NECA Petition for Waiver
Federal Communications Commission
Washington, D.C. 20554In the Matter of
Connect America Fund
WC Docket No. 10-90
A National Broadband Plan for Our Future
GN Docket No. 09-51
Developing an Unified Intercarrier Compensation
CC Docket No. 01-92
Establishing Just and Reasonable Rates for
WC Docket No. 07-135
Local Exchange Carriers
High-Cost Universal Service Support
WC Docket No. 05-337
Federal-State Joint Board on Universal Service
CC Docket No. 96-45
Lifeline and Link-Up
WC Docket No. 03-109
Universal Service Fund – Mobility Fund
WT Docket No. 10-208
Adopted: May 14, 2013Released: May 14, 2013
By the Chief, Pricing Policy Division, Wireline Competition Bureau:
On April 9, 2013, the National Exchange Carrier Association (NECA) filed a petition on
behalf of its rate-of-return member carriers seeking expedited clarification or, in the alternative, a waiver
of requirements in section 51.909(a)(4) of the Commission’s rules for the 2013-2014 annual access tariff
filing period.1 For the reasons explained below, we find good cause to grant NECA a waiver of section
51.909(a)(4) for purposes of the 2013-2014 annual access tariff filing period.
The USF/ICC Transformation Order adopted, among other things, an intercarrier
compensation (ICC) reform timeline including rules that require carriers to adjust, over a period of years,
1 See Petition of the National Exchange Carrier Association for Expedited Clarification or Waiver, WC Docket No.
10-90 et. al at 1 (filed April 9, 2013) (NECA Petition). See also 47 C.F.R. § 51.909(a)(4); Connect America Fund et
al., WC Docket No. 10-90 et al., Order, DA 13-564 (Wireline Comp. Bur. rel. Mar. 27, 2013) (Rule Clarification
Order). The Wireline Competition Bureau issued a Public Notice seeking comment on NECA’s petition. See
Pleading Cycle Established for National Carrier Exchange Association Petition for Expedited Clarification or
Waiver of Requirements in Section 51.909(a)(4) of the Commission’s Rules, CC Docket Nos. 03-109 et al., Public
Notice, DA 13-709 (Wireline Comp. Bur. rel. Apr. 12, 2013). No comments were filed in this proceeding.
Federal Communications Commission DA 13-1099
many of their legacy interstate and intrastate switched access charges, effective on July 1 of each of those
years, with the ultimate goal of transitioning to a bill-and-keep regime.2 The Commission also adopted a
recovery mechanism to mitigate the impact of reduced ICC revenues on carriers and to facilitate
continued investment in broadband infrastructure, while providing greater certainty and predictability
going forward than the status quo.3 The recovery mechanism allows incumbent local exchange carriers
(LECs) to recover ICC revenues reduced due to the ICC reforms, up to a defined baseline, which is
defined as “Eligible Recovery.”4 A carrier may recover a limited portion of its Eligible Recovery from its
end users through a fixed monthly charge called the Access Recovery Charge (ARC), and the remainder
of its Eligible Recovery, if it so elects, from Connect America Fund ICC support.5
In the USF/ICC Transformation Order, the Commission stated that “carriers remain free
to make elections regarding participation in the NECA pool and tariffing processes during the
transition.”6 The USF/ICC Transformation Order did not provide procedures governing the switched
access rate caps when carriers enter or exit the pool.7 In the Rule Clarification Order, the Bureau adopted
section 51.909(a)(4), which sets out a mechanism requiring NECA to adjust its switched access rate caps
upon entry and exit of carriers to the NECA pool.8 Section 51.909(a)(4) effectuates the Commission’s
intent that NECA pooling remain available during the transition, consistent with its historical operation,
and ensures that the balance between interstate switched access revenues and Connect America Fund ICC
support is maintained and does not affect a rate-of-return carrier’s decision to enter or exit the NECA
NECA’s petition seeks expedited clarification or, in the alternative, a waiver of
requirements in section 51.909(a)(4). Specifically, NECA requests that the Commission clarify that
section 51.909(a)(4) does not require adjustments to NECA’s capped interstate switched access rates
when pool participation changes result in de minimis impacts.10 NECA states that during the 2013-2014
tariff periods, pool composition changes will result in changes of only about 0.053% to NECA’s switched
access rate caps, and any potential impacts on the Connect America Fund ICC support associated with
such changes also would be minor, approximately $138,500 for the upcoming tariff year.11 NECA argues
that the costs of strictly adhering to this new rule outweigh the benefits in such circumstances.12 In the
alternative, NECA requests that the Commission waive section 51.909(a)(4) for the 2013-2014 tariff
2 Connect America Fund et al., WC Docket No. 10-90 et al., Report and Order and Further Notice of Proposed
Rulemaking, 26 FCC Rcd 17663, 17934-35, para. 801 and Fig. 9 (2011) (USF/ICC Transformation Order), pets. for
review pending sub nom. In re: FCC 11-161, No. 11-9900 (10th Cir. filed Dec. 8, 2011).
