 
recipient amount being treated as a negative amount. The Association 
shall divide the calculated difference by the Rate-of-Return Carrier's 
2011-2012 tariff year projected interstate switched access revenues 
excluding Local Switching Support to produce a percent net contribution 
or net receipt factor.
    (B) The Association shall multiply the factor calculated in 
paragraph (a)(4)(ii)(A) of this section by the Rate-of-Return Carrier's 
switched access revenues for the preceding calendar year to yield the 
amount of the Rate-of-Return Carrier's net contribution or net receipts 
for the calendar year.
    (iii) To determine the Association's adjusted switched access rate 
caps, the Association shall:
    (A) Add the amounts calculated under paragraphs (a)(4)(i) and 
(a)(4)(ii) of this section;
    (B) Divide the amount determined in paragraph (a)(4)(iii)(A) of 
this section by the preceding year's switched access revenues of the 
Rate-of-Return Carriers that will participate in the Association 
traffic-sensitive tariff for the next annual tariff period;
    (C) The Association shall proportionately adjust its June 30 
switched access rate caps by the percentage amount determined in 
paragraph (a)(4)(iii)(B) of this section.
    (iv) The interstate switched access rate caps determined pursuant 
to paragraph (a)(4)(iii)(C) of this section shall be the new capped 
interstate switched access rates for purposes of Sec.  51.909(a). The 
Association shall provide support in its annual access tariff filing to 
justify the revised interstate switched access rate caps, the Access 
Recovery Charges that will be assessed, and the amount of Connect 
America Fund ICC support each carrier will be eligible to receive.
    (5) A Rate-of-Return Carrier exiting the Association traffic-
sensitive tariff

[[Page 26268]]

pursuant to Sec.  69.3(e)(6) of this chapter must establish new 
switched access rate caps as follows:
    (i) The Rate-of-Return Carrier shall multiply the factor determined 
in paragraph (a)(4)(ii)(A) of this section by negative one and then 
proportionately adjust the Association's capped switched access rates 
as of the date preceding the effective date of the exiting Rate-of-
Return Carrier's next annual tariff filing by this percentage. A Rate-
of-Return Carrier that was a net contributor to the pool will have rate 
caps that are lower than the Association's switched access rate caps, 
while a net recipient will have switched access rate caps that are 
higher than the Association's switched access rate caps;
    (ii) The interstate switched access rate caps determined pursuant 
to paragraph (a)(5)(i) of this section shall be the new capped 
interstate switched access rates of the exiting Rate-of-Return Carrier 
for purposes of Sec.  51.909(a). An exiting Rate-of-Return Carrier 
shall provide support in its annual access tariff filing to justify the 
revised interstate switched access rate caps, the Access Recovery 
Charges that will be assessed, and the amount of Connect America Fund 
ICC support the carrier will be eligible to receive.
    (6) If the Association revises its interstate switched access rate 
caps pursuant to paragraph (a)(4) of this section, each Rate-of-Return 
Carrier participating in the upcoming annual Association traffic-
sensitive tariff shall:
    (i) Revise any of its intrastate switched access rates that would 
have reached parity with its interstate switched access rates in 2013 
to parity with the revised interstate switched access rate levels;
    (ii) The Association shall provide Rate-of-Return Carriers that are 
participating in the Association traffic-sensitive pool with notice of 
any revisions the Association proposes under paragraph (a)(4) of this 
section no later than May 1.
* * * * *
    (c) * * *
    (1) Transitional Intrastate Access Service rates shall be no higher 
than the Rate-of-Return Carrier's interstate Terminating End Office 
Access Service, Terminating Tandem-Switched Transport Access Service, 
and Originating and Terminating Dedicated Transport Access Service 
rates and subject to the same rate structure and all subsequent rate 
and rate structure modifications. Except as provided in paragraph 
(c)(2) of this section, nothing in this section obligates or allows a 
Rate-of-Return Carrier that has intrastate rates lower than its 
functionally equivalent interstate rates to make any intrastate tariff 
filing or intrastate tariff revisions to increase such rates.
* * * * *

0
3. Amend Sec.  51.915 by revising paragraphs (b)(13), (d)(1)(iii)(F), 
(d)(1)(iv)(F), (d)(1)(v)(F), (d)(1)(vi)(G), (d)(1)(vii)(H), 
(d)(1)(viii) and (f)(6) to read as follows:


Sec.  51.915  Recovery mechanism for price cap carriers.

