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Attach FilesAttachRetrieve Files &R"Sh5^18MSS888S8888SSSSSSSSSS88Jxir{icx{8Aui{x`xoYi{xxxl888SS8JSJSJ8SS..S.SSSS>A.SSxSSJJSJSSSSSS8SSSSSSSSS.xJxJxJxJxJorJiJiJiJiJ8.8.8.8.{SxSxSxSxS{S{S{S{SxSxJ{SxSxSxS{S`SxSxSxSrSrSrS{SiSiSiSiSxSxSxSxSxS{S{SS.SSSSz]SSuSiSiSk2g/a{S{SxSxSxoSoSZ?YSYSiSiSiS{S{S{S{SxxSkI8SS888WxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNxxxSSS8JDDSSSSSS;SSSS;88VVS++SSffSSxSc]]8VS;"xxSxWxxS唔S88xfxxxxxxxxxxx8SxS]SxoS8SxJS`xlxxxxxxxxxxMxxxxxxofxGcxxxxxxxSxxxxxxxJxxxxJxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx8xxx8xxx8xxx8xxxxxxxxxxxxxxfi]f]oJiAlJ{SxJ8.uJo]]{JoSxJxf`SfSSiJxJofx]fffxi{8SxxxfJffff88SSSSx{SSSxxxf8`SJ88`SJ8Muu]daqqZZnn{{xu{{M{aZZ5M5M҅P?k2N`ƙ"Sh5^;C]ddCCCdCCCCddddddddddCCȲY~~vCN~sk~CCCddCYdYdYCdd88d8ddddJN8ddddYYdYddddddCddddddddd8YYYYYY~Y~Y~Y~YC8C8C8C8ddddddddddYdddddsdddddddd~d~d~d~ddddddddd8ddddoddd~d~d<|8tddddddlLkdkd~d~d~ddddddXCddCCCWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNdddCYQQddddddFddddFCChhd44ddzzdddvooChdF"Ȑdhd岲dCCȐzȲxCddodȐȅdCdYdsȐ]ȐȐȧzȐUvŐdȐYYCCCCŐz~ozoY~NYdYC8YooYdYzsdzdd~YYzozzz~CdzYzzzzCCdddddddzCsdYC"Sh5^18PSS888S8888SSSSSSSSSS88Sddoxd`xx8Jo]oxdxdS]xdd]]888SS8SSJSJ.SS..J.xSSSS??.SJoJJ?JSJSSSSSS8SSSSSSSSS.dSdSdSdSdSooJdJdJdJdJ8.8.8.8.oSxSxSxSxSxSxSxSxS]JdSxSxSxS]JxSdSdSdSdSoSoSoSxSdSdSdSdSxSxSxSxSxSxSxSS/SSSSSSSoS]S]S]/]/doSoSxSxSodSdSS?SSSS]S]S]SxSxSxSxSo]S]?8SS888WxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNxxxSSS8SMMSSSSSS;SSSS;88SSS..SSffSSxSYSS8SS;"xxSxSxxS哓S88xfxxxxxxxxxxx8SfS]SxoS8SxJS`xlxxxxxxxxxxMxxxxxxofxGcxxxxxxxSxxxxxxxJxxxxJxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx8xxx8xxx8xxx8xxxxxxxxxxxxxfff]f]oJfA]JxSxJ8.oJo]]oJoSxJxffSfSS]J]Joff]fffffx8Sx]]fJffff88SSSSfxSSS]]]f8`SJ8dYC\   pxtll\tll@\@\`L"Sh5^;C]ddCCCdCCCCddddddddddCCȲdxN`xoȐCCCddCdoYoYFdo8Co8odooYNCodddYdddddddddCddddddddo8dddddϐYYYYYN8N8N8N8oddddooooddoddddxoddddddodddddddddood8doddrddoddN8ooddddoNododdddooooȐdYCddCCCWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNdddCdUUddddddFddddFCCssd44ddzzddd~ooCsdF"Ȑdsd岲dCCȐzȲxCddodȐȅdCdYdsȐ`ȐȐȮzȐUvŐdȐddCCCCŐzozoYNYYYN8YooYdYzzdzddYYzozzzNdzYzzzzCCdddddddzCzdYCȐCddoddCdYds`zUvdddCCCCzozoYNYYYN8YooYdYzzdzddYYzozzzNdzYzzzzCCdddddddzCzdYC\   pxtll\tll@\@\`L"Sh5^$(8<><q*"xxxxWWxxxWWkkxxx:J2J2H2H2YHC2C26&6262?2?2?2J2J2J2J2^HH2@,!22!!!WddddddddddddddddddddddddddddddddddddddddddddddddxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNHHH222!,))22X222YY2#2222Y#!!442Ydd22==Ld2d2H2;SS88Y!42^x#"ddddHHddd2Hdd4HHYYddd2YYddd Y2!!dddddH=dYHHHHHHHHHHx!d2H282YdHdC2!2H,29HNAddHHHHHHHHHHddddd.dHHHHdddddddddddddddddddHHddddddSC=NdHddd+;HHHHddddddHHH2HHdHHdddHHH,HHHH,HHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH!HHH!HHH!HHH!HHHHHHHHHHHHHH=?8=8C,?'A,J2H,!F,C8[8J,C2H,H=92=22?,H,C=H8N===H?J!2HHH=,====!!2222HJ222HHH=!92,!d!92,!ddhrZz.lZrrvvnFFZ8UAC` ` 1.  Local exchange carriers ("LECs") are regulated at the interstate level either  Y-  as "cost companies," as "price cap companies," or as "average schedule companies." xP'-  jԍ In addition, cost study companies and average schedule companies are permitted to file their own tariffs on  zP-the basis of compensation that was received in earlier time periods. See 47 C.F.R.  61.39. Cost   Lcompanies are those companies that receive compensation for the use of their facilities in   originating and terminating interstate common carrier communications services on the basis of   their actual interstate costs of performing those functions. To determine their actual interstate   costs, cost companies perform studies of their total costs in accordance with the requirements  Y;-  ;that are contained in Parts 32, 36, and 64 of the Commissions rules.O;" zP!-ԍ See 47 C.F.R. Parts 32, 36, 64.O Price cap companies are   <companies that once were cost study companies, for which rates were subsequently capped  Y -  in accordance with rules that were adopted by the Commission.  