§ 51.907   Transition of price cap carrier access charges.

   (a)  Notwithstanding any other provision of the Commission's rules, on
   December  29,  2011,  a  Price Cap Carrier shall cap the rates for all
   interstate  and intrastate rate elements for services contained in the
   definitions  of Interstate End Office Access Services, Tandem Switched
   Transport Access Services, and Dedicated Transport Access Services. In
   addition, a Price Cap Carrier shall also cap the rates for any interstate
   and  intrastate rate elements in the traffic sensitive basket” and the
   “trunking basket” as described in 47 CFR 61.42(d)(2) and (3) to the extent
   that such rate elements are not contained in the definitions of Interstate
   End Office Access Services, Tandem Switched Transport Access Services, and
   Dedicated Transport Access Services. Carriers will remove these services
   from price cap regulation in their July 1, 2012 annual tariff filing.

   (b) Step 1. Beginning July 1, 2012, notwithstanding any other provision of
   the Commission's rules:

   (1)  Each  Price  Cap  Carrier  shall file tariffs, in accordance with
   § 51.905(b)(2), with the appropriate state regulatory authority, that set
   forth the rates applicable to Transitional Intrastate Access Service in each
   state in which it provides Transitional Intrastate Access Service.

   (2)  Each Price Cap Carrier shall establish the rates for Transitional
   Intrastate Access Service using the following methodology:

   (i) Calculate total revenue from Transitional Intrastate Access Service at
   the carrier's interstate access rates in effect on December 29, 2011, using
   Fiscal Year 2011 intrastate switched access demand for each rate element.

   (ii) Calculate total revenue from Transitional Intrastate Access Service at
   the carrier's intrastate access rates in effect on December 29, 2011, using
   Fiscal Year 2011 intrastate switched access demand for each rate element.

   (iii) Calculate the Step 1 Access Revenue Reduction. The Step 1 Access
   Revenue Reduction is equal to one-half of the difference between the amount
   calculated in paragraph (b)(2)(i) of this section and the amount calculated
   in paragraph (b)(2)(ii) of this section.

   (iv) A Price Cap Carrier may elect to establish rates for Transitional
   Intrastate  Access Service using its intrastate access rate structure.
   Carriers using this option shall establish rates for Transitional Intrastate
   Access Service such that Transitional Intrastate Access Service revenue at
   the proposed rates is no greater than Transitional Intrastate Access Service
   revenue at the intrastate rates in effect as of December 29, 2011 less the
   Step 1 Access Revenue Reduction, using Fiscal Year 2011 demand. Carriers
   electing to establish rates for Transitional Intrastate Access Service in
   this manner shall notify the appropriate state regulatory authority of their
   election in the filing required by § 51.907(b)(1).

   (v)  A Price Cap Carrier may elect to apply its interstate access rate
   structure and interstate rates to Transitional Intrastate Access Service. In
   addition to applicable interstate access rates, the carrier may, between
   July 1, 2012 and July 1, 2013, assess a transitional per-minute charge on
   Transitional  Intrastate  Access  Service end office switching minutes
   (previously billed as intrastate access). The transitional per-minute charge
   shall be no greater than the Step 1 Access Revenue Reduction divided by
   Fiscal Year 2011 Transitional Intrastate Access Service end office switching
   minutes. Carriers electing to establish rates for Transitional Intrastate
   Access Service in this manner shall notify the appropriate state regulatory
   authority of their election in the filing required by paragraph (b)(1) of
   this section.

   (vi) Except as provided in paragraph (b)(3) of this section, nothing in this
   section obligates or allows a Price Cap Carrier that has intrastate rates
   lower  than  its  functionally equivalent interstate rates to make any
   intrastate tariff filing or intrastate tariff revisions to increase such
   rates.

   (3) If a Price Cap Carrier must make an intrastate switched access rate
   reduction pursuant to paragraph (b)(2) of this section, and that Price Cap
   Carrier  has  an  intrastate rate for a rate element that is below the
   comparable interstate rate for that element, the Price Cap Carrier shall:

   (i) Increase the rate for any intrastate rate element that is below the
   comparable interstate rate for that element to the interstate rate no later
   than July 1, 2013;

   (ii) Include any increases made pursuant to paragraph (b)(3)(i) of this
   section in the calculation of its eligible recovery for 2012.

