Goto Section: 51.915 | 51.919 | Table of Contents

FCC 51.917
Revised as of October 2, 2015
Goto Year:2014 | 2016
§ 51.917   Revenue recovery for Rate-of-Return Carriers.

   (a)  Scope. This section sets forth the extent to which Rate-of-Return
   Carriers may recover, through the recovery mechanism outlined in paragraphs
   (d) through (f) of this section, a portion of revenues lost due to rate
   reductions required by § 20.11(b) of this chapter, and § § 51.705 and 51.909.

   (b) Definitions.

   (1) 2011 Interstate Switched Access Revenue Requirement. 2011 Interstate
   Switched Access Revenue Requirement means:

   (i) For a Rate-of-Return Carrier that participated in the NECA 2011 annual
   switched access tariff filing, its projected interstate switched access
   revenue requirement associated with the NECA 2011 annual interstate switched
   access tariff filing;

   (ii) For a Rate-of-Return Carrier subject to § 61.38 of this chapter that
   filed its own annual access tariff in 2010 and did not participate in the
   NECA 2011 annual switched access tariff filing, its projected interstate
   switched access revenue requirement in its 2010 annual interstate switched
   access tariff filing; and

   (iii) For a Rate-of-Return Carrier subject to § 61.39 of this chapter that
   filed   its   own   annual   switched   access  tariff  in  2011,  its
   historically-determined  annual  interstate  switched  access  revenue
   requirement filed with its 2011 annual interstate switched access tariff
   filing.

   (2)  Expected  Revenues.  Expected Revenues from an access service are
   calculated using the default transition rate for that service specified by
   § 51.909 and forecast demand for that service. Expected Revenues from a
   non-access service are calculated using the default transition rate for that
   service specified by § 20.11 of this chapter or § 51.705 of this chapter and
   forecast net demand for that service.

   (3) Rate-of-Return Carrier Baseline Adjustment Factor. The Rate-of-Return
   Carrier Baseline Adjustment Factor, as used in calculating eligible recovery
   for Rate-of-Return Carriers, is equal to ninety-five (95) percent for the
   period beginning July 1, 2012. It is reduced by five (5) percent of its
   previous value in each subsequent annual tariff filing.

   (4)  Revenue  Requirement. Revenue Requirement is equal to a carrier's
   regulated operating costs plus an 11.25 percent return on a carrier's net
   rate base calculated in compliance with the provisions of parts 36, 65 and
   69 of this chapter. For an average schedule carrier, its Revenue Requirement
   shall be equal to the average schedule settlements it received from the
   pool, adjusted to reflect an 11.25 percent rate of return, or what it would
   have received if it had been a participant in the pool. If the reference is
   to an operating segment, these references are to the Revenue Requirement
   associated with that segment.

   (5) True-up Adjustment. The True-up Adjustment is equal to the True-up
   Revenues for any particular service for the period in question.

   (6) True-up Revenues. True-up Revenues from an access service are equal to
   (projected demand minus actual realized demand for that service) times the
   default transition rate for that service specified by § 51.909. True-up
   Revenues from a non-access service are equal to (projected demand minus
   actual realized net demand for that service) times the default transition
   rate for that service specified by § 20.11(b) of this chapter or § 51.705.
   Realized demand is the demand for which payment has been received, or has
   been made, as appropriate, by the time the true-up is made.

   (7) 2011 Rate-of-Return Carrier Base Period Revenue. 2011 Rate-of-Return
   Carrier Base Period Revenue is the sum of:

   (i) 2011 Interstate Switched Access Revenue Requirement;

   (ii) Fiscal Year 2011 revenues from Transitional Intrastate Access Service
   received by March 31, 2012; and

   (iii) Fiscal Year 2011 reciprocal compensation revenues received by March
   31, 2012, less Fiscal Year 2011 reciprocal compensation payments paid and/or
   payable by March 31, 2012

   (c) 2011 Rate-of-Return Carrier Base Period Revenue shall be adjusted to
   reflect the removal of any increases in revenue requirement or revenues
   resulting  from access stimulation activity the Rate-of-Return Carrier
   engaged in during the relevant measuring period. A Rate-of-Return Carrier
   should make this adjustment for its initial July 1, 2012, tariff filing, but
   the adjustment may result from a subsequent Commission or court ruling.

