FCC Web Documents citing 65.700

as compiled by hallikainen.com/FccRules on 2012 06 01

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  • AT&T Alascom, Inc. (collectively, ``AT&T'') filed an informal complaint against Alaska Communications System, Inc. d/b/a ATU Telecommunications d/b/a Anchorage Telephone Utility (``ACS''). AT&T alleges that ACS has violated section 201(b) of the Communications Act of 1934, as amended (``the Act''), 47 U.S.C. §201(b), and the Commission's rules regarding the maximum allowable rate-of-return for local exchange carriers in 47 C.F.R. § 65.700 et seq. AT&T's claims are in key respects similar to claims presented by GCI Communications in a formal complaint on which the Commission ruled in favor of the complainant. That ruling is now under review by the U.S. Court of Appeals for the District of Columbia Circuit (``D.C. Circuit''). Because the outcome of that appeal is likely to affect the
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  • AT&T of the Virgin Islands, Inc. (collectively, ``AT&T'') filed an informal complaint against Virgin Islands Telephone Corporation d/b/a Innovative Telephone (``Vitelco''). AT&T alleges that Vitelco has violated section 201(b) of the Communications Act of 1934, as amended (``the Act''), 47 U.S.C. § 201(b), and the Commission's rules regarding the maximum allowable rate-of-return for local exchange carriers in 47 C.F.R. § 65.700 et seq. According to a proposed order attached to a joint motion filed by the parties on September 10, 2001, ``Vitelco is expected to respond to the complaint by denying all of the allegations in the complaint and claiming it has no liability to AT&T.'' AT&T's claims are in key respects similar to claims presented by GCI Communications in a
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  • pursuant to section 1.716 of the Commission's rules, 47 C.F.R. § 1.716, WorldCom, Inc. (``WorldCom'') filed an informal complaint against Virgin Islands Telephone Corporation d/b/a Innovative Telephone (``Vitelco''). WorldCom alleges that Vitelco has violated the Communications Act of 1934, as amended (``the Act''), and the Commission's rules regarding the maximum allowable rate-of-return for local exchange carriers in 47 C.F.R. § 65.700 et seq. According to a proposed order attached to a joint motion filed by the parties on October 11, 2001, ``Vitelco is expected to respond to the complaint by denying all of the allegations in the complaint and claiming it has no liability to WorldCom.'' WorldCom's claims are in key respects similar to claims presented by General Communications, Inc. (``GCI'')
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  • Incumbent Local Exchange Carriers and Interexchange Carriers, CC Docket No. 00-256, Second Report and Order and Further Notice of Proposed Rulemaking, 16 FCC Rcd 19613 (2001) (Rate-of-Return Access Charge Reform Order). ``Rate-of-return'' carriers are permitted to earn no more than a Commission-prescribed return on the investments that they make in providing interstate exchange access services. See generally 47 C.F.R. § 65.700 et seq. 47 U.S.C. §§ 204 and 205. 47 C.F.R. § 69.3. ATU Tariff Transmittal No. 108, D&J, at 14 (June 16, 2000). 2000 Annual Access Filings, CC Docket No. 00-122, Memorandum Opinion and Order, DA 00-1487 (Competitive Pricing Division, released June 30, 2000). See ACS Transmittal No. 1, dated Sept. 26, 2000, effective Oct. 11, 2000. Under Transmittal No.
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  • Incumbent Local Exchange Carriers and Interexchange Carriers, CC Docket No. 00-256, Second Report and Order and Further Notice of Proposed Rulemaking, 16 FCC Rcd 19613 (2001) (Rate-of-Return Access Charge Reform Order). ``Rate-of-return'' carriers are permitted to earn no more than a Commission-prescribed return on the investments that they make in providing interstate exchange access services. See generally 47 C.F.R. § 65.700 et seq. December 17, 2001 MAG Access Charge Tariff Filings, CCB/CPD File No. 01-23, Order, DA 01-3023 (Competitive Pricing Division, released Dec. 31, 2001), Erratum, DA 01-3032 (Competitive Pricing Division, released Dec. 31, 2001) (collectively Suspension Order). The Division subsequently reconsidered the Suspension Order and terminated the investigation of, inter alia, a portion of the NECA tariff. December 17, 2001,
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  • efforts since the 2000 Biennial Regulatory Review. Comments USTA asserts that reporting requirements should be eliminated for price cap carriers except when a lower formula adjustment is filed. USTA further states that services that are excluded from price cap regulation should not be subject to the prescribed rate of return. In addition, USTA claims that the Commission should modify section 65.700 to calculate the maximum allowable rate of return on all access elements in the aggregate instead of for each access category, and should modify section 65.702 to measure earnings on an overall interstate basis instead of separately for each category. NECA states that Class B carriers have the option of using a standard allowance method for calculating the cash working
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  • 5 FCC Rcd 7507, 7532, paras. 1, 216 (1990) (Rate-of-Return Represcription Order) (subsequent history omitted). The Commission's rules specify that ``maximum allowable rates of return'' equal the prescribed rate of return plus .25% on overall interstate access earnings and plus .4% on earnings within any access service category, such as common line, traffic sensitive, or special access. 47 C.F.R. § 65.700(a), (b). The Commission explained that these ``buffer zones'' above the prescribed 11.25% rate of return recognize the effects that fluctuations in demand and operating costs have on the earnings of rate-of-return LECs, while protecting customers against unreasonably high rates and helping define overearnings. Amendment of Parts 65 and 69 of the Commission's Rules to Reform the Interstate Rate of Return
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  • to 1 percent (100 basis points) above the prescribed rate of return. In the final rule, to better balance the risks and rewards of the incentive plan, the Commission increased the permissible earnings zone for incentive plan carriers from a 100 to a 150 basis point maximum Legal Basis: 47 U.S.C. 51, 154, 201-205, 218-220, 403. Section Number and Title: 65.700(c) Determining the maximum allowable rate of return. PART 68 -- CONNECTION OF TERMINAL EQUIPMENT TO THE TELEPHONE NETWORK SUBPART A - GENERAL Brief Description: Part 68 implements the Hearing Aid Compatibility Act of 1988 (HAC Act). The HAC Act requires that, unless exempt, all essential telephones and all telephones manufactured in or imported into the United States after August 16,
