Before the

Federal Communications Commission

**Washington, D.C. 20554**

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**ORDER DESIGNATING ISSUES FOR INVESTIGATION**

**Adopted: August 24, 2007 Released: August 24, 2007**

**Direct Cases Due by:** **September 21, 2007**

**Oppositions to Direct Cases Due by: October 5, 2007**

**Rebuttals Due by:** **October 12, 2007**

By the Chief, Pricing Policy Division:

# Introduction

1.  In this order, we designate for investigation issues regarding the
    switched access rates contained in the 2007 annual access tariff
    filings of Reasnor Telephone Company, LLC. (Reasnor) and local
    exchange carriers (LECs) exiting the traffic-sensitive tariff of the
    National Exchange Carrier Association, Inc. (NECA).[^1] We suspended
    the switched access rates in these tariff filings on June 28,
    2007.[^2] As discussed below, we designate these issues for
    investigation to address allegations that certain access stimulation
    practices may be leading to such increases in access demand and
    access profits that the access rates of some of these carriers
    become unjust and unreasonable. Specifically, pursuant to section
    204 of the Communications Act of 1934, as amended (the Act),[^3] we
    designate for investigation: (1) whether Reasnor's switched access
    rates filed in its 2007 annual access tariff filing are just and
    reasonable; (2) whether the costs of any direct payments, sharing of
    revenues, or other forms of compensation to the provider of an
    access stimulating service are properly included in the revenue
    requirement used to determine a carrier's switched access rates; (3)
    whether the rates filed in the suspended carriers' 2007 annual
    access tariff filings will remain just and reasonable if demand
    increases dramatically; (4) whether the Commission should require
    carriers subject to this investigation to include language in their
    tariffs to ensure that it has an opportunity to review a carrier's
    rates when a significant increase in local switching demand
    occurs; (5) whether the existing cost support requirements contained
    in sections 61.38 and 61.39 are adequate to permit the Commission to
    determine that the revised rates filed as a result of a significant
    increase in access traffic, pursuant to issue four above, are just
    and reasonable or whether additional data will be necessary; and (6)
    whether the rates specified in the suspended tariffs have remained,
    or will remain, just and reasonable during the investigation.
    Finally, as we have previously indicated, the Commission is
    preparing a notice of proposed rulemaking in which it will address
    access stimulation generally in a comprehensive manner. [^4] For
    purposes of managing this investigation and reducing the burdens on
    carriers, and without prejudice to that broader proceeding, we will
    not require any carrier other than Reasnor to respond to issues two
    through six above if that carrier files tariff language, specified
    herein, that commits such carrier to modify its tariff in the event
    it experiences a significant increase in demand. Alternatively, we
    will not require any carrier to respond to any issue raised in this
    order if that carrier files a petition for a waiver to join the NECA
    traffic-sensitive tariff.

# Background 

## Tariff Process for Local Exchange Carriers

2.  Incumbent LECs are required to file and maintain tariffs with the
    Commission.[^5] Carriers subject to rate-of-return regulation must
    file tariffs every two years for a two year period as provided in
    section 69.3(f), but may file tariffs at any time pursuant to the
    policy that tariffs are carrier initiated.[^6] NECA files tariffs
    each year. Tariffs must be filed in advance of their effective date
    in order to provide the Commission and the public with notice of
    changes in carriers' rates, terms, and conditions of service, and to
    provide an opportunity for interested parties to evaluate and
    comment on proposed tariffs.[^7] Pursuant to section 204 of the Act,
    the Commission, during the notice period, may suspend the
    effectiveness of a tariff and initiate an investigation to determine
    whether the tariff is just and reasonable.[^8] In the *Streamlined
    Tariff Order*, the Commission concluded that the statute
    "contemplates pre-effective tariff review by identifying specific
    actions that we can take, i.e., suspension and investigation, prior
    to the effective date of the tariff \[and that\] pre-effective
    review is a useful tool to assure carriers\' compliance with
    sections 201 through 203 of the Act.\"[^9] If a tariff investigation
    has not been completed within five months of the tariff's specified
    effective date, then the proposed tariff goes into effect subject to
    the results of the investigation.[^10] At the conclusion of the
    investigation, the Commission may prescribe rates prospectively and
    order refunds as necessary for any period in which the tariff was in
    effect.[^11]

3.  In the 1996 Act, Congress enacted section 204(a)(3), which provides
    that LEC tariffs that take effect on seven days notice (when rates
    are reduced) or 15 days notice (for any other change) after filing
    are "deemed lawful" unless rejected or suspended and investigated by
    the Commission.[^12] The Commission concluded in the *Streamlined
    Tariff Order* that a tariff filed pursuant to section 204(a)(3) (a
    "streamlined" tariff) that takes effect without prior suspension and
    investigation is conclusively presumed to be reasonable under
    section 201, and thus protected from retrospective refund liability
    in a formal complaint proceeding, even if the carrier is ultimately
    found to have overearned.[^13]

## Methods for establishing tariff rates

4.  Commission rules provide rate-of-return LECs with alternative means
    for filing interstate access tariffs. Most rate-of-return LECs
    participate in the traffic-sensitive pool managed by NECA and
    participate in the traffic-sensitive tariff filed annually by NECA
    for participating members.[^14] The rates in the traffic-sensitive
    tariff are set based on the projected aggregate costs (or average
    schedule settlements) and demand of all pool members and are
    targeted to achieve an 11.25 percent return.[^15] Each participating
    carrier receives a settlement from the pool based on its costs plus
    a prorata share of the profits, or based on its settlement pursuant
    to the average schedule formulas. Stated differently, revenues in
    excess of costs are shared among all pool members. Cost and average
    schedule carriers may choose to enter or leave the NECA pool on July
    1 of any year by providing notice to NECA by the preceding March
    1.[^16]

5.  Alternatively, a rate-of-return carrier may file access tariffs
    pursuant to the provisions of section 61.38 (section 61.38 carrier),
    or section 61.39 (section 61.39 carrier). Under section 61.38, a
    carrier is required to file access tariffs in even numbered years to
    be effective for a two-year period.[^17] A section 61.38 carrier
    files tariffed rates based on its projected costs and demand and
    targets its rates to earn an 11.25 percent return. If the demand of
    a section 61.38 carrier increases above the level projected by the
    carrier in its tariff filing during the tariff period, it does not
    share the increased revenues with any other carrier. Accordingly, a
    section 61.38 carrier retains the increased revenues to the extent
    they exceed any increase in costs, protected from retrospective
    refund liability by the deemed lawful provision of the Act, but
    earnings over 11.25 percent are subject to complaint, and the
    Commission can order prospective rate changes.

