Before the

**Federal Communications Commission**

**Washington, D.C. 20554**

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| In the Matter of                 | * | CC Docket No. 00-122         |
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**MEMORANDUM OPINION AND ORDER**

**Adopted:** June 30, 2000 **Released:** June 30, 2000

By the Chief, Competitive Pricing Division:

# Introduction

1.  Local exchange carriers (LECs) are required by Section 69.3(a) of
    the Commission\'s rules to file annual revisions to their interstate
    tariffs to become effective July 1, 2000.[^1] Price cap LECs and
    LECs subject to rate of return regulation filed their tariff
    transmittals on June 16, 2000,[^2] with AT&T, GCI, Sprint, and
    WorldCom filing petitions to suspend and investigate on June
    22, 2000. On June 27, 2000, some LECs filed replies to the petitions
    filed by AT&T, GCI, Sprint, and WorldCom.[^3]

2.  In this Memorandum Opinion and Order, we suspend for one day and set
    for investigation the price cap LECs\' 2000 Annual Access Tariffs in
    the following areas: 1) the rates for the traffic sensitive and
    trunking baskets, elements of which comprise the average traffic
    sensitive (ATS) rates, of all the price cap LECs; 2) the rates for
    the CMT baskets of Ameritech, Citizens, GSTC, GTOC, and Southwestern
    Bell; 3) the rates for the special access baskets of all the price
    cap LECs except Aliant, Cincinnati Bell, Citizens, Frontier of
    Minnesota and Iowa, and Sprint; and 4) the universal service fund
    (USF) rates of Nevada Bell, Pacific, and Southwestern Bell.

# DISCUSSION

3.  The price cap LECs' annual tariff filings are largely compliant with
    Commission rules, despite having to implement substantial rule
    revisions on short notice.[^4] The concerns we have are minor
    relative to the number of changes they have had to implement.
    Nevertheless, the price cap tariff filings require further inquiry.

4.  We find that AT&T, Sprint, and WorldCom present arguments in support
    of their petitions to suspend and investigate the price cap LECs\'
    2000 Annual Access Tariffs that raise substantial questions of
    lawfulness that warrant investigation of these tariffs.[^5] These
    issues may include, but are not limited to, the following:
    1) whether most price cap LECs improperly removed USF recovery from
    ATS rates; 2) whether Ameritech, Bell South, GSTC, GTOC, Pacific,
    and Southwestern Bell have improperly counted voluntary ATS
    reductions, low-end adjustment reversals, sharing true-ups, and/or
    sales of exchanges toward the \$2.1 billion target for ATS
    reductions; 3) whether GSTC, GTOC, and all the RBOCs except Bell
    Atlantic have improperly included SONET revenues in the special
    access basket but excluded such revenues from the overall ATS
    calculation; and 4) whether Citizens has failed to make the proper
    'R' value adjustment when removing USF exogenous cost amounts.

5.  In addition to the issues raised by the petitioners, we have
    identified other issues that raise substantial questions of
    lawfulness that warrant investigation of the price cap LECs\'
    tariffs. These may include, but are not limited to, whether the USF
    line item charges of Nevada Bell, Pacific, and Southwestern Bell are
    reasonable. We note that the USF charges of Nevada Bell, Pacific,
    and Southwestern Bell appear to be significantly higher than what is
    necessary to recover the companies' universal service contributions
    associated with switched access service.

6.  We note that it is necessary to suspend the ATS rates of all price
    cap LECs \-- even those whose ATS rates may not raise substantial
    questions of lawfulness when viewed in isolation. Under the
    Commission's recently adopted rule revisions,[^6] price cap LECs
    must make a collective \$2.1 billion reduction in switched access
    usage charges in their 2000 Annual Access Tariffs.[^7] Under section
    61.48(l), each price cap LEC's reduction is affected by the
    reductions of the other price cap LECs. Thus, if any price cap LEC's
    ATS rates need to be recalculated in this investigation, they will
    all need to be recalculated.

