FCC 97-158 First Report & Order on Access Charge Reform

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FCC 97-158

First Report & Order In the Matter of
Access Charge Reform
Price Cap Performance Review for Local Exchange Carriers
Transport Rate Structure and Pricing
Usage of the Public Switched Network by Information Service and Internet Access Providers

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Table of Contents
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These files do not contain the changes specified in the 6/4/97 Errata!

TITLE PAGE

I. Introduction 1

A. Background 17

1. The Existing Rate System 17

2. Implicit Subsidies in the Existing System 28

3. The Telecommunications Act of 1996 32

B. Access Charge Reform 35

1. Rationalizing the Rate Structure 36

2. Baseline Rate Level Reductions 42

II. Summary of Rate Structure Changes and Transitions 53

A. Common Line Rate Structure Changes 54

B. Other Rate Structure Changes 61

III. Rate Structure Modifications 67

A. Common Line 67

1. Overview 67

2. Subscriber Line Charge 72

3. Carrier Common Line Charge 88

4. Common Line PCI Formula 106

5. Assessment of SLCs and PICCs on Derived Channels 111

B. Local Switching 123

1. Non-Traffic Sensitive Charges 123

2. Traffic Sensitive Charges 136

C. Transport 150

1. Entrance Facilities and Direct-Trunked Transport 152

2. Tandem-Switched Transport 158

D. Transport Interconnection Charge (TIC) 210

1. Background 210

2. Discussion 212

E. SS7 Signalling 244

1. Background 244

2. Discussion 252

F. Impact of New Technologies 256

IV. Baseline Rate Levels 258

A. Primary Reliance on a Market-Based Approach With A Prescriptive Backdrop and the Adoption of Several Initial Prescriptive Measures 258

1. Background 258

2. Discussion 262

B. Prescriptive Approaches 285

1. Prescription of a New X-Factor 285

2. Rejection of Certain Prescriptive Approaches 287

C. Equal Access Costs 299

1. Background 299

2. Discussion 302

D. Correction of Improper Cost Allocations 315

1. Marketing Expenses 315

2. General Support Facilities 326

V. Access Reform For Incumbent Rate-of-Return Local Exchange Carriers 329

A. Background 329

B. Discussion 330

VI. Other Issues 336

A. Applicability of Part 69 to Unbundled Elements 336

1. Background 336

2. Discussion 337

B. Treatment of Interstate Information Services 341

1. Background 341

2. Discussion 344

C. Terminating Access 349

1. Price Cap Incumbent LECs 350

2. Non-Incumbent LECs 358

3. "Open End" Services 365

D. Universal Service-Related Part 69 Changes 367

1. Background 368

2. Discussion 372

E. Part 69 Allocation Rules 388

1. Background 388

2. Discussion 389

F. Other Proposed Part 69 Changes 390

1. Background 390

2. Discussion 391

VII. Further Notice of Proposed Rulemaking 397

A. PICCs for Special Access Lines 397

1. Background 398

2. Proposal 403

B. General Support Facilities Costs 407

1. Background 408

2. Proposal 412

VIII. Final Regulatory Flexibility Analysis 419

IX. Procedural Issues 441

X. Ordering Clauses 459

Appendix A List of Commenters

Appendix B Comment Summary

Appendix C Final Rules

STATEMENTS

Commissioner Quello

Commissioner Ness

Commissioner Chong

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last updated 6/9/97