6.  Finally, a rate-of-return carrier that has 50,000 or fewer access
    lines in a study area may elect to file its access tariffs in
    accordance with section 61.39 of the Commission\'s rules (section
    61.39 carrier), which was adopted in the *Small Carrier Tariff
    Order*.[^18] A carrier choosing to proceed under this rule is
    required to file access tariffs in odd numbered years to be
    effective for a two-year period.[^19] The initial rates of section
    61.39 carriers are set based on historical costs (or average
    schedule settlements) and associated demand for the preceding
    year.[^20] These carriers do not pool their costs and revenues with
    any other carrier. Thus, if demand increases, the carrier retains
    the revenues to the extent they exceed any cost increase, protected
    from retrospective refund liability by the deemed lawful provision
    of the Act. Section 61.39 carriers' rates are required to be just
    and reasonable, may be challenged in a complaint proceeding, and the
    Commission can order prospective rate changes for rate-of-return
    violations.[^21] Section 61.39 carriers were required to file
    tariffs this year.[^22]

## Prior History of this Proceeding

7.  *Tariff Filings*. On June 15, 2007, or June 22, 2007, section 61.39
    carriers filed revised interstate access tariffs in accordance with
    section 69.3(f)(2) of the Commission's rules.[^23] In addition,
    several section 61.38 carriers left the NECA pool and filed their
    own traffic-sensitive access tariffs.[^24] AT&T Corp. (AT&T), Qwest
    Communications Corporation (Qwest), Sprint Nextel Corporation
    (Sprint Nextel), and Verizon filed petitions to suspend and
    investigate the tariffs of carriers leaving the NECA
    traffic-sensitive pool and filing their own tariffs pursuant to
    section 61.39 of the Commission's rules.[^25] AT&T also petitioned
    to suspend the tariff filing of Reasnor.[^26] A number of the LECs
    filing pursuant to section 61.39 of the Commission's rules filed
    replies to the petitions.[^27]

8.  *Suspension Order*. On June 28, 2007, we suspended for one day the
    switched access rates contained in the 2007 annual access tariff
    filings of several LECs leaving the NECA traffic-sensitive pool and
    the switched access rates of Reasnor.[^28] We imposed an accounting
    order, and initiated an investigation into the lawfulness of the
    switched access rates contained in the suspended tariffs.

# issues designated for investigation 

## The Reasonableness of Reasnor's Tariffed Rates 

9.  The first issue designated for investigation is whether Reasnor's
    switched access rates filed in its 2007 annual access tariff filing
    are just and reasonable. As presented by AT&T, the revenue
    requirement Reasnor used in calculating rates showed an
    extraordinary increase over the prior period, particularly when
    compared to Reasnor's increase in demand.[^29] The increase in the
    settlement amount produced by the average schedule formula, as noted
    by AT&T, was more than an eight-fold increase above the increase in
    demand. This is inconsistent with the economies of scale generally
    accepted for local switching, tandem switching, or transport
    functions. In fact, the incremental costs associated with the
    increase in demand should be relatively low. This anomalous result
    suggests that Reasnor's demand was likely to have been outside any
    parameter used to establish the average schedule formulas. We
    believe the use of the significantly increased demand as the
    variable to calculate the new average schedule settlement amount for
    the 2007 annual access tariff filing was unlikely to have produced a
    reasonable rate, as evidenced by the relative increases in costs and
    demand alleged by AT&T.

10. As part of its direct case, Reasnor shall file the tariff support
    materials it would have filed with its 2007 tariff filing if it had
    been requested to do so by the Commission.[^30] Specifically,
    Reasnor shall explain in detail how it developed the average
    schedule settlement amount it used to calculate its switched access
    rates and shall produce the traffic-sensitive formulas it used to
    calculate the settlement amounts. Reasnor shall specify the
    variables that were used in making the calculations and produce the
    supporting work papers. Reasnor shall explain why it believes that
    the rates it filed are just and reasonable. As part of that
    explanation, Reasnor shall provide the observed range of demands
    that were considered in creating the average schedule formulas that
    Reasnor used to develop its settlement amount.

11. If we conclude that Reasnor's rates are unjust and unreasonable, it
    will be necessary to establish an acceptable means of generating a
    revenue requirement amount. Because Reasnor is an average schedule
    carrier, it does not have the data necessary to do a traditional
    cost-of-service study. To assist the Commission in establishing the
    proper demand and expense factors, we direct Reasnor to file the
    tariff support materials for the rates it filed in January 2006. As
    part of its direct case, Reasnor shall provide an estimate of any
    incremental local switching, tandem switching, and tandem transport
    investment and expenses in addition to those reflected in its 2006
    filing that would be necessary to handle the increased demand. In
    addition, Reasnor is directed to file its total company balance
    sheet as of January 1, 2006, and December 31, 2006, and its income
    statement for 2006. The balance sheet and expense information should
    be disaggregated to a similar level as that contained in the Class B
    accounts in Part 32 of the Commission's rules. Reasnor shall also
    file local switching and tandem switching demand data for each month
    since January 2006. Reasnor shall identify any investment or expense
    it incurred during 2006 that exceeded 25 percent of the year-end
    balance in any asset account or 25 percent of the expenses in any
    expense account for 2006 and explain why such expenditures are used
    and useful.[^31] If we conclude that the costs produced by the
    average schedule formula that were used by Reasnor do not produce
    just and reasonable rates, we may use the average schedule
    settlements supporting Reasnor's 2006 tariff filing as a base from
    which to determine reasonable rates. If we take this approach,
    Reasnor's estimates of additional investment and expenses that are
    necessary for facilities to handle any increased traffic will be
    critical to the process. Reasnor bears the burden of justifying its
    revenue requirement base. We also ask Reasnor to comment on the
    methodologies and conclusions of the May 1, 2007, declaration of
    Peter Copeland that estimates the incremental costs of adding
    significant amounts of switched access traffic.[^32] If Reasnor is
    unable to file rates that can be determined to be just and
    reasonable, or if it appears that repeated tariff filings will be
    necessary because of swings in demand, Reasnor should comment on
    whether it would be appropriate for the Commission to forbear from
    deemed lawful status for its tariff for the remainder of the
    two-year tariff period.

12. In addition to the materials requested above, Reasnor may file any
    additional materials or arguments that it believes address the
    question of what would be just and reasonable switched access rates
    for Reasnor.[^33] If Reasnor files additional data, it should
    present the data in a manner comparable to the requirements
    specified above for similar data.

