Goto Section: 61.44 | 61.46 | Table of Contents
FCC 61.45
Revised as of October 2, 2015
Goto Year:2014 |
2016
§ 61.45 Adjustments to the PCI for Local Exchange Carriers.
(a) Price cap local exchange carriers shall file adjustments to the PCI for
each basket as part of the annual price cap tariff filing, and shall
maintain updated PCIs to reflect the effect of mid-year exogenous cost
changes.
(b)(1)(i) Adjustments to price cap local exchange carrier PCIs, in those
carriers' annual access tariff filings, the traffic sensitive basket
described in § 61.42(d)(2), the trunking basket described in § 61.42(d)(3),
the special access basket described in § 61.42(d)(5) and the Interexchange
Basket described in § 61.42(d)(4)(i), shall be made pursuant to the following
formula:
“PCIt = PCIt − 1[1 + w[GDP-PI − X] + Z / R].”
PCIt − 1 = PCIt −1[1 + w[GDP-PI − X] + Z / R]
Where the terms in the equation are described:
GDP-PI = For annual filings only, the percentage change in the GDP-PI
between the quarter ending six months prior to the effective date of the new
annual tariff and the corresponding quarter of the previous year. For all
other filings, the value is zero.
X = For the CMT, traffic sensitive, and trunking baskets, for annual filings
only, the factor is set at the level prescribed in paragraphs (b)(1)(ii) and
(iii) of this section. For the interexchange basket, for annual filings
only, the factor is set at the level prescribed in paragraph (b)(1)(v) of
this section. For the special access basket, for annual filings only, the
factor is set at the level prescribed in paragraph (b)(1)(iv) of this
section. For all other filings, the value is zero.
g = For annual filings for the CMT basket only, the ratio of minutes of use
per access line during the base period, to minutes of use per access line
during the previous base period, all minus 1.
Z = The dollar effect of current regulatory changes when compared to the
regulations in effect at the time the PCI was updated to PCIt−1, measured at
base period level of operations.
Targeted Reduction = the actual possible dollar value of the (GDP-PI − X)
reductions that will be targeted to the ATS Charge pursuant to § 61.45(i)(3).
The reductions calculated by applying the (GDP-PI − X) portion of the
formula to the CCL element within the CMT basket will contain the “g”
component, as defined above.
R = Base period quantities for each rate element “I”, multiplied by the
price for each rate element “I” at the time the PCI was updated to PCIt − 1.
w = R + Z, all divided by R (used for the traffic sensitive, trunking, and
special access baskets).
wix = R—(access rate in effect at the time the PCI was updated to PCIt − 1 *
base period demand) + Z, all divided by R.
PCIt = The new PCI value.
PCIt −1 = the immediately preceding PCI value.
(ii) The X value applicable to the baskets specified in § § 61.42(d)(1),
(d)(2), and (d)(3), shall be 6.5%, to the extent necessary to reduce a
tariff entity's ATS charge to its Target Rate as set forth in § 61.3(qq).
Once any price cap local exchange carrier tariff entity's ATS Charge is
equal to the Target Rate as set forth in § 61.3(qq) for the first time (the
former NYNEX telephone companies may be treated as a separate tariff
entity), then, except as provided in paragraph (b)(1)(iii) of this section,
X is equal to GDP-PI and no further reductions will be mandated (i.e., if
applying the full X-factor reduction for a given year would reduce the ATS
charge below the Target Rate as set forth in § 61.3 (qq), the amount of
X-factor reduction applied that year will be the amount necessary to reach
the Target Rate as set forth in § 61.3 (qq)). A filing entity does not reach
the Target Rate as set forth in § 61.3(qq) in any year in which it exercises
an exogenous adjustment pursuant to § 61.45(d)(vii). For companies with
separate tariff entities under a single price cap, the following rules shall
apply:
(A) Targeting amounts as defined in § 61.45(i)(1)(i) shall be identified
separately, using the revenue for each of the tariff entities under the cap.
(B) Each tariff entity shall only be required to use the amount of targeting
necessary to get to the Target Rate as set forth in § 61.3 (qq).
(iii)(A) Except as provided in paragraph (b)(1)(iii)(B) of this section,
once the Tariff Entity's Target Rate as set forth in § 61.3 (qq) is achieved,
the X-factor for the CMT basket will equal GDP-PI as long as GDP-PI is less
than or equal to 6.5% and greater than 0%. If GDP-PI is greater than 6.5%,
and an entity has eliminated its CCL and multi-line business PICCs charges,
the X-factor for the CMT basket will equal 6.5%, and all End User Common
Line charges, rates and nominal caps, will be increased by the difference
between GDP-PI and the 6.5% X-factor. If GDP-PI is less than 0, the X-factor
for the CMT basket will be 0.
