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New York State Public Service Commission Issues Order Implementing Originating Access Charge Reform(Targeted News Service Via Acquire Media NewsEdge) ALBANY, N.Y., Oct. 3 -- The New York State Public Service Commission issued the following order: CASE 09-M-0527 - Proceeding to Examine Issues Related to a Universal Service Fund. BY THE COMMISSION: INTRODUCTION On January 21, 2014, the Commission issued an Order to Show Cause (OSC)1 why intrastate originating access charges should not be reduced to zero over a seven-year period, in accordance with a specified phased-in schedule, beginning July 1, 2014. The OSC also proposed a mechanism for recovery of the associated revenue loss for the smaller Incumbent Local Exchange Carriers (ILECs) eligible to seek recovery from the State Universal Service Fund (SUSF). The OSC required responses from affected carriers and invited responses from other interested parties. Following submission of these responses in February and replies thereto in March, a diverse group of carriers submitted an alternative, compromise proposal for consideration by the Commission (the Alternative Compromise Proposal). This alternative proposed that the Commission reduce originating access charges only to the level of interstate access charges, rather than to zero, and that the schedule be delayed slightly, with the first reduction taking place on January 1, 2015. The Alternative Compromise Proposal was put out for comment, with initial and reply comments filed in late June and early July. After consideration of all comments as well as the record developed to date in this proceeding, we now generally adopt the terms of the Alternative Compromise Proposal. We order that intrastate originating access charges be reduced to the level of interstate originating access charges in two steps, in January 2015 and January 2016. We further establish a mechanism such that affected incumbent carriers can recover the revenue loss from the SUSF during that same time period. As provided in the OSC, those carriers can be made whole for the loss by recovering the difference from the SUSF, according to the procedure proposed by the OSC, which we adopt here. We will be examining the SUSF to determine whether revisions to its structure or funding are warranted within the same time period that these access charge reductions are taking place. BACKGROUND AND PROCEDURAL HISTORY This order concludes the third and final phase of this case, which through prior rulings and orders was designated to address access charge reform. More details on the process, record, and prior decisions are set forth in prior orders.2 In the second phase of this case, the Commission established a SUSF to provide necessary supplemental revenue to local exchange carriers serving in the high-cost areas of the State. The Phase II Order3 established the SUSF for a term of four years, beginning January 1, 2013, and provided for contributions from delimited carriers of up to $5 million for the first funding year and up to $4 million per year for the remaining three years. Carriers eligible to receive funding from the SUSF must first seek to meet their revenue requirements through increases to their basic residential rates to the level of the $23 per line per month State benchmark rate. Once rate increases to the benchmark are exhausted as a means of revenue increase, eligible carriers are then required to employ a standard rate case process to determine a need for supplemental relief from the SUSF. To date, the demand for disbursements from the SUSF has been significantly lower than the total amount committed to the fund. For example, in 2013, its first year, the SUSF collected only $1.25 million of the allotted $5 million, because that amount was sufficient to meet 2013 disbursements. In a report filed by Staff in this proceeding,4 Staff states that, for 2014, Staff expects that $2 million will be collected and will be more than sufficient to cover the known disbursements needed, estimated at $1.15 million. As the Commission noted in the June 2013 Order, the establishment of the SUSF was an important predicate to consideration of access charge reform, because it provides a means for ameliorating the impact of the loss of access charge revenue on the State's ILECs. The Commission committed at that time to move forward decisively with access charge reform, concluding that the impacts on carriers could variously be accommodated through the existing SUSF, rate relief undertaken through the traditional rate case process, rate flexibility already granted to carriers such as Verizon New York Inc (Verizon) and Frontier Communications of Rochester, Inc. (Frontier of Rochester), and, where necessary, absorption of some relatively small revenue loss by some carriers. The Commission concluded that the benefits to be realized by the State as a whole from access charge reform justified the impacts.5 In the OSC, the Commission cited the updated information in the Staff report as confirming the intention expressed