§ 54.607   Determining the rural rate.

   (a) The rural rate shall be the average of the rates actually being
   charged to commercial customers, other than health care providers, for
   identical or similar services provided by the telecommunications
   carrier providing the service in the rural area in which the health
   care provider is located. The rates included in this average shall be
   for services provided over the same distance as the eligible service.
   The rates averaged to calculate the rural rate must not include any
   rates reduced by universal service support mechanisms. The “rural rate”
   shall be used as described in this subpart to determine the credit or
   reimbursement due to a telecommunications carrier that provides
   eligible telecommunications services to eligible health care providers.

   (b) If the telecommunications carrier serving the health care provider
   is not providing any identical or similar services in the rural area,
   then the rural rate shall be the average of the tariffed and other
   publicly available rates, not including any rates reduced by universal
   service programs, charged for the same or similar services in that
   rural area over the same distance as the eligible service by other
   carriers. If there are no tariffed or publicly available rates for such
   services in that rural area, or if the carrier reasonably determines
   that this method for calculating the rural rate is unfair, then the
   carrier shall submit for the state commission's approval, for
   intrastate rates, or the Commission's approval, for interstate rates, a
   cost-based rate for the provision of the service in the most
   economically efficient, reasonably available manner.

   (1) The carrier must provide, to the state commission, or intrastate
   rates, or to the Commission, for interstate rates, a justification of
   the proposed rural rate, including an itemization of the costs of
   providing the requested service.

   (2) The carrier must provide such information periodically thereafter
   as required, by the state commission for intrastate rates or the
   Commission for interstate rates. In doing so, the carrier must take
   into account anticipated and actual demand for telecommunications
   services by all customers who will use the facilities over which
   services are being provided to eligible health care providers.

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