2020 annual access tariff filing to offer rate flexibility, stability and customization

by Jennifer Leonard, senior director – Access Tariffs and Costs

Despite recent changes and disruptions in the way we live and work, preparation for the 2020 annual access tariff filing continues to move forward as scheduled. This year’s filing will be made on June 16 for effect on July 1. We are focused on continuing the initiatives we started over the last few years offering valuable rate flexibility requested by members, increased rate stability for competitive services, and the ability to customize special access rates.

Special access rate stability and options

Stabilizing DSL voice-data and Ethernet Transport Service rates associated with a rate band, to the extent possible, is a goal again this year. Once rate bands for special access services were assigned to each company, many members in the traffic sensitive pool increased or decreased their special access rate bands via the special access rates flexibility tool, as long as the results generated the same required level of projected special access revenues by company. Over 100 pool participants used this tool based on their specific cost and demand characteristics and were able to further reduce their rates through rate band buy down agreements.   

We also plan to file another fixed rate option this summer, allowing pool participants to list themselves in the tariff as offering to all customers 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

An FCC order released in November 2018 gave rate-of-return carriers receiving fixed high-cost support the ability to participate in incentive pricing regulation for their business data services, effective either in July 2019 or July 2020. A number of new carriers elected this option in 2020.  As a reminder, 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/non ex-ante BDS services under non ex-ante pricing regulation. Please note:
    • carriers electing in 2019 can assign their higher speed BDS services to any reasonable rate for July 1, 2020.
    • carriers electing in 2020 have non-ex ante rates frozen for six months beginning July 1, 2020, at January 2020 levels; or they can opt to detariff some or all of these higher speed BDS elements effective July 1, 2020.

We continue to provide the BDS pricing model, tariff review plan filing and tariffing service for a fee to carriers who elect to have their ex ante and/or non-ex ante rates filed in Tariff No. 6.

For a second year, we’ve worked with the FCC’s Wireline Competition Bureau to develop the BDS TRPs all rate-of-return carriers opting into the BDS framework will use to report lower speed BDS data for filing. This year there are four separate TRPs. The calculations and rate progressions differ for carriers that elected in 2019 versus 2020, and the TRPs are further differentiated for use by a single study area or holding company.

Another step in the authorized RoR and rate transitions

Beginning in July, the authorized targeted rate of return will be 10%. That rate of return is built into revenue requirements for the upcoming test period. We are also 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 1.49%, excluding the proposed terminating end office rate. It’s hard to believe the terminating end office rate has finally transitioned over several years to its last stop at $0.

Making Tariff No. 5 data more useful

Since April 2019, we have made available to our members and consultants a service pricing tool (login required) that serves as a convenient way to price out Ethernet Transport Service and other special access service circuits for customers. We continue to find ways to enhance the tool to make the use of Tariff No. 5 information easier. If you have suggestions on how we can further develop the service pricing tool, please contact your member service manager.

Filed under May 2020 , Tagged with FCC, Pooling, Tariffs

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