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Posted by Connie Wightman on 4/1/14 4:50 PM

describe the imageThe next step for implementation of access reform will be to reduce terminating end office switched access rates in the preordained downward glide-path to the rate of $0.0007 per minute. In this step, the ILECs will calculate their composite terminating end office rate, and CLECs will be capped at the new ILECs rates. The terminating end office composite encompasses the following rate elements, where applicable:

  • Local Switching
  • Common and Dedicated End Office Trunk Ports
  • Information Surcharge
  • Transport Interconnection

Starting with this new composite, ILECs will compute the amount of reduction required to bring the rate down by 1/3 of the difference between that composite rate and $0.0007. The result will become the new Target Composite. Each ILEC can reach the Target Composite by reducing individual rate elements, or by creating a single composite rate element to replace the original rate element set. The new rate or rates must go into effect on July 1, 2014, and will serve as the cap for each ILEC’s intrastate terminating access as well.

On March 25, 2014, the FCC issued an order on access tariff filing procedures for this upcoming installment of the switched access reductions. The Order sets the effective date of July 1, 2014, for this year’s annual access charge tariff filings. As usual, the ILECs will file a preview of their calculations in their annual access tariff review plan, which this year will be due on May 19, 2014. Anyone wishing to comment must do so by May 29th.

The actual ILEC tariff revisions that become effective on July 1, 2014, must be filed by June 16th for those filing on 15 days’ notice; and June 24th for those filing on seven days’ notice (reductions only). Petitions to suspend or reject the tariff filings made on 15 days’ notice are due June 23, 2014. Petitions to suspend or reject tariff filings made on seven days’ notice are due June 26, 2014.

Since CLECs are benchmarked (effectively capped) at the ILEC rates in the territories in which they compete, they do not need to make these calculations. Within 15 days of the effective date of the ILEC reductions (by July 16, 2014) the CLECs must file interstate rate revisions so as not to exceed the ILECs’ rates. They can match each ILEC’s rates individually, or create a composite in those states in which they compete with multiple ILECs. The rates CLECs file at the interstate level will also need to be filed for intrastate terminating end office rates, unless their tariffs already point back to their filed interstate tariffs.

Tandem switching and transport rates are not included in this reduction.

The FCC released a clarification order yesterday (DA 14-434) stating in part “To ensure the maximum rate parity, intrastate terminating end office rates will be set at the interstate rate level for the comparable rate element unless the intrastate rate for that rate element is lower, in which case the lower rate will be used.” The Order also clarifies how the composite rate is to be calculated.

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Topics: FCC, tariff, telecom regulation, access, FCC ICC/USF Reform Order, switched access

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