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  • and international long distance prices have fallen by over 50 percent since 1993. Recent Efforts There has been no Commission action addressing these rules since the previous biennial review. Comments USTA asserts that services that are excluded from price cap regulation should not be subject to the prescribed rate of return. USTA further states that the Commission should modify section 65.700 to calculate the maximum allowable rate of return on all access elements in the aggregate instead of for each access category, and should modify section 65.702 to measure earnings on an overall interstate basis instead of separately for each category. Recommendation WCB staff finds the rules in Part 65 are necessary in the public interest and therefore recommends no changes
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  • Recommendation The staff does not recommend changes in the Part 65 rules at this time. Comments USTA maintains that Part 65 reporting requirements should be eliminated, except when a lower formula adjustment is filed. USTA also states that the Commission should modify Section 65.702 to measure earnings on an overall interstate basis. USTA further proposes that the Commission modify section 65.700 to calculate the maximum allowable rate of return on all access elements in the aggregate instead of for each access category. GSA notes that the Common Carrier Bureau initiated a proceeding to represcribe the interstate rate of return in October 1998. GSA recommends that the Commission conclude that proceeding on an expedited basis. In its reply comments, GSA disputes USTA's
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  • and Alaska Communications Systems, Inc., File No. EB-00-MD-016 (September 29, 2000) (``Joint Statement''), at ¶ 3. Id. at ¶ 4. Id. at ¶ 1. Id. at ¶ 5. See generally Represcribing the Authorized Rate of Return for Interstate Services of Local Exchange Carriers, Order, 5 FCC Rcd 7507, 7532 at ¶¶ 1, 216 (1990) (``Rate-of-Return Prescription Order''); 47 C.F.R. § 65.700. See 47 C.F.R. §§ 65.700-702; see also MCI Telecom. Corp. v. FCC, 59 F.3d 1407, 1415 (D.C. Cir. 1995) (discussing the general process carriers follow in setting rates to comply with the rate-of-return prescription). MCI, 59 F.3d at 1415; see In the Matter of Amendment of Part 65, Interstate Rate of Return Prescription: Procedures and Methodologies to Establish Reporting Requirements,
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  • Incumbent Local Exchange Carriers and Interexchange Carriers, CC Docket No. 00-256, Second Report and Order and Further Notice of Proposed Rulemaking, 16 FCC Rcd 19613 (2001) (Rate-of-Return Access Charge Reform Order). ``Rate-of-return'' carriers are permitted to earn no more than a Commission-prescribed return on the investments that they make in providing interstate exchange access services. See generally 47 C.F.R. § 65.700 et seq. Id. at 19654, para. 90. Id. Id. at 19656, para. 96. Id. at 19649, para. 76, 19658, para. 103; see also Multi-Association Group (MAG) Plan for Regulation of Interstate Services of Non-Price Cap Incumbent Local Exchange Carriers and Interexchange Carriers, CC Docket No. 00-256, Declaratory Ruling, 16 FCC Rcd 21931, 21932-33, at paras. 3-5 (Competitive Pricing Division, released
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  • schedule. Thus, the 1993 interstate access tariff year runs from July 1, 1993, to June 30, 1994, and the 1993 interstate access rates are the rates in effect during this period. The maximum allowable rate of return consists of the prescribed rate of return plus four tenths of one percent of the prescribed rate of return. See 47 C.F.R. § 65.700. The Commission adopted a rule that required a LEC earning more than the maximum allowable rate of return on a specified segment of its operations during a two-year period automatically to refund the excess earnings directly to its interstate access customers. Authorized Rates of Return for the Interstate Service of AT&T Communications and Exchange Carriers, FCC 85-527 (released Sept. 30,
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  • ¶¶ 1, 216 (1990) (``Rate-of-Return Prescription Order'') (subsequent history omitted). See, e.g., 47 C.F.R. §§ 61.38, 61.39. 47 U.S.C. § 203. 47 C.F.R. §§ 69.3(a), 61.58(a)(2)(ii). Annual tariffs for access services generally become effective July 1. 47 C.F.R. § 69.3(f). The maximum allowable rate of return is equal to the prescribed rate of return plus the amount specified in sections 65.700(a) or (b), of our rules, 47 C.F.R. §§ 65.700(a),(b), which is a margin that the carrier may earn from legal tariff rates before any refund obligation arises. See, e.g., 47 C.F.R. §§ 65.600(b), 65.700-702; MCI v. FCC, 59 F.3d at 1415. The two-year monitoring period for determining compliance with the maximum allowable rate of return begins on January 1 of
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  • 5 FCC Rcd 7507, 7532, paras. 1, 216 (1990) (Rate-of-Return Represcription Order) (subsequent history omitted). The Commission's rules specify that ``maximum allowable rates of return'' equal the prescribed rate of return plus .25% on overall interstate access earnings and plus .4% on earnings within any access service category, such as common line, traffic sensitive, or special access. 47 C.F.R. § 65.700(a), (b). The Commission explained that these ``buffer zones'' above the prescribed 11.25% rate of return recognize the effects that fluctuations in demand and operating costs have on the earnings of rate-of-return LECs, while protecting customers against unreasonably high rates and helping define overearnings. Amendment of Parts 65 and 69 of the Commission's Rules to Reform the Interstate Rate of Return
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  • Rcd at 19622-24, paras. 16-20. Id. at 19701-02, paras. 208-10. 47 U.S.C. § 204(a)(3); See ACS of Anchorage, Inc. v. FCC, 290 F.3d 403 (D.C. Cir 2002). Rates are deemed lawful pursuant to section 204(a)(3) if they are not suspended before becoming effective. The majority of filed tariff rates are not suspended and therefore are deemed lawful. 47 C.F.R. § 65.700(b). The price cap regulations also give price cap carriers greater flexibility in determining the amount of revenues that may be recovered from a given access service. The price cap rules group services together into different baskets, service categories, and service subcategories. The rules then identify the total permitted revenues for each basket or category of services. Within these baskets or
