Goto Section: 54.207 | 54.302 | Table of Contents
FCC 54.301
Revised as of October 2, 2015
Goto Year:2014 |
2016
§ 54.301 Local switching support.
(a) Calculation of local switching support. (1) Beginning January 1, 1998
and ending December 31, 2011, an incumbent local exchange carrier that has
been designated an eligible telecommunications carrier and that serves a
study area with 50,000 or fewer access lines shall receive support for local
switching costs using the following formula: The carrier's projected annual
unseparated local switching revenue requirement, calculated pursuant to
paragraph (d) of this section, shall be multiplied by the local switching
support factor. Beginning January 1, 2012 and ending June 30, 2012, a
rate-of-return carrier, as that term is defined in § 54.5 of this chapter,
that is an incumbent local exchange carrier that has been designated an
eligible telecommunications carrier and that serves a study area with 50,000
or fewer access lines and is not affiliated with a price cap carrier, as
that term is defined in § 61.3(aa) of this chapter, shall receive support for
local switching costs frozen at the same support level received for calendar
year 2011, subject to true-up. For purposes of this section, local switching
costs shall be defined as Category 3 local switching costs under part 36 of
this chapter. Beginning January 1, 2012, no carrier that is a price cap
carrier, as that term is defined in § 61.3(aa) of this chapter, or a
rate-of-return carrier, as that term is defined in § 54.5 of this chapter,
that is affiliated with a price cap carrier, shall receive local switching
support. Beginning July 1, 2012, no carrier shall receive local switching
support.
(2) Local switching support factor. (i) The local switching support factor
shall be defined as the difference between the 1996 weighted interstate DEM
factor, calculated pursuant to § 36.125(f) of this chapter, and the 1996
unweighted interstate DEM factor.
(ii) If the number of a study area's access lines increases such that, under
§ 36.125(f) of this chapter, the weighted interstate DEM factor for 1997 or
any successive year would be reduced, that lowered weighted interstate DEM
factor shall be applied to the study area's 1996 unweighted interstate DEM
factor to derive a new local switching support factor. If the number of a
study area's access lines decreases or has decreased such that, under
§ 36.125(f) of this chapter, the weighted interstate DEM factor for 2010 or
any successive year would be raised, that higher weighted interstate DEM
factor shall be applied to the study area's 1996 unweighted interstate DEM
factor to derive a new local switching support factor.
(3) Beginning January 1, 1998, the sum of the unweighted interstate DEM
factor, as defined in § 36.125(a)(5) of this chapter, and the local switching
support factor shall not exceed 0.85. If the sum of those two factors would
exceed 0.85, the local switching support factor shall be reduced to a level
that would reduce the sum of the factors to 0.85.
(b) Submission of data to the Administrator. Until October 1, 2011, each
incumbent local exchange carrier that has been designated an eligible
telecommunications carrier and that serves a study area with 50,000 or fewer
access lines shall, for each study area, provide the Administrator with the
projected total unseparated dollar amount assigned to each account listed
below for the calendar year following each filing. This information must be
provided to the Administrator no later than October 1 of each year. The
Administrator shall use this information to calculate the projected annual
unseparated local switching revenue requirement pursuant to paragraph (d) of
this section.
I
Telecommunications Plant in Service (TPIS) Account 2001
Telecommunications Plant—Other Accounts 2002, 2003, 2005
General Support Assets Account 2110
Central Office Assets Accounts 2210, 2220, 2230
Central Office-switching, Category 3 (local switching) Account 2210,
Category 3
Information Origination/termination Assets Account 2310
Cable and Wire Facilities Assets Account 2410
Amortizable Tangible Assets Account 2680
Intangibles Account 2690
II
Rural Telephone Bank (RTB) Stock Included in Account 1410
Materials and Supplies Account 1220.1
Cash Working Capital Defined in 47 CFR 65.820(d)
III
Accumulated Depreciation Account 3100
Accumulated Amortization Included in Accounts 2005, 2680, 2690, 3410
Net Deferred Operating Income Taxes Accounts 4100, 4340
Network Support Expenses Account 6110
General Support Expenses Account 6120
Central Office Switching, Operator Systems, and Central Office Transmission
Expenses Accounts 6210, 6220, 6230
Information Origination/Termination Expenses Account 6310
Cable and Wire Facilities Expenses Account 6410
Other Property, Plant and Equipment Expenses Account 6510
Network Operations Expenses Account 6530
Access Expense Account 6540
Depreciation and Amortization Expense Account 6560
Marketing Expense Account 6610
Services Expense Account 6620
Corporate Operations Expense Account 6720
Operating Taxes Accounts 7230, 7240
Federal Investment Tax Credits Account 7210
Provision for Deferred Operating Income Taxes-Net Account 7250
Allowance for Funds Used During Construction Included in Account 7300
Charitable Contributions Included in Account 7300
Interest and Related Items Account 7500
IV
Other Non-Current Assets Included in Account 1410
Deferred Maintenance and Retirements Included in Account 1438
Deferred Charges Included in Account 1438
Other Jurisdictional Assets and Liabilities Accounts 1500, 4370
Customers' Deposits Account 4040
Other Long-Term Liabilities Included in Account 4300
(c) Allocation of accounts to switching. The Administrator shall allocate to
local switching, the accounts reported pursuant to paragraph (b) of this
section as prescribed in this paragraph.
(1) General Support Assets (Account 2110); Amortizable Tangible Assets
(Account 2680); Intangibles (Account 2690); and General Support Expenses
(Account 6120) shall be allocated according to the following factor:
Account 2210 Category ÷ 3 (Account 2210 + Account 2220 + Account 2230 +
Account 2310 + Account 2410).