   (d) Eligible Recovery for Rate-of-Return Carriers. (1) Notwithstanding any
   other provision of the Commission's rules, a Rate-of-Return Carrier may
   recover the amounts specified in this paragraph through the mechanisms
   described in paragraphs (e) and (f) of this section.

   (i) Beginning July 1, 2012, a Rate-of-Return Carrier's eligible recovery
   will  be  equal to the 2011 Rate-of-Return Carrier Base Period Revenue
   multiplied by the Rate-of-Return Carrier Baseline Adjustment Factor less:

   (A) The Expected Revenues from Transitional Intrastate Access Service for
   the year beginning July 1, 2012, reflecting forecasted demand multiplied by
   the rates in the rate transition contained in § 51.909;

   (B) The Expected Revenues from interstate switched access for the year
   beginning July 1, 2012, reflecting forecasted demand multiplied by the rates
   in the rate transition contained in § 51.909; and

   (C) Expected Net Reciprocal Compensation Revenues for the year beginning
   July 1, 2012 using the target methodology required by § 51.705.

   (ii) Beginning July 1, 2013, a Rate-of-Return Carrier's eligible recovery
   will  be  equal to the 2011 Rate-of-Return Carrier Base Period Revenue
   multiplied by the Rate-of-Return Carrier Baseline Adjustment Factor less:

   (A) The Expected Revenues from Transitional Intrastate Access Service for
   the year beginning July 1, 2013, reflecting forecasted demand multiplied by
   the rates in the rate transition contained in § 51.909;

   (B) The Expected Revenues from interstate switched access for the year
   beginning July 1, 2013, reflecting forecasted demand multiplied by the rates
   in the rate transition contained in § 51.909; and

   (C) Expected Net Reciprocal Compensation Revenues for the year beginning
   July 1, 2013 using the target methodology required by § 51.705.

   (iii) Beginning July 1, 2014, a Rate-of-Return Carrier's eligible recovery
   will  be  equal to the 2011 Rate-of-Return Carrier Base Period Revenue
   multiplied by the Rate-of-Return Carrier Baseline Adjustment Factor less:

   (A) The Expected Revenues from Transitional Intrastate Access Service for
   the year beginning July 1, 2014, reflecting forecasted demand multiplied by
   the  rates  in the rate transition contained in § 51.909 (including the
   reduction in intrastate End Office Switched Access Service rates), adjusted
   to reflect the True-Up Adjustment for Transitional Intrastate Access Service
   for the year beginning July 1, 2012;

   (B) The Expected Revenues from interstate switched access for the year
   beginning July 1, 2014, reflecting forecasted demand multiplied by the rates
   in the rate transition contained in § 51.909, adjusted to reflect the True-Up
   Adjustment for Interstate Switched Access for the year beginning July 1,
   2012; and

   (C) Expected Net Reciprocal Compensation Revenues for the year beginning
   July 1, 2014 using the target methodology required by § 51.705, adjusted to
   reflect the True-Up Adjustment for Reciprocal Compensation for the year
   beginning July 1, 2012.

   (D) An amount equal to True-up Revenues for Access Recovery Charges for the
   year beginning July 1, 2012 multiplied by negative one.

   (iv) Beginning July 1, 2015, and for all subsequent years, a Rate-of-Return
   Carrier's eligible recovery will be calculated by updating the procedures
   set forth in paragraph (d)(1)(iii) of this section for the period beginning
   July  1,  2014,  to  reflect the passage of an additional year in each
   subsequent year.

   (v)  If  a  Rate-of-Return Carrier receives payments for intrastate or
   interstate switched access services or for Access Recovery Charges after the
   period used to measure the adjustments to reflect the differences between
   estimated  and actual revenues, it shall treat such payments as actual
   revenue in the year the payment is received and shall reflect this as an
   additional adjustment for that year.

   (vi) If a Rate-of-Return Carrier receives or makes reciprocal compensation
   payments after the period used to measure the adjustments to reflect the
   differences  between  estimated and actual net reciprocal compensation
   revenues, it shall treat such amounts as actual revenues or payments in the
   year the payment is received or made and shall reflect this as an additional
   adjustment for that year.