zPr$- m u%}- "5%')=,.0E357M:<>UACX` hp x (#%'0*,.8135@8:UACX` hp x (#%'0*,.8135@8:UACX` hp x (#%'0*,.8135@8:0ԍ See, generally, Further Modification at 1.Z The Further Modification also included  P"! a request to approve a onetime settlement to permit average schedule companies to recover the  P" costs associated with the Commission's Universal Service Fund ("USF") data request  Y40 P"! immediately.q 4} zP#0ԍ See Further Modification at IV34, 35 and VI1 to 3, respectively.q On April 4, 1995, we invited comments on NECA's 1995 Further Modification  P" to determine whether the modifications that were proposed by NECA comply with Section"8 0*(("  Y0 P"p 69.606(a) of the Commission's rules.#X P 7[hXP# $} zPy0 P"ԍ National Exchange Carrier Association, Inc., 1995 Further Modification of Average Schedules, Public  zPC0 P"` Notice, DA 95632, released April 4, 1995 (Com. Car. Bur.). Comments ("Further Modification comments") were  P" filed by AT&T, ICORE, NTCA, OPASTCO, AND USTA. MCI filed an Opposition. Reply comments ("Further Modification replies") were filed by ICORE, MCI, NECA, AND NTCA.#Xw P 7[hXP# No party objected to the revised TSCO formulas that  P" NECA filed on March 17, 1995. As a consequence, with the exception of NECA's special  P"` revenue requirement adjustment related to regulatory fees, which is discussed in more detail  P"0! below, the revisions to the average schedule formulas proposed by NECA, and as modified by  P" NECA in its March 17, 1995 filing, are approved with an effective date of July 1, 1995.  P"! NECA is also directed, in consultation with the Common Carrier Bureau, to perform additional  P"P research to modify the TSCO formula. NECA is also directed to consult with the Common  P"! Carrier Bureau for the development by NECA of calculations and procedures that will preclude  P"`! the multiple recovery, by average schedule companies, of the costs of complying with the USF data request. l l  Y 0` ` 5 II. PLEADINGS  X 0` ` A. NECA's 1994 Filing ` `  Y0 ` ` ` ` 3. Average schedule companies receive compensation for the costs of  Yz0 P" providing interstate access pursuant to formulas that became effective July 1, 1994. z} zP0 P"0ԍ National Exchange Carrier Association, Inc., Memorandum Opinion and Order, 9 FCC Rcd 3266 (Com.  zP0 P"Car. Bur. 1994) ("1994 Average Schedule Order"). The formulas currently in effect are referred to herein as the  P""1994 Schedules." NECA's December 30, 1994 filing proposing the 1995 schedules is referred to as the "1994  P"Filing." The data and analysis upon which the 1994 Filing was based are referred to as the "1994 Study." Similar nomenclature is followed with respect to other years' filings. NECA  P" states that its proposed revisions to the average schedule formulas are based on a "ground up"  YL0 P" study, similar in detail to those employed by NECA in 1991, 1992, and 1993. Lh } xPe0ԍ Appendix F of the 1994 Filing contains flowcharts that describe NECA's study methodology. NECA states  P" that the proposed formulas will produce settlements from July 1, 1995 through June 30, 1996  P" that simulate disbursements that would be received during that period by a cost company that  P" is representative of average schedule companies, as required by Section 69.606(a) of the  Y0Commission's rules.B } xP!0ԍ 47 C.F.R. 69.606(a).B  Y0 `  ` ` 4. NECA further states that the cumulative net effect of the formula changes  Y0 P"@ is an increase of 0.3 percent in payments to the average schedule companies. } xP%0 P"ԍ 1994 Filing at Section I2. This figure is based on NECA's analysis of the proposed formula changes relative to those currently in effect, with demand held constant. Specifically,  P"0 NECA states that average schedule companies should experience an average decrease of 2.0"0*(("  P"` percent below current settlement levels for the common line portion of their settlements and  Y0 P"@ average increases of 2.0 percent above current settlements for the traffic sensitive portion.