FCC orders yield updates for 2018 annual access tariff filing

by Jennifer Leonard, senior director - Access Tariffs and Costs

Several FCC orders and an Ethernet Transport Service rate realignment project are keeping NECA staff very busy as we prepare our upcoming annual access charge tariff filing. This year’s filing on June 18 will continue to address and incorporate the effects of recent USF rate-of-return reform orders on access rates and universal service support.  

Ethernet Transport Service rate realignment

We are compressing our ETS rate band structure to provide fewer rate bands with most rates closer to the average ETS rate available in the pool, greatly simplifying the ETS service offering in the tariff. In addition, we are realigning rate levels to provide nominal rate increases between speeds, which is more in line with the ETS service cost structure. These changes should allow tariff participants with ETS demand to charge rates closer to competitive rates in their areas and should result in increased sales of ETS services. The result of this simplification will mean the number of ETS rate bands in the 2018 annual filing will be less than the number of non-DSL special access rate bands and for nearly all companies, the ETS rate band assignment will differ from the non-DSL special access rate band assignment.

Key updates based on FCC orders

These are some of the updates contained in the upcoming annual tariff filing as a result of recent FCC orders:

  • A change from the surrogate cost method to using actual costs to develop consumer broadband-only loop charges
  • Changes due to mergers and acquisitions
  • Limits on the amount of imputed Access Recovery Charge revenue on CBOLs, which serves to increase Connect America Fund Broadband Loop Support broadband-only support for affected carriers
  • Defined limits on expense recovery

CAF BLS projections

For common line pool participants, the current view of the CAF BLS voice-only projection for this upcoming July 2018 through June 2019 test period is $672.5 million. The CAF BLS broadband-only projected amount for the same test period is currently estimated at $171.1 million, resulting in a total estimated CAF BLS projection amount of $843.6 million. USAC calculates the final support payout amounts (based on carrier data we collect from our members and file with them) and their final calculated amounts reflect restrictions resulting from the Budget Control Mechanism and the $250 cap per line per month.

Continued transition of authorized RoR and switched access rate adjustments

For the July 2018 through June 2019 test period, the authorized targeted rate of return will be 10.50 percent, moving towards the eventual rate of 9.75 percent as authorized in the March 2016 USF Reform Order. We are also required to modify the overall level of switched access rates based on traffic sensitive pool participation. Switched access rates are proposed to increase by 0.222 percent, excluding the terminating end office rate.

Keeping lines of communication open with the Commission

As in prior years, we’ve been working closely with the FCC to ensure NECA’s filing documentation and underlying data result in a successful tariff filing. We will meet with them to provide a high-level preview on the upcoming filing this month and stay in regular contact through the filing on June 18.

Filed under May 2018 , Tagged with FCC, Spring 2018, Tariffs, USF Reform

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