## Compensation to the Provider of the Stimulating Activity

13. The second issue designated for investigation is whether the cost of
    any direct payments, sharing of access revenues, or other forms of
    compensation to the provider of an access stimulating service, or
    the cost of directly providing the access stimulating activity, is
    properly included in the revenue requirements used to develop
    switched access rates. It is unclear what these costs have to do
    with the provision of exchange access. Including such costs as a
    cost of exchange access may be an unreasonable practice that
    violates section 201(b) and the prudent expenditure standard.[^34]
    To the extent that a carrier includes payments to the providers of
    the access stimulating activity, such as direct payments, the cost
    of revenue sharing arrangements, or any other form of compensation,
    or the costs of directly providing the stimulating activity itself,
    in its operating expenses, it would increase its revenue requirement
    and thereby its access rates. In these cases, the customer using the
    access stimulating service is not paying separately for the service.
    If compensation costs, or the direct costs of providing the access
    stimulating activity, are included in operating expense and thus
    bundled with access costs, the IXCs are paying for the costs of the
    access stimulating service through the higher access charges
    assessed by the LEC.

14. We direct the carriers subject to this investigation to indicate as
    part of their direct cases whether they have included any such
    compensation in their switched access revenue requirements, and, if
    so, indicate the amount of such payments. Each carrier subject to
    this investigation shall indicate if it has entered into any
    agreement to pay compensation, or to provide anything of value, to
    an entity to stimulate access traffic, or if it intends to enter
    into such an arrangement. Any carrier subject to this investigation
    that has entered into such an arrangement shall file a copy of the
    contract or contracts as part of its direct case. Any party
    believing that such expenses are appropriate expenses of exchange
    access should explain its theory of why such expenses should be
    included in the revenue requirement for exchange access. If we
    conclude that including such compensation in the revenue requirement
    for switched access is an unreasonable practice, any carrier that
    has included such amounts in its revenue requirement may be required
    to file revised rates.

## Demand Range Over Which Rates May Be Presumed to Be Just and Reasonable 

15. The third issue designated for investigation is whether the rates
    filed in the suspended carriers' 2007 annual access tariff filings
    will remain just and reasonable if demand increases dramatically.
    Section 201(b) of the Act requires that rates be just and
    reasonable. In establishing rates for rate-of-return carriers, rates
    are set by cost carriers to recover expenses plus a reasonable rate
    of return, or based on average schedule settlements for average
    schedule carriers. If expenses do not increase at a proportionate
    rate to demand, the realized rates of return are likely to exceed
    the authorized rate of return and thus become unjust and
    unreasonable at some point.[^35] AT&T, Qwest, Sprint Nextel, and
    Verizon assert that they have seen a pattern of access stimulation
    by section 61.39 carriers in recent years and that they expect that
    many of the carriers leaving the pool and filing tariffs pursuant to
    section 61.39 will engage in such access stimulation practices in
    the future.[^36] They also note that some of the carriers leaving
    the traffic-sensitive pool, or an affiliate, have engaged in access
    stimulation in the past.[^37] The petitioners contend that, if the
    carriers at issue engage in traffic stimulation, the carriers will
    earn returns that greatly exceed that permitted by the Commission's
    rules, with no remedy available because of the deemed lawful
    provision of section 204(a)(3).[^38] The petitioners also contend
    that the access stimulation violates the intent of the *Small
    Carrier Tariff Order,* which requires that rates filed by small LECs
    based on historical data be just and reasonable.[^39] The Wireline
    Competition Bureau, on its own motion, concluded that the tariffs of
    those carriers exiting the NECA traffic-sensitive pool and filing
    their own tariffs pursuant to section 61.38 of the Commission's
    rules also raise questions of whether rates would remain just and
    reasonable in the face of access stimulation. If these carriers
    enter into access stimulation activities, they, like section 61.39
    carriers, can generate increased revenues that likely would result
    in rates that are unjust and unreasonable, but which would be
    protected by the deemed lawful provision of the Act.[^40]

16. To determine if the tariffed rates subject to this investigation
    are, and will remain, just and reasonable, it is necessary to
    explore the relationship between the relative rates of growth of
    expenses and revenues as demand changes. Initially, we must
    establish the baseline data on which the discussion of many of the
    following issues will depend. Because section 61.39 carriers did not
    file tariff support materials with their tariffs, we direct them to
    file the supporting materials required by section 61.39(b) as part
    of their direct case.[^41] Each section 61.39 carrier shall also
    provide its December 31, 2005, and December 31, 2006, balance sheets
    and its income statement accounts for 2006. The balance sheet and
    income statement data should be disaggregated to a similar level as
    that contained in the Class B accounts in Part 32 of the
    Commission's rules. We incorporate the section 61.38 carriers'
    tariff support materials from their 2007 annual interstate access
    tariff filings into the record of this investigation.[^42] These
    carriers shall also file local switching demand data for each month
    of 2006.

17. In order to assess whether tariff rates will remain reasonable as
    demand grows, we need to understand the degree to which demand
    increases cause average costs to decline. We direct the carriers
    whose tariffs were suspended to quantify to the extent possible any
    additional investment and expenses, including both plant-related and
    non-plant related, beyond that supporting their tariff filing that
    would be incurred as a result of increased demand.[^43] The
    investment and costs the carriers include should only be those costs
    necessary to accommodate the increased demand and should not include
    costs incurred to meet other needs. Each carrier should provide a
    projection of switched access investment and cost data for increases
    in local switching demand of 30, 100, and 1000 percent over that
    used in establishing the rates in the carrier's suspended tariff.
    Investment and expense data should be disaggregated to a similar
    level as that contained in the Class B accounts in Part 32 of the
    Commission's rules. To ensure that we have a complete picture of the
    investment and expense effects of the traffic growth, each carrier
    shall identify each asset account in which the projected new
    investment for the year is greater than 10 percent of the account
    balance at the beginning of the year. The carriers should generally
    describe the nature of the projected increased investments in the
    account and specifically identify any of the projected investments
    that would be more than 25 percent of the total investment for the
    year in that account. These carriers shall also identify each
    expense account in which expenses for the year would be projected to
    increase by more than 10 percent of the total expense for that
    account during the year. The carriers should generally describe the
    nature of the projected increased expenses in the account and
    specifically identify any projected increased expense that would be
    more than 25 percent of the total expense in that account for the
    year. Each carrier should indicate the effect that the projected
    increases in demand would have on the carrier's average per minute
    switched access cost and its switched access rate of return. In
    calculating its rate of return, each carrier shall exclude from
    expenses any amounts reflecting direct payments, revenue sharing, or
    other compensation provided to the entity providing the stimulating
    activity. Finally, section 61.39 carriers shall, for each of the
    three specified levels of increased demand (*i.e.*, 30, 100, and
    1000 percent), provide the results of running the increased demand
    through the average schedule formulas used to derive the baseline
    expense amount.

