Source: https://www.law.cornell.edu/cfr/text/47/51.505
Timestamp: 2016-02-09 06:12:39
Document Index: 436797706

Matched Legal Cases: ['art 51', '§ 51', '§ 51', '§ 51', '§ 51', '§ 51', '§ 51', '§ 51', '§ 51', '§ 151', '§ 152', '§ 153', '§ 154', '§ 155', '§ 157', '§ 201', '§ 202', '§ 203', '§ 204', '§ 205', '§ 207', '§ 208', '§ 209', '§ 218', '§ 220', '§ 225', '§ 226', '§ 227', '§ 251', '§ 252', '§ 253', '§ 254', '§ 256', '§ 271', '§ 303', '§ 332']

47 CFR 51.505 - Forward-looking economic cost. | US Law | LII / Legal Information Institute
CFR › Title 47 › Chapter I › Subchapter B › Part 51 › Subpart F › Section 51.505 47 CFR 51.505 - Forward-looking economic cost.
The total element long-run incremental cost of the element, as described in paragraph (b); and
A reasonable allocation of forward-looking common costs, as described in paragraph (c).
Total element long-run incremental cost.
Efficient network configuration.
Forward-looking cost of capital.
Reasonable allocation of forward-looking common costs—
Forward-looking common costs.
The sum of a reasonable allocation of forward-looking common costs and the total element long-run incremental cost of an element shall not exceed the stand-alone costs associated with the element. In this context, stand-alone costs are the total forward-looking costs, including corporate costs, that would be incurred to produce a given element if that element were provided by an efficient firm that produced nothing but the given element.
The sum of the allocation of forward-looking common costs for all elements and services shall equal the total forward-looking common costs, exclusive of retail costs, attributable to operating the incumbent LEC's total network, so as to provide all the elements and services offered.
Factors that may not be considered.
Embedded costs.
Retail costs include the costs of marketing, billing, collection, and other costs associated with offering retail telecommunications services to subscribers who are not telecommunications carriers, described in § 51.609;
Revenues to subsidize other services.
Cost study requirements.
A state commission may set a rate outside the proxy ranges or above the proxy ceilings described in § 51.513 only if that commission has given full and fair effect to the economic cost based pricing methodology described in this section and § 51.511 in a state proceeding that meets the requirements of paragraph (e)(2) of this section.
Any state proceeding conducted pursuant to this section shall provide notice and an opportunity for comment to affected parties and shall result in the creation of a written factual record that is sufficient for purposes of review. The record of any state proceeding in which a state commission considers a cost study for purposes of establishing rates under this section shall include any such cost study.
§ 51.505 Forward-looking economic cost.
In general. The forward-looking economic cost of an element equals the sum of: (1) The total element long-run incremental cost of the element, as described in paragraph (b); and (2) A reasonable allocation of forward-looking common costs, as described in paragraph (c). (b)
Total element long-run incremental cost. The total element long-run incremental cost of an element is the forward-looking cost over the long run of the total quantity of the facilities and functions that are directly attributable to, or reasonably identifiable as incremental to, such element, calculated taking as a given the incumbent LEC's provision of other elements. (1)
Efficient network configuration. The total element long-run incremental cost of an element should be measured based on the use of the most efficient telecommunications technology currently available and the lowest cost network configuration, given the existing location of the incumbent LEC's wire centers. (2)
Forward-looking cost of capital. The forward-looking cost of capital shall be used in calculating the total element long-run incremental cost of an element. (3)
Depreciation rates. The depreciation rates used in calculating forward-looking economic costs of elements shall be economic depreciation rates. (c)
Reasonable allocation of forward-looking common costs - (1)
Forward-looking common costs. Forward-looking common costs are economic costs efficiently incurred in providing a group of elements or services (which may include all elements or services provided by the incumbent LEC) that cannot be attributed directly to individual elements or services. (2)
(i) The sum of a reasonable allocation of forward-looking common costs and the total element long-run incremental cost of an element shall not exceed the stand-alone costs associated with the element. In this context, stand-alone costs are the total forward-looking costs, including corporate costs, that would be incurred to produce a given element if that element were provided by an efficient firm that produced nothing but the given element. (ii) The sum of the allocation of forward-looking common costs for all elements and services shall equal the total forward-looking common costs, exclusive of retail costs, attributable to operating the incumbent LEC's total network, so as to provide all the elements and services offered. (d)
Factors that may not be considered. The following factors shall not be considered in a calculation of the forward-looking economic cost of an element: (1)
Embedded costs. Embedded costs are the costs that the incumbent LEC incurred in the past and that are recorded in the incumbent LEC's books of accounts; (2)
Retail costs. Retail costs include the costs of marketing, billing, collection, and other costs associated with offering retail telecommunications services to subscribers who are not telecommunications carriers, described in § 51.609; (3)
Opportunity costs. Opportunity costs include the revenues that the incumbent LEC would have received for the sale of telecommunications services, in the absence of competition from telecommunications carriers that purchase elements; and (4)
Revenues to subsidize other services. Revenues to subsidize other services include revenues associated with elements or telecommunications service offerings other than the element for which a rate is being established. (e)
Cost study requirements. An incumbent LEC must prove to the state commission that the rates for each element it offers do not exceed the forward-looking economic cost per unit of providing the element, using a cost study that complies with the methodology set forth in this section and § 51.511. (1) A state commission may set a rate outside the proxy ranges or above the proxy ceilings described in § 51.513 only if that commission has given full and fair effect to the economic cost based pricing methodology described in this section and § 51.511 in a state proceeding that meets the requirements of paragraph (e)(2) of this section. (2) Any state proceeding conducted pursuant to this section shall provide notice and an opportunity for comment to affected parties and shall result in the creation of a written factual record that is sufficient for purposes of review. The record of any state proceeding in which a state commission considers a cost study for purposes of establishing rates under this section shall include any such cost study. This is a list of United States Code sections, Statutes at Large, Public Laws, and Presidential Documents, which provide rulemaking authority for this CFR Part.This list is taken from the Parallel Table of Authorities and Rules provided by GPO [Government Printing Office].It is not guaranteed to be accurate or up-to-date, though we do refresh the database weekly. More limitations on accuracy are described at the GPO site.United States CodeU.S. Code: Title 47 - TELECOMMUNICATIONS§ 151 - Purposes of chapter; Federal Communications Commission created§ 152 - Application of chapter§ 153 - Definitions§ 154 - Federal Communications Commission§ 155 - Commission§ 157 - New technologies and services§ 201 - Service and charges§ 202 - Discriminations and preferences§ 203 - Schedules of charges§ 204 - Hearings on new charges; suspension pending hearing; refunds; duration of hearing; appeal of order concluding hearing§ 205 - Commission authorized to prescribe just and reasonable charges; penalties for violations§ 207 - Recovery of damages§ 208 - Complaints to Commission; investigations; duration of investigation; appeal of order concluding investigation§ 209 - Orders for payment of money§ 218 - Management of business; inquiries by Commission§ 220 - Accounts, records, and memoranda§ 225 - Telecommunications services for hearing-impaired and speech-impaired individuals§ 226 - Telephone operator services§ 227 - Restrictions on use of telephone equipment§ 251 - Interconnection§ 252 - Procedures for negotiation, arbitration, and approval of agreements§ 253 - Removal of barriers to entry§ 254 - Universal service§ 256 - Coordination for interconnectivity§ 271 - Bell operating company entry into interLATA services§ 303 - Powers and duties of Commission§ 332 - Mobile services