7.  Accordingly we will suspend the price cap LECs' 2000 Annual Access
    Tariff filings, to the extent indicated in paragraph 2, *supra*. The
    specific issues that will be the subject of the investigation will
    be identified in an upcoming designation order and may include, but
    may not be limited to, the issues identified in this Order. We may
    also, by order, identify discrete issues that do not warrant further
    investigation.

# EX PARTE REQUIREMENTS

8.  This investigation is a permit‑but‑disclose proceeding and subject
    to the requirements of Section 1.1206(b) of the rules, 47 C.F.R. §
    1.1206(b), as revised. Persons making oral *ex parte* presentations
    are reminded that memoranda summarizing the presentations must
    contain a summary of the substance of the presentation and not
    merely a listing of the subjects discussed. More than a one or two
    sentence description of the views and arguments presented is
    generally required. *See* 47 C.F.R. § 1.1206(b)(2), as revised.
    Other rules pertaining to oral and written presentations are set
    forth in Section 1.1206(b), as well.

# ORDERING CLAUSES 

9.  ACCORDINGLY, IT IS ORDERED that, pursuant to Section 204(a) of the
    Communications Act of 1934, as amended, 47 U.S.C. § 204(a), and
    through the authority delegated pursuant to Sections 0.91 and 0.291
    of the Commission\'s rules, 47 C.F.R. §§ 0.91 and 0.291, the revised
    tariff rates for the traffic sensitive and trunking baskets filed by
    all price cap local exchange carriers, listed in Appendix A, ARE
    SUSPENDED for one day and an investigation IS INSTITUTED.

10. IT IS FURTHER ORDERED that, pursuant to Section 204(a) of the
    Communications Act of 1934, as amended, 47 U.S.C. § 204(a), and
    through the authority delegated pursuant to Sections 0.91 and 0.291
    of the Commission\'s rules, 47 C.F.R. §§ 0.91 and 0.291, the revised
    tariff rates for the CMT baskets filed by Ameritech Operating
    Companies, Citizens Telecommunications Companies, GTE System
    Telephone Companies, GTE Telephone Operating Companies, and
    Southwestern Bell Telephone Company, ARE SUSPENDED for one day and
    an investigation IS INSTITUTED.

11. IT IS FURTHER ORDERED that, pursuant to Section 204(a) of the
    Communications Act of 1934, as amended, 47 U.S.C. § 204(a), and
    through the authority delegated pursuant to Sections 0.91 and 0.291
    of the Commission\'s rules, 47 C.F.R. §§ 0.91 and 0.291, the revised
    tariff rates for the special access baskets of Ameritech Operating
    Companies, Bell Atlantic Telephone Companies, BellSouth
    Telecommunications, Inc., Frontier Telephone of Rochester, Inc., GTE
    System Telephone Companies, GTE Telephone Operating Companies, Iowa
    Telecommunications Services, Inc., Nevada Bell, Pacific Bell
    Telephone Company, Southern New England Telephone Co., Southwestern
    Bell Telephone Company, U S WEST Communications, Inc., and Valor
    Telecommunications Southwest ARE SUSPENDED for one day and an
    investigation IS INSTITUTED.

12. IT IS FURTHER ORDERED that, pursuant to Section 204(a) of the
    Communications Act of 1934, as amended, 47 U.S.C. § 204(a), and
    through the authority delegated pursuant to Sections 0.91 and 0.291
    of the Commission\'s rules, 47 C.F.R. §§ 0.91 and 0.291, the
    proposed universal service fund tariff rates of Nevada Bell, Pacific
    Bell Telephone Company, and Southwestern Bell Telephone Company ARE
    SUSPENDED for one day and an investigation IS INSTITUTED.

