Rhode Island Code of Regulations › Title 810 - Public Utilities Commission › Chapter 20 - Telecommunications › Subchapter 00 - N/A › Part 2 - Regulations Regarding "Avoided Cost" for Development of Wholesale Discounts from Retail Rates (810-RICR-20-00-2) › Section 810-RICR-20-00-2.4 - Calculation of Avoided Cost Discount

Current through June 14, 2024
A. When calculation
				 the avoided cost discount for wholesale rates, the incumbent local exchange
				 carrier shall start with its jurisdictionally separated costs for the State of
				 Rhode Island. From the jurisdictionally separated accounts, it will make the
				 following calculations in its cost study of retail avoided costs to produce two
				 components (direct cost component and an indirect cost component) of the total
				 avoided cost discount:
1. Include as avoided
				 direct costs the intrastate costs in USOA accounts 6611 (product management),
				 6612 (sales), 6613 (product advertising), 6621 (call completion services), 6622
				 (number services), and 6623 (customer services). The sum of these intrastate
				 costs will be divided by intrastate revenues to yield the direct avoided cost
				 discount component of the total avoided cost discount.
2. Include as avoided indirect costs a portion
				 of the intrastate costs included in USOA accounts 6121-6124 (general support
				 expenses), 6711, 6712, 6721-6728 (corporate operations expenses), and 5301
				 (telecommunications uncollectables). These intrastate costs are assumed to be
				 avoided in the same proportion to total intrastate revenues as direct costs are
				 avoided, as defined in §
											2.4(A)(1)     of
				 this Part above, to yield the indirect avoided cost discount component of the
				 total avoided cost discount.
3. The
				 total avoided cost discount will be the sum of the direct avoided cost component
				 as described in §
											2.4(A)(1)     of
				 this Part above, and the indirect avoided cost component, as described in §
											2.4(A)(2)     of
				 this Part above.
4. Not included
				 plant-specific expenses and plant non-specific expenses other than general
				 support expenses, that is, not included accounts 6110-6116 and 6210-6565, except
				 as provided above.
5. Costs included
				 in accounts 6611-6613 and 6621-6623 may be included in wholesale rates (that is,
				 excluded from the avoided costs) only to the extent that a party demonstrates
				 that specific costs in these accounts will be incurred and are not avoidable with
				 respect to services sold at wholesale, or that specific costs in these accounts
				 are not included in the costs of services sold at retail. Costs included in
				 accounts 6110-6116 and 6210-6565 may be treated as direct avoided costs (see
				 §
											2.4(A)(3)     of
				 this Part above), and excluded from wholesale rates only to be the extent that a
				 party demonstrates that specific costs in these accounts can reasonably be
				 avoided when an incumbent local exchange carrier provides a telecommunications
				 service to a requesting carrier for resale.
6. An incumbent local exchange carrier may
				 include up to one (1) per cent of the amount in account 5301 (telecommunications
				 uncollectables) in its resale rates to compensate itself for the risk we impose
				 upon it by requiring that it continue to serve the ultimate customers, without
				 interruption, in the event of default by the carrier reselling its
				 services.