NECA’s proposed 2022 High-Cost Loop formula for small, average schedule companies will significantly increase settlements for 72 qualifying study areas.
In 2021, 71 study areas received $3.875 million in HCL payments. NECA’s proposed 2022 formula will pay approximately $6.034 million to 72 average schedule study areas. This represents an increase of about 55.79% from roughly $54,577 per study area to almost $83,806.
This reminds us a bit of how ICORE first entered the consulting business in 1985. Back then, a newly minted NECA, created to perform many functions formerly done by the recently divested Bell companies and AT&T, had proposed a flash cut of both common line and traffic sensitive average schedule settlements for some of the nation’s smallest carriers.
One relatively small carrier was switching MCI traffic and receiving substantial average schedule settlements using rules then in place. But several other small carriers, those on state borders or serving institutions or businesses with high levels of interstate traffic, would also be negatively affected by a sudden flash cut.
ICORE worked with a group of small carriers and the FCC to reach a compromise, whereby common line settlements were reduced by a flash cut, while traffic sensitive formulas were gradually decreased over a 10-year transition.
We assisted some of the nation’s smallest carriers back then, and we continue some 36 years later.