} zPb0 P" ԍ Id. NECA explains that the net effect is not zero because the traffic sensitive settlements constitute a larger portion of total average schedule settlements.  P" NECA states that average schedule companies with fewer than 10,000 access lines, which  P"p constitute 93 percent of all average schedule exchange carriers, will generally experience  Y0 P"0! settlement increases for each central office while larger average schedule companies are likely  P" to experience small settlement decreases for each central office. NECA attributes these  P"P! differences to: (1) smaller companies experiencing more rapid total company cost growth than  P"! larger companies; (2) smaller companies allocating a higher proportion of local switching costs  P" to the interstate jurisdiction due to growth in the weighted Dial Equipment Minutes ("DEM")  P"! allocator; and (3) smaller companies typically obtaining more of their total settlements from the  Y 0central office formula, which is increasing, than do larger companies.= "} xP 0ԍ 1994 Filing at I2.=     X 0   B. Comments 1994 Filing   m m  Y 0 `    ` ` 5. ICORE, NTCA, OPASTCO, and USTA urge the Commission to approve  P"! the proposed schedules. ICORE also states that average schedule companies must be reimbursed  Y0 P" for the costs of completing the Commission's Universal Service Fund ("USF") data request.\} xP0 P"  I. A. 1. a.(1)(a) i) a) I. A. 1. a.(1)(a) i) a)#Xw P7[hXP# m u%}- "5%')=,.0E357M:<>UAC m u%}- "5%')=,.0E357M:<>UAC m u%}- "5%')=,.0E357M:<>UACX` hp x (#%'0*,.8135@8:UACICORE 1994 Filing comments at 4. The USF data request required exchange carriers to provide information  zP0 P" for use in the Commission's Universal Service Fund proceeding. See, generally, Notice of Inquiry, 9 FCC Rcd  zP07404 (1994); Order, 9 FCC Rcd 7962 (1994).  P"`! ICORE argues that absent some cost recovery mechanism, average schedule companies will not  P"! properly recover these very specific onetime costs. ICORE contends that the USF data request  P"P entails onetime, nonrecurring costs rather than annual, ongoing fees, and thus a special  P"! reimbursement seems more appropriate than an acrosstheboard revenue requirement adjustment  P" built into the schedules. ICORE states that 80 to 100 hours for average schedule companies  P"` to complete USF data requests, at loaded labor costs of $50 to $60 per hour may be more  Y0 P"  accurate than the FCC's estimated 60 to 80 hours.G} Yw0 I. A. 1. a.(1)(a) i) a) I. A. 1. a.(1)(a) i) a)#Xw P7[hXP# m u%}- "5%')=,.0E357M:<>UAC m u%}- "5%')=,.0E357M:<>UAC m u%}- "5%')=,.0E357M:<>UACX` hp x (#%'0*,.8135@8:UAC#Xw P7[hXP# #c P7P##c P7P#Id. at 7.#Xw P7[hXP#G ICORE thus recommends a onetime  Y0reimbursement of $5,000 to compensate each average schedule company.; } zP!0ԍ  Id. ;  m u%}- "5%')=,.0E357M:<>UAC` hp x (#%'0*,.8135@8:UAC m u%}- "5%')=,.0E357M:<>UACX` hp x (#%'0*,.8135@8:UAC NTCA 1994 Filing comments at 23. OPASTCO states that it agrees with NECA's proposed modifications. USTA states"} 0*(( "  Y0that it strongly supports NECA's proposed modifications. Yy0 I. A. 1. a.(1)(a) i) a) I. A. 1. a.(1)(a) i) a)#Xw P7[hXP#` hp x (#%'0*,.8135@8:UAC m u%}- "5%')=,.0E357M:<>UACX` hp x (#%'0*,.8135@8:UAC #c PE37P#USTA 1994 Filing comments at 3.#Xw PE37[hXP# ` `  Y0 `  ` ` 7. In its reply comments, NECA states that it agrees that average schedule  P"! companies should be afforded the opportunity to recover the costs of preparing responses to the  Y0 P"0 USF data request,(y Y0 I. A. 1. a.(1)(a) i) a) I. A. 1. a.(1)(a) i) a)#Xw P7[hXP#` hp x (#%'0*,.8135@8:UAC m u%}- "5%')=,.0E357M:<>UACX` hp x (#%'0*,.8135@8:UAC#Xw P7[hXP# #c PE37P#NECA 1994 Filing replies at 5.#Xw PE37[hXP#( and that it will make such a proposal in a subsequent filing with this  Y0 P" Commission.* Yh 0 I. A. 1. a.