SUMMARY OF MAG ITEM
 
Order
	The Order increases the caps on subscriber line charges (SLCs) to the levels paid by most 
subscribers nationwide.  The residential and single-line business SLC cap will increase to $5.00 on 
January 1, 2002, and may increase up to $6.00 on July 1, 2002, and $6.50 on July 1, 2003, subject to 
a cost review study for the SLC caps of price cap carriers.  The multi-line business SLC cap will 
increase to $9.20 on January 1, 2002.  Lifeline support will be increased in an amount equal to any 
SLC rate increases for low-income subscribers.  
	The Order allows limited SLC deaveraging, which will enhance the competitiveness of rate-of-return 
carriers by giving them important pricing flexibility.  The SLC deaveraging method is consistent 
with the Rural Task Force universal service support disaggregation scheme. 
	The Order reforms the local switching and transport rate structure.  In particular, it shifts the non-
traffic sensitive costs of local switch line ports to the common line category, and reallocates the 
remaining costs contained in the Transport Interconnection Charge to other access rate elements.  
These measures align the rate structure more closely with the manner in which costs are incurred and 
reduce per-minute switched access charges.
	The Order creates a new universal service support mechanism, Interstate Common Line Support, to 
convert implicit support in the rate structure to explicit support that is available to all eligible 
telecommunications carriers.  Specifically, Interstate Common Line Support will replace the carrier 
common line (CCL), which will be phased out as of July 1, 2003, when SLC caps reach their 
maximum levels.  The new support mechanism will ensure that changes in the rate structure do not 
affect the overall recovery of interstate access costs by rate-of-return carriers serving high-cost areas.    
	The Order does not adopt proposals to prescribe a single, target rate for per-minute charges, either on 
an optional or a mandatory basis.  The reforms adopted in the Order will reduce per-minute charges 
for all rate-of-return carriers, while giving them the flexibility to establish rates based on their own 
costs in the areas they serve. 
	The Order streamlines the rules for introduction of new access services by rate-of-return carriers.
	The Order terminates the proceeding on the represcription of the authorized rate-of-return, which 
was set at 11.25 percent in 1990.
	The Order does not adopt MAG proposals to impose new requirements on interexchange carriers.  
The Order concludes that the proposed requirements are unnecessary, inconsistent with the 
Commission's deregulatory approach to the interexchange services market, and would entail undue 
administrative costs and burdens.
Further Notice of Proposed Rulemaking
	The Further Notice seeks additional comment on the MAG incentive plan and how it might be 
modified to provide incentives for cost efficiency gains that will benefit consumers through lower 
rates and improved services.  The Further Notice also requests further comment on the MAG's 
proposed changes to the "all-or-nothing rule," on additional pricing flexibility measures, and on the 
continued need for the Long Term Support mechanism in light of the reforms adopted in the Order. 
 
 
(...continued from previous page)
(continued....)
		                    October 11, 2001