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In Focus

By Bill Hegmann, President and CEO

Like me, you may still be trying to wrap your head around what the USF RoR Reform Order will mean for your operations. On one hand, it gives a lot more clarity on what universal support will look like going forward. On the other hand, for many carriers it may mean doing more with less as you invest in and maintain your network. 

With the two distinct funding paths the Order offers, it is pretty clear you have some tough choices to make. Its 249 pages prompt a number of questions and NECA staff is working diligently to sort it all out. On top of that, the FCC is asking for feedback on further proposed changes and we are carefully reviewing those as well. 

The Order, including 20 pages of rule changes, was just published in the Federal Register. Most rules become effective on May 25, but some need OMB approval so are not in effect yet. We do know this year's annual access tariff filing will include an 11.0 percent authorized rate of return, effective July 1. This is the first of six annual .25 percent drops to eventually get to a 9.75 percent rate of return.

Speaking of our annual access filing, there is good news to report. Filing preparations have revealed two trends: special access costs are not increasing as quickly as they have been in recent years and demand is not decreasing as quickly as we had projected in last year's filing. The combined effect of those two factors means any needed rate increase on average would be significantly lower than last year's rate increase, which should help address concerns such as growing competition for telecom services.

You will hear more about the annual filing and our efforts to implement the USF Order's provisions soon. Stay tuned. 

Filed under April 2016, Tagged with In Focus, Tariffs, USF Reform


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