(1)(a) i) a) I. A. 1. a.(1)(a) i) a)#Xw P7[hXP#` hp x (#%'0*,.8135@8:UAC m u%}- "5%')=,.0E357M:<>UACX` hp x (#%'0*,.8135@8:UAC#Xw P7[hXP# #c P7P# Id.#Xw P7[hXP#  NECA also states that its proposed revisions to the average schedules have  P" received support from ICORE, NTCA, OPASTCO, and USTA, and that no party had filed  Y_0comments in opposition to NECA's average schedule filing._ Y 0 I. A. 1. a.(1)(a) i) a) I. A. 1. a.(1)(a) i) a)#Xw P7[hXP#` hp x (#%'0*,.8135@8:UAC m u%}- "5%')=,.0E357M:<>UACX` hp x (#%'0*,.8135@8:UAC#Xw P7[hXP# #c P7P# Id. at 7.  Y10 `  ` ` 8. In its reply comments, ICORE reiterates its proposal that the average  P"" schedule companies be granted a special reimbursement to cover the costs of completing the USF  P"0 data request. In addition, ICORE states that all commenters agree that NECA's proposed  P"P average schedule modifications are in compliance with Commission rules, and ICORE urges  Y 0 P" adoption effective July 1, 1995.)  Y0 I. A. 1. a.(1)(a) i) a) I. A. 1. a.(1)(a) i) a)#Xw P 7[hXP#` hp x (#%'0*,.8135@8:UAC m u%}- "5%')=,.0E357M:<>UACX` hp x (#%'0*,.8135@8:UAC#Xw P7[hXP# #c PE37P#ICORE 1994 Filing replies at 4.#Xw PE37[hXP#) NTCA states that the expedited schedule for completion of  P"P the USF data request, together with average schedule companies' relative inexperience with  P"P! jurisdictional separations rulemaking data requests, caused these companies to incur substantial  P"@! expenses in staff time and outside resource assistance and average schedule companies should  Yy0 P" recover their USF data request expenses through a special schedule settlement.(y=  Yg0 I. A. 1. a.(1)(a) i) a) I. A. 1. a.(1)(a) i) a)#Xw P!7[hXP#` hp x (#%'0*,.8135@8:UAC m u%}- "5%')=,.0E357M:<>UACX` hp x (#%'0*,.8135@8:UAC#Xw P7[hXP# #c PE37P#NTCA 1994 Filing replies at 2.#Xw PE37[hXP#( USTA  P"p! recommends that the Commission allow NECA to modify the 1995 average schedules to permit  YK0immediate recovery of these costs.(K  Y0 I. A. 1. a.(1)(a) i) a) I. A. 1. a.(1)(a) i) a)#Xw P"7[hXP#` hp x (#%'0*,.8135@8:UAC m u%}- "5%')=,.0E357M:<>UACX` hp x (#%'0*,.8135@8:UAC#Xw P7[hXP# #c PE37P# USTA 1994 Filing replies at 2.#c PE37P#(  Y0 `  ` ` 9. MCI opposes ICORE's suggestion that average schedule formulas be  P" adjusted to recover the costs that average schedule companies incurred in complying with the  Y0 P" USF data request.   Y?#0 I. A. 1. a.(1)(a) i) a) I. A. 1. a.(1)(a) i) a)#Xw P#7[hXP#` hp x (#%'0*,.8135@8:UAC m u%}- "5%')=,.0E357M:<>UACX` hp x (#%'0*,.8135@8:UAC#c P7P# MCI opposition to ICORE comments at 1.#Xw PE37[hXP#  MCI states that ICORE's suggestion is inconsistent with the average  Y0 P"! schedule regime, unnecessary, and unsupported.P Y%0 I. A. 1. a.(1)(a) i) a) I. A. 1. a.(1)(a) i) a)#Xw P$7[hXP#` hp x (#%'0*,.8135@8:UAC m u%}- "5%')=,.0E357M:<>UACX` hp x (#%'0*,.8135@8:UAC Id. #Xw P7[hXP# MCI argues that overhead costs, such as legal"0*(( "  Y0 P"" and regulatory costs, are already embedded in current and proposed average schedule formulas. Yy0 I. A. 1. a.(1)(a) i) a) I. A. 1. a.(1)(a) i) a)#Xw P%7[hXP#` hp x (#%'0*,.8135@8:UAC m u%}- "5%')=,.0E357M:<>UACX` hp x (#%'0*,.8135@8:UAC #c PE37P#Id. at 2.#Xw PE37[hXP#  P"! MCI contends that NECA's recent data request to enable it to comply with a Commission data  P"! filing requirement in the USF docket, therefore, is no different than a myriad of other legal and  P" regulatory costs that are embedded in the average schedules. MCI states that even if the  P"! expenses associated with complying with this USF data request were materially different in size  P"` and type from other regulatory and legal costs, the average schedule companies would  Yv0 P"" nevertheless be compensated when the formulas are automatically adjusted.: vy Y 0 I. A. 1. a.(1)(a) i) a) I. A. 1. a.(1)(a) i) a)#Xw P&7[hXP#` hp x (#%'0*,.8135@8:UAC m u%}- "5%')=,.0E357M:<>UACX` hp x (#%'0*,.8135@8:UAC #c P7P##c PE37P#Id.