2019 annual access tariff filing designed to fulfill member needs

by Jennifer Leonard, senior director – Access Tariffs and Costs

This year’s annual access tariff filing (to be made on June 17 for effect on July 2) will consider recent USF rate-of-return reform orders on access rates and universal service support, and be more tailored to individual member needs than ever before. Some new options stem from regulatory changes put forth by the FCC in late 2018. Other enhancements are the result of NECA initiatives to give members more of what they have been asking for: increased rate stability for competitive services; and the ability to customize special access rates.

Special access rate flexibility and ETS rate stability

Traffic sensitive pool participants can now move their special access rate bands around as long as the results generate the same required level of projected special access revenues. The majority of pool participants can use the new special access rate flexibility tool based on their specific cost and demand characteristics. When possible, we will not change Ethernet Transport Service rates associated with a rate band. This allows an increase in members with no ETS rate changes between test periods and provides stabilized rates for Tariff No. 5 participants. Members that experience changes in rates can use the special access rate flexibility tool or the existing rate band buy down mechanism to further adjust ETS and other special access rate bands.

We also plan to file another fixed rate option, allowing pool participants to list themselves in the tariff as offering ETS service plans with stabilized rates for a period of either three or five years. Any resulting revenue shortfalls generated from the fixed rate option must be made up by those pool participants so other pool members are not negatively affected.

Incentive regulation for RoR carriers

Based on an FCC order released in November 2018, rate-of-return carriers receiving fixed high cost support, such as those that receive universal service support based on the Alternative Connect America Cost Model, can participate in incentive pricing regulation for their business data services effective in July 2019. These carriers will:

  • be removed from the special access portion of the traffic sensitive pool;
  • use a price cap-like incentive pricing model to set their lower speed (DS3 and below) BDS services under ex-ante pricing regulation; and
  • eventually select rates for their higher speed BDS services under non ex-ante pricing regulation.

We will provide (for a fee) the model, tariff review plan filing and tariffing service to carriers whose rates will be filed in a new Tariff No. 6. The new tariff will point to the existing Tariff No. 5 for terms and conditions and contain both lower and higher speed BDS rates for members electing to have NECA do so on their behalf.

Members electing the new BDS framework will use a new TRP form to report required data for filing. We worked with the FCC’s Wireline Competition Bureau staff to develop the BDS TRP that all carriers opting into the BDS framework will use to report lower speed BDS data for filing. 

Continued transition to authorized RoR and rates

Beginning in July, the authorized targeted rate of return will be 10.25%, moving toward the eventual rate of 9.75% as authorized in the March 2016 USF Reform Order. We are required to modify the overall level of switched access rates based on changes in traffic sensitive pool participation for the upcoming test period. Interstate switched access rates are proposed to decrease by 0.446%, excluding the proposed terminating end office rate of $0.0007.

Next steps

Believe it or not, we have started planning for what comes after the annual access tariff filing. The FCC released a public notice on May 2 regarding A-CAM II offers. Companies must decide by June 17 whether to accept their offer of fixed support over a 10-year period, retroactive to January 1, 2019.  We will immediately start focusing on changes required by additional pool participants accepting A-CAM II offers, which will include removing them from the NECA common line pool retroactive to January 1, 2019, and collecting and filing tariffing decisions related to CL rate elements and consumer broadband-only loop. Stay tuned!

Filed under May 2019 , Tagged with FCC, Tariffs, USF Reform

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