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  • NASUCA Proposal at 2. See ICF Proposal at 51-54. See Represcribing the Authorized Rate of Return for Interstate Services of Local Exchange Carriers, CC Docket No. 89-624, Order, 5 FCC Rcd 7507 (1990) (the Commission prescribes for the interstate access services of local exchange carriers an authorized, overall rate of return on investment of 11.25 percent). See 47 C.F.R. § 65.700. See, e.g., CBICC Proposal at 2; ICF Proposal at 48. Under the ARIC proposal, the current SLC caps would continue, but would be redesigned to recover both non-traffic sensitive and traffic sensitive costs. ARIC Proposal at 68-69. Rural carriers would bill SLCs at the weighted average residential and business SLCs for the price cap carriers in each state. Id. at
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  • the formal complaint process. Rate-of-return carriers are required to set their tariff rates at levels targeted to produce no more than an 11.25 percent return on investment based on an analysis of historical or projected cost data and the historical or projected demand for services, but may ultimately exceed the target rate of return up to the allowed maximum. Section 65.700 of the Commission's rules establish a maximum allowable rate of return for carriers subject to that section that is equal to the prescribed rate plus the amount specified in either section 65.700(a), (b), or (c). Compliance with the prescribed rate of return is measured over a two-year period (the ``monitoring period''). Carriers that exceed the maximum allowable rate of return
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  • period. (5) For End User Common Line charges included in a tariff pursuant to this Section, the incumbent local exchange carrier must provide supporting information for the two-year historical period with its letter of transmittal in accordance with §61.38. (c) Maximum allowable rate of return. Incumbent Local exchange carriers filing tariffs under this section are not required to comply with §§65.700 through 65.701 of this chapter, except with respect to periods during which tariffs were not subject to this section. The Commission may require any carrier to submit such information if it deems it necessary to monitor the carrier's earnings. However, rates must be calculated based on the incumbent local exchange carrier's prescribed rate of return applicable to the period during
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  • to possible refund liability, noted that it was not addressing ``the case of a carrier that furtively employs improper accounting techniques in a tariff filing, thereby concealing potential rate-of-return violations.'' ACS of Anchorage, Inc. v. FCC, 290 F.3d 403, 413 (D.C. Cir. 2002). The carrier would also be subject to sanctions for violating the Commission's tariffing rules. 47 C.F.R. § 65.700. An exchange carrier's interstate earnings are measured in accordance with the requirements set forth in 47 C.F.R. § 65.702. See, e.g., Verizon Access Stimulation Comments at 13, 18 (25 percent increase in traffic compared to the same quarter of the prior year); Qwest Access Stimulation Comments at 20-22 (100 percent increase in traffic compared to average monthly historical volume figures).
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  • at 11. Bluegrass Section XV Comments at 15-16. Bluegrass Section XV Comments at 14-15; but see Free Conferencing Corporation Section XV Comments at 35 (opposing requiring a competitive LEC to use section 61.38). USF/ICC Transformation NPRM, 26 FCC Rcd at 4768, para. 666. The carrier would also be subject to sanctions for violating the Commission's tariffing rules. 47 C.F.R. § 65.700. An exchange carrier's interstate earnings are measured in accordance with the requirements set forth in 47 C.F.R. § 65.702. USF/ICC Transformation NPRM, 26 FCC Rcd at 4768, para. 666. See, e.g., Level 3 Section XV Comments at 4. Section 503(b)(2)(B) of the Act authorizes the Commission to assess a forfeiture of up to $150,000 for each violation, or each day
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  • period. (5) For End User Common Line charges included in a tariff pursuant to this Section, the incumbent local exchange carrier must provide supporting information for the two-year historical period with its letter of transmittal in accordance with §61.38. (c) Maximum allowable rate of return. Incumbent Local exchange carriers filing tariffs under this section are not required to comply with §§65.700 through 65.701 of this chapter, except with respect to periods during which tariffs were not subject to this section. The Commission may require any carrier to submit such information if it deems it necessary to monitor the carrier's earnings. However, rates must be calculated based on the incumbent local exchange carrier's prescribed rate of return applicable to the period during
• http://transition.fcc.gov/eb/Orders/2001/fcc01032.doc http://transition.fcc.gov/eb/Orders/2001/fcc01032.html
  • and Alaska Communications Systems, Inc., File No. EB-00-MD-016 (September 29, 2000) (``Joint Statement''), at ¶ 3. Id. at ¶ 4. Id. at ¶ 1. Id. at ¶ 5. See generally Represcribing the Authorized Rate of Return for Interstate Services of Local Exchange Carriers, Order, 5 FCC Rcd 7507, 7532 at ¶¶ 1, 216 (1990) (``Rate-of-Return Prescription Order''); 47 C.F.R. § 65.700. See 47 C.F.R. §§ 65.700-702; see also MCI Telecom. Corp. v. FCC, 59 F.3d 1407, 1415 (D.C. Cir. 1995) (discussing the general process carriers follow in setting rates to comply with the rate-of-return prescription). MCI, 59 F.3d at 1415; see In the Matter of Amendment of Part 65, Interstate Rate of Return Prescription: Procedures and Methodologies to Establish Reporting Requirements,
• http://transition.fcc.gov/eb/Orders/2002/DA-02-34A1.html
  • 28, 2001, pursuant to section 1.716 of the Commission's rules, 47 C.F.R. 1.716, WorldCom, Inc. (``WorldCom'') filed an informal complaint against Virgin Islands Telephone Corporation d/b/a Innovative Telephone (``Vitelco'').1 WorldCom alleges that Vitelco has violated the Communications Act of 1934, as amended (``the Act''), and the Commission's rules regarding the maximum allowable rate-of-return for local exchange carriers in 47 C.F.R. 65.700 et seq. According to a proposed order attached to a joint motion filed by the parties on October 11, 2001, ``Vitelco is expected to respond to the complaint by denying all of the allegations in the complaint and claiming it has no liability to WorldCom.''2 2. WorldCom's claims are in key respects similar to claims presented by General Communications, Inc.
