PUBLIC NOTICE
FEDERAL COMMUNICATIONS COMMISSION  
1919 M STREET, N.W.
WASHINGTON, D.C. 20554                                 DA 97-32

News media information 202/418-0500     Fax-On-Demand  202/418-2830     Internet:  http://www.fcc.gov    ftp.fcc.gov

PLEADING CYCLE ESTABLISHED FOR COMMENTS ON NECA'S 1997 PROPOSED
   MODIFICATIONS TO THE INTERSTATE AVERAGE SCHEDULE FORMULAS 
                                AAD 97-2

                                             Released: January 10, 1997

Comment Date:  February 12, 1997 
Reply Date:         February 27, 1997


     On December 31, 1996, the National Exchange Carrier Association, Inc. ("NECA") filed
modifications to the average schedule formulas that NECA proposes become effective July 1, 1997. 
These average schedule formulas compensate more than six hundred incumbant local exchange
carriers for the use of their facilities in originating and terminating interstate common carrier
communications.

     NECA projects an overall 0.8% decrease in the combined Common Line and Traffic
Sensitive formula settlements, assuming demand levels are held constant.  More specifically,
Common Line settlements are expected to increase on average by 2.4% while Traffic Sensitive
formula settlements are expected to decrease on average by 2.9%.  The net effect of these changes
is not simply additive because Traffic Sensitive settlements constitute a larger portion of total
average schedule settlements.  In addition to formula level changes due to the effects of cost and
demand growth, NECA proposes changes in the Common Line formula to reflect recent deregulation
of public pay telephones.  A separate Public Notice, DA 96-132, Pleading Cycle Established for
Comments on NECA's Supplemental Modification to the Interstate Average Schedule Formulas, was
released December 31, 1996 to address the changes in the Common Line Formula due to payphone
deregulation.

     NECA proposes two changes in its Traffic Sensitive Central Office ("TSCO") formula for
settlement payments to average schedule companies.  The TSCO formula is structured in tiers so that
per minute payments progressively decrease.   NECA proposes to change the formula so that one
of the decreases in per minute payments  occurs at a higher minutes per line threshold.  NECA also
proposes to change the High Volume Access Line Multiplier.  NECA states that these proposed
changes reflect the results of studies it conducted in response to the Commission's directive in its
1996 Memorandum Opinion and Order (National Exchange Carrier Association, Inc., Proposed
Modifications to the Interstate Average Schedules, Memorandum Opinion and Order, AAD 96-2,
DA 96-1040). 

     NECA also proposes changing the structure of the Non-Distance Sensitive Line Haul formula
to reflect the relationship between circuit group sizes and circuit termination costs.  According to
NECA, study areas with small numbers of circuits per exchange would, on average, receive higher
settlements per circuit, while study areas with large numbers of circuits per exchange would, on
average, receive lower settlements per circuit. 

     Interested parties may file comments on the petition on or before February 12, 1997, and
reply comments on or before February 27, 1997, with the Secretary, Federal Communications
Commission, 1919 M Street, N.W., Room 222, Washington, D.C. 20554.  Comments and reply
comments should reference AAD 97-2.  An original and nine (9) copies of each pleading should be
sent to the Secretary, Federal Communications Commission, 1919 M Street, N.W., Room 222,
Washington, D.C., 20554.  A copy of the pleading should also be sent to George Williams and
Abdel-Hamid Eqab, Competitive Safeguards Branch, Common Carrier Bureau, and to the
Commission's contractor for public service record duplication: International Transcription Service
(ITS), 2100 M Street, N.W., Suite 140, Washington, D.C. 20037.  Copies of the petition may be
obtained from the Accounting and Audits Division's public reference room, Room 812, 2000 L
Street, N.W., Washington, D.C.  Copies are also available from ITS at (202) 857-3800.

     We will treat this proceeding as non-restricted for purposes of the Commission's ex parterules.  See generally, 47 C.F.R.  1.1200-1.1216.  However, if this waiver petition is opposed, it
will be treated as a restricted proceeding under the Commission's ex parte rules.  See generally, 47
C.F.R.  1.1208-1.1216.  For further information contact George Williams or Abdel-Hamid Eqab
at (202) 418-0830. 

                FEDERAL COMMUNICATIONS COMMISSION