in the June 2013 Order. The Commission in the OSC proposed a phased schedule to reduce originating access charges for all local exchange telephone companies in New York, both incumbent local exchange carriers (ILECs) and Competitive LECs (CLECs). The schedule and methodology of the rate reductions were intended to follow the previously implemented reform of terminating access charges, and to be in accordance with past Commission orders relative to New York intrastate access charges.6 Thus, originating charges were to be reduced over a seven-year period, pursuant to a schedule substantially similar to that required for price cap carriers' terminating access charges by the Federal Communications Commission (FCC) in the Transformation Order,7 with reductions made on July 1 of each year beginning July 1, 2014. Carriers would be directed to file enabling tariffs at least 30 days prior to the July 1st effective dates each year in compliance with this schedule of phased reductions to originating access. By Year Seven, originating switched end office and transport rates would be reduced to zero for all originating traffic within the tandem serving area when the originating carrier owns the serving tandem switch. Carriers who would experience originating access revenue reductions pursuant to the proposal set forth in the OSC were to submit comments by February 28, 2014. Other interested parties could submit comments by the February 28, 2014 deadline 6 Intrastate CLEC access charges are essentially capped at rate charges by the dominant LEC in their region; the dominant carriers in New York are Verizon and Frontier of Rochester. See, Case 12-C-0112, Compliance With The Federal Communications Commission's Report And Order And Further Notice Of Proposed Rulemaking Released November 18, 2011, Order On Tariff Revisions To Reduce Terminating Intrastate Switched Carrier Access Charges And Reciprocal Compensation (issued May 24, 2012). This still applies, except to the extent modified in a May 2013 order, which allowed a company's access rate to exceed the dominant carrier's rate for the functionally equivalent element, if it is mirroring its interstate charge for the same access element. See, Case 13-C-0103, In The Matter Of Compliance With FCC Report And Order And Further Notice Of Proposed Rulemaking, Released November 18, 2011 - Phase II, Order On Tariff Revisions To Reduce Terminating Intrastate Switched Carrier Access Charges (issued May 24, 2013) as well. Replies to the initial comments were to be filed by March 24, 2014.8 Those companies who submitted comments or replies are shown on Exhibit A. Under the OSC, the Commission needed to take further action to order implementation of the access charge reductions, including ordering carriers to file tariffs to take effect by July 1 as proposed by the OSC. Before such action occurred, the Alternative Compromise Proposal was submitted on June 4, 2014, by the New York State Telecommunications Association (NYSTA) Smaller ILECs,9 Verizon, Frontier Communications, Inc. (Frontier Communications)10, Windstream Communications, Inc., (Windstream) and tw telecom of new york, l.p. (tw telecom). In response to this proposal, the Commission requested comments by June 27, 2014. Replies were also accepted and were due by July 7, 2014. PARTY COMMENTS Responses to the OSC The Commission's OSC was generally hailed by AT&T Communications of New York, Inc. (AT&T) and Sprint Corporation (Sprint), carriers who would benefit financially from access charge reductions and who have championed access charge reform throughout this proceeding. Parties who opposed the OSC for various reasons included the carriers most likely to experience some revenue loss as a result, including Verizon, Frontier Communications, the NYSTA Smaller ILECs, Windstream and tw telecom filing jointly, Qwest Communications Company, LLC d/b/a CenturyLink QCC (Qwest), HyperCube Telecom, LLC (HyperCube), Earthlink Business and its New York certificated entities11 (Earthlink Business) and Cablevision Systems Corporation (Cablevision), as well as the Utility Intervention Unit of the New York Department of State (UIU). Waiting for FCC Action A primary argument put forth by many of the commenting carriers, previously considered and addressed by the Commission in the June 2013 Order, was that the Commission should not act independently of the FCC, which has pending a Further Notice Of Proposed Rulemaking proposing originating access charge reductions. The NYSTA Smaller ILECs reiterated their position that the Commission runs the risk of placing New York in the position of forgoing possible Federal Universal Service Fund disbursements should the FCC decide to reduce originating access and fund those reductions in a manner similar to terminating access. AT&T argued that the FCC has already established an exhaustive record that supports the need for the reduction of both terminating and originating access rates to "bill-and-keep" levels (i.e., where no access charges are paid, with each carrier simply keeping the revenues received from its