   (c) Step 2. Beginning July 1, 2013, notwithstanding any other provision of
   the Commission's rules:

   (1) Transitional Intrastate Access Service rates shall be no higher than the
   Price Cap Carrier's interstate access rates. Once the Price Cap Carrier's
   Transitional Intrastate Access Service rates are equal to its functionally
   equivalent interstate access rates, they shall be subject to the same rate
   structure and all subsequent rate and rate structure modifications. Except
   as provided in paragraph (c)(4) of this section, nothing in this section
   obligates or allows a Price Cap Carrier that has intrastate rates lower than
   its functionally equivalent interstate rates to make any intrastate tariff
   filing or intrastate tariff revisions to increase such rates.

   (2) In cases where a Price Cap Carrier does not have intrastate rates that
   permit it to determine composite intrastate End Office Access Service rates,
   the carrier shall establish End Office Access Service rates such that the
   ratio between its composite intrastate End Office Access Service revenues
   and its total intrastate switched access revenues may not exceed the ratio
   between its composite interstate End Office Access Service revenues and its
   total interstate switched access revenues.

   (3) [Reserved]

   (4) If a Price Cap Carrier made an intrastate switched access rate reduction
   in 2012 pursuant to paragraph (b)(2) of this section, and that Price Cap
   Carrier  has  an  intrastate rate for a rate element that is below the
   comparable interstate rate for that element, the Price Cap Carrier shall:

   (i) Increase the rate for any intrastate rate element that is below the
   comparable interstate rate for that element to the interstate rate on July
   1, 2013; and

   (ii) Include any increases made pursuant to paragraph (b)(4)(i) of this
   section in the calculation of its eligible recovery for 2013.

   (d) Step 3. Beginning July 1, 2014, notwithstanding any other provision of
   the Commission's rules:

   (1) A Price Cap Carrier shall establish separate originating and terminating
   rate elements for all per-minute components within interstate and intrastate
   End Office Access Service. For fixed charges, the Price Cap Carrier shall
   divide the rate between originating and terminating rate elements based on
   relative  originating and terminating end office switching minutes. If
   sufficient originating and terminating end office switching minute data is
   not  available,  the carrier shall divide such charges equally between
   originating and terminating elements.

   (2)  Each  Price  Cap  Carrier shall establish rates for interstate or
   intrastate  terminating  End Office Access Service using the following
   methodology:

   (i) Each Price Cap Carrier shall calculate the 2011 Baseline Composite
   Terminating End Office Access Rate. The 2011 Baseline Composite Terminating
   End Office Access Rate means the Composite Terminating End Office Access
   Rate calculated using Fiscal Year 2011 interstate demand multiplied by the
   interstate  End Office Access Service rates at the levels in effect on
   December  29,  2011,  and then dividing the result by 2011 Fiscal Year
   interstate local switching demand.

   (ii)  Each Price Cap Carrier shall calculate its 2014 Target Composite
   Terminating End Office Access Rate. The 2014 Target Composite Terminating
   End Office Access Rate means $0.0007 per minute plus two-thirds of any
   difference between the 2011 Baseline Composite Terminating End Office Access
   Rate and $0.0007 per minute.

   (iii) Beginning July 1, 2014, no Price Cap Carrier's interstate Composite
   Terminating End Office Access Rate shall exceed its 2014 Target Composite
   Terminating End Office Access Rate. A price cap carrier shall determine
   compliance by calculating interstate Composite Terminating End Office Access
   Rates using the relevant Fiscal Year 2011 interstate demand multiplied by
   the respective interstate rates as of July 1, 2014, and then dividing the
   result  by  the relevant 2011 Fiscal Year interstate terminating local
   switching demand. A price cap carrier's intrastate terminating end office
   access rates may not exceed the comparable interstate terminating end office
   access  rates.  In the alternative, any Price Cap Carrier may elect to
   implement  a  single  per  minute rate element for both interstate and
   intrastate terminating End Office Access Service no greater than the 2014
   Target  Composite Terminating End Office Access Rate if its intrastate
   terminating  end  office access rates would be at rate parity with its
   interstate terminating end office access rates.