13. IT IS FURTHER ORDERED that, pursuant to Sections 204(a) and 4(i) of
    the Communications Act of 1934, as amended, 47 U.S.C. §§ 204(a),
    154(i), and through the authority delegated pursuant to Sections
    0.91 and 0.291 of the Commission\'s rules, 47 C.F.R. §§ 0.91 and
    0.291, all price cap local exchange carriers, listed in Appendix A,
    SHALL KEEP ACCURATE ACCOUNT of all amounts received that are
    associated with the rates that are subject to this investigation.

14. IT IS FURTHER ORDERED that each local exchange carrier required to
    suspend its tariff revisions for one day pursuant to this Order MAY
    FILE a supplement advancing the currently scheduled effective date
    to June 30, 2000. For this purpose, we waive Sections 61.58 and
    61.59 of the Commission\'s rules, 47 C.F.R. §§ 61.58, 61.59.
    Carriers should cite the \"DA\" number on the instant Order as the
    authority for the filings.

15. IT IS FURTHER ORDERED that each local exchange carrier required to
    suspend its tariff revisions for one day pursuant to this Order
    SHALL FILE a supplement reflecting the one day suspension.

16. IT IS FURTHER ORDERED that all local exchange carriers noted above
    SHALL FILE these supplements no later than five business days from
    the release date of this Order.

17. IT IS FURTHER ORDERED that the petitions to suspend and investigate
    or to reject the Annual 2000 Access Tariff Filings ARE GRANTED to
    the extent indicated herein and otherwise ARE DENIED.

> FEDERAL COMMUNICATIONS COMMISSION
>
> Jane E. Jackson
>
> Chief
>
> Competitive Pricing Division
>
> Common Carrier Bureau

**APPENDIX A**

**FILINGS MADE BY PRICE CAP CARRIERS FOR ANNUAL ACCESS 2000**

**June 16, 2000**

‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑

Aliant Communications Company (Aliant) Transmittal No. 33

Ameritech Operating Companies (Ameritech) Transmittal No.1238

Bell Atlantic Telephone Companies (Bell Atlantic) Transmittal No. 1304

BellSouth Telecommunications, Inc. (BellSouth) Transmittal No. 550

Cincinnati Bell Telephone Company (Cincinnati Bell) Transmittal No. 749

Citizens Telecommunications Companies (Citizens) Transmittal No. 78

Frontier Communications of Minnesota and

Frontier Communications of Iowa (Frontier of Minnesota and Iowa)
Transmittal No. 27

