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 AND ORDER ON RECONSIDERATION**

**Adopted:** July 28, 2000 **Released:** July 28, 2000

By the Acting Chief, Competitive Pricing Division:

**I. INTRODUCTION**

1\. On June 30, 2000, the Common Carrier Bureau (Bureau) suspended for
one day and set for investigation the price cap local exchange carriers'
(LECs) 2000 Annual Access Tariffs[^1] 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 common line, marketing, and certain residual
interconnection charges (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. [^2]

## 2. In particular, the Bureau questioned: 1) whether most price cap LECs had improperly removed USF recovery from ATS rates; 2) whether Ameritech, Bell South, GSTC, GTOC, Pacific, and Southwestern Bell had 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 regional Bell Operating Companies (RBOCs) except Bell Atlantic had improperly included SONET revenues in the special access basket but excluded such revenues from the overall ATS calculation; and 4) whether Citizens had failed to make the proper 'R' value adjustment when removing USF exogenous cost amounts. [^3] In addition, we found that the USF charges of Nevada Bell, Pacific, and Southwestern Bell appeared to be significantly higher than what would be necessary to recover the companies' universal service contributions associated with switched access services, and that they therefore raised a substantial question of lawfulness that warranted investigation.[^4] Finally, the Bureau suspended the ATS rates of all price cap LECs because, under section 61.48(l) of the Commission's rules,[^5] the amount of each price cap LEC's reduction is affected by the amount of reduction taken by the other price cap LECs. [^6] Thus, if any price cap LEC's ATS rates would need to be recalculated in this investigation, they would all need to be recalculated.

## 3. In this Order, on our own motion, we reconsider our decision in the *2000 Annual Access Tariff Suspension Order*.

**II. DISCUSSION**

4\. Pursuant to Sections 0.91, 0.291, and 1.108 of the Commission's
rules, 47 C.F.R. §§ 0.91, 0.291, 1.108, we reconsider on our own motion
our decision in the *2000 Annual Access Tariff Suspension Order* to
suspend and investigate: 1) the rates for the traffic sensitive and
trunking baskets of all price cap LECs; 2) the rates for the CMT basket
filed by Ameritech, Citizens, GSTC, GTOC, and Southwestern Bell; and 3)
the rates for the special access baskets filed by all the price cap LECs
except Aliant, Cincinnati Bell, Citizens, Frontier of Minnesota and
Iowa, and Sprint.[^7] On July 27, 2000, the price cap LECs filed
revisions to their 2000 Annual Access Tariffs that address the questions
of lawfulness raised in their annual access filings.[^8] Accordingly, we
decline to investigate the rates for the CMT basket and special access
basket of the above price cap LECs and the ATS rates of all price cap
LECs, and terminate these portions of the proceeding in CC Docket No.
00-122.

5\. In addition, we reconsider on own motion our decision to suspend and
investigate the USF rates of Nevada Bell, Pacific, and Southwestern
Bell. In the *2000 Annual Access Tariff Suspension Order*, we found that
the USF charges imposed on switched access customers of Nevada Bell,
Pacific, and Southwestern Bell appeared to be significantly higher than
what was necessary to recover the companies' USF contributions
associated with switched access service. Our review of the tariff
filings indicated that these charges recover the companies\' universal
service contribution obligations associated with both their switched
access and special access revenues. We believe that it is inappropriate
for LECs to recover special access contribution obligations from
switched access customers. The USF surcharge on switched access
customers should recover only the USF contributions attributable to
switched access revenues. On July 27, 2000, Nevada Bell, Pacific, and
Southwestern Bell filed revisions to these USF rates in response to our
concerns.[^9] Accordingly, we decline to investigate the USF rates of
Nevada Bell, Pacific, and Southwestern Bell and terminate this portion
of the proceeding in CC Docket No. 00-122.

**III. ORDERING CLAUSES**

## 6. accordingly, IT IS ORDERED that, pursuant to Sections 0.91, 0.291, and 1.108 of the Commission's rules, 47 C.F.R. §§ 0.91, 0.291, 1.108, we reconsider on our own motion our decision in the *2000 Annual Access Tariff Suspension Order* to suspend and investigate the revised tariff rates for the traffic sensitive and trunking baskets filed by all price cap local exchange carriers, listed in Appendix A.

