Goto Section: 51.915 | 51.919 | Table of Contents

FCC 51.917
Revised as of December 6, 2018
Goto Year:2018 | 2020
  § 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.

   (4) Except as provided in paragraph (f)(5) of this section, a
   Rate-of-Return Carrier must impute an amount equal to the Access
   Recovery Charge for each Consumer Broadband-Only Loop line that
   receives support pursuant to § 54.901 of this chapter, with the
   imputation applied before CAF-ICC recovery is determined. The per line
   per month imputation amount shall be equal to the Access Recovery
   Charge amount prescribed by paragraph (e) of this section, consistent
   with the residential or single-line business or multi-line business
   status of the retail customer.

   (5) Notwithstanding paragraph (f)(4) of this section, commencing July
   1, 2018 and ending June 30, 2023, the maximum total dollar amount a
   carrier must impute on supported consumer broadband-only loops is
   limited as follows:

   (i) For the affected tariff year, the carrier shall compare the amounts
   in paragraphs (f)(5)(i)(A) and (B) of this section.

   (A) The sum of the revenues from projected Access Recovery Charges
   assessed pursuant to paragraph (e) of this section, any amounts imputed
   pursuant to paragraph (f)(2) of this section, and any imputation
   pursuant to paragraph (f)(4) of this section.

   (B) The sum of the revenues from Access Recovery Charges assessed
   pursuant to paragraph (e) of this section and any amounts imputed
   pursuant to paragraph (f)(2) of this section for tariff year 2015-16,
   after being trued-up.

   (ii) If the amount determined in paragraph (f)(5)(i)(A) of this section
   is greater than the amount determined in paragraph (f)(5)(i)(B), the
   sum of the revenues from projected Access Recovery Charges assessed
   pursuant to paragraph (e) of this section and any amounts imputed
   pursuant to paragraph (f)(2) of this section for the affected year must
   be compared to the amount determined in paragraph (f)(5)(ii)(B) of this
   section.

   (A) If the former amount is greater than the latter amount, no
   imputation is made on Consumer Broadband-Only Loops.

   (B) If the former amount is equal to or less than the latter amount,
   the imputation on Consumer Broadband-Only Loops is limited to the
   difference between the two amounts.

   [ 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;  81 FR 24337 , Apr. 25, 2016;  83 FR 14189 , Apr. 3, 2018]

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Goto Section: 51.915 | 51.919

Goto Year: 2018 | 2020
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