• http://transition.fcc.gov/eb/Orders/2004/FCC-04-195A1.html
  • at 1, 216 (1990) (``Rate-of-Return Prescription Order'') (subsequent history omitted). 10 See, e.g., 47 C.F.R. 61.38, 61.39. 11 47 U.S.C. 203. 12 47 C.F.R. 69.3(a), 61.58(a)(2)(ii). Annual tariffs for access services generally become effective July 1. 47 C.F.R. 69.3(f). 13 The maximum allowable rate of return is equal to the prescribed rate of return plus the amount specified in sections 65.700(a) or (b), of our rules, 47 C.F.R. 65.700(a),(b), which is a margin that the carrier may earn from legal tariff rates before any refund obligation arises. See, e.g., 47 C.F.R. 65.600(b), 65.700-702; MCI v. FCC, 59 F.3d at 1415. The two-year monitoring period for determining compliance with the maximum allowable rate of return begins on January 1 of odd-numbered years
• http://www.fcc.gov/eb/Orders/2001/fcc01032.doc http://www.fcc.gov/eb/Orders/2001/fcc01032.html
  • and Alaska Communications Systems, Inc., File No. EB-00-MD-016 (September 29, 2000) (``Joint Statement''), at ¶ 3. Id. at ¶ 4. Id. at ¶ 1. Id. at ¶ 5. See generally Represcribing the Authorized Rate of Return for Interstate Services of Local Exchange Carriers, Order, 5 FCC Rcd 7507, 7532 at ¶¶ 1, 216 (1990) (``Rate-of-Return Prescription Order''); 47 C.F.R. § 65.700. See 47 C.F.R. §§ 65.700-702; see also MCI Telecom. Corp. v. FCC, 59 F.3d 1407, 1415 (D.C. Cir. 1995) (discussing the general process carriers follow in setting rates to comply with the rate-of-return prescription). MCI, 59 F.3d at 1415; see In the Matter of Amendment of Part 65, Interstate Rate of Return Prescription: Procedures and Methodologies to Establish Reporting Requirements,
• http://www.fcc.gov/eb/Orders/2002/DA-02-34A1.html
  • 28, 2001, pursuant to section 1.716 of the Commission's rules, 47 C.F.R. 1.716, WorldCom, Inc. (``WorldCom'') filed an informal complaint against Virgin Islands Telephone Corporation d/b/a Innovative Telephone (``Vitelco'').1 WorldCom alleges that Vitelco has violated the Communications Act of 1934, as amended (``the Act''), and the Commission's rules regarding the maximum allowable rate-of-return for local exchange carriers in 47 C.F.R. 65.700 et seq. According to a proposed order attached to a joint motion filed by the parties on October 11, 2001, ``Vitelco is expected to respond to the complaint by denying all of the allegations in the complaint and claiming it has no liability to WorldCom.''2 2. WorldCom's claims are in key respects similar to claims presented by General Communications, Inc.
• http://www.fcc.gov/eb/Orders/2004/FCC-04-195A1.html
  • at 1, 216 (1990) (``Rate-of-Return Prescription Order'') (subsequent history omitted). 10 See, e.g., 47 C.F.R. 61.38, 61.39. 11 47 U.S.C. 203. 12 47 C.F.R. 69.3(a), 61.58(a)(2)(ii). Annual tariffs for access services generally become effective July 1. 47 C.F.R. 69.3(f). 13 The maximum allowable rate of return is equal to the prescribed rate of return plus the amount specified in sections 65.700(a) or (b), of our rules, 47 C.F.R. 65.700(a),(b), which is a margin that the carrier may earn from legal tariff rates before any refund obligation arises. See, e.g., 47 C.F.R. 65.600(b), 65.700-702; MCI v. FCC, 59 F.3d at 1415. The two-year monitoring period for determining compliance with the maximum allowable rate of return begins on January 1 of odd-numbered years
• http://www.fcc.gov/ogc/documents/opinions/2002/01-1059.doc http://www.fcc.gov/ogc/documents/opinions/2002/01-1059.html
  • v. Alaska Communications Systems Holdings Inc., File No. EB-00-MD-016, at ex. 1 (Oct. 20, 2000), well in excess of the prescribed maximum rate of return of 11.65%, see In re Represcribing the Authorized Rate of Return for Interstate Services of Local Exchange Carriers, 5 FCC Rcd 7507, p 1 (1990) (prescribing maximum rate of return of 11.25%); 47 C.F.R. § 65.700(a) (stating that maximum allowable rate of return for any access service category is the prescribed rate of return plus 0.4%). In August 2000, GCI filed a complaint with the Commission alleging that ACS had improperly calculated its interstate costs by treating ISP calls as interstate, and had violated its prescribed rate of return during the 1997-98 monitoring period. Order at
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  • AT&T Alascom, Inc. (collectively, ``AT&T'') filed an informal complaint against Alaska Communications System, Inc. d/b/a ATU Telecommunications d/b/a Anchorage Telephone Utility (``ACS''). AT&T alleges that ACS has violated section 201(b) of the Communications Act of 1934, as amended (``the Act''), 47 U.S.C. §201(b), and the Commission's rules regarding the maximum allowable rate-of-return for local exchange carriers in 47 C.F.R. § 65.700 et seq. AT&T's claims are in key respects similar to claims presented by GCI Communications in a formal complaint on which the Commission ruled in favor of the complainant. That ruling is now under review by the U.S. Court of Appeals for the District of Columbia Circuit (``D.C. Circuit''). Because the outcome of that appeal is likely to affect the
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  • AT&T of the Virgin Islands, Inc. (collectively, ``AT&T'') filed an informal complaint against Virgin Islands Telephone Corporation d/b/a Innovative Telephone (``Vitelco''). AT&T alleges that Vitelco has violated section 201(b) of the Communications Act of 1934, as amended (``the Act''), 47 U.S.C. § 201(b), and the Commission's rules regarding the maximum allowable rate-of-return for local exchange carriers in 47 C.F.R. § 65.700 et seq. According to a proposed order attached to a joint motion filed by the parties on September 10, 2001, ``Vitelco is expected to respond to the complaint by denying all of the allegations in the complaint and claiming it has no liability to AT&T.'' AT&T's claims are in key respects similar to claims presented by GCI Communications in a