#Xw PE37[hXP#: MCI further states  P"" that adjusting the 1995 average schedules to recognize the costs of complying with the USF data  P" request is administratively burdensome, and if the average schedule companies wish to be  P" compensated for their actual cost of complying with the USF data request, they should be  Y 0 P" required to submit their actual costs rather than being compensated on the basis of an ad hoc  P"! estimate. MCI concludes that ICORE has not demonstrated that an average schedule adjustment  Y 0for USF data request expenses is required.!! * Y0 I. A. 1. a.(1)(a) i) a) I. A. 1. a.(1)(a) i) a)#Xw P'7[hXP#` hp x (#%'0*,.8135@8:UAC m u%}- "5%')=,.0E357M:<>UACX` hp x (#%'0*,.8135@8:UAC#c PE37P# Id. at 34.#Xw PE37[hXP#! ` `  X 0` ` C. NECA's 1995 Further Modification Filing  Y0 `   ` `  10. On March 17, 1995, NECA proposed further modifications to the TSCO  P" formula that it had filed on December 30, 1994. NECA states that this new TSCO formula  P" more accurately reflects the perunit costs of providing local switching services for interstate  P" access. In addition, NECA states that while a few high traffic volume study areas will  P" experience material settlement decreases, many study areas with lower traffic volumes will  P" experience slight settlement increases. NECA states that total settlements for all average schedule companies will remain unchanged from those contained in the 1994 Filing.  Y0 `  ` `  11. NECA also proposes a special, lump sum payment to each average  P" schedule company for the expenses associated with completing the Commission's USF data  Y0 P"! request." Y80 P" I. A. 1. a.(1)(a) i) a) I. A. 1. a.(1)(a) i) a)#Xw P(7[hXP#` hp x (#%'0*,.8135@8:UAC m u%}- "5%')=,.0E357M:<>UACX` hp x (#%'0*,.8135@8:UAC #c PE37P#See Amendment of Part 36 of the Commission's Rules Establishment of a Joint Board, CC Docket No. 80 zP! 0286, Order, 9 FCC Rcd 7962 (1994) ("USF data request").#Xw PE37[hXP# NECA requests a onetime payment of $2,478 to each average schedule company that  P" completed the data request. NECA states that on December 1, 1994 the Commission released  P"0 an order directing all exchange carriers to submit data to support the Commission's  Yg0 P"p! investigations related to the USF.V#gV Yn$0 I. A. 1. a.(1)(a) i) a) I. A. 1. a.(1)(a) i) a)#Xw P)7[hXP#` hp x (#%'0*,.8135@8:UAC m u%}- "5%')=,.0E357M:<>UACX` hp x (#%'0*,.8135@8:UAC#Xw P7[hXP# #c PE37P##c PE37P#Further Modification at VI1. #Xw PE37[hXP#V NECA asserts that absent the modification that it proposes,  P"  average schedule companies would experience a lengthy lag before these costs would be"P #0*(("  Y0 P"p recognized in future filings._$ xPy0 P"`  I. A. 1. a.(1)(a) i) a) I. A. 1. a.(1)(a) i) a)#Xw P*7[hXP#` hp x (#%'0*,.8135@8:UAC m u%}- "5%')=,.0E357M:<>UACX` hp x (#%'0*,.8135@8:UAC The data that are used to develop the average schedule formulas are based on cost study, and average schedule  zPA0 P" company, data that are several years old. See 1994 Filing passim. As a consequence, specific expenditures in 1995  P"would not be reflected in average schedule formulas until 1995 data were used in samples of average schedule and  P"cost companies. NECA also states that to prevent double compensation of these costs, it will adjust settlement  xP0formulas in future average schedule studies, when these costs do appear in average schedule company accounts.#Xw PE37[hXP#_ NECA states that in developing the proposed formula it  P"! determined that 70 hours represented the average time the companies spent to complete the USF  Y0 P" data request.%z Y0 P"@ I. A. 1. a.(1)(a) i) a) I. A. 1. a.