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Average schedule formula changes proposed

By Karen Rowland, Senior Manager – Average Schedule Methods

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. Filed each December, these formulas are reviewed by the FCC and become effective subject to an FCC Order. 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.

Proposed formula changes for this July

The 2016 proposed formula changes would increase overall settlement rates by about 2.6 percent at constant demand. With average projected change in demand, the overall settlement change is a decrease of about 0.1 percent. The effects of these changes on individual companies vary, depending on company demand characteristics. 

Breaking down the changes by category, there are increases in the DSL and Non-DSL formulas, attributable to higher account growth and a continued increase in account allocations to the special access category. Non-DSL demand is projected to decline significantly, leading to a further increase in the Non-DSL formula, while a projected increase in DSL demand has partially offset the increase in the DSL formula. The common line formula is decreasing slightly, a result of opposing effects of higher account growth and decreased account allocations to common line. 

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 the Average Schedule Support page of our website, under Worksheets, Tools and Forms. The forecasting tool is provided to allow companies to compare the settlement effects of existing and proposed formulas and also contains some additional forecasting features for future years. 

Average schedule high cost loop universal service formula approved

In addition to the settlement formula filing each December, NECA files modifications to the average schedule universal service formula every August. On October 23, the FCC approved universal service High Cost Loop Support formula modifications NECA filed on August 21, 2015. The new formulas became effective on January 1, 2016, and will remain in effect through December 31, 2016. NECA 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 the Average Schedule Support pageof our website, under Worksheets, Tools and Forms.

Filed under January 2016, Tagged with Average schedules


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