   (e) Step 4. Beginning July 1, 2015, notwithstanding any other provision of
   the Commission's rules:

   (1) Each Price Cap Carrier shall establish interstate or intrastate rates
   for terminating End Office Access Service using the following methodology:

   (i)  Each  Price Cap Carrier shall calculate its 2015 Target Composite
   Terminating End Office Access Rate. The 2015 Target Composite Terminating
   End  Office Access Rate means $0.0007 per minute plus one-third of any
   difference between the 2011 Composite Terminating End Office Access Rate and
   $0.0007 per minute.

   (ii) Beginning July 1, 2015, no Price Cap Carrier's interstate Composite
   Terminating End Office Access Rate shall exceed its 2015 Target Composite
   Terminating End Office Access Rate. A price cap carrier shall determine
   compliance by calculating interstate Composite Terminating End Office Access
   Rates using the relevant Fiscal Year 2011 interstate demand multiplied by
   the respective interstate rates as of July 1, 2015, and then dividing the
   result  by  the relevant 2011 Fiscal Year interstate terminating local
   switching demand. A price cap carrier's intrastate terminating end office
   access rates may not exceed the comparable interstate terminating end office
   access  rates.  In the alternative, any Price Cap Carrier may elect to
   implement  a  single  per  minute rate element for both interstate and
   intrastate terminating End Office Access Service no greater than the 2015
   Target  Composite Terminating End Office Access Rate if its intrastate
   terminating  end  office access rates would be at rate parity with its
   interstate terminating end office access rates.

   (2) Nothing in this section obligates or allows a Price Cap Carrier that has
   intrastate rates lower than its functionally equivalent interstate rates to
   make any intrastate tariff filing or intrastate tariff revisions raising
   such rates.

   (f) Step 5. Beginning July 1, 2016, notwithstanding any other provision of
   the Commission's rules, each Price Cap Carrier shall establish interstate
   terminating  End  Office  Access Service rates such that its Composite
   Terminating End Office Access Service rate does not exceed $0.0007 per
   minute.  A price cap carrier shall determine compliance by calculating
   interstate Composite Terminating End Office Access Rates using the relevant
   Fiscal Year 2011 interstate demand multiplied by the respective interstate
   rates as of July 1, 2016, and then dividing the result by the relevant 2011
   Fiscal Year interstate terminating local switching demand. A price cap
   carrier's intrastate terminating end office access rates may not exceed the
   comparable  interstate  terminating  end  office  access rates. In the
   alternative,  any  Price  Cap  Carrier may elect to implement a single
   per-minute rate element for both interstate and intrastate Terminating End
   Office Access Service no greater than the 2016 Target Composite Terminating
   End Office Access Rate if its intrastate terminating end office access rates
   would be at rate parity with its interstate terminating end office access
   rates. Nothing in this section obligates or allows a Price Cap Carrier that
   has intrastate rates lower than its functionally equivalent interstate rates
   to make any intrastate tariff filing or intrastate tariff revisions raising
   such rates.

   (g) Step 6. Beginning July 1, 2017, notwithstanding any other provision of
   the Commission's rules:

   (1)  Each  Price Cap Carrier shall, in accordance with a bill-and-keep
   methodology, refile its interstate access tariffs and any state tariffs, in
   accordance  with  § 51.905(b)(2), removing any intercarrier charges for
   terminating End Office Access Service.

   (2) Each Price Cap Carrier shall establish, for interstate and intrastate
   terminating traffic traversing a tandem switch that the terminating carrier
   or its affiliates owns, Tandem-Switched Transport Access Service rates no
   greater than $0.0007 per minute.

   (3) Nothing in this section obligates or allows a Price Cap Carrier that has
   intrastate rates lower than its functionally equivalent interstate rates to
   make any intrastate tariff filing or intrastate tariff revisions raising
   such rates.

   (h) Step 7. Beginning July 1, 2018, notwithstanding any other provision of
   the Commission's rules, each Price Cap carrier shall, in accordance with
   bill-and-keep, as defined in § 51.713, revise and refile its interstate
   switched access tariffs and any state tariffs to remove any intercarrier
   charges applicable to terminating tandem-switched access service traversing
   a tandem switch that the terminating carrier or its affiliate owns.

   [ 76 FR 73856 , Nov. 29, 2011, as amended at  77 FR 48452 , Aug. 14, 2012;  79 FR 28844 , May 20, 2014]

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