(1)(a) i) a)#Xw P+7[hXP#` hp x (#%'0*,.8135@8:UAC m u%}- "5%')=,.0E357M:<>UACX` hp x (#%'0*,.8135@8:UAC#Xw P7[hXP# #c PE37P#Id. NECA states that 70 hours is the average of the Commission's estimate of 60 to 80 hours for average  xP 0schedule companies to complete the survey. #Xw PE37[hXP# NECA further states that it assigned a cost to this effort by using the  P"@" Miscellaneous Hourly Labor Rate published in its access charge tariff for Additional Engineering  P"! Services of $35.40 per hour, and NECA therefore estimated the average cost of responding to  Y0the USF data request to be $2,478.#X P,7[hXP#& W10 P" I. A. 1. a.(1)(a) i) a) I. A. 1. a.(1)(a) i) a)#Xw P-7[hXP#` hp x (#%'0*,.8135@8:UAC m u%}- "5%')=,.0E357M:<>UACX` hp x (#%'0*,.8135@8:UAC#Xw P7[hXP# #c PE37P# Id. at VI2. See National Exchange Carrier Association, Inc., Tariff F.C.C. No. 5, Transmittal No. 602,  zP0filed April 1, 1994, pages 1731 ("NECA 1994 Tariff"). #Xw PE37[hXP##Xw P.7[hXP#  X_0` ` D. Comments Further Modification Filing ` `  X10` ` 1. Modification of Traffic Sensitive Central Office Formula  Y 0 `  ` `  12. NECA states that it restructured the TSCO formula to respond to  P"`! Commission concerns that a few very high volume companies may have been overcompensated  P"p for their traffic sensitive costs under the 1994 formulas. While ICORE supports NECA's  P"! proposed revision to the TSCO formula, ICORE suggests that there is a need to compute central  Y 0 P"0! office average schedule settlements on an annual basisN ' n  Y0 P" I. A. 1. a.(1)(a) i) a) I. A. 1. a.(1)(a) i) a)#Xw P/7[hXP#` hp x (#%'0*,.8135@8:UAC m u%}- "5%')=,.0E357M:<>UACX` hp x (#%'0*,.8135@8:UAC #c PE37P#The average schedule formulas are administered on a monthly basis. As noted above, NECA proposes a  P"lower settlement rate for companies with more than 350 minutes per month. In recommending annual settlement  P" treatment for this settlement element, ICORE states that a simple example should suffice to demonstrate its concern.  P" An average schedule company may have three summer months with 500 TS minutes per access line, but an average  P"` of only 250 for the other nine months. For the annual period (the period on which small cost companies would base  P"P their weighted DEM) it would average 312.5 minutes per line, well below the 350 minute threshold, and be entitled  P"pto "full" settlements for the entire period. ICORE states that on a monthly basis, however, the same average  P"@ schedule company will experience reduced settlements for the three individual summer months and thus, it appears  P"that the company's TS minutes and resultant settlements should be "trued up" on an annual basis, or a rolling  xP 0 P"average of minutes and settlements be utilized, to adjust for seasonality. ICORE Further Modification comments  xP!0at 6.#Xw PE37[hXP#N and that carriers adversely affected by  Y0 P"p! NECA's formula revision be given a transition period before full settlement reductions occur.;( Y0$0 I. A. 1. a.(1)(a) i) a) I. A. 1. a.(1)(a) i) a)#Xw P07[hXP#` hp x (#%'0*,.8135@8:UAC m u%}- "5%')=,.0E357M:<>UACX` hp x (#%'0*,.8135@8:UAC #c PE37P#ICORE Further Modification comments at 56.#Xw PE37[hXP#;  P" ICORE argues that without some smoothing, or adjustment for seasonality, average schedule  Yb0 P"0" companies may experience unwarranted reductions in their traffic sensitive settlements.)b Y'0 I. A. 1. a.(1)(a) i) a) I. A. 1. a.(1)(a) i) a)#Xw P17[hXP#` hp x (#%'0*,.8135@8:UAC m u%}- "5%')=,.0E357M:<>UACX` hp x (#%'0*,.8135@8:UAC #c PE37P#Id. at 7.#Xw PE37[hXP# ICORE"bQ)0*(( "  P" comments that the adversely affected companies will now experience significant settlement  P"" reductions simply because of a formula change, rather than because of any change in their actual  Y0 P" costs or operations.@* YK0 I. A. 1. a.(1)(a) i) a) I. A. 1. a.(1)(a) i) a)#Xw P27[hXP#` hp x (#%'0*,.8135@8:UAC m u%}- "5%')=,.0E357M:<>UACX` hp x (#%'0*,.8135@8:UAC #c P7P##c PE37P#Id.