§  51.705   LECs' rates for transport and termination.

   (a) Notwithstanding any other provision of the Commission's rules, by
   default, transport and termination for Non-Access Telecommunications
   Traffic exchanged between a local exchange carrier and a CMRS provider
   within the scope of § 51.701(b)(2) shall be pursuant to a bill-and-keep
   arrangement, as provided in § 51.713.

   (b) Establishment of incumbent LECs' rates for transport and
   termination:

   (1) This provision applies when, in the absence of a negotiated
   agreement between parties, state commissions establish Non-Access
   Reciprocal Compensation rates for the exchange of Non-Access
   Telecommunications Traffic between a local exchange carrier and a
   telecommunications carrier other than a CMRS provider where the
   incumbent local exchange carriers did not have any such rates as of
   December 29, 2011. Any rates established pursuant to this provision
   apply between December 29, 2011 and the date at which they are
   superseded by the transition specified in paragraphs (c)(2) through
   (c)(5) of this section.

   (2) An incumbent LEC's rates for transport and termination of
   telecommunications traffic shall be established, at the election of the
   state commission, on the basis of:

   (i) The forward-looking economic costs of such offerings, using a cost
   study pursuant to § § 51.505 and 51.511; or

   (ii) A bill-and-keep arrangement, as provided in § 51.713.

   (3) In cases where both carriers in a Non-Access Reciprocal
   Compensation arrangement are incumbent LECs, state commissions shall
   establish the rates of the smaller carrier on the basis of the larger
   carrier's forward-looking costs, pursuant to § 51.711.

   (c) Except as provided by paragraph (a) of this section, and
   notwithstanding any other provision of the Commission's rules, default
   transitional Non-Access Reciprocal Compensation rates shall be
   determined as follows:

   (1) Effective December 29, 2011, no telecommunications carrier may
   increase a Non-Access Reciprocal Compensation for transport or
   termination above the level in effect on December 29, 2011. All
   Bill-and-Keep Arrangements in effect on December 29, 2011 shall remain
   in place unless both parties mutually agree to an alternative
   arrangement.

   (2) Beginning July 1, 2012, if any telecommunications carrier's
   Non-Access Reciprocal Compensation rates in effect on December 29, 2011
   or established pursuant to paragraph (b) of this section subsequent to
   December 29, 2011, exceed that carrier's interstate access rates for
   functionally equivalent services in effect in the same state on
   December 29, 2011, that carrier shall reduce its reciprocal
   compensation rate by one half of the difference between the Non-Access
   Reciprocal Compensation rate and the corresponding functionally
   equivalent interstate access rate.

   (3) Beginning July 1, 2013, no telecommunications carrier's Non-Access
   Reciprocal Compensation rates shall exceed that carrier's tariffed
   interstate access rate in effect in the same state on January 1 of that
   same year, for equivalent functionality.

   (4) After July 1, 2018, all Price-Cap Local Exchange Carrier's
   Non-Access Reciprocal Compensation rates and all non-incumbent LECs
   that benchmark access rates to Price Cap Carrier shall be set pursuant
   to Bill-and-Keep arrangements for Non-Access Reciprocal Compensation as
   defined in this subpart.

   (5) After July 1, 2020, all Rate-of-Return Local Exchange Carrier's
   Non-Access Reciprocal Compensation rates and all non-incumbent LECs
   that benchmark access rates to Rate-of-Return Carriers shall be set
   pursuant to Bill-and-Keep arrangements for Non-Access Reciprocal
   Compensation as defined in this subpart.

   [ 76 FR 73855 , Nov. 29, 2011]