7\. IT IS FURTHER ORDERED that, pursuant to Sections 0.91, 0.291, and
1.108 of the Commission's rules, 47 C.F.R. §§ 0.91, 0.291, 1.108, we
reconsider on our own motion our decision in the *2000* A*nnual Access
Tariff Suspension Order* to suspend and investigate 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.

8\. IT IS FURTHER ORDERED that, pursuant to Sections 0.91, 0.291, and
1.108 of the Commission's rules, 47 C.F.R. §§ 0.91, 0.291, 1.108, we
reconsider on our own motion our decision in the *2000* A*nnual Access
Tariff Suspension Order* to suspend and investigate 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.

9\. IT IS FURTHER ORDERED that, pursuant to sections 0.91, 0.291, and
1.108 of the Commission's rules, 47 C.F.R. §§ 0.91, 0.291, 1.108, we
reconsider on our own motion our decision in the *2000* A*nnual Access
Tariff Suspension Order* to suspend and investigate the proposed
universal service fund tariff rates of Nevada Bell, Pacific Bell
Telephone Company, and Southwestern Bell Telephone Company.

10\. IT IS FURTHER ORDERED that, pursuant to Sections 0.91 and 0.291 of
the Commission's rules, 47 C.F.R. §§ 0.91, 0.291, CC Docket No. 00-122,
the investigation and accounting order imposed by the Common Carrier
Bureau IS TERMINATED.

FEDERAL COMMUNICATIONS COMMISSION

Tamara L. Preiss

Acting 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

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

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

**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)

**APPENDIX C**

## JULY 27, 2000 FILINGS MADE BY PRICE CAP CARRIERS FOR ANNUAL ACCESS 2000

Aliant Communications Company Transmittal No. 36

Ameritech Operating Companies Transmittal No. 1242

Bell Atlantic Telephone Companies Transmittal No. 1316

BellSouth Telecommunications, Inc. Transmittal No. 558

Cincinnati Bell Telephone Company Transmittal No. 752

Citizens Telecommunications Companies Transmittal No. 80

Frontier Communications of Minnesota

and Frontier Communications of Iowa Transmittal No. 30

Frontier Telephone of Rochester, Inc. Transmittal No. 32

GTE System Telephone Companies Transmittal No. 1267

GTE Telephone Operating Companies Transmittal No. 328

Iowa Telecommunications Services, Inc. Transmittal No. 3

Nevada Bell Transmittal No. 311

Pacific Bell Telephone Company Transmittal No. 9

Southern New England Telephone Co. Transmittal No. 749

Southwestern Bell Telephone Company Transmittal Nos. 2837/2838

Sprint Local Telephone Companies Transmittal No. 123

U S WEST Communications, Inc. Transmittal No. 1092

Valor Telecommunications Southwest Concurs in GTOC Tariffs

[^1]: Appendix A lists the price cap LECs filing tariffs and their
    respective tariff transmittal numbers, and identifies the
    abbreviated names used for the price cap LECs. Appendix B lists the
    petitions and replies to the tariff filings, and identifies the
    abbreviated names used for the petitioners.

[^2]: *2000 Annual Access Tariff Filings*, CC Docket No. 00-122,
    Memorandum Opinion and Order, DA 00-1487 (Comp. Pric. Div., rel.
    Jun. 30, 2000) (*2000* *Annual Access Tariff Suspension Order*).

[^3]: *2000* *Annual Access Tariff Suspension Order* at ¶ 4.

[^4]: *2000* *Annual Access Tariff Suspension Order* at ¶ 5.

[^5]: 47 C.F.R. § 61.48(l).

[^6]: *2000* *Annual Access Tariff Suspension Order* at ¶ 6.

[^7]: *See* Appendix A for the relevant Tariff Transmittal Numbers.

[^8]: *See* Appendix C for the Tariff Transmittal Numbers of the
    relevant July 27, 2000 filings.

[^9]: *See* Transmittal Nos. 311, 9, and 2837/2838 filed by Nevada Bell,
    Pacific Bell, and Southwestern Bell, respectively.