#c PE37P#@ NTCA notes that NECA's 1995 Further Modification achieves an  P"! improved level of accuracy and addresses concerns expressed by Commission staff regarding the  P" possibility that very high traffic volume companies may receive settlements much in excess of  P"! that which a similarlysituated cost study LEC would receive. NTCA also states that this filing  P"` is a measured, and reasonable, response to the necessary objectives of the process and the  Y_0 P"`! Commission's concerns.2+_y Y 0 I. A. 1. a.(1)(a) i) a) I. A. 1. a.(1)(a) i) a)#Xw P37[hXP#` hp x (#%'0*,.8135@8:UAC m u%}- "5%')=,.0E357M:<>UACX` hp x (#%'0*,.8135@8:UAC#Xw P7[hXP# #c PE37P#NTCA Further Modification comments at 3.#Xw PE37[hXP#2 OPASTCO states that by accurately reflecting the lower perminute  P" cost of carrying higher volumes of traffic, NECA's modified TSCO formula will produce  P" settlements that more closely simulate average schedule companies' actual switching costs,  Y 0 P" particularly those with high minutes of use.5, * Y0 I. A. 1. a.(1)(a) i) a) I. A. 1. a.(1)(a) i) a)#Xw P47[hXP#` hp x (#%'0*,.8135@8:UAC m u%}- "5%')=,.0E357M:<>UACX` hp x (#%'0*,.8135@8:UAC#Xw P7[hXP# #c P7P##c PE37P#OPASTCO Further Modification comments at 5.5 USTA states that this proposed modification  P"! satisfactorily addresses any concerns that certain high volume average schedule companies could  Y 0recover excessive settlements.2-  Yx0 I. A. 1. a.(1)(a) i) a) I. A. 1. a.(1)(a) i) a)#Xw P57[hXP#` hp x (#%'0*,.8135@8:UAC m u%}- "5%')=,.0E357M:<>UACX` hp x (#%'0*,.8135@8:UAC#Xw P7[hXP# #c PE37P#USTA Further Modification comments at 2.#Xw PE37[hXP#2  Y 0 ` P ` `  13. In response, NECA states that it considered the annual administration  P" method during its formula development work and concluded that an annual method is not  P" required to simulate cost company settlements, and that the effort would entail significant  P"` additional complexity and administrative burden to exchange carriers with no material  P"! improvement in accuracy. NECA states that contrary to ICORE's contention, there is no need  P"! to compute average schedule settlements on an annual basis in order to "simulate" cost company  P"0 disbursements because the proposed formula itself is calculated in a manner that reflects the  Y0 P" annual revenue requirements of average schedule companies.1. YZ0 I. A. 1. a.(1)(a) i) a) I. A. 1. a.(1)(a) i) a)#Xw P67[hXP#` hp x (#%'0*,.8135@8:UAC m u%}- "5%')=,.0E357M:<>UACX` hp x (#%'0*,.8135@8:UAC #Xw P7[hXP# #c PE37P#NECA Further Modification replies at 8.#Xw PE37[hXP#1 NECA also states that it chose  P"! to avoid the very substantial complications that would be introduced if average schedules use an  P"" annual administration method, and proposed the same monthly method used for all other average  P"P schedule settlements. As a consequence, NECA recommends that the Commission not adopt  Y0 P" ICORE's proposal.5/=  Y!0 I. A. 1. a.(1)(a) i) a) I. A. 1. a.(1)(a) i) a)#Xw P77[hXP#` hp x (#%'0*,.8135@8:UAC m u%}- "5%')=,.0E357M:<>UACX` hp x (#%'0*,.8135@8:UAC #c PE37P#NECA Further Modification comments at 57.#Xw PE37[hXP#5 NECA states that the Commission should carefully consider requests for  P" individual company transition plans if a company demonstrates that hardship results from the  Y0 P"0! instant reduction in settlements.0  Y2%0 I. A. 1. a.(1)(a) i) a) I. A. 1. a.(1)(a) i) a)#Xw P87[hXP#` hp x (#%'0*,.8135@8:UAC m u%}- "5%')=,.0E357M:<>UACX` hp x (#%'0*,.8135@8:UAC #c PE37P#Id. at 9.#Xw PE37[hXP# NECA, therefore, suggests that the Commission consider on  P" a casebycase basis the need for transition mechanisms to be applied to any average schedule  P"  company that experiences hardship as a result of the proposed modification of the TSCO"e 00*(("  Y0formula.W1y Yy0 P" I. A. 1. a.(1)(a) i) a) I. A. 1. a.(1)(a) i) a)#Xw P97[hXP#` hp x (#%'0*,.8135@8:UAC m u%}- "5%')=,.0E357M:<>UACX` hp x (#%'0*,.8135@8:UAC#Xw P7[hXP# #c PE37P#Id. at 10. NECA states that it has been communicating with these companies since January 1995. High  P"volume companies were advised that their Central Office settlements might be affected substantially as a result of  xP*0revisions to the Traffic Sensitive Central Office formula.