* * * * *
    (b) * * *
    (13) True-up Revenues for Access Recovery Charge. True-up revenues 
for Access Recovery Charge are equal to (projected demand minus actual 
realized demand for Access Recovery Charges) times the tariffed Access 
Recovery Charge. This calculation shall be made separately for each 
class of service and shall be adjusted to reflect any changes in 
tariffed rates for the Access Recovery Charge. Realized demand is the 
demand for which payment has been received by the time the true-up is 
made.
* * * * *
    (d) * * *
    (1) * * *
    (iii) * * *
    (F) An amount equal to True-up Revenues for Access Recovery Charges 
for the year beginning July 1, 2012.
    (iv) * * *
    (F) An amount equal to True-up Revenues for Access Recovery Charges 
for the year beginning July 1, 2013.
    (v) * * *
    (F) An amount equal to True-up Revenues for Access Recovery Charges 
for the year beginning July 1, 2014.
    (vi) * * *
    (G) An amount equal to True-up Revenues for Access Recovery Charges 
for the year beginning July 1, 2015.
    (vii) * * *
    (H) An amount equal to True-up Revenues for Access Recovery Charges 
for the year beginning July 1, 2016.
    (viii) Beginning July 1, 2019, and in subsequent years, a Price Cap 
Carrier's eligible recovery will be equal to the amount calculated in 
paragraph (d)(1)(vii)(A) through (d)(1)(vii)(H) of this section before 
the application of the Price Cap Carrier Traffic Demand Factor 
applicable in 2018 multiplied by the appropriate Price Cap Carrier 
Traffic Demand Factor for the year in question, and then adding an 
amount equal to True-up Revenues for Access Recovery Charges for the 
year beginning July 1 two years earlier.
* * * * *
    (f) * * *
    (6) A Price Cap Carrier that elects to receive CAF ICC support must 
certify with its annual access tariff filing that it has complied with 
paragraphs (d) and (e) of this section, and, after doing so, is 
eligible to receive the CAF ICC support requested pursuant to paragraph 
(f) of this section.

0
4. Amend Sec.  51.917 by revising paragraphs (b)(5), (b)(6), 
(d)(1)(iii)(D) and (f)(3) to read as follows:


Sec.  51.917  Revenue recovery for Rate-of-Return Carriers.

* * * * *
    (b) * * *
    (5) True-up Adjustment. The True-up Adjustment is equal to the 
True-up Revenues for any particular service for the period in question.
    (6) True-up Revenues. True-up Revenues from an access service are 
equal to (projected demand minus actual realized demand for that 
service) times the default transition rate for that service specified 
by Sec.  51.909. True-up Revenues from a non-access service are equal 
to (projected demand minus actual realized net demand for that service) 
times the default transition rate for that service specified by Sec.  
20.11(b) of this chapter or Sec.  51.705. Realized demand is the demand 
for which payment has been received, or has been made, as appropriate, 
by the time the true-up is made.
* * * * *
    (d) * * *
    (1) * * *
    (iii) * * *
    (D) An amount equal to True-up Revenues for Access Recovery Charges 
for the year beginning July 1, 2012.
* * * * *
    (f) * * *
    (3) A Rate-of-Return Carrier that elects to receive CAF ICC support 
must certify with its annual access tariff filing that it has complied 
with paragraphs (d) and (e), and, after doing so, is eligible to 
receive the CAF ICC support requested pursuant to paragraph (f) of this 
section.
* * * * *

PART 54--UNIVERSAL SERVICE

0
5. The authority citation for part 54 continues to read as follows:

    Authority: Secs. 5, 48 Stat. 1068, as amended; 47 U.S.C. 155.


0
6. Amend Sec.  54.304 by revising paragraphs (c)(1) and (d)(1) to read 
as follows:


Sec.  54.304  Administration of Connect America Fund Intercarrier 
Compensation Replacement.