   (vii) If a Rate-of-Return Carrier recovers any costs or revenues that are
   already being recovered as Eligible Recovery through Access Recovery Charges
   or the Connect America Fund from another source, that carrier's ability to
   recover reduced switched access revenue from Access Recovery Charges or the
   Connect America Fund shall be reduced to the extent it receives duplicative
   recovery. Any duplicative recovery shall be reflected as a reduction to a
   carrier's  Eligible  Recovery  calculated  pursuant  to  § 51.917(d). A
   Rate-of-Return Carrier seeking revenue recovery must annually certify as
   part of its tariff filings to the Commission and to the relevant state
   commission that the carrier is not seeking duplicative recovery in the state
   jurisdiction for any Eligible Recovery subject to the recovery mechanism.

   (viii)(A) If a Rate-of-Return Carrier in any tariff period underestimates
   its projected demand for services covered by § 51.917(b)(6) or 51.915(b)(13),
   and thus has too much Eligible Recovery in that tariff period, it shall
   refund the amount of any such True-up Revenues or True-up Revenues for
   Access Recovery Charge that are not offset by the Rate-of-Return Carrier's
   Eligible Recovery (calculated before including the true-up amounts in the
   Eligible  Recovery  calculation)  in  the true-up tariff period to the
   Administrator by August 1 following the date of the Rate-of-Return Carrier's
   annual access tariff filing.

   (B) If a Rate-of-Return Carrier in any tariff period receives too little
   Eligible Recovery because it overestimates its projected demand for services
   covered  by § 51.917(b)(6) or 51.915(b)(13), which True-up Revenues and
   True-up Revenues for Access Recovery Charge it cannot recover in the true-up
   tariff period because the Rate-of-Return Carrier has a negative Eligible
   Recovery in the true-up tariff period (before calculating the true-up amount
   in the Eligible Recovery calculation), the Rate-of-Return Carrier shall
   treat the unrecoverable true-up amount as its Eligible Recovery for the
   true-up tariff period.

   (e) Access Recovery Charge. (1) A charge that is expressed in dollars and
   cents per line per month may be assessed upon end users that may be assessed
   a subscriber line charge pursuant to § 69.104 of this chapter, to the extent
   necessary to allow the Rate-of-Return Carrier to recover some or all of its
   Eligible Recovery determined pursuant to paragraph (d) of this section,
   subject  to  the caps described in paragraph (e)(6) of this section. A
   Rate-of-Return Carrier may elect to forgo charging some or all of the Access
   Recovery Charge.

   (2) Total Access Recovery Charges calculated by multiplying the tariffed
   Access Recovery Charge by the projected demand for the year may not recover
   more than the amount of eligible recovery calculated pursuant to paragraph
   (d) of this section for the year beginning on July 1.

   (3) For the purposes of this section, a Rate-of-Return Carrier holding
   company  includes  all  of  its  wholly-owned  operating  companies. A
   Rate-of-Return Carrier Holding Company may recover the eligible recovery
   attributable to any Rate-of-Return study areas operated by its wholly-owned
   operating  companies  that are Rate-of-Return incumbent local exchange
   carriers through assessments of the Access Recovery Charge on end users in
   any  Rate-of-Return study areas operated by its wholly-owned operating
   companies that are Rate-of-Return incumbent local exchange carriers.

   (4) Distribution of Access Recovery Charges among lines of different types

   (i) A Rate-of-Return Carrier that does not receive ICC-replacement CAF
   support (whether because they elect not to or because they do not have
   sufficient eligible recovery after the Access Recovery Charge is assessed or
   imputed) may not recover a higher ratio of its total revenue recovery from
   Access Recovery Charges assessed on Residential and Single Line Business
   lines than the following ratio (using holding company lines):

   (A) The number of Residential and Single-Line Business lines assessed an End
   User Common Line charge (excluding Lifeline Customers), divided by

   (B) The sum of the number of Residential and Single-Line Business lines
   assessed an End User Common Line charge (excluding Lifeline Customers), and
   two  (2)  times the number of End User Common Line charges assessed on
   Multi-Line Business customers.

   (5) For purposes of this subpart, Residential and Single Line Business lines
   are lines (other than lines of Lifeline Customers) assessed the residential
   and single line business end user common line charge.

   (i)  For purposes of this subpart, Multi-Line Business Lines are lines
   assessed the multi-line business end user common line charge.