18. Notwithstanding the above data requirements, carriers subject to
    this investigation may submit other investment and expense data or
    other considerations that they believe are relevant in determining
    the range over which their rates will remain just and reasonable. To
    be most useful, any data should be provided at similar
    disaggregation levels to that specified above for the required
    submissions.

## Tariffing Requirements if Demand Increases Above a Commission-Specified Range 

19. The fourth issue designated for investigation is how the Commission
    should ensure it has an opportunity to review the rates when a
    specified increase in local switching demand is reached. As
    discussed above, it appears that, at some point, an increase in
    local switching demand will result in switched access rates that are
    no longer just and reasonable. The Commission relies on pre-review
    of tariffs as its primary means to ensure filed rates are just and
    reasonable.[^44] Because the increased demand occurs after the
    tariffs are in effect, the Commission will be unable to identify in
    advance of the tariffs becoming effective those cases in which the
    local switching demand will increase to the point at which it
    exceeds the upper limit of the range for just and reasonable rates.
    In these circumstances, the deemed lawful provisions would be
    protecting rates that are likely unjust and unreasonable rather than
    protecting customers from unjust and unreasonable rates.

20. One potential solution would be to require these section 61.38 and
    61.39 carriers to include language in their traffic-sensitive
    tariffs similar to the following:

    If the monthly interstate local switching minutes of the issuing
    carrier exceeds \[\_\_\] percent of the interstate local switching
    demand in the same month of the previous year (refile trigger), the
    issuing carrier will file revised local switching and transport
    tariff rates within \[\_\_\] days of the end of the month in which
    the issuing carrier met the refile trigger.

21. Because it is normal for demand to fluctuate over time, carriers
    shall also address how the measurement period, e.g., monthly,
    bimonthly, or quarterly, should affect the determination of the
    growth trigger that will require a tariff filing. As the measurement
    period gets longer, we believe that the growth factor should
    decrease because the longer measurement period neutralizes possible
    spikes in demand that otherwise would need to be compensated for if
    a shorter time period were used. We invite each carrier whose tariff
    filing was suspended to comment on whether we should establish
    different trigger levels depending on the size of carriers, and at
    what levels any such triggers should be set. In addition,
    respondents should comment on whether we should establish different
    trigger points depending on whether the increase in traffic is
    endogenous or exogenous. We note that the increased levels of demand
    that were used to specify what detail should be provided by carriers
    subject to this investigation in paragraph 17 above are not to be
    taken as proposals of what the trigger level should be, but were
    intended to be data points to provide comparability among the data
    filed and to show the effects that increased demand has on the
    carriers' revenue requirement and return.

22. As part of their direct case, carriers subject to this investigation
    shall comment on whether this conceptual approach and language is
    adequate to address the problems identified. If a carrier exceeds
    the demand trigger, as discussed in paragraph 21, it will be
    required to file a revised tariff. In this connection, a carrier
    will need to obtain the traffic data and determine whether it has
    exceeded the limit, and, if so, prepare and file a revised tariff.
    As part of their direct cases, we direct carriers to provide data on
    how long it takes to get traffic data and on how much time would be
    needed to prepare and file the revised tariff. Notwithstanding the
    above specific requirements, each carrier whose tariff was suspended
    may submit other materials or data that they believe are relevant to
    the Commission's consideration of this issue.

## Support Materials for the Revised Tariffs 

23. The fifth issue designated for investigation is whether the existing
    cost support requirements contained in section 61.38 and 61.39 of
    the Commission's rules will be adequate to permit the Commission to
    determine if revised rates filed as a result of significant
    increases in access traffic as described above are just and
    reasonable, or whether additional data will be necessary. As part of
    their direct cases, we direct the section 61.38 carriers subject to
    this investigation to explain how the cost relationships underlying
    their initial tariff could be revised so that they could be relied
    upon to produce just and reasonable rates at the higher demand
    levels. They shall specify any additional data that would be
    necessary to permit historic costs to be extrapolated forward to
    produce just and reasonable rates. Carriers subject to this
    investigation shall also address how the Commission should determine
    the proper demand to use in setting the revised rates.

24. As part of their direct cases, we direct average schedule 61.39
    carriers to explain how they would establish revised
    traffic-sensitive rates that are just and reasonable based on "an
    amount calculated to reflect the traffic sensitive average schedule
    pool settlement the carrier would have received if the carrier had
    continued to participate, based upon the most recent average
    schedule formulas approved by the Commission."[^45] As discussed
    above, the average schedule formulas may not produce reasonable
    estimates of average schedule costs if the new demand is
    significantly outside the range of traffic used in establishing the
    formulas. The expectation in the *Small Carrier Tariff Order,* that
    rate neutrality could be achieved by reliance on the average
    schedule formula to establish tariff rates, may be valid only if a
    relatively stable demand level is maintained. If we should determine
    that the validity of using the average schedule formulas in
    subsequent tariff filings is generally limited to carriers whose
    access demand falls within the range of demand observations used to
    establish the average schedule formulas initially, we direct section
    61.39 carriers subject to this investigation to propose alternatives
    for establishing just and reasonable rates. We direct carriers to
    comment on the possible use of the settlement amount associated with
    the highest demand point of the observed demand range, which would
    be divided by recent demand levels to set switched access rates. To
    assist the Commission in evaluating this proposal, we direct each
    section 61.39 carrier to determine the appropriate ranges for its
    switched access service and calculate the resulting settlement
    amount using the highest observed demand in the data from which the
    average schedules were derived. These carriers shall also address
    what the appropriate demand would be for calculating revised rates.

25. As discussed above, the extraordinary increases in local switching
    demand raises issues about the existing costing and average schedule
    procedures. Without reasonable and reliable methods of establishing
    new cost and demand levels, the Commission would be unable to
    determine if revised switched access rates filed based on this
    higher demand will be just and reasonable. The potential exists for
    demand volatility to lead to repeated tariff filings in which the
    carriers and the Commission would be attempting to estimate a moving
    target. Carriers subject to this investigation should address
    whether it would be appropriate for the Commission to forbear from
    enforcing the deemed lawful provision of section 204(a)(3) for a
    mid-course tariff filing that is triggered by a sufficient increase
    in demand, as discussed in conjunction with issue four.[^46] This
    would exclude such switched access tariffs from the streamlined
    filing process and could reduce the costs to carriers of tariff
    preparation and possible investigation and the costs to the
    Commission of reviewing, and possibly conducting an investigation
    of, such tariffs. Forbearing from section 204(a)(3) may help ensure
    that rates charged by these carriers were just and reasonable
    because they would be subject to refunds in the event of
    overearnings. Carriers subject to this investigation shall address
    these concerns and the merits of the forbearance approach. Parties
    should address whether the Commission should require carriers to
    include language in their tariffs to implement the forbearance from
    deemed lawful, if so, what the tariff language should be, or whether
    some other approach would be better.