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  • pursuant to section 1.716 of the Commission's rules, 47 C.F.R. § 1.716, WorldCom, Inc. (``WorldCom'') filed an informal complaint against Virgin Islands Telephone Corporation d/b/a Innovative Telephone (``Vitelco''). WorldCom alleges that Vitelco has violated the Communications Act of 1934, as amended (``the Act''), and the Commission's rules regarding the maximum allowable rate-of-return for local exchange carriers in 47 C.F.R. § 65.700 et seq. According to a proposed order attached to a joint motion filed by the parties on October 11, 2001, ``Vitelco is expected to respond to the complaint by denying all of the allegations in the complaint and claiming it has no liability to WorldCom.'' WorldCom's claims are in key respects similar to claims presented by General Communications, Inc. (``GCI'')
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  • Incumbent Local Exchange Carriers and Interexchange Carriers, CC Docket No. 00-256, Second Report and Order and Further Notice of Proposed Rulemaking, 16 FCC Rcd 19613 (2001) (Rate-of-Return Access Charge Reform Order). ``Rate-of-return'' carriers are permitted to earn no more than a Commission-prescribed return on the investments that they make in providing interstate exchange access services. See generally 47 C.F.R. § 65.700 et seq. 47 U.S.C. §§ 204 and 205. 47 C.F.R. § 69.3. ATU Tariff Transmittal No. 108, D&J, at 14 (June 16, 2000). 2000 Annual Access Filings, CC Docket No. 00-122, Memorandum Opinion and Order, DA 00-1487 (Competitive Pricing Division, released June 30, 2000). See ACS Transmittal No. 1, dated Sept. 26, 2000, effective Oct. 11, 2000. Under Transmittal No.
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  • Incumbent Local Exchange Carriers and Interexchange Carriers, CC Docket No. 00-256, Second Report and Order and Further Notice of Proposed Rulemaking, 16 FCC Rcd 19613 (2001) (Rate-of-Return Access Charge Reform Order). ``Rate-of-return'' carriers are permitted to earn no more than a Commission-prescribed return on the investments that they make in providing interstate exchange access services. See generally 47 C.F.R. § 65.700 et seq. December 17, 2001 MAG Access Charge Tariff Filings, CCB/CPD File No. 01-23, Order, DA 01-3023 (Competitive Pricing Division, released Dec. 31, 2001), Erratum, DA 01-3032 (Competitive Pricing Division, released Dec. 31, 2001) (collectively Suspension Order). The Division subsequently reconsidered the Suspension Order and terminated the investigation of, inter alia, a portion of the NECA tariff. December 17, 2001,
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  • efforts since the 2000 Biennial Regulatory Review. Comments USTA asserts that reporting requirements should be eliminated for price cap carriers except when a lower formula adjustment is filed. USTA further states that services that are excluded from price cap regulation should not be subject to the prescribed rate of return. In addition, USTA claims that the Commission should modify section 65.700 to calculate the maximum allowable rate of return on all access elements in the aggregate instead of for each access category, and should modify section 65.702 to measure earnings on an overall interstate basis instead of separately for each category. NECA states that Class B carriers have the option of using a standard allowance method for calculating the cash working
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  • 5 FCC Rcd 7507, 7532, paras. 1, 216 (1990) (Rate-of-Return Represcription Order) (subsequent history omitted). The Commission's rules specify that ``maximum allowable rates of return'' equal the prescribed rate of return plus .25% on overall interstate access earnings and plus .4% on earnings within any access service category, such as common line, traffic sensitive, or special access. 47 C.F.R. § 65.700(a), (b). The Commission explained that these ``buffer zones'' above the prescribed 11.25% rate of return recognize the effects that fluctuations in demand and operating costs have on the earnings of rate-of-return LECs, while protecting customers against unreasonably high rates and helping define overearnings. Amendment of Parts 65 and 69 of the Commission's Rules to Reform the Interstate Rate of Return
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  • to 1 percent (100 basis points) above the prescribed rate of return. In the final rule, to better balance the risks and rewards of the incentive plan, the Commission increased the permissible earnings zone for incentive plan carriers from a 100 to a 150 basis point maximum Legal Basis: 47 U.S.C. 51, 154, 201-205, 218-220, 403. Section Number and Title: 65.700(c) Determining the maximum allowable rate of return. PART 68 -- CONNECTION OF TERMINAL EQUIPMENT TO THE TELEPHONE NETWORK SUBPART A - GENERAL Brief Description: Part 68 implements the Hearing Aid Compatibility Act of 1988 (HAC Act). The HAC Act requires that, unless exempt, all essential telephones and all telephones manufactured in or imported into the United States after August 16,
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  • and international long distance prices have fallen by over 50 percent since 1993. Recent Efforts There has been no Commission action addressing these rules since the previous biennial review. Comments USTA asserts that services that are excluded from price cap regulation should not be subject to the prescribed rate of return. USTA further states that the Commission should modify section 65.700 to calculate the maximum allowable rate of return on all access elements in the aggregate instead of for each access category, and should modify section 65.702 to measure earnings on an overall interstate basis instead of separately for each category. Recommendation WCB staff finds the rules in Part 65 are necessary in the public interest and therefore recommends no changes
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  • Recommendation The staff does not recommend changes in the Part 65 rules at this time. Comments USTA maintains that Part 65 reporting requirements should be eliminated, except when a lower formula adjustment is filed. USTA also states that the Commission should modify Section 65.702 to measure earnings on an overall interstate basis. USTA further proposes that the Commission modify section 65.700 to calculate the maximum allowable rate of return on all access elements in the aggregate instead of for each access category. GSA notes that the Common Carrier Bureau initiated a proceeding to represcribe the interstate rate of return in October 1998. GSA recommends that the Commission conclude that proceeding on an expedited basis. In its reply comments, GSA disputes USTA's
