The FCC’s recent FNPRM on certain interstate jurisdictional cost separations issues, including a proposal to extend for another fifteen years the existing freeze on category allocations, would create a very deep freeze indeed. Category allocations have already been frozen for 18 years, since 2001, so this extension would put the freeze at an almost glacial 33 years.
The Commission is also asking whether it should alter the scope of its referral to the Joint Board regarding comprehensive separations reform, as well as seeking comments on allowing Rate-of-Return carriers that originally elected to freeze their category relationships, a one-time opportunity to opt out and categorize their costs based on “current circumstances.”
It seems to us that with the sea changes that have taken place in telecommunications over the past several years — including the dramatic migration to cell phone usage and the explosion of broadband, versus the pre-2001 POTS era — the continued reliance on these outdated factors for another fifteen years may skew the true percentage of interstate usage that drives the jurisdictional cost separations process.
While interstate cost separations procedures have had a declining role in determining interstate rates and revenue requirements, they are still important to many small, R-o-R carriers. They are used to establish Special Access Rates, Subscriber Line Charges (SLCs) where the SLCs are below the maximum level and, most importantly, Interstate Common Line Support.
To continue to base these key interstate rates and charges on decades-old frozen factors may be unfair to many of the companies that depend on them. Or it may be very well be to their advantage.
ICORE emphatically believes that those RLECs using frozen factors should at least be given the opportunity to evaluate their situation and opt out of the freeze if it is in their best interest. We will be filing comments in this FNPRM, and asking for your support.