## Reasonableness of Rates During the Investigation

26. The sixth issue designated for investigation is whether the switched
    access rates of the suspended tariffs remain just and reasonable
    during the investigation. It is possible that, during the period of
    the investigation, some carriers' demand could increase sufficiently
    such that the carriers' rates might become unjust and unreasonable
    during the investigation. Therefore, for the duration of this
    investigation, the carriers subject to this investigation shall file
    within 35 days of the end of each month the local switching demand
    for the month and the average monthly demand used to establish the
    rates in its 2007 annual access tariff filing. If a carrier's demand
    increases by more than the trigger we adopt, the carrier may be
    required to file revised rates and propose a plan to refund any
    excess revenues collected during the period the tariffs were under
    investigation.

## Safe Harbor Procedure

27. Finally, we note that the primary focus of this investigation is
    directed to allegations of substantial growth in terminating access
    traffic from access stimulation activities that may be increasing
    carriers' rates of return to levels that result in the tariffed
    rates becoming unjust and unreasonable.[^47] Because the increased
    demand from an access stimulation activity occurs after the tariffs
    are in effect, the Commission is unable to identify, prior to the
    tariffs going into effect, those cases in which access stimulation
    will occur. We are also aware that some exogenous variations in
    demand levels and patterns are likely, and we do not intend to
    penalize carriers for that normal variation.

28. We have previously indicated that the Commission is preparing a
    notice of proposed rulemaking in which it will address access
    stimulation in a comprehensive manner.[^48] For purposes of managing
    this investigation and reducing the burdens on carriers, and without
    prejudice to that broader proceeding, we establish safe harbor
    mechanisms for carriers subject to this investigation. First, for
    carriers other than Reasnor, we will not require any carrier to
    respond to issues two through six above if that carrier files
    language similar to that described in paragraph 20 in its switched
    access tariff. That language must commit such carrier to filing a
    revised switched access tariff within 60 days of the end of the
    month in which its interstate local switching demand increases to a
    level that is more than 100 percent over the interstate local
    switching demand in the same month in the previous year.[^49]
    Second, we will not require any carrier to respond to any issue
    raised in this order if that carrier files a petition for a waiver
    to join the NECA traffic-sensitive tariff. These filings shall be
    made on or before the date on which carriers' direct cases are
    due.[^50] At the end of this investigation, we may, based on the
    record developed, establish different conditions than that reflected
    by the above tariff language for those carriers that proceed with
    the investigation.

# Procedural MATTERS

## Filing Schedules

29. This investigation is designated WC Docket No. 07-184. The carriers
    listed in the Appendix are designated as parties to this
    investigation of the listed tariff filings.

30. The carriers listed in the Appendix shall file their direct cases no
    later than **September** **21, 2007.** The direct cases must present
    the parties' positions with respect to the issues described in this
    Order. Pleadings responding to the direct cases may be filed no
    later than **October 5, 2007**, and must be captioned "Oppositions
    to Direct Case" or "Comments on Direct Case." The carriers listed in
    the Appendix may each file a "Rebuttal" to oppositions or comments
    no later than **October 12, 2007**.

31. An original and four copies of all pleadings shall be filed with the
    Secretary of the Commission. In addition, parties shall serve with
    three copies: Pricing Policy Division, Wireline Competition Bureau,
    445 12th Street, S.W., Room 5-A233, Washington, D.C. 20554, Attn:
    Douglas Slotten. Parties shall also serve with one copy: Best Copy
    and Printing, Inc., 445 12th Street, S.W., Room CY-B402, Washington,
    DC 20554 (202) 863-2893. Members of the general public who wish to
    express their views in an informal manner regarding the issues in
    this investigation may do so by submitting one copy of their
    comments to the Office of the Secretary, Federal Communications
    Commission, 445 12th Street, S.W., Room TW-A325, Washington,
    D.C. 20554. Such comments should specify the docket number of this
    investigation, WC Docket No. 07‑184. Parties are also strongly
    encouraged to submit their pleadings via the Internet through the
    Electronic Comment Filing System at
    \<http://www.fcc.gov/e-file/ecfs.html\>. Generally, only one copy of
    an electronic submission must be filed. In completing the
    transmittal screen, commenters should include their full name,
    Postal Service mailing address, and the applicable docket number,
    which in this instance is WC Docket No. 07‑184. Parties may also
    submit an electronic comment via Internet e-mail. To get filing
    instructions for e-mail comments, commenters should send an e-mail
    to \<ecfs@fcc.gov\>, and should include the following words in the
    body of the message: "get form \<your e-mail address\>." A sample
    form and directions will be sent in reply.

    Filings can be sent by hand or messenger delivery, by commercial
    overnight courier, or by first-class or overnight U.S. Postal
    Service mail (although we continue to experience delays in receiving
    U.S. Postal Service mail). All filings must be addressed to the
    Commission's Secretary, Office of the Secretary, Federal
    Communications Commission.

    -   The Commission's contractor will receive hand-delivered or
        messenger-delivered paper filings for the Commission's Secretary
        at 236 Massachusetts Avenue, N.E., Suite 110, Washington,
        DC 20002. The filing hours at this location are 8:00 a.m. to
        7:00 p.m. All hand deliveries must be held together with rubber
        bands or fasteners. Any envelopes must be disposed of
        [before]{.underline} entering the building.

    -   Commercial overnight mail (other than U.S. Postal Service
        Express Mail and Priority Mail) must be sent to 9300 East
        Hampton Drive, Capitol Heights, MD 20743.

    -   U.S. Postal Service first-class, Express, and Priority mail must
        be addressed to 445 12^th^ Street, S.W., Washington, DC 20554.

32. The direct cases, oppositions, and replies and any other filed
    documents in this investigation may be obtained from Best Copy and
    Printing, Inc., in person at 445 12th Street, S.W., Room CY-B402,
    Washington, DC 20554, via telephone at (202) 488-5300, via facsimile
    at (202) 488-5563, or via e-mail at <FCC@BCPIWEB.COM>. The pleadings
    will also be available for public inspection and copying during
    regular business hours in the FCC Reference Information Center, Room
    CY-A257, 445 12th Street, S.W., Washington, DC 20554, and through
    the Commission's Electronic Filing System (ECFS) accessible on the
    Commission's Web site,
    [http://www.fcc.gov/cgb/ecfs](http://www.fcc.gov/cgb/ecfs/).