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  • and Alaska Communications Systems, Inc., File No. EB-00-MD-016 (September 29, 2000) (``Joint Statement''), at ¶ 3. Id. at ¶ 4. Id. at ¶ 1. Id. at ¶ 5. See generally Represcribing the Authorized Rate of Return for Interstate Services of Local Exchange Carriers, Order, 5 FCC Rcd 7507, 7532 at ¶¶ 1, 216 (1990) (``Rate-of-Return Prescription Order''); 47 C.F.R. § 65.700. See 47 C.F.R. §§ 65.700-702; see also MCI Telecom. Corp. v. FCC, 59 F.3d 1407, 1415 (D.C. Cir. 1995) (discussing the general process carriers follow in setting rates to comply with the rate-of-return prescription). MCI, 59 F.3d at 1415; see In the Matter of Amendment of Part 65, Interstate Rate of Return Prescription: Procedures and Methodologies to Establish Reporting Requirements,
• http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-02-160A1.doc http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-02-160A1.pdf http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-02-160A1.txt
  • Incumbent Local Exchange Carriers and Interexchange Carriers, CC Docket No. 00-256, Second Report and Order and Further Notice of Proposed Rulemaking, 16 FCC Rcd 19613 (2001) (Rate-of-Return Access Charge Reform Order). ``Rate-of-return'' carriers are permitted to earn no more than a Commission-prescribed return on the investments that they make in providing interstate exchange access services. See generally 47 C.F.R. § 65.700 et seq. Id. at 19654, para. 90. Id. Id. at 19656, para. 96. Id. at 19649, para. 76, 19658, para. 103; see also Multi-Association Group (MAG) Plan for Regulation of Interstate Services of Non-Price Cap Incumbent Local Exchange Carriers and Interexchange Carriers, CC Docket No. 00-256, Declaratory Ruling, 16 FCC Rcd 21931, 21932-33, at paras. 3-5 (Competitive Pricing Division, released
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  • schedule. Thus, the 1993 interstate access tariff year runs from July 1, 1993, to June 30, 1994, and the 1993 interstate access rates are the rates in effect during this period. The maximum allowable rate of return consists of the prescribed rate of return plus four tenths of one percent of the prescribed rate of return. See 47 C.F.R. § 65.700. The Commission adopted a rule that required a LEC earning more than the maximum allowable rate of return on a specified segment of its operations during a two-year period automatically to refund the excess earnings directly to its interstate access customers. Authorized Rates of Return for the Interstate Service of AT&T Communications and Exchange Carriers, FCC 85-527 (released Sept. 30,
• http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-04-195A1.doc http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-04-195A1.pdf http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-04-195A1.txt
  • ¶¶ 1, 216 (1990) (``Rate-of-Return Prescription Order'') (subsequent history omitted). See, e.g., 47 C.F.R. §§ 61.38, 61.39. 47 U.S.C. § 203. 47 C.F.R. §§ 69.3(a), 61.58(a)(2)(ii). Annual tariffs for access services generally become effective July 1. 47 C.F.R. § 69.3(f). The maximum allowable rate of return is equal to the prescribed rate of return plus the amount specified in sections 65.700(a) or (b), of our rules, 47 C.F.R. §§ 65.700(a),(b), which is a margin that the carrier may earn from legal tariff rates before any refund obligation arises. See, e.g., 47 C.F.R. §§ 65.600(b), 65.700-702; MCI v. FCC, 59 F.3d at 1415. The two-year monitoring period for determining compliance with the maximum allowable rate of return begins on January 1 of
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  • 5 FCC Rcd 7507, 7532, paras. 1, 216 (1990) (Rate-of-Return Represcription Order) (subsequent history omitted). The Commission's rules specify that ``maximum allowable rates of return'' equal the prescribed rate of return plus .25% on overall interstate access earnings and plus .4% on earnings within any access service category, such as common line, traffic sensitive, or special access. 47 C.F.R. § 65.700(a), (b). The Commission explained that these ``buffer zones'' above the prescribed 11.25% rate of return recognize the effects that fluctuations in demand and operating costs have on the earnings of rate-of-return LECs, while protecting customers against unreasonably high rates and helping define overearnings. Amendment of Parts 65 and 69 of the Commission's Rules to Reform the Interstate Rate of Return
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  • Rcd at 19622-24, paras. 16-20. Id. at 19701-02, paras. 208-10. 47 U.S.C. § 204(a)(3); See ACS of Anchorage, Inc. v. FCC, 290 F.3d 403 (D.C. Cir 2002). Rates are deemed lawful pursuant to section 204(a)(3) if they are not suspended before becoming effective. The majority of filed tariff rates are not suspended and therefore are deemed lawful. 47 C.F.R. § 65.700(b). The price cap regulations also give price cap carriers greater flexibility in determining the amount of revenues that may be recovered from a given access service. The price cap rules group services together into different baskets, service categories, and service subcategories. The rules then identify the total permitted revenues for each basket or category of services. Within these baskets or
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  • NASUCA Proposal at 2. See ICF Proposal at 51-54. See Represcribing the Authorized Rate of Return for Interstate Services of Local Exchange Carriers, CC Docket No. 89-624, Order, 5 FCC Rcd 7507 (1990) (the Commission prescribes for the interstate access services of local exchange carriers an authorized, overall rate of return on investment of 11.25 percent). See 47 C.F.R. § 65.700. See, e.g., CBICC Proposal at 2; ICF Proposal at 48. Under the ARIC proposal, the current SLC caps would continue, but would be redesigned to recover both non-traffic sensitive and traffic sensitive costs. ARIC Proposal at 68-69. Rural carriers would bill SLCs at the weighted average residential and business SLCs for the price cap carriers in each state. Id. at
