§ 61.47   Adjustments to the SBI; pricing bands.

   (a) In connection with any price cap tariff filing proposing changes in
   the rates of services in service categories, subcategories, or density
   zones, the carrier must calculate an SBI value for each affected
   service category, subcategory, or density zone pursuant to the
   following methodology:

   SBIt = SBIt-1[Σi vi(Pt/Pt−1)i]

   where

   SBIt = the proposed SBI value,

   SBIt-1 = the existing SBI value,

   Pt = the proposed price for rate element “i,”

   Pt-1 = the existing price for rate element “i,” and

   vi = the current estimated revenue weight for rate element “i,”
   calculated as the ratio of the base period demand for the rate element
   “i” priced at the existing rate, to the base period demand for the
   entire group of rate elements comprising the service category priced at
   existing rates.

   (b) New services that are added to existing service categories or
   subcategories must be included in the appropriate SBI calculations
   under paragraph (a) of this section beginning at the first annual price
   cap tariff filing following completion of the base period in which they
   are introduced. This index adjustment requires that the demand for the
   new service during the base period must be included in determining the
   weights used in calculating the SBI.

   (c) In the event that the introduction of a new service requires the
   creation of a new service category or subcategory, a new SBI must be
   established for that service category or subcategory beginning at the
   first annual price cap tariff filing following completion of the base
   period in which the new service is introduced. The new SBI should be
   initialized at a value of 100, corresponding to the service category or
   subcategory rates in effect the last day of the base period, and
   thereafter should be adjusted as provided in paragraph (a) of this
   section.

   (d) Any price cap tariff filing proposing rate restructuring shall
   require an adjustment to the affected SBI pursuant to the general
   methodology described in paragraph (a) of this section. This adjustment
   requires the conversion of existing rates in the rate element group
   into rates of equivalent value under the proposed structure, and then
   the comparison of the existing rates that have been converted to
   reflect restructuring to the proposed restructured rates. This
   calculation may require use of carrier data and estimation techniques
   to assign customers of the preexisting service to those services
   (including the new restructured service) that will remain or become
   available after restructuring.

   (e) Pricing bands shall be established each tariff year for each
   service category and subcategory within a basket. Each band shall limit
   the pricing flexibility of the service category, subcategory, as
   reflected in the SBI, to an annual increase of a specified percent
   listed in this paragraph, relative to the percentage change in the PCI
   for that basket, measured from the levels in effect on the last day of
   the preceding tariff year. For local exchanage carriers subject to
   price cap regulation as that term is defined in § 61.3(ee), there shall
   be no lower pricing band for any service category or subcategory.

   (1) Five percent:

   (i) Local Switching (traffic sensitive basket)

   (ii) Information (traffic sensitive basket)

   (iii) Database Access Services (traffic sensitive basket)

   (iv) 800 Database Vertical Services subservice (traffic sensitive
   basket)

   (v) Billing Name and Address (traffic sensitive basket)

   (vi) Local Switching Trunk Ports (traffic sensitive basket)

   (vii) Signalling Transfer Point Port Termination (traffic sensitive
   basket)

   (viii) Voice Grade (trunking and special access baskets)

   (ix) Audio/Video (special access basket)

   (x) Total High Capacity (trunking and special access baskets)

   (xi) DS1 Subservice (trunking and special access baskets)

   (xii) DS3 Subservice (trunking and special access baskets)

   (xiii) Wideband (special access basket)

   (2) Two percent:

   (i) Tandem-Switched Transport (trunking basket)

   (ii) Signalling for Tandem Switching (trunking basket)

   (f) A price cap local exchange carrier may establish density zones
   pursuant to the requirements set forth in § 69.123 of this chapter, for
   any service in the trunking and special access baskets, other than the
   interconnection charge set forth in § 69.124 of this chapter. The
   pricing flexibility of each zone shall be limited to an annual increase
   of 15 percent, relative to the percentage change in the PCI for that
   basket, measured from the levels in effect on the last day of the
   preceding tariff year. There shall be no lower pricing band for any
   density zone.

   (g)-(i)(l) [Reserved]

   (2) Effective January 1, 1998, notwithstanding the requirements of
   paragraph (a) of this section, if a price cap local exchange carrier is
   recovering interconnection charge revenues through per-minute rates
   pursuant to § 69.155 of this chapter, any reductions to the PCI for the
   basket designated in § 61.42(d)(3) resulting from the application of the
   provisions of § 61.45(b)(1)(i) and from the application of the
   provisions of § § 61.45(i)(1) and 61.45(i)(2) shall be directed to the
   SBI of the service category designated in § 61.42(d)(i).

   (3) [Reserved]

   (4) Effective January 1, 1998, the SBI reduction required by paragraph
   (i)(2) of this section shall be determined by dividing the sum of the
   dollar amount of any PCI reduction required by § § 61.45(i)(1) and
   61.45(i)(2), by the dollar amount associated with the SBI for the
   service category designated in § 61.42(e)(2)(vi), and multiplying the
   SBI for the service category designated in § 61.42(e)(2)(vi) by one
   minus the resulting ratio.

   (5) Effective July 1, 2000, notwithstanding the requirements of
   paragraph (a) of this section and subject to the limitations of
   § 61.45(i), if a price cap local exchange carrier is recovering an ATS
   charge greater than its Target Rate as set forth in § 61.3(qq), any
   reductions to the PCI for the traffic sensitive or trunking baskets
   designated in § § 61.42(d)(2) and 61.42(d)(3) resulting from the
   application of the provisions of § 61.45(b), and the formula in
   § 61.45(b) and from the application of the provisions of § § 61.45(i)(1),
   and 61.45(i)(2) shall be directed to the SBIs of the service categories
   designated in § § 61.42(e)(1) and 61.42(e)(2).

   (j) [Reserved]

   (k) In no case shall a price cap local exchange carrier include data
   associated with services offered pursuant to contract tariff in the
   calculations required by this section.

   [ 54 FR 19843 , May 8, 1989]

   Editorial Note: For Federal Register citations affecting § 61.47, see
   the List of CFR Sections Affected, which appears in the Finding Aids
   section of the printed volume and at www.fdsys.gov.

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