33. To request materials in accessible formats for people with
    disabilities (braille, large print, electronic files, audio format),
    send an e-mail to <fcc504@fcc.gov> or call the Consumer &
    Governmental Affairs Bureau at 202-418-0530 (voice), 202-418-0432
    (TTY).

34. Commenters who file information that they believe should be withheld
    from public inspection may request confidential treatment pursuant
    to Section 0.459 of the Commission's rules. Commenters should file
    both their original comments for which they request confidentiality
    and redacted comments, along with their request for confidential
    treatment. Commenters should not file proprietary information
    electronically. *See* Examination of Current Policy Concerning the
    Treatment of Confidential Information Submitted to the Commission,
    *Report and Order*, 13 FCC Rcd 24816 (1998), *Order on
    Reconsideration*, 14 FCC Rcd 20128 (1999). Even if the Commission
    grants confidential treatment, information that does not fall within
    a specific exemption pursuant to the Freedom of Information Act
    (FOIA) must be publicly disclosed pursuant to an appropriate
    request. *See* 47 C.F.R. § 0.461; 5 U.S.C. § 552. We note that the
    Commission may grant requests for confidential treatment either
    conditionally or unconditionally. As such, we note that the
    Commission has the discretion to release information on public
    interest grounds that does fall within the scope of a FOIA
    exemption.

## *Ex Parte* Requirements

35. This proceeding shall be treated as a "permit-but-disclose"
    proceeding in accordance with the Commission's *ex parte*
    rules.[^51] Persons making oral *ex parte* presentations are
    reminded that memoranda summarizing the presentations must contain
    summaries of the substance of the presentations 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.[^52] Other rules pertaining to oral and written
    presentations are set forth in Section 1.1206(b) of the Commission's
    rules as well.

## Paperwork Reduction Act

36. This order designating issues for investigation contains no new or
    modified information collections subject to the Paperwork Reduction
    Act of 1995, Pub. Law 104-13.

# ORDERING CLAUSES

37. IT IS ORDERED that, pursuant to sections 4(i), 4(j), 201(b), 203(c),
    204(a), and 403 of the Communications Act, 47 U.S.C. §§ 154(i),
    154(j), 201(b), 203(c), 204(a), and 403, and sections 0.91 and 0.291
    of the Commission's rules, 47 C.F.R. §§ 0.91, 0.291, the issues set
    forth in this order ARE DESIGNATED FOR INVESTIGATION.

38. IT IS FURTHER ORDERED that the carriers listed in the Appendix SHALL
    BE parties to this proceeding.

39. IT IS FURTHER ORDERED that each carrier listed in the Appendix SHALL
    INCLUDE, in its direct case, a response to each request for
    information that it is required to answer by this order.

    FEDERAL COMMUNICATIONS COMMISSION

    Albert M. Lewis

    Chief, Pricing Policy Division

**[APPENDIX -PARTIES SUBJECT TO THIS INVESTIGATION AND
ASSOCIATED]{.underline}**

**[TRANSMITTALS AFFECTED BY SUSPENSION]{.underline}**

[Alliance Communications Cooperative]{.underline} Transmittal Nos. 7 & 9
Tariff F.C.C. No. 2

[Broadband Network Group, LLC]{.underline} Transmittal No. 1 Tariff
F.C.C. No. 1

Arthur Mutual Telephone Company

Bascom Mutual Telephone Company

Benton Ridge Telephone Company

Buckland Telephone Company

Fort Jennings Telephone Company

Glandorf Telephone Company, Inc.

Kalida Telephone Company, Inc.

Middle Point Home Telephone Company

Ottoville Mutual Telephone Company

Ridgeville Telephone Company

Sherwood Mutual Telephone Association, Inc.

Vaughnsville Telephone Company

[CenturyTel Operating Companies]{.underline} Transmittal No. 55 Tariff
F.C.C. No. 1

CenturyTel of Central Wisconsin, LLC

CenturyTel of Wisconsin

Spectra Communications Group, LLC

Telephone USA of Wisconsin, LLC

[Consortia Consulting]{.underline} Transmittal No. 1 Tariff F.C.C. No. 1

Beresford Municipal Telephone Company

McCook Cooperative Telephone Company

Roberts County Telephone Cooperative Assn/

RC Communications, Inc.

Western Telephone Company

[Elsie Communications, Inc]{.underline}. Transmittal No. 1 Tariff F.C.C.
No. 1

[Farmers Mutual Telephone Company (ID)]{.underline} Transmittal No. 1
Tariff F.C.C. No. 1

[ICORE]{.underline} Transmittal No. 80 Tariff F.C.C. No. 2

Jordan-Soldier Valley Telephone Company

Killduff Telephone Company

Lynnville Telephone Company

Northeast Iowa Telephone Company, Inc.

Sully Telephone Association

**[APPENDIX -PARTIES SUBJECT TO THIS INVESSTIGATION AND
ASSOCIATED]{.underline}**

**[TRANSMITTALS AFFECTED BY SUSPENSION (CONT'D)]{.underline}**

[John Staurulakis, Inc.]{.underline} Transmittal No. 130 Tariff F.C.C.
No. 1

Camden Telephone & Telegraph Company, Inc.

Chesnee Telephone Company

Gearheart Communications Company, Inc.

d/b/a Coalfields Telephone Company

Mt. Vernon Telephone Company

Oklahoma Communication Systems, Inc.

Skyline Telephone Membership Corporation

Tennessee Telephone Company

Yadkin Valley Telephone Membership Corp

[Royal Telephone Company]{.underline} Transmittal No. 1 Tariff F.C.C.
No. 1

[Windstream Telephone System]{.underline} Transmittal No. 6 Tariff
F.C.C. No. 1

Windstream Communications Kerrville, L.P

Windstream Standard, Inc.

[ICORE]{.underline} Transmittal Nos. 80 & 81 Tariff F.C.C. No. 2

Reasnor Telephone Company

[^1]: The tariffs that were suspended are listed in the Appendix.

[^2]: ^?^ *2007 Annual Access Tariff Filings*, WCB/Pricing No. 07-10,
    Order, DA 07-2862 (Wireline Comp. Bur., rel. June 28, 2007)
    (*Suspension Order*). We note that the group of Century Tel
    companies exiting the NECA pool filed averaged rates along with
    CenturyTel of Wisconsin, which had an existing tariff. Therefore, we
    also suspended the tariff of CenturyTel of Wisconsin.

[^3]: 47 U.S.C. § 204; Telecommunications Act of 1996, Pub. L. No.
    104-104, 110 Stat. 56 (1996) (1996 Act).