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  • the formal complaint process. Rate-of-return carriers are required to set their tariff rates at levels targeted to produce no more than an 11.25 percent return on investment based on an analysis of historical or projected cost data and the historical or projected demand for services, but may ultimately exceed the target rate of return up to the allowed maximum. Section 65.700 of the Commission's rules establish a maximum allowable rate of return for carriers subject to that section that is equal to the prescribed rate plus the amount specified in either section 65.700(a), (b), or (c). Compliance with the prescribed rate of return is measured over a two-year period (the ``monitoring period''). Carriers that exceed the maximum allowable rate of return
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  • period. (5) For End User Common Line charges included in a tariff pursuant to this Section, the incumbent local exchange carrier must provide supporting information for the two-year historical period with its letter of transmittal in accordance with §61.38. (c) Maximum allowable rate of return. Incumbent Local exchange carriers filing tariffs under this section are not required to comply with §§65.700 through 65.701 of this chapter, except with respect to periods during which tariffs were not subject to this section. The Commission may require any carrier to submit such information if it deems it necessary to monitor the carrier's earnings. However, rates must be calculated based on the incumbent local exchange carrier's prescribed rate of return applicable to the period during
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  • to possible refund liability, noted that it was not addressing ``the case of a carrier that furtively employs improper accounting techniques in a tariff filing, thereby concealing potential rate-of-return violations.'' ACS of Anchorage, Inc. v. FCC, 290 F.3d 403, 413 (D.C. Cir. 2002). The carrier would also be subject to sanctions for violating the Commission's tariffing rules. 47 C.F.R. § 65.700. An exchange carrier's interstate earnings are measured in accordance with the requirements set forth in 47 C.F.R. § 65.702. See, e.g., Verizon Access Stimulation Comments at 13, 18 (25 percent increase in traffic compared to the same quarter of the prior year); Qwest Access Stimulation Comments at 20-22 (100 percent increase in traffic compared to average monthly historical volume figures).
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  • at 11. Bluegrass Section XV Comments at 15-16. Bluegrass Section XV Comments at 14-15; but see Free Conferencing Corporation Section XV Comments at 35 (opposing requiring a competitive LEC to use section 61.38). USF/ICC Transformation NPRM, 26 FCC Rcd at 4768, para. 666. The carrier would also be subject to sanctions for violating the Commission's tariffing rules. 47 C.F.R. § 65.700. An exchange carrier's interstate earnings are measured in accordance with the requirements set forth in 47 C.F.R. § 65.702. USF/ICC Transformation NPRM, 26 FCC Rcd at 4768, para. 666. See, e.g., Level 3 Section XV Comments at 4. Section 503(b)(2)(B) of the Act authorizes the Commission to assess a forfeiture of up to $150,000 for each violation, or each day
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  • period. (5) For End User Common Line charges included in a tariff pursuant to this Section, the incumbent local exchange carrier must provide supporting information for the two-year historical period with its letter of transmittal in accordance with §61.38. (c) Maximum allowable rate of return. Incumbent Local exchange carriers filing tariffs under this section are not required to comply with §§65.700 through 65.701 of this chapter, except with respect to periods during which tariffs were not subject to this section. The Commission may require any carrier to submit such information if it deems it necessary to monitor the carrier's earnings. However, rates must be calculated based on the incumbent local exchange carrier's prescribed rate of return applicable to the period during
• http://transition.fcc.gov/eb/Orders/2001/fcc01032.doc http://transition.fcc.gov/eb/Orders/2001/fcc01032.html
  • and Alaska Communications Systems, Inc., File No. EB-00-MD-016 (September 29, 2000) (``Joint Statement''), at ¶ 3. Id. at ¶ 4. Id. at ¶ 1. Id. at ¶ 5. See generally Represcribing the Authorized Rate of Return for Interstate Services of Local Exchange Carriers, Order, 5 FCC Rcd 7507, 7532 at ¶¶ 1, 216 (1990) (``Rate-of-Return Prescription Order''); 47 C.F.R. § 65.700. See 47 C.F.R. §§ 65.700-702; see also MCI Telecom. Corp. v. FCC, 59 F.3d 1407, 1415 (D.C. Cir. 1995) (discussing the general process carriers follow in setting rates to comply with the rate-of-return prescription). MCI, 59 F.3d at 1415; see In the Matter of Amendment of Part 65, Interstate Rate of Return Prescription: Procedures and Methodologies to Establish Reporting Requirements,
• http://transition.fcc.gov/eb/Orders/2002/DA-02-34A1.html
  • 28, 2001, pursuant to section 1.716 of the Commission's rules, 47 C.F.R. 1.716, WorldCom, Inc. (``WorldCom'') filed an informal complaint against Virgin Islands Telephone Corporation d/b/a Innovative Telephone (``Vitelco'').1 WorldCom alleges that Vitelco has violated the Communications Act of 1934, as amended (``the Act''), and the Commission's rules regarding the maximum allowable rate-of-return for local exchange carriers in 47 C.F.R. 65.700 et seq. According to a proposed order attached to a joint motion filed by the parties on October 11, 2001, ``Vitelco is expected to respond to the complaint by denying all of the allegations in the complaint and claiming it has no liability to WorldCom.''2 2. WorldCom's claims are in key respects similar to claims presented by General Communications, Inc.