   (ii) [Reserved]

   (6) Per-line caps and other limitations on Access Recovery Charges. (i) For
   each  line  other  than lines of Lifeline Customers assessed a primary
   residential or single-line business end user common line charge pursuant to
   § 69.104 of this chapter, a Rate-of-Return Carrier may assess an Access
   Recovery Charge as follows:

   (A) Beginning July 1, 2012, a maximum of $0.50 per month for each line;

   (B) Beginning July 1, 2013, a maximum of $1.00 per month for each line;

   (C) Beginning July 1, 2014, a maximum of $1.50 per month for each line;

   (D) Beginning July 1, 2015, a maximum of $2.00 per month for each line;

   (E) Beginning July 1, 2016, a maximum of $2.50 per month for each line; and

   (F) Beginning July 1, 2017, a maximum of $3.00 per month for each line.

   (ii) For each line assessed a multi-line business end user common line
   charge pursuant to § 69.104 of this chapter, a Rate-of-Return Carrier may
   assess an Access Recovery Charge as follows:

   (A) Beginning July 1, 2012, a maximum of $1.00 per month for each multi-line
   business end user common line charge assessed;

   (B) Beginning July 1, 2013, a maximum of $2.00 per month for each multi-line
   business end user common line charge assessed;

   (C) Beginning July 1, 2014, a maximum of $3.00 per month for each multi-line
   business end user common line charge assessed;

   (D) Beginning July 1, 2015, a maximum of $4.00 per month for each multi-line
   business end user common line charge assessed;

   (E) Beginning July 1, 2016, a maximum of $5.00 per month for each multi-line
   business end user common line charge assessed; and

   (F) Beginning July 1, 2017, a maximum of $6.00 per month for each multi-line
   business end user common line charge assessed.

   (iii) The Access Recovery Charge allowed by paragraph (e)(6)(i) of this
   section may not be assessed to the extent that its assessment would bring
   the total of the Rate Ceiling Component Charges above the Residential Rate
   Ceiling. This limitation does not apply to single-line business customers.

   (iv) The Access Recovery Charge allowed by paragraph (e)(6)(ii) of this
   section may not be assessed to the extent that its assessment would bring
   the total of the multi-line business end user common line charge and the
   Access Recovery Charge above $12.20 per line.

   (v) The Access Recovery Charge may not be assessed on lines of Lifeline
   Customers.

   (vi) If in any year, the Rate of return carriers' Access Recovery Charge is
   not at its maximum, the succeeding year's Access Recovery Charge may not
   increase more than $0.50 per line for charges under paragraph (e)(6)(i) of
   this  section  or  $1.00 per line for charges assessed under paragraph
   (e)(6)(ii) of this section.

   (vii)  A  Price  Cap  Carrier  with  study  areas  that are subject to
   rate-of-return regulation shall recover its eligible recovery for such study
   areas through the recovery procedures specified in this section. For that
   purpose, the provisions of paragraph (e)(3) of this section shall apply to
   the rate-of-return study areas if the applicable conditions in paragraph
   (e)(3) of this section are met.

   (f)  Rate-of-Return  Carrier  eligibility  for CAF ICC Recovery. (1) A
   Rate-of-Return Carrier shall elect in its July 1, 2012 access tariff filing
   whether  it  will  receive  CAF  ICC  Support  under this paragraph. A
   Rate-of-Return Carrier eligible to receive CAF ICC Support subsequently may
   elect at any time not to receive such funding. Once it makes the election
   not to receive CAF ICC Support, it may not elect to receive such funding at
   a later date.

   (2)  Beginning  July 1, 2012, a Rate-of-Return Carrier may recover any
   eligible recovery allowed by paragraph (d) of this section that it could not
   have recovered through charges assessed pursuant to paragraph (e) of this
   section from CAF ICC Support pursuant to § 54.304. For this purpose, the
   Rate-of-Return  Carrier  must impute the maximum charges it could have
   assessed under paragraph (e) of this section.

   (3) A Rate-of-Return Carrier that elects to receive CAF ICC support must
   certify with its annual access tariff filing that it has complied with
   paragraphs (d) and (e), and, after doing so, is eligible to receive the CAF
   ICC support requested pursuant to paragraph (f) of this section.

   [ 76 FR 73856 , Nov. 29, 2011, as amended at  77 FR 14302 , Mar. 9, 2012;  78 FR 26268 , May 6, 2013;  79 FR 28847 , May 20, 2014;  80 FR 15909 , Mar. 26, 2015]

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Goto Section: 51.915 | 51.919

Goto Year: 2014 | 2016
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