3 Id. at 17677, para. 36.
4 Id. at 17956, para. 847.
5 Id. at 17994, para. 918; 47 C.F.R. § 51.917(d)-(f).
6 USF/ICC Transformation Order, 26 FCC Rcd at 17934-35, para. 801 and Fig. 9, n.1499.
7 See Investigation of Certain 2012 Annual Access Tariffs, WC Docket No. 12-233, Order, 27 FCC Rcd 15557,
15567, para. 23 (2012) (Termination Order) (citing Investigation of Certain 2012 Annual Access Tariffs, WC
Docket No. 12-233, Order Designating Issues for Investigation, 27 FCC Rcd 10311, 10320, paras. 25 (Wireline
Comp. Bur. 2012) (Designation Order)).
8 47 C.F.R. § 51.909(a)(4). See Rule Clarification Order, para. 13.
9 See Rule Clarification Order, para. 14. See also USF/ICC Transformation Order, 26 FCC Rcd at 17934, para.
801, n. 1499.
10 NECA Petition at 2.
11 Id. at 5.
12 Id. at 2, 6.
Federal Communications Commission DA 13-1099
period.13 NECA states that such a waiver would avoid the need for tariff revisions at the federal and state
levels required to effectuate de minimis changes in rates associated with 2013 pool election changes.14
We find that good cause exists to grant NECA a limited waiver of section 51.909(a)(4)
for purposes of the 2013-2014 annual access tariff filing period.15 NECA states that only two companies
will change their pool participation status during the relevant time period, and calculates that the net
impact of the changes under section 51.909(a)(4) will be a 0.053% increase in NECA’s switched access
rate caps,16 which NECA estimates will increase Connect America Fund ICC support by approximately
$138,500 for the 2013-2014 annual access tariff filing period.17 We agree with NECA that this impact is
de minimis and the costs of strict compliance with section 51.909(a)(4) for the upcoming tariff period
outweigh the benefits, given the administrative costs across the industry of implementing such de minimis
rate changes at both the interstate and intrastate levels.18 Therefore, we conclude that NECA has
demonstrated the existence of special circumstances and we find that granting the requested waiver will
serve the public interest.
Accordingly, IT IS ORDERED that, pursuant to sections 201-205 of the Communications
Act of 1934, as amended, 47 U.S.C. §§ 201-205, section 1.3 of the Commission’s rules, 47 C.F.R. § 1.3,
and the authority delegated pursuant to sections 0.91 and 0.291 of the Commission’s rules, 47 C.F.R. §§
0.91, 0.291, section 51.909(a)(4) of the Commission’s rules IS WAIVED for purposes of NECA’s annual
access tariff filing for the 2013-2014 annual access tariff filing period.
FEDERAL COMMUNICATIONS COMMISSION
14 Id. NECA also states that a waiver is appropriate because section 51.909(a)(4) is not currently effective since,
although the Rule Clarification Order was released on March 27, 2013, Federal Register publication has not yet
taken place, which would make timely notification to the companies in its Traffic Sensitive Pool difficult. Id. at 9.
15 Generally, the Commission’s rules may be waived for good cause shown. 47 C.F.R. § 1.3. The Commission may
exercise its discretion to waive a rule where the particular facts make strict compliance inconsistent with the public
interest. Northeast Cellular Telephone Co. v. FCC, 897 F.2d 1164, 1166 (D.C. Cir. 1990) (Northeast Cellular). In
addition, the Commission may take into account considerations of hardship, equity, or more effective
implementation of overall policy on an individual basis. WAIT Radio v. FCC, 418 F.2d 1153, 1159 (D.C. Cir.
1969); Northeast Cellular, 897 F.2d at 1166. Waiver of the Commission’s rules is therefore appropriate only if
special circumstances warrant a deviation from the general rule, and such deviation will serve the public interest.
Northeast Cellular, 897 F.2d at 1166. Moreover, in demonstrating whether a waiver is warranted, the burden of
proof rests with the petitioner. Tucson Radio, Inc., v. FCC, 452 F.2d 1380, 1382 (D.C.Cir. 1971).
16 See NECA Petition at 5 (explaining that, for the 2013-2014 annual access tariff filing period, one carrier has
notified NECA that it will enter the pool and one carrier has notified NECA that it will exit the pool). See also
Letter from Jennifer Leonard, Director-Access, Tariffs & Costs, NECA, to Julie Veach, Chief, Wireline Competition
Bureau, Federal Communications Commission (filed Mar. 28, 2013).
17 NECA Petition at 5-6.
18 Id. at 2, 6-7 (explaining that without the waiver, the NECA companies would incur a significant cost in making
corresponding changes to their intrastate rates).
Federal Communications Commission DA 13-1099
Kalpak S. Gude
Chief, Pricing Policy Division
Wireline Competition Bureau
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