own customer, such that the access charge "rate" is zero). It said there is no need to delay access charge reform in New York. Qwest, however, asserted that originating access services have unique attributes that make them different from terminating switched access, so that the FCC's reduction of terminating access charges to a bill-and-keep regime does not necessarily mandate the same action with respect to originating access. Sprint disputed that claim, asserting that when the local customer is originating a local or long distance call, the same local network functions are performed. Therefore, Sprint argued, there is no reason bill-and-keep cannot be the compensation standard for the origination of long distance calls as the Commission has proposed. Arbitrage Concerns Verizon, Frontier Communications, the NYSTA Smaller ILECs, Qwest, Windstream/tw telecom, HyperCube, and Earthlink Business stated that if New York's efforts are not coordinated with those adopted at a national level, rate disparities could create arbitrage opportunities. That is, if New York reduces intrastate access rates below the interstate rate there will be incentives for carriers to reroute or mischaracterize calls variously as interstate or intrastate, depending on which of the two rates is more beneficial to that carrier. To avoid disparities between the intrastate and interstate rates, Verizon, Frontier Communications and the NYSTA Smaller ILECs urged that, if the Commission implements its access charge reform, it should end the proposed originating access phase-down when intrastate rates reach the interstate rate levels. Similarly, Windstream/tw telecom, supported by HyberCube and Earthlink Business, asserted that when access reform is implemented, the Commission should not establish rate reductions with an end target lower than the Voice over Internet Protocol (VoIP) intrastate originating access rate. They explained that an arbitrage opportunity will arise if the Commission lowers New York's Time Division Multiplexing (TDM) intrastate toll traffic originating access to a level below the VoIP rate, set by the FCC at the interstate rate. Sprint acknowledged that rate arbitrage will occur during the rate transition; however, the financial incentives to engage in arbitrage schemes decrease as the overall rates for intercarrier compensation decrease. Sprint opined that the solution to this problem is not to delay the much needed reform; instead, the Commission should attempt to complete reform as quickly as possible. AT&T claimed that reducing originating access charges will not create arbitrage opportunities and that by joining other states that have already implemented originating access charge reform, the Commission will reduce arbitrage opportunities. AT&T pointed out that once all charges reach the bill-and-keep level, arbitrage opportunities will no longer exist. Financial Consequences Parties devoted considerable comment to the specific terms of the seven-year phased reduction of access charges. Some carriers that would experience reduced revenues as a result proposed to mitigate that effect variously by lengthening the phase-in period, ending the phased reduction when intrastate rates reach parity with interstate rates, or proposing additional means for revenue recovery. Verizon asserted that the Commission's proposal did not fully address the financial impact on the larger ILECs. Verizon proposed that the current non-basic residential pricing flexibility be extended to all business services and that the competitive price ceiling be raised to $25 to offset the financial effects of the Commission's proposal. Sprint supported Verizon's proposal to increase the competitive benchmark rate. Frontier Communications said it will be greatly harmed by the transition. It calculated that the reduction of originating access charges in Year One of $7.6 million for the Frontier Communications companies almost completely offsets the dedicated CAF funding for broadband that it has received. It proposed that the Commission adopt a five-year transition of intrastate originating access rates to interstate levels (20% of the difference annually) and delay the start of these reductions until July 1, 2015 to allow affected carriers to have sufficient time to plan and budget for the revenue impact of such reductions and to continue to invest in rural areas in New York. As an alternative to the glide path it recommended, Frontier Communications stated that it should be allowed some other mechanism that mitigates the effects on available capital for broadband and other network investment. Specifically, it proposed that Frontier of Rochester be an eligible recipient for funds from the SUSF. On the other hand, AT&T argued that, although the Commission timetable is reasonable, an accelerated schedule should be adopted to bring New York's originating access rates to bill-and-keep in five years rather than seven, mirroring the rate for terminating access at that point. Verizon's reply comments opposed the accelerated schedule proposed by AT&T. Verizon argued