(B) For tariff filing entities with a Target Rate of $0.0095, or for the
portion of a filing entity consolidated pursuant to § 61.48(o) that, prior to
such consolidation, had a Target Rate of $0.0095, in which the ATS charge
has achieved the Target Rate but in which the carrier common line (CCL)
charge has not been eliminated, the X-factor for the CMT basket will be 6.5%
until the earlier of June 30, 2004, or until CCL charges are eliminated
pursuant to paragraph (i)(4) of this section. Thereafter, in any filing
entity in which a CCL charge remains after July 1, 2004, the X-factor for
the CMT basket will be determined pursuant to paragraph (b)(1)(iii)(A) of
this section as if CCL charges were eliminated.
(iv) For the special access basket specified in § 61.42(d)(5), the value of X
shall be 3.0% for the 2000 annual filing. The value of X shall be 6.5% for
the 2001, 2002 and 2003 annual filings. Starting in the 2004 annual filing,
X shall be equal to GDP-PI for the special access basket.
(v) For the interexchange basket specified in § 61.42(d)(4), the value of X
shall be 3.0% for all annual filings.
(b)(2) Adjustments to price cap local exchange carrier PCIs and average
price cap CMT revenue per line, in tariff filings other than the annual
access tariff filing, for the CMT basket described in § 61.42(d)(1), the
traffic sensitive basket described in § 61.42(d)(2), the trunking basket
described in § 61.42(d)(3), the interexchange basket described in
§ 61.42(d)(4), and the special access basket described in § 61.42(d)(5), shall
be made pursuant to the formulas set forth in paragraph (b)(1)(i) of this
section, except that the “w(GDP-PI − X)” component of those PCI formulas
shall not be employed.
(c) Effective July 1, 2000, the prices of the CMT basket rate elements,
excluding special access surcharges under § 69.115 of this chapter and line
ports in excess of basic under § 69.157 of this chapter, shall be set based
upon Average Price Cap CMT Revenue per Line month.
(d) The exogenous cost changes represented by the term “Z” in the formula
detailed in paragraph (b)(1)(i) of this section shall be limited to those
cost changes that the Commission shall permit or require by rule, rule
waiver, or declaratory ruling.
(1) Subject to further order of the Commission, those exogenous changes
shall include cost changes caused by:
(i) The completion of the amortization of depreciation reserve deficiencies;
(ii) Such changes in the Uniform System of Accounts, including changes in
the Uniform System of Accounts requirements made pursuant to § 32.16 of this
chapter, as the Commission shall permit or require be treated as exogenous
by rule, rule waiver, or declaratory ruling;
(iii) Changes in the Separations Manual;
(iv) [Reserved]
(v) The reallocation of investment from regulated to nonregulated activities
pursuant to § 64.901 of this chapter;
(vi) Such tax law changes and other extraordinary cost changes as the
Commission shall permit or require be treated as exogenous by rule, rule
waiver, or declaratory ruling;
(vii) Retargeting the PCI to the level specified by the Commission for
carriers whose base year earnings are below the level of the lower
adjustment mark, subject to the limitation in § 69.731 of this chapter. The
allocation of LFAM amounts will be allocated pursuant to § 61.45(d)(3). This
section shall not be applicable to tariff filings during the tariff year
beginning July 1, 2000, but is applicable in subsequent years;
(viii) Inside wire amortizations;
(ix) The completion of amortization of equal access expenses.
(2) Price cap local exchange carriers specified in § § 61.41(a)(2) or (a)(3)
shall, in their annual access tariff filing, recognize all exogenous cost
changes attributable to modifications during the coming tariff year in their
Subscriber Plant Factor and the Dial Equipment Minutes factor, and
completions of inside wire amortizations and reserve deficiency
amortizations.
(3) Exogenous cost changes shall be apportioned on a cost-causative basis
between price cap services as a group, and excluded services as a group.
Total exogenous cost changes thus attributed to price cap services shall be
recovered from services other than those used to calculate the ATS charge.
(e) [Reserved]
(f) The exogenous costs caused by new services subject to price cap
regulation must be included in the appropriate PCI calculations under
paragraphs (b) and (c) of this section beginning at the first annual price
cap tariff filing following completion of the base period in which such
services are introduced.
(g) In the event that a price cap tariff becomes effective, which tariff
results in an API value (calculated pursuant to § 61.46) that exceeds the
currently applicable PCI value, the PCI value shall be adjusted upward to
equal the API value.
