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NECA files 2018 average schedule formula changes

By Tanja Curovic, senior director – Rates, Average Schedules and Advanced Analytics

On December 21, 2017, NECA filed the 2018 Modification of Average Schedules. These formulas are reviewed by the FCC and are scheduled to become effective in July 2018, subject to an FCC order expected by June 2018. **

Proposed formula changes for July 2018

The 2018 proposed formula changes would increase overall settlement rates by about 5.6 percent at constant demand. With average projected change in demand, the overall settlement change is an increase of about 3.8 percent. The effects of the formula changes on individual companies will vary, depending on company demand trends and characteristics. 

Breaking down the changes by category, there are: 

  • increases in the common line formula and the consumer broadband only loop formula, attributable to an increased account allocation to the common line category;  

  • increases in the special access DSL (voice-data) formula, attributable to higher account growth than last year; and 

  • increases in special access non-DSL formulas, attributable to decreased demand growth. 

Descriptions of the formulas, an updated settlement analysis work paper and a forecasting tool to analyze the effect of demand changes in conjunction with the formula changes are available on our Average Schedule Resources page under Worksheets, Tools and Forms. The forecasting tool allows companies to compare the settlement effects of existing and proposed formulas and contains additional forecasting features for future years. 

Simplification of average schedule filings

This year marks the beginning of a process to simplify and streamline our average schedule filing process. Average schedule companies continue to be key participants in NECA’s access tariffs and revenue pools, and it is critical the formulas produce settlements that simulate cost company settlements as required by FCC rules and that our filings thoroughly document and support proposed formulas. As technology, data collection and analysis improves, we are continually looking for ways to accomplish average schedule studies more economically and efficiently.  

This year’s filing came in at under 100 pages (down from 580 last year) due to streamlining of text and filing supporting data separately in electronic format, saving both paper and money. We will continue to review the average schedule study and filing processes in future years to determine if further efficiencies can be realized. 

Average schedule high-cost loop universal service formula approved

In addition to the settlement formula filing each December, we file modifications to the average schedule universal service formula every August. On October 23, 2017, the FCC approved the universal service high-cost loop support formula modifications we filed on August 30, 2017. The new formulas became effective on January 1, 2018, and will remain in effect through December 31, 2018. We notified members of this new formula and its effects last August. For further analysis, worksheets containing the new universal service formulas can be found on our Average Schedule Resources page under Worksheets, Tools and Forms.


**As required by the FCC's Part 69 rules, NECA develops average schedule formulas designed to simulate the disbursements received by cost companies with characteristics similar to the average schedule population. Each December we file modifications of average schedules. Assuming FCC approval, formula modifications become effective on July 1 and reflect changes in company cost characteristics, demand, FCC rules, network technology and related operations. 


Filed under January 2018, Tagged with Average schedules, Winter 2018

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