that if access rate changes are implemented, the Commission should provide for a reasonable glide path that mirrors the phase-down that the FCC has mandated for terminating access rates. The NYSTA Smaller ILECs asserted that if access reform goes forward, that it should be limited to a reasonable, measured phase-down to comparable interstate switched access rate levels, until and unless the FCC acts upon the remaining issues associated with the treatment of interstate and intrastate originating switched access rates. Although opposing Commission action independent of the FCC, Verizon hailed the phase-down schedule of the OSC in that it applies to all local exchange carriers equally. UIU asserted that SUSF may not be sufficient to assist those companies needing funding to offset the shortfalls from anticipated revenue reductions in access charges. UIU supported the NYSTA Smaller ILECs in their argument that the SUSF should be reviewed by the Commission before a seven-year phased-in originating access reform plan is established. Windstream, tw telecom, Earthlink Business, and HyperCube asserted that that most of their customers have long-term contracts and therefore that that these costs cannot immediately be passed along.12 Because these carriers do not have access to the SUSF, they argued that originating access charge reductions would put them at a competitive disadvantage and be contrary to the revenue neutrality principles underlying access charge reform. They also argued for a longer glide path to accommodate the revenue losses they are experiencing due to the FCC's imposition of new terminating access and VoIP originating access reductions. Recovery from SUSF The NYSTA Smaller ILECs asserted that more efficient means, rather than a rate case, are needed to recover access charges from the SUSF. Sprint replied that allowing access to the fund without financial review is bad public policy and the Commission has the obligation to conduct a thorough review to determine financial justification for incremental funding, thus fulfilling its duty to all New Yorkers. Some carriers, in their reply comments, objected to Frontier Communications' suggestion that Frontier of Rochester be allowed to recover access charge revenue shortfall from the SUSF. Verizon stated that companies not eligible to receive funding from the SUSF should rely on retail rate increases, strategic realignments and other cost reduction or revenue-enhancement initiatives to address their reduced revenue rather than seek disbursements from the fund. AT&T noted that, when the SUSF was established pursuant to a joint proposal among the parties in this case, it explicitly excluded Frontier of Rochester from eligibility to draw from the fund, yet Frontier Communications did not file any objection to the joint proposal or the Commission's Order adopting it. Moreover, AT&T argued, it strains credulity for Frontier Communications to claim that it could not have foreseen the effects of access charge reductions, since such reductions have been contemplated as a part of this proceeding since it was initiated in 2009. Role of the Interexchange Carriers The NYSTA Smaller ILECS complained that the Commission's proposed action is a windfall to AT&T and Sprint. UIU claimed that there is little information in the record to indicate that the long distance companies will provide tangible benefits to consumers as a result of the proposed originating access fee reductions. UIU also expressed concern that to date, AT&T and Sprint have not made a commitment to deploy and improve Internet Protocol (IP) networks from the savings they have already realized from the reductions in terminating access fees. Frontier Communications argued that the Commission should require AT&T, Sprint and other beneficiaries of the access charge reductions to contribute more to SUSF funding. Procedural Concerns Many parties, including the NYSTA Smaller ILECs, Frontier Communications, Windstream & tw telecom, Qwest and UIU, asserted that the Commission does not currently have a sufficient record basis to take the action outlined in the OSC. Only Frontier Communications, however, called for evidentiary hearings as a means to further develop the record. The NYSTA Smaller ILECs asserted that the proposed action is based on the untested premise that advances and improvements in IP networks will be deterred if delays occur in the adoption of additional access reform. They argued that the whole process should be tabled until New York-specific facts are on record. AT&T disparaged this position as a stalling technique. AT&T and Sprint stated there is no need for evidentiary hearings or further record development, since the FCC has already established an exhaustive record that supports the need for the reduction of both terminating and originating access rates to bill-and-keep. Alternative Compromise Proposal On June 4, 2014, the Alternative Compromise Proposal was filed by the NYSTA Smaller ILECs, Verizon, Frontier Communications, and Windstream Communications and tw telecom, jointly. These parties