(h) [Reserved]
(i)(1)(i) Price cap local exchange carriers that are recovering revenues
through rates pursuant to § § 69.106, 69.108, 69.109, 69.110, 69.111, 69.112,
69.113, 69.118, 69.123, 69.124, 69.125, 69.129, or § 69.155 of this chapter
shall target, to the extent necessary to reduce the ATS Charge to the Target
Rate as set forth in § 61.3 (qq) for the first time, any PCI reductions
associated with the dollar impact of application of the (GDP-PI − X) portion
of the formula in § 61.45(b)(1)(i) to the traffic sensitive and trunking
baskets. In order to calculate the actual dollars to transfer to the
trunking and traffic sensitive baskets, carriers will first determine the
“Targeted Revenue Differential” that will be transferred to the trunking and
traffic sensitive baskets to reduce the ATS Charge to the Target Rate as set
forth in § 61.3(qq). The Targeted Revenue Differential shall be applied only
to the trunking and traffic sensitive baskets to the extent necessary to
reduce the ATS charge to the Target Rate as set forth in § 61.3 (qq), and
shall not be applied to reduce the PCIs in any other basket or to reduce
Average Price Cap CMT Revenue per Line month, except as provided in
§ 61.45(i)(4).
(ii) For the purposes of § 61.45(i)(1)(i), Targeted Revenue Differential will
be determined by adding together the following amounts:
(A) R* (GDP-PI − X) for the traffic sensitive basket, trunking basket, and
the CMT basket excluding CCL revenues; and
(B) CCL Revenues* [(GDP-PI − X − (g / 2)] / [1 + (g / 2)]
Where “g” is defined in § 61.45(b)(1)(i).
(2) Until a tariff entity's ATS Charge equals the Target Rate as set forth
in § 61.3 (qq) for the first time, the Targeted Revenue Differential will be
targeted to reduce the following rates for that tariff filing entity, in
order of priority:
(i) To the residual per minute Transport Interconnection Charge, until that
rate is $0.00; then
(ii) To the Information Surcharge, until that rate is $0.00; then
(iii) To the other Local Switching charges and Switched Transport charges
until the tariff entity's ATS Rate equals the Target Rate as set forth in
§ 61.3(qq) for the first time. In making these reductions, the reductions to
Local Switching rates as a percentage of total X-factor reductions must be
greater than or equal to the percentage proportion of Local Switching
revenues to the total sum of revenues for Local Switching, Local Switching
Trunk Ports, Signalling Transfer Point Port Termination, Switched Direct
Trunked Transport, Signalling for Switched Direct Trunked Transport,
Entrance Facilities for switched access traffic, Tandem Switched Transport,
and Signalling for Tandem Switching (i.e., Local Switching gets at least its
proportionate share of reductions).
(3) After a price cap local exchange carrier reaches the Target Rate as set
forth in § 61.3(qq), the ATS Rate will be recalculated each subsequent Annual
Filing. This process will identify the new ATS Charge for the new base
period level. Due to change in base period demand and inclusion of new
services for that annual filing, the absolute level of a tariff entity's ATS
Charge may change. The resulting new ATS Charge level will be what that
tariff entity will be measured against during that base period. For example,
if a company whose target is $0.0055 reached the Target Rate during the 2000
annual filing, that level may change to $0.0058 in the 2001 annual filing
due to change in demand and inclusion of new services. Therefore, it will be
the $0.0058 average rate that the tariff entity will be measured against for
all non-annual filings. Likewise, if that same company was at the Target
Rate during the 2000 filing, that level may change to $0.0053 average rate
in the 2001 annual filing due to change in demand and inclusion of new
services. In that case, it will be at the $0.0053 average rate that the
tariff entity will be measured.
(4) A company electing a $0.0095 Target Rate will, in the tariff year it
reaches the Target Rate, apply any Targeted Revenue Differential remaining
after reaching the Target Rate to reduce Average Price Cap CMT Revenue per
Line month until the CCL charge is eliminated. In subsequent years, until
the earlier of June 30, 2004 or when the CCL charge is eliminated, tariff
filing entities with a Target Rate of $0.0095, or the portion of a filing
entity consolidated pursuant to § 61.48(o) that, prior to such consolidation,
had a Target Rate of $0.0095, will reduce Average Price Cap CMT Revenue per
Line month according to the following method:
(i) Filing entity calculates the maximum allowable carrier common line
revenue, as defined in § 61.46(d)(1), that would be permitted in the absence
of further adjustment pursuant to this paragraph;
(ii) Filing entity identifies maximum amount of dollars available to reduce
Average Price Cap CMT Revenue per Line month by the following:
(CMT revenue in a $0.0095 Area −CCL revenue in a $0.0095 Area) * (GDP-PI −X)
+ (CCL Revenue in a $0.0095 Area) * [(GDP-PI − X) − (g / 2)] / [1 + (g / 2)]
(iii) The Average Price Cap CMT Revenue per Line month shall then be reduced
by the lesser of the amount described in paragraph (i)(4)(i) of this section
and the amount described in paragraph (i)(4)(ii) of this section, divided by
base period Switched Access End User Common Line Charge lines.
[ 65 FR 38696 , June 21, 2000; 65 FR 57741 , Sept. 26, 2000; 76 FR 43214 , July
20, 2011]
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Goto Section: 61.44 | 61.46
Goto Year: 2014 |
2016
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