Frontier Telephone of Rochester, Inc. (Frontier of Rochester)
Transmittal No. 28

GTE System Telephone Companies (GSTC) Transmittal No. 322

GTE Telephone Operating Companies (GTOC) Transmittal No. 1261

Iowa Telecommunications Services, Inc. (Iowa Telecom) Transmittal No. 1

Nevada Bell Transmittal No. 308

Pacific Bell Telephone Company (Pacific) Transmittal No. 6

Southern New England Telephone Co. (SNET) Transmittal No. 747

Southwestern Bell Telephone Company (Southwestern Bell) Transmittal No.
2831

Sprint Local Telephone Companies (Sprint) Transmittal No. 117

Sprint Local Telephone Companies Amended Trans. No. 117

U S WEST Communications, Inc. (U S WEST) Transmittal No. 1081

Valor Telecommunications Southwest (Valor) Concurs in GTOC Tariffs

**June 19, 2000**

‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑

Frontier Telephone of Rochester, Inc. Transmittal No. 29

Nevada Bell Amended Trans. No. 308

Pacific Bell Amended Trans. No. 6

Southern New England Telephone Co. Amended Trans. No. 747

U S WEST Communications, Inc. Amended Trans. No. 1081

**June 22, 2000**

‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑

GTE Telephone Operating Companies Amended Trans. No. 1261

U S WEST Communications, Inc. 2^nd^ Amended Trans No.1081

## June 27, 2000 {#june-27-2000 .unnumbered}

‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑

Bell Atlantic Telephone Companies Transmittal No. 1307

**June 28, 2000**

‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑

Aliant Communications Company Transmittal No. 34

Bell Atlantic Telephone Companies Transmittal No. 1308

Frontier Communications of Minnesota

and Frontier Communications of Iowa Transmittal No. 28

Frontier Telephone of Rochester, Inc. Transmittal No. 30

GTE Telephone Operating Companies Transmittal No. 1262

Sprint Local Telephone Companies Transmittal No. 119

U S WEST Communications, Inc. Transmittal No. 1082

**FILINGS MADE BY RATE OF RETURN CARRIERS FOR ANNUAL ACCESS 2000**

**June 15, 2000**

‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑

Winterhaven Telephone Company Transmittal No. 7

**June 16, 2000**

‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑

Alltel Telephone System Transmittal No. 85

Anchorage Telephone Utility Transmittal No. 108

CenturyTel Operating Companies Transmittal No. 9

Chillicothe Telephone Company Transmittal No. 67

Council Grove Telephone Company Transmittal No. 2

Dunkirk and Fredonia Telephone Co. Transmittal No. 26

Gallatin River Communications Transmittal No. 1

Gulf Telephone Company Transmittal No. 1

GVNW Inc./ Management Transmittal No. 169

ICORE Transmittal No. 24

Illinois Consolidated Telephone Company Transmittal No. 106

Iowa Network Access Division Transmittal No. 18

James Valley Cooperative Telephone Co. Transmittal No. 1

John Staurulakis, Inc. Transmittal No. 47

National Exchange Carrier Association (NECA) Transmittal No. 864

Puerto Rico Telephone Company (PRTC) Transmittal No. 38

Roseville Telephone Company (Roseville) Transmittal No. 71

Sioux Valley Telephone Company Transmittal No. 1

South Dakota Network, Inc. Transmittal No. 2

Telephone Exchange Utilities Carrier Assoc. Transmittal No. 164

Townes Telecommunications, Inc. Transmittal No. 9

TXU Communications Telephone Co. Transmittal No. 5

Virgin Islands Telephone Corporation Transmittal No. 42

Wood County Telephone Company Transmittal No. 29

**June 22, 2000**

‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑

Utelco, Inc. Transmittal No. 7

**APPENDIX B**

PETITIONS FILED AGAINST THE 2000 ANNUAL ACCESS TARIFF FILINGS

AT&T Corp. (AT&T)

General Communication, Inc. (GCI)

Sprint Corporation (Sprint)

WorldCom, Inc. (WorldCom)

REPLIES FILED IN THE 2000 ANNUAL ACCESS TARIFF FILINGS

Aliant Communications Company

Bell Atlantic Telephone Companies

BellSouth Telecommunications, Inc.

GTE Telephone Operating Companies and GTE System Telephone Companies

Iowa Telecommunications Services, Inc.

National Exchange Carrier Association

Roseville Telephone Company

SBC Communications Inc.

U S West Communications, Inc. (U S West)

[^1]: 47 C.F.R. § 69.3(a).

[^2]: Appendix A lists the price cap and rate of return LECs filing
    tariffs, their tariff transmittal numbers, and identifies the
    abbreviated names used for the price cap LECs.

[^3]: Appendix B lists the petitions and replies to the tariff filings,
    and identifies the abbreviated names used for the petitioners.

[^4]: Access Charge Reform, CC Docket No. 96-262, Sixth Report and Order
    in CC Docket Nos. 96-262 and 94-1, Report and Order in CC Docket No.
    99-249, Eleventh Report and Order in CC Docket No. 96-45, FCC 00-193
    (rel. May 31, 2000) (*CALLS Order*).

[^5]: 47 U.S.C. § 204(a).

[^6]: *See CALLS Order*.

[^7]: *See* 47 CFR § 61.48(l).