[^4]: *Establishing Just an Reasonable Rates for Local Exchange
    carriers, Call Blocking by Carriers*, WC Docket No. 07-135,
    Declaratory Ruling and Order, DA 07-2863 at 3, para. 4 (Wireline
    Comp. Bur., rel. June 28, 2007) (*Call Blocking Order*).

[^5]: *See* 47 U.S.C. § 203. A tariff is a schedule of rates and
    regulations filed by a common carrier. 47 C.F.R. § 61.3(rr).

[^6]: 47 C.F.R. § 69.3(f).

[^7]: *See* 47 U.S.C. § 203(b).

[^8]: 47 U.S.C. § 204(a)(1).

[^9]: *Implementation of Section 402(b)(1) of the Telecommunications Act
    of 1996*, CC Docket No. 96-187, Order, 12 FCC Rcd 2170, 2197, para.
    52 (1997) (*Streamlined Tariff Order*), *recon. on other grounds*,
    17 FCC Rcd 17039 (2002) (*Streamlined Tariff Reconsideration*).

[^10]: 47 U.S.C. § 204(a)(1). The Commission is to issue an order
    concluding a tariff investigation within five months after the date
    the tariff would have gone into effect. 47 U.S.C. § 204(a)(2)(A).
    This time limit was intended only to spur Commission action, not to
    limit its authority. *1993 Annual Access Tariff Filings*, CC Docket
    Nos. 93-193, 94-65, Order, 19 FCC Rcd 14949, 14960, para. 24 (2004).
    It does not operate as a statute of limitations, and its violation
    does not constrain the Commission's authority to act. *Id*. at
    14959-60, para. 22 (citing *Southwestern Bell Tel. Co. v. FCC*, 138
    F.3d 746, 748 (8th Cir. 1998)).

[^11]: 47 U.S.C. § 204(a)(1).

[^12]: *See* 47 U.S.C. § 204(a)(3); *see also Streamlined Tariff Order*,
    12 FCC Rcd at 2202-03, paras. 67-68.

[^13]: *Streamlined Tariff Order*, 12 FCC Rcd at 2182, para. 18; *see
    also* *ACS of Anchorage, Inc. v. FCC*, 290 F.3d 403, 412 (D.C. Cir.
    2002) (when filed in conjunction with section 204(a)(3), rates are
    considered to be reasonable for purposes of section 201 without
    inquiring into a carrier's rate of return). This contrasts with the
    legal status of a filed tariff prior to the 1996 Act. Then, tariffs
    that took effect without suspension or investigation were legal
    (i.e., procedurally valid), but not necessarily lawful (i.e.,
    substantively just and reasonable). *Id.* at 410-11. Customers that
    purchased service pursuant to an unsuspended and uninvestigated
    tariff prior to February 8, 1997, could challenge the tariff's
    lawfulness through the formal complaint process, and, if successful
    could be awarded a refund. 47 U.S.C. § 208.

[^14]: National Exchange Carrier Association, Inc., Tariff FCC No. 5,
    Title Pages 1-68.

[^15]: In lieu of cost studies, average schedule carriers are
    compensated by formulas that establish settlements for average
    schedule carriers that are comparable to the settlements received by
    comparable cost companies. The average schedule settlements are
    added to the costs of the cost companies to form the revenue
    requirement for the pool. *See infra* para. 6.

[^16]: 47 C.F.R. § 69.3(e)(6).

[^17]: 47 C.F.R. § 69.3(f)(1).

[^18]: *Regulation of Small Telephone Companies*, 2 FCC Rcd 3811 (1987)
    (*Small Carrier Tariff Order*).

[^19]: 47 C.F.R. § 69.3(f)(2). These carriers have the option of filing
    tariffs pursuant to either section 61.38, or section 61.39. 47
    C.F.R. §§ 61.38 and 69.3(f)(1).

[^20]: 47 C.F.R. §61.39)(b); *See* *Small Carrier Tariff Order*, 2 FCC
    Rcd at 3812, para. 7 (noting that this process "should not permit or
    provide incentives for small companies to file access tariffs
    producing excessive returns"). For subsequent tariff filings, cost
    carriers establish rates based on a cost of service study for
    traffic sensitive elements for the total period since the local
    exchange carrier\'s last annual filing, with related demand for the
    same period, while average schedule carriers establish rates based
    on an amount calculated to reflect the traffic sensitive average
    schedule pool settlement the carrier would have received if the
    carrier had continued to participate in the NECA pool, based upon
    the most recent average schedule formulas approved by the
    Commission. 47 C.F.R. § 61.39(b)(2)(ii).

[^21]: The Commission indicated that it stood ready to undertake
    necessary corrective measures if the use of historical data to set
    rates proved not to be rate neutral in practice, or if switching
    between the use of prospective and historical costs and demand as a
    basis for ratemaking appeared likely to violate the principle of
    rate neutrality in a given case. *Small Carrier Tariff Order* at
    3813, para. 14. The Commission exempted section 61.39 carriers from
    the obligation to file Form 492 and to make automatic refunds. This
    latter point has been supplanted by the deemed lawful provision of
    the Act, which protects these carriers from refund liability.

[^22]: 47 C.F.R. § 69.3(f)(2).

[^23]: 47 C.F.R. §§ 69.3(h) and 69.3(f)(2); *see* *Suspension Order* at
    Appendix A.

[^24]: *See* *Suspension Order,* Appendix A.

[^25]: July 2007 Annual Access Charge Tariff Filings, Petition of AT&T
    Corp. to Suspend and Investigate LEC Tariffs Filed Pursuant to
    Section 61.39, WCB/Pricing No. 07-10 (filed June 22, 2007) (AT&T
    Petition) (; July 2007 Annual Access Charge Tariff Filings, Qwest
    Conditional Petition to Suspend and Investigate, WCB/Pricing No.
    07-10 (filed June 19, 2007) (Qwest Petition); July 2007 Annual
    Access Charge Tariff Filings, Petition to Suspend and Investigate of
    Sprint Nextel Corporation, WCB/Pricing No. 07-10 (filed June 22,
    2007) (Sprint Nextel Petition); July 2007 Annual Access Charge
    Tariff Filings, Petition of Verizon to Suspend and Investigate
    Tariff Filings, WCB/Pricing No. 07-10 (filed June 19, 2007) (Verizon
    Petition).

[^26]: AT&T Petition at 21-25.