• http://transition.fcc.gov/eb/Orders/2004/FCC-04-195A1.html
  • at 1, 216 (1990) (``Rate-of-Return Prescription Order'') (subsequent history omitted). 10 See, e.g., 47 C.F.R. 61.38, 61.39. 11 47 U.S.C. 203. 12 47 C.F.R. 69.3(a), 61.58(a)(2)(ii). Annual tariffs for access services generally become effective July 1. 47 C.F.R. 69.3(f). 13 The maximum allowable rate of return is equal to the prescribed rate of return plus the amount specified in sections 65.700(a) or (b), of our rules, 47 C.F.R. 65.700(a),(b), which is a margin that the carrier may earn from legal tariff rates before any refund obligation arises. See, e.g., 47 C.F.R. 65.600(b), 65.700-702; MCI v. FCC, 59 F.3d at 1415. The two-year monitoring period for determining compliance with the maximum allowable rate of return begins on January 1 of odd-numbered years
• http://www.fcc.gov/eb/Orders/2001/fcc01032.doc http://www.fcc.gov/eb/Orders/2001/fcc01032.html
  • and Alaska Communications Systems, Inc., File No. EB-00-MD-016 (September 29, 2000) (``Joint Statement''), at ¶ 3. Id. at ¶ 4. Id. at ¶ 1. Id. at ¶ 5. See generally Represcribing the Authorized Rate of Return for Interstate Services of Local Exchange Carriers, Order, 5 FCC Rcd 7507, 7532 at ¶¶ 1, 216 (1990) (``Rate-of-Return Prescription Order''); 47 C.F.R. § 65.700. See 47 C.F.R. §§ 65.700-702; see also MCI Telecom. Corp. v. FCC, 59 F.3d 1407, 1415 (D.C. Cir. 1995) (discussing the general process carriers follow in setting rates to comply with the rate-of-return prescription). MCI, 59 F.3d at 1415; see In the Matter of Amendment of Part 65, Interstate Rate of Return Prescription: Procedures and Methodologies to Establish Reporting Requirements,
• http://www.fcc.gov/eb/Orders/2002/DA-02-34A1.html
  • 28, 2001, pursuant to section 1.716 of the Commission's rules, 47 C.F.R. 1.716, WorldCom, Inc. (``WorldCom'') filed an informal complaint against Virgin Islands Telephone Corporation d/b/a Innovative Telephone (``Vitelco'').1 WorldCom alleges that Vitelco has violated the Communications Act of 1934, as amended (``the Act''), and the Commission's rules regarding the maximum allowable rate-of-return for local exchange carriers in 47 C.F.R. 65.700 et seq. According to a proposed order attached to a joint motion filed by the parties on October 11, 2001, ``Vitelco is expected to respond to the complaint by denying all of the allegations in the complaint and claiming it has no liability to WorldCom.''2 2. WorldCom's claims are in key respects similar to claims presented by General Communications, Inc.
• http://www.fcc.gov/eb/Orders/2004/FCC-04-195A1.html
  • at 1, 216 (1990) (``Rate-of-Return Prescription Order'') (subsequent history omitted). 10 See, e.g., 47 C.F.R. 61.38, 61.39. 11 47 U.S.C. 203. 12 47 C.F.R. 69.3(a), 61.58(a)(2)(ii). Annual tariffs for access services generally become effective July 1. 47 C.F.R. 69.3(f). 13 The maximum allowable rate of return is equal to the prescribed rate of return plus the amount specified in sections 65.700(a) or (b), of our rules, 47 C.F.R. 65.700(a),(b), which is a margin that the carrier may earn from legal tariff rates before any refund obligation arises. See, e.g., 47 C.F.R. 65.600(b), 65.700-702; MCI v. FCC, 59 F.3d at 1415. The two-year monitoring period for determining compliance with the maximum allowable rate of return begins on January 1 of odd-numbered years
• http://www.fcc.gov/ogc/documents/opinions/2002/01-1059.doc http://www.fcc.gov/ogc/documents/opinions/2002/01-1059.html
  • v. Alaska Communications Systems Holdings Inc., File No. EB-00-MD-016, at ex. 1 (Oct. 20, 2000), well in excess of the prescribed maximum rate of return of 11.65%, see In re Represcribing the Authorized Rate of Return for Interstate Services of Local Exchange Carriers, 5 FCC Rcd 7507, p 1 (1990) (prescribing maximum rate of return of 11.25%); 47 C.F.R. § 65.700(a) (stating that maximum allowable rate of return for any access service category is the prescribed rate of return plus 0.4%). In August 2000, GCI filed a complaint with the Commission alleging that ACS had improperly calculated its interstate costs by treating ISP calls as interstate, and had violated its prescribed rate of return during the 1997-98 monitoring period. Order at