Sec. 51.507  General rate structure standard.

    (a) Element rates shall be structured consistently with the manner 
in which the costs of providing the elements are incurred.
    (b) The costs of dedicated facilities shall be recovered through 
flat-rated charges.
    (c) The costs of shared facilities shall be recovered in a manner 
that efficiently apportions costs among users. Costs of shared 
facilities may be apportioned either through usage-sensitive charges or 
capacity-based flat-rated charges, if the state commission finds that 
such rates reasonably reflect the costs imposed by the various users.
    (d) Recurring costs shall be recovered through recurring charges, 
unless an incumbent LEC proves to a state commission that such recurring 
costs are

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de minimis. Recurring costs shall be considered de minimis when the 
costs of administering the recurring charge would be excessive in 
relation to the amount of the recurring costs.
    (e) State commissions may, where reasonable, require incumbent LECs 
to recover nonrecurring costs through recurring charges over a 
reasonable period of time. Nonrecurring charges shall be allocated 
efficiently among requesting telecommunications carriers, and shall not 
permit an incumbent LEC to recover more than the total forward-looking 
economic cost of providing the applicable element.
    (f) State commissions shall establish different rates for elements 
in at least three defined geographic areas within the state to reflect 
geographic cost differences.
    (1) To establish geographically-deaveraged rates, state commissions 
may use existing density-related zone pricing plans described in 
Sec. 69.123 of this chapter, or other such cost-related zone plans 
established pursuant to state law.
    (2) In states not using such existing plans, state commissions must 
create a minimum of three cost-related rate zones.