reassert their primary positions previously submitted in this docket and noted above, that the Commission should not take any action regarding originating intrastate switched access charges until the FCC addresses the non-VoIP originating access issues raised in the FCC's November 2011 Further Notice of Proposed Rulemaking. In the event the Commission does act, however, they present their unified support in the alternative to a two-year step-down from current intrastate access charge rates to the interstate originating access charge rates, with no further reduction below the interstate level. The Alternative Compromise Proposal would delay the implementation of these reductions from the schedule set forth in the OSC, beginning the initial step, a 50% reduction in the difference between intrastate and interstate rates, in January 2015 and scheduling the remaining reduction by January 2016. As noted above, comments and replies on the Alternative Compromise Proposal were sought through a Commission Notice. HyperCube Telecom, LLC (HyperCube) does not support the Alternative Compromise Proposal. Rather, it urges the Commission to wait for FCC guidance on originating access charge reform. In the event that the Commission proceeds independently with intrastate originating access reductions, HyperCube asserts the Commission should not apply such reductions to toll-free ("8YY") traffic. Specifically, it sets forth what it asserts are the four attributes of a bill-and-keep regime that prompted the FCC's reforms in the Transformation Order - that bill-and-keep is a market-based approach, that it is consistent with cost-causation principles, that it benefits consumers, and that it eliminates arbitrage - and argues that these goals are not realized when access charge reductions are applied to toll-free traffic. Cablevision Systems Corporations (Cablevision) supports the Alternative Compromise Proposal. Cablevision notes with approval that, since the FCC has already ordered that originating access rates for VoIP traffic be reduced to interstate levels, the Alternative Compromise Proposal would provide for parity of all originating access traffic, both VoIP and TDM, by 2016. Earthlink opposes the Alternative Compromise Proposal and urges the Commission to wait for the FCC to act. It notes that its original position in response to the OSC was to support the joint comments of Windstream and tw telecom. Those carriers had argued that reductions in originating access would fundamentally disadvantage CLECs because such companies lack the ability to recoup lost access revenue through the SUSF and have difficulty in recouping revenue by raising customers' rates, either because they prefer not to raise rates or because they are locked into multi-year contracts (two years or more) which cannot be changed during the term of the contract. Unlike Windstream and tw telecom, which are now proponents of the Alternative Compromise Proposal, Earthlink continues to believe that a decision to reduce intrastate access rates to interstate levels in advance of an FCC order would be a mistake. It states that it will not have sufficient time to restructure its pricing and contracts to recover all of its costs directly from its end users. Lastly, it states that it is now going through the process of raising end-user rates to recoup costs formerly recovered from terminating access charges, and it urges the Commission not to add the burden of reduced originating access revenue at this time. AT&T and Sprint oppose the Alternative Compromise Proposal and urge the Commission instead to implement the transition of originating access charges to zero in a manner that follows the OSC. Sprint says that, under the Alternative Compromise Proposal, the reform of intrastate originating access rates would not be complete, and both consumers and the industry would thereby be denied the full merits that reform promises. DISCUSSION In prior orders in this proceeding, we have determined that reductions in switched access charges will move these charges to a level that is more closely cost-based and devoid of implicit subsidies. This reform is necessary and important to reduce opportunities for arbitrage, to provide greater financial predictability and to foster a fairer, more competitively neutral market. Such changes will benefit all New Yorkers by fostering further innovation and benefits that come from a more robust competitive market. Such improvements will come at the expense of some revenue loss to some carriers. As we stated in the June 2013 Order and the OSC, we were prepared to move forward based on our view that the impact on these carriers could variously be accommodated through the existing SUSF, through rate relief undertaken through the traditional rate case process, through rate flexibility already granted to carriers such as Verizon and Frontier of Rochester and, where necessary, absorption of some relatively small revenue loss. Under the Alternative Compromise Proposal, these impacts are significantly lessened and even eliminated. For example, both