Well, school is almost out and that can mean only one thing . . . Access Reform Step Four filings are due!
By July 2015, pursuant to the FCC’s Order (FCC 11-161), price cap ILECs – and CLECs that benchmark to them – must reduce their interstate and intrastate terminating switched end office rates and reciprocal compensation by two-thirds of the difference between a carrier’s rates as they were July 2013 and $0.0007.
Rate-of-Return ILECs – and CLECs that benchmark to them – must reduce their interstate and intrastate terminating switched end office rates and reciprocal compensation by two-thirds of the difference between a carrier’s rates as they were in July 2013 and $0.005.
These reductions are referred to as Step Four of the FCC ICC/USF Reform Order. Several state Commissions, including those shown below, have issued orders with early filing dates and effective dates of July 1, 2015, (ILECs) and July 31, 2015 (CLECs).
Remember how we got here?
- In Step One (2012), CLECs computed the rate reductions by reducing their intrastate rates by half the difference between their interstate rates (benchmarked at ILEC rates) and their intrastate rates. Their interstate rates were already benchmarked at ILEC rates and ILECs did not file rate reductions at the interstate level. This created a static environment from which CLECs could make the necessary state reductions.
- In Step Two (2013), CLECs’ terminating intrastate switched access rates had to reach their interstate levels which were still benchmarked at the ILEC rates. The ILECs’ interstate rates were essentially unchanged since prior to November 2011. Again, this was a static environment from which CLECs could reliably anticipate and match the ILEC rates.
- In Step Three (2014), the ILECs were required to compute phased down interstate rates for terminating end office access service. The phased down rates could be filed as one reduced composite rate element or as reductions to the various rate elements making up end office access service. These reductions and the workpapers associated with them were specific to each ILEC and were based in part on computations reflecting prior period demand. CLECs were not in a position to know which option each ILEC would take or what the resulting rates would be until they were filed on June 16, 2014, with the FCC.