* * * * *
    (c) * * *
    (1) A Price Cap Carrier seeking CAF ICC support pursuant to Sec.  
51.915 of this

[[Page 26269]]

chapter shall file data with the Administrator, the Commission, and the 
relevant state commissions no later than June 30, 2012, for the first 
year, and on the date it files its annual access tariff filing with the 
Commission, in subsequent years, establishing the amount of the Price 
Cap Carrier's eligible CAF ICC funding during the upcoming funding 
period pursuant to Sec.  51.915 of this chapter. The amount shall 
include any true-ups, pursuant to Sec.  51.915 of this chapter, 
associated with an earlier funding period.
* * * * *
    (d) * * *
    (1) A Rate-of-Return Carrier seeking CAF ICC support shall file 
data with the Administrator, the Commission, and the relevant state 
commissions no later than June 30, 2012, for the first year, and on the 
date it files its annual access tariff filing with the Commission, in 
subsequent years, establishing the Rate-of-Return Carrier's projected 
eligibility for CAF ICC funding during the upcoming funding period 
pursuant to Sec.  51.917 of this chapter. The projected amount shall 
include any true-ups, pursuant to Sec.  51.917 of this chapter, 
associated with an earlier funding period.
* * * * *

0
7. Amend Sec.  54.901 by revising paragraphs (c) introductory text and 
(c)(2) to read as follows:


Sec.  54.901  Calculation of Interstate Common Line Support.

* * * * *
    (c) Beginning January 1, 2012, for purposes of calculating the 
amount of Interstate Common Line Support determined pursuant to 
paragraph (a) of this section that a non-price cap carrier may receive, 
the corporate operations expense allocated to the Common Line Revenue 
Requirement, pursuant to Sec.  69.409 of this chapter, shall be limited 
to the lesser of:
* * * * *
    (2) The portion of the monthly per-loop amount computed pursuant to 
Sec.  36.621(a)(4)(iii) of this chapter that would be allocated to the 
interstate Common Line Revenue Requirement pursuant to Sec.  69.409 of 
this chapter.
* * * * *

PART 69--ACCESS CHARGES

0
8. The authority citation for part 69 continues to read as follows:

    Authority:  47 U.S.C. 154, 201, 202, 203, 205, 218, 220, 254, 
403.


0
9. Amend Sec.  69.306 by revising paragraph (d)(2) and adding paragraph 
(d)(3) to read as follows:


Sec.  69.306  Central office equipment (COE).

* * * * *
    (d) * * *
    (2) Until June 30, 2012, for non-price cap local exchange carriers, 
line-side port costs shall be assigned to the Common Line rate element. 
Such amount shall be determined after any local switching support has 
been removed from the interstate Local Switching revenue requirement. 
Non-price cap local exchange carriers may use thirty percent of the 
interstate Local Switching revenue requirement, minus any local 
switching support, as a proxy for allocating line port costs to the 
Common Line category.
    (3) Beginning July 1, 2012, a non-price cap local exchange carrier 
shall assign line-side port costs to the Common Line rate element equal 
to the amount of line-side port costs it shifted in its 2011 projected 
Interstate Switched Access Revenue Requirement.
* * * * *

0
10. Amend Sec.  69.415 by revising paragraphs (b) and (c) introductory 
text and adding paragraph (d) to read as follows:


Sec.  69.415  Reallocation of certain transport expenses.

* * * * *
    (b) Until June 30, 2012, the amount to be reallocated is limited to 
the total revenues recovered through the interconnection charge 
assessed pursuant to Sec.  69.124 for the 12-month period ending June 
30, 2001.
    (c) Until June 30, 2012, the reallocation of the amount in 
paragraph (b) of this section shall be based on each access element's 
projected revenue requirement divided by the total revenue requirement 
of all the access elements, provided that:
* * * * *
    (d) Beginning July 1, 2012, the amount of the Transport 
Interconnection Charges to be reallocated to each category shall be 
equal to the amount of Transport Interconnection Charge costs the non-
price cap local exchange carrier was projected to shift to each 
category in projecting its 2011 Interstate Switched Access Revenue 
Requirement.
* * * * *
[FR Doc. 2013-10562 Filed 5-3-13; 8:45 am]
BILLING CODE 6712-01-P