Verizon and Frontier of Rochester will experience minimal, if any, impact, because the intrastate access rates of these carriers are already at interstate levels. Consequently, we need not consider Verizon's proposal that we raise its benchmark rate for basic service or Frontier Communications' proposal that Frontier of Rochester be allowed to recover revenue shortfalls from the SUSF. Similarly, because the CLECs operating in the service territories of Verizon and Frontier of Rochester are limited to charging access at the level of those incumbent carriers, they are already charging rates equivalent to the interstate rate and so should not see a reduction in access charge revenue.13 Many of the rural incumbent carriers do have access rates above the interstate rate and so will see a revenue reduction from this phase-down. Again, however, the revenue reduction will be significantly smaller than the loss that would result from reducing rates all the way to zero. As provided in the OSC, those carriers can be made whole for the loss by recovering the difference from the SUSF, according to the procedure proposed by the OSC, which we will adopt here. While reducing the impact on the incumbent carriers, the Alternative Compromise Proposal provides many of the benefits of the reform proposed in the OSC. It will also facilitate joint reductions in intrastate and interstate rates if the FCC expands the scope of further switched access reductions. While the reductions do not go so far as those established for terminating access charges, they represent a significant improvement over the status quo. By reducing subsidies, they further the goal of fostering the competitive market. These reductions bring New York into line with over 20 other states that have reduced their intrastate access rates to the interstate level.14 This equivalency means that our action will be entirely consistent and congruent with national reform efforts. At the same time, we are mindful of some of the responses submitted in response to the OSC which highlighted some of the benefits of terminating the rate reductions when access charges reach parity with interstate levels. Certainly one significant advantage is the reduction, if not elimination, of arbitrage opportunities. As a result of our adoption of the Alternative Compromise Proposal, intrastate originating access rates for traditional TDM calls will be at the same levels as interstate originating access for both TDM and VoIP calls. Therefore there should be no incentive to mischaracterize or misroute calls. We believe adoption of the Alternative Compromise Proposal also addresses the concerns raised by Qwest and HyperCube that attempt to distinguish terminating access from originating access or from toll-free traffic. Qwest's arguments, even assuming their validity, are directed against reducing originating access charges to zero, not against the more modest reduction to interstate levels. Similarly, assuming without conceding the validity of HyperCube's arguments, they lose significant force in the wake of a reduction only to interstate levels. We note the continuing lack of any evidence or even argument by any party in support of a claim that intrastate access charges are at appropriate, just and reasonable levels. The pause in further reductions represented by the Alternative Compromise Proposal allows us to better coordinate the interplay between these actions and the SUSF, which, by its own terms, sunsets at the end of 2016, absent further Commission action. We will therefore be examining the SUSF to determine whether revisions to its structure or funding are warranted within the same time period that these access charge reductions are taking place. We see no need for any further process before taking action now to implement reform. While many parties have made the bald statement that we lack a sufficient record to take action, they have not made any offer of proof or otherwise specified any particular evidence that is allegedly lacking and is relevant to the decision to move forward with reform. As noted above, no party asserts that access charges are at just and reasonable levels, which would be the carriers' burden to demonstrate in any hearing on the subject. UIU asserts that the SUSF may not be sufficient to reimburse carriers for revenue losses, yet it does not claim that the calculations in the Staff Report or in the Commission's prior orders are incorrect; therefore its assertion is unfounded. Some of the competitive carriers assert they will suffer financial harm; yet, in the face of the Commission's OSC they have failed to provide even an estimate to show the order of magnitude of such alleged harm, let alone to provide any documentation or other evidence. Consequently, they have failed to sway our view that any such financial harm is minimal and insufficient to outweigh the broad public benefits that will accompany reform. UIU complains that our record lacks evidence that the interexchange carriers will pass along to their end-use customers any savings they realize from access