[^27]: July 2007 Annual Access Charge Tariff Filings, National Exchange
    Carrier Association Reply, WCB/Pricing No. 07-10 (filed June 26,
    2007); July 2007 Annual Access Charge Tariff Filings, Reply of Group
    of Companies Under Consortia Consulting Tariff F.C.C. No. 1 to
    Petitions to Suspend and Investigate, WCB/Pricing No. 07-10 (filed
    June 26, 2007); July 2007 Annual Access Charge Tariff Filings, Reply
    of Alliance Communications Cooperative, Inc. to Petitions to Suspend
    and Investigate, WCB/Pricing No. 07-10 (filed June 26, 2007); July
    2007 Annual Access Charge Tariff Filings, Reply of Elsie
    Communications, Inc. to Petitions to Suspend and Investigate,
    WCB/Pricing No. 07-10 (filed June 26, 2007); July 2007 Annual Access
    Charge Tariff Filings, Consolidated Reply to the Petitions to
    Suspend and Investigate Filed by Qwest Communications Corporation,
    AT&T Corp., Sprint Nextel Corporation and Verizon, WCB/Pricing No.
    07-10 (filed June 26, 2007).

[^28]: *See* *Suspension Order,* Appendix B and C.

[^29]: In its petition to suspend Reasnor's tariffs, AT&T argues that,
    although Reasnor's local switching rate has decreased, it has more
    than offset the decrease by significant increases to other rates,
    for example, in tandem switching and tandem switched termination.
    AT&T Petition at 23. AT&T asserts that Reasnor achieved these
    increases by using the recently approved proposed average schedule
    formulas. AT&T argues that these formulas were designed to create
    reasonable rates for carriers whose traffic does not fluctuate, not
    to create just and reasonable rates for access stimulating carriers
    like Reasnor. AT&T asserts that Reasnor is claiming a 107,236
    percent increase in costs based on a 12,717 percent growth in its
    access minutes of use.

[^30]: 47 C.F.R. § 61.39(a).

[^31]: In evaluating whether proposed rates are just and reasonable, the
    Commission employs the "used and useful" doctrine and its associated
    prudent expenditure standard. *See generally American Telephone and
    Telegraph Co.*, Docket No. 19129 Phase I, 38 FCC 2d 213 (1972),
    *aff'd sub nom., Nader v. FCC*, 520 F.2d 182 (D.C. Cir. 1974);
    *Phase II*, 64 FCC 2d 1 (1977) (*Docket No. 19129 Phase II*),
    *recon. in part*, 67 FCC 2d 1429 (1978); *Amendment of Part 65 of
    the Commission's Rules to Prescribe Components of the Rate Base and
    Net Income of Dominant Carriers*, CC Docket No. 86-497, Report and
    Order, 2 FCC Rcd 269 (1987), *recon*., 4 FCC Rcd 1697 (1989). Under
    these principles, the Commission examines whether the expense
    promotes customer benefits, or is primarily for the benefit of the
    carrier.

[^32]: This declaration was filed in support of a formal complaint in
    Qwest Communications Corporation v. Farmers and Merchants Mutual
    Telephone Company, File No. EB-07-MD-001 at Exh. C (filed May 2,
    2007). The declaration is hereby incorporated in this proceeding.

[^33]: We note that, once Reasnor's rates are established at just and
    reasonable levels, it will be subject to the conclusions reached on
    the other issues designated in this order.

[^34]: *See supra* n. 31.

[^35]: It is well established that there is a large fixed cost to
    purchasing a local switch and that the marginal or incremental cost
    of increasing the capacity of a local switch are low (some contend
    that they are zero) and certainly less than the average cost per
    minute of the local switch. Thus, if the average revenue per minute
    remains constant as demand grows, but the average cost per minute
    falls (which occurs if the marginal cost per minute is less than the
    average cost per minute), then profits (or return) will rise. *See
    supra*. N. 30.

[^36]: *See* AT&T Petition at 10; Verizon Petition at 10; Qwest Petition
    at 9. The Qwest petition was conditional, requesting suspension and
    investigation only if the carriers refuse to certify that they have
    no reason to believe that their rates would increase by 300 percent
    during the tariff period, and that, if they do, the carrier will
    file revised tariff rates. *Id*.

[^37]: *See, e.g.*, AT&T Petition at 14; Verizon Petition at 13.

[^38]: *See* Sprint Nextel Petition at 2-3.

[^39]: *Small Carrier Tariff Order*, 2 FCC Rcd at 3812, para. 7.

[^40]: *See* 47 U.S.C. § 204(a)(3).

[^41]: 47 C.F.R. § 61.39(b).

[^42]: Those materials may be found on the Commission's Electronic
    Tariff Filing System at
    [[http://www.fcc.gov/wcb/iatd/neca.html]{.underline}](http://www.fcc.gov/wcb/iatd/neca.html)
    (reflecting sizeable traffic growth for a significant number of
    carriers)..

[^43]: We recognize that average schedule carriers will only be able to
    produce total company data reflecting increased investment and
    expenses beyond those investments and expenses associated with its
    operations as of the beginning of the tariff period. This should not
    significantly alter the conclusions because most cost increases are
    likely to be associated with interstate usage. Cost company data may
    also be used to confirm the reliability of the average schedule
    results.

[^44]: *Streamlined Tariff Order*, 12 FCC Rcd at 2197, para. 52.

[^45]: 47 C.F.R. §61.39(b)(2)(II).

[^46]: The repeated filings could result because the lower switched
    access rate could mean that the compensation that is integral to
    these operations could not be paid, and the LECs would have to
    terminate them. This could lead to the LECs filing revised rates to
    reflect the anticipated lower demand.

[^47]: *Suspension Order* at 2-3, paras. 4-6.

[^48]: *See* *Call Blocking Order* at 3, para. 4.

[^49]: We believe that the selection of 60 days and 100 percent will
    achieve the limited purpose for which they are intended pending the
    resolution of the rulemaking proceeding. We will address the
    lawfulness of the tariffs of the carriers filing the tariff language
    in the order concluding this investigation. We encourage carriers to
    discuss possible tariff language with Commission staff before making
    the tariff filing. A carrier is not precluded from seeking
    permission to be excused from the obligation to make the tariff
    filing if it believes that the circumstances are such that the
    existing rates will not be unjust or unreasonable.

[^50]: This does not limit a carrier's ability to make carrier-initiated
    tariff filings. *See supra* para. 2 n.5.

[^51]: 47 C.F.R. §§ 1.1200, 1.1206; Amendment of 47 C.F.R. § 1.1200 *et
    seq*. Concerning Ex Parte Presentations in Commission Proceedings,
    GC Docket No. 95-21, *Report and Order*, 12 FCC Rcd 7348 (1997).

[^52]: 47 C.F.R. § 1.1206(b)(2).