Comments on Access Charge Detariffing Include Serious RLEC Concerns

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The FCC’s NPRM on Eliminating Ex Ante Pricing Regulation of Telephone Access Charges has drawn criticism from several organizations representing RLECs.

The Concerned Rural LECs, for instance, stated that they, “have a variety of concerns with the deregulation and detariffing (of access charges)…especially if those proposals are made mandatory. The NPRM’s assertion that local rates can be easily adjusted to incorporate Telephone Access Charges is inaccurate for many RoR ILECs because many states continue to regulate RoR ILECs’ local rates. Even if (they) could easily increase their local rates…without changes to the FCC’s jurisdictional separations rules, these carriers could face significant harm in the state ratemaking process.”

WTA–Advocates for Rural Broadband said it favors the Commission’s adopting, “a more flexible permissive detariffing of telephone access charges (‘TACS’) rather than mandatory detariffing. The predominant TACs – the Subscriber Line Charge and the Access Recovery Charge(‘ARC’) – have long been capped and stable and are both familiar and acceptable to the vast majority of customers. There are no significant current problems or complaints to be resolved, nor any material benefits to be gained, by detariffing TACs on a nationwide basis.”

NTCA—The Rural Broadband Association urged “the Commission to consider that the NPRM’s proposal threatens to undermine much of the certainty that is so critical to RLECs operating in high-cost rural areas, certainty that the agency has gone to great lengths recently to instill. At a time when RLECs are expanding the quality and reach of their broadband networks through recent welcome changes to support mechanisms, the Commission’s injection of uncertainty and additional hurdles to much needed cost recovery, while also causing customer confusion , seems nonsensical.”

These comments seem very much on point, particularly when RLECs are losing customers to large national and regional broadband providers, while also experiencing significant nonpayment problems due to COVID-19. At the same time, RLECs are required by federal telecommunications law (unlike their far larger broadband competitors) to provide universal service at affordable rates to every customer in their franchised service areas.

The mandatory detariffing of SLCs and ARCs, and the inclusion of those lost revenues in local rates, seems diametrically opposed to the financial health of RLECs, as well as their required provision of Universal Service.