(2) Telecommunications Plant—Other (Accounts 2002, 2003, 2005); Rural
Telephone Bank (RTB) Stock (included in Account 1410); Materials and
Supplies (Account 1220.1); Cash Working Capital (Sec. 65.820(d) of this
chapter); Accumulated Amortization (Included in Accounts 2005, 2680, 2690,
3410); Net Deferred Operating Income Taxes (Accounts 4100, 4340); Network
Support Expenses (Account 6110); Other Property, Plant and Equipment
Expenses (Account 6510); Network Operations Expenses (Account 6530);
Marketing Expense (Account 6610); Services Expense (Account 6620); Operating
Taxes (Accounts 7230, 7240); Federal Investment Tax Credits (Accounts 7210);
Provision for Deferred Operating Income Taxes—Net (Account 7250); Interest
and Related Items (Account 7500); Allowance for Funds Used During
Construction (Included in Account 7300); Charitable Contributions (included
in Account 7300); Other Non-current Assets (Included in Account 1410); Other
Jurisdictional Assets and Liabilities (Accounts 1500, 4370); Customer
Deposits (Account 4040); Other Long-term Liabilities (Included in Account
4300); and Deferred Maintenance and Retirements (Included in Account 1438)
shall be allocated according to the following factor:
Account 2210 Category 3 Account 2001.
(3) Accumulated Depreciation for Central Office—switching (Account 3100
associated with Account 2210) and Depreciation and Amortization Expense for
Central Office—switching (Account 6560 associated with Account 2210) shall
be allocated according to the following factor:
Account 2210 Category 3 ÷ Account 2210.
(4) Accumulated Depreciation for General Support Assets (Account 3100
associated with Account 2110) and Depreciation and Amortization Expense for
General Support Assets (Account 6560 associated with Account 2110) shall be
allocated according to the following factor:
Account 2210 Category 3 ÷ Account 2001.
(5) Corporate Operations Expenses (Account 6720) shall be allocated
according to the following factor:
[[Account 2210 Category 3 (Account 2210 + Account 2220 + Account 2230)]] ×
(Account 6210 + Account 6220 + Account 6230)] + [(Account 6530 + Account
6610 + Account 6620) × (Account 2210 Category 3 Account 2001)] (Account 6210
+ Account 6220 + Account 6230 + Account 6310 + Account 6410 + Account 6530 +
Account 6610 + Account 6620).
(6) Central Office Switching, Operator Systems, and Central Office
Transmission Expenses (Account 6210, Account 6220, Account 6230) shall be
allocated according to the following factor:
Account 2210 Category 3 ÷ (Accounts 2210 + 2220 + 2230).
(d) Calculation of the projected annual unseparated local switching revenue
requirement. The Administrator shall calculate the projected annual
unseparated local switching revenue requirement by summing the components
listed in this paragraph.
(1) Return on Investment attributable to COE Category 3 shall be obtained by
multiplying the average projected unseparated local switching net investment
by the authorized interstate rate of return. Projected unseparated local
switching net investment shall be calculated as of each December 31 by
deducting the accumulated reserves, deferrals and customer deposits
attributable to the COE Category 3 investment from the gross investment
attributable to COE Category 3. The average projected unseparated local
switching net investment shall be calculated by summing the projected
unseparated local switching net investment as of December 31 of the calendar
year following the filing year and such investment as of December 31 of the
filing year and dividing by 2.
(2) Depreciation expense attributable to COE Category 3 investment,
allocated pursuant to paragraph (c) of this section.
(3) All expenses, excluding depreciation expense, collected in paragraph (b)
of this section, allocated pursuant to paragraph (c) of this section.
(4) Federal income tax attributable to COE Category 3 shall be calculated
using the following formula; the accounts listed shall be allocated pursuant
to paragraph (c) of this section:
[Return on Investment attributable to COE Category 3—Included in Account
7300—Account 7500-Account 7210)] × [Federal Income Tax Rate (1—Federal
Income Tax Rate)].
(e) True-up adjustment—(1) Submission of true-up data. Until December 31,
2012, each incumbent local exchange carrier that has been designated an
eligible telecommunications carrier and that serves a study area with 50,000
or fewer access lines shall, for each study area, provide the Administrator
with the historical total unseparated dollar amount assigned to each account
listed in paragraph (b) of this section for each calendar year no later than
12 months after the end of such calendar year
(2) Calculation of true-up adjustment. (i) The Administrator shall calculate
the historical annual unseparated local switching revenue requirement for
each carrier when historical data for each calendar year are submitted.
(ii) The Administrator shall calculate each carrier's local switching
support payment, calculated pursuant to 54.301(a), using its historical
annual unseparated local switching revenue requirement.
(iii) For each carrier receiving local switching support, the Administrator
shall calculate the difference between the support payment calculated
pursuant to paragraph (e)(2)(ii) of this section and its support payment
calculated using its projected annual unseparated local switching revenue
requirement.
(iv) The Administrator shall adjust each carrier's local switching support
payment by the difference calculated in paragraph (e)(2)(iii) of this
section no later than 15 months after the end of the calendar year for which
historical data are submitted.
[ 63 FR 2126 , Jan. 13, 1998; 63 FR 33585 , June 19, 1998, as amended at 67 FR 13226 , Mar. 21, 2002; 67 FR 5701 , Feb. 6, 2002; 75 FR 17874 , Apr. 8, 2010;
76 FR 73870 , Nov. 29, 2011; 77 FR 14302 , Mar. 9, 2012]
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Goto Section: 54.207 | 54.302
Goto Year: 2014 |
2016
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