charge reductions. Access charge reform carries with it no such requirement, however. A flow-through of benefits to interexchange customers is not a reason for our reform action here nor was it cited in either the June 2013 Order or the OSC as a basis for or goal of access charge reform. Consequently there is no need for record development on this topic. Finally, in response to the OSC, the Commission received almost no objection to the recovery scheme set forth there, providing a mechanism for affected carriers to be reimbursed through a combination of rate increases and recovery from the SUSF. The NYSTA Smaller ILECs charge that the requirement to file a rate case is an inefficient means to recover access charges from the SUSF. We clarify that the OSC proposal was that carriers whose resultant basic residential rate would remain below the $23 State benchmark level would file for basic rate increases to recover the shortfall without the need to make any showing of competitive presence or earnings levels.15 The Commission envisioned that such filings need show little more than the filing carriers' estimates of access charge revenue losses, and the OSC specified that these estimates be based upon actual access minutes for the prior calendar year, priced out at the access charge rate reductions ordered by the Commission.16 Under these circumstances, the resulting "rate case" should be able to proceed quickly and efficiently. Only in those instances where rate increases to the benchmark are exhausted as a means of revenue increase will carriers be required to employ a standard rate case process to determine a need for supplemental relief from the SUSF.17 Some carriers' comments seem to suggest that the ability of some carriers but not others to receive reimbursement from the SUSF means that access charge reform will not take place in an entirely competitively neutral fashion. This complaint, however, goes to the structure of the SUSF, not to access charge reform and its accompanying recovery mechanism. The carriers making such allegations had an opportunity to participate in Phase II of this case when the SUSF was created. Many supported the joint proposal presented to the Commission at that time; others chose not to oppose the proposal. When the Commission adopted the terms of the joint proposal, establishing the terms and conditions of the SUSF, those carriers did not seek rehearing or challenge the Commission's order in court. They should not be heard now to complain or to launch what is essentially a collateral attack on a prior Commission order. When the Commission revisits the structure of the SUSF in 2016, carriers will be free to propose a different SUSF regime. CONCLUSION The Commission orders: 1. Local Exchange Carriers shall file tariffs by November 30, 2014, effective January 1, 2015, for reducing intrastate originating access rates by 50 percent of the differential between those rates and the carrier's interstate rates for comparable service in effect on January 1, 2015. 2. By November 30, 2015, local exchange carriers shall file tariffs, effective January 1, 2016, to bring intrastate originating switched end and transport rates to parity with the interstate access rates that will be in effect on January 1, 2016. Such tariffs shall provide that, when the originating carrier owns the serving tandem switch, originating switched end office and transport rates are reduced to zero for all originating traffic within the tandem serving area. 3. Carriers eligible to seek funding from the State Universal Service Fund that have a basic residential rate below the State benchmark level may file for basic residential and/or basic business rate increases to recover their estimated shortfall in originating access charge revenue for the upcoming year, up to the benchmark level. Estimates of access charge revenue losses should be based upon actual access minutes for the prior calendar year, priced out at the access charge rate reductions provided for in this order. Such basic rate increases will be in addition to the $2 per year basic residential rate increase allowed pursuant to the Framework Extension Order (issued December 18, 2009) in Case 07-C-0349, Examining a Framework for Regulatory Relief. Carriers need not make the showing of competitive presence and earnings levels, required for relief under the Framework Extension Order, in order to obtain basic rate relief for forgone originating access charge revenue pursuant to this order. 4. Carriers eligible to seek recovery from the State Universal Service Fund that have a basic residential rate at the benchmark level or a basic residential rate that would rise above the benchmark level under the recovery process set forth in the prior paragraph may seek to recover access charge revenue losses upon the filing of a standard rate case to determine a need for supplemental relief from the SUSF. 5. This proceeding is continued. By the Commission, KATHLEEN H. BURGESS Secretary CC AutoTriage5rn-141006-30FurigayJane-4887941 30FurigayJane (c) 2014 Targeted News Service |