#Xw PE37[hXP#W  Y0 ` ` 2. Recovery of Expenses Related to the USF data request  Y0 ` P ` `  14. NTCA, OPASTCO, and USTA support NECA's proposal for a onetime  P"! settlement for recovery of costs associated with the USF data request. ICORE is also supportive  P"@! of NECA's proposal for a onetime payment to average schedule companies for completing the  P"0 USF data request, but ICORE believes that the reimbursement amount should be $3,816 per  YI0 P" company (rather than $2,478) to reflect a mixture of internal and external work.A2I  Y 0 I. A. 1. a.(1)(a) i) a) I. A. 1. a.(1)(a) i) a)#Xw P:7[hXP#` hp x (#%'0*,.8135@8:UAC m u%}- "5%')=,.0E357M:<>UACX` hp x (#%'0*,.8135@8:UAC#Xw P7[hXP# #c PE37P#ICORE Further Modification comments at 78.#Xw PE37[hXP#A ICORE  P"@! states, that although in its earlier comments it recommended $5,000 per company, ICORE now  P" " proposes assuming 40 hours at $35.40 per hour of internal work, plus 40 hours at $60 per hour  P" for outside vendor time, to produce a one time reimbursement of $3,816 per qualifying  Y 0 P" company.3  YX0 I. A. 1. a.(1)(a) i) a) I. A. 1. a.(1)(a) i) a)#Xw P;7[hXP#` hp x (#%'0*,.8135@8:UAC m u%}- "5%')=,.0E357M:<>UACX` hp x (#%'0*,.8135@8:UAC #c PE37P#Id. #Xw PE37[hXP# ICORE argues that the onetime payment of USF data request costs would be the  P" most appropriate method because: (1) the FCC's USF data request was a specific, onetime  P"p activity that placed unanticipated time and cost burdens on average schedule companies and,  P"! where possible, these kinds of costs should be reimbursed in the year incurred, not several years  P"` later as part of a generic formula revision; and (2) under NECA's proposal, only companies  P"! responding to the data request would receive reimbursement, while MCI would spread the costs  P" into a future formula that would compensate both respondents and nonrespondents. ICORE  P"` asserts, however, that it is by no means suggesting a special reimbursement mechanism in  Y50 P"0 conjunction with every industry or regulatory change.45k YQ0 I. A. 1. a.(1)(a) i) a) I. A. 1. a.(1)(a) i) a)#Xw P<7[hXP#` hp x (#%'0*,.8135@8:UAC m u%}- "5%')=,.0E357M:<>UACX` hp x (#%'0*,.8135@8:UAC#c PE37P# Id. at 89.#Xw PE37[hXP# NTCA states that the Commission  P" should allow average schedule companies to recover their share of the USF data request  Y0 P" expenses through a special schedule settlement.25  Y0 I. A. 1. a.(1)(a) i) a) I. A. 1. a.(1)(a) i) a)#Xw P=7[hXP#` hp x (#%'0*,.8135@8:UAC m u%}- "5%')=,.0E357M:<>UACX` hp x (#%'0*,.8135@8:UAC#Xw P7[hXP# #c PE37P#NTCA Further Modification comments at 4.#Xw PE37[hXP#2 OPASTCO states that a onetime settlement  P"p! of $2,478 would expeditiously compensate average schedule companies for the labor necessary  Y0 P" to complete the Commission's USF data request.66  YW"0 I. A. 1. a.(1)(a) i) a) I. A. 1. a.(1)(a) i) a)#Xw P>7[hXP#` hp x (#%'0*,.8135@8:UAC m u%}- "5%')=,.0E357M:<>UACX` hp x (#%'0*,.8135@8:UAC #c PE37P#OPASTCO Further Modification comments at 5.#Xw PE37[hXP#6 USTA states that average schedule  P"! companies incurred substantial and unexpected costs to respond to the data request and the one Y0 P"! time settlement is consistent with the recovery of such costs by cost settlement companies.37~  Y%0 I. A. 1. a.(1)(a) i) a) I. A. 1. a.(1)(a) i) a)#Xw P?7[hXP#` hp x (#%'0*,.8135@8:UAC m u%}- "5%')=,.0E357M:<>UACX` hp x (#%'0*,.8135@8:UAC #c PE37P#USTA Further Modification comments at 2.#Xw PE37[hXP#3 In  P" reply, NECA states that the amount ($2,478) of its proposed onetime reimbursement is" /70*(("  Y0reasonable and should be approved as filed.28 Yy0 I. A. 1. a.(1)(a) i) a) I. A. 1. a.(1)(a) i) a)#Xw P@7[hXP#` hp x (#%'0*,.8135@8:UAC m u%}- "5%')=,.0E357M:<>UACX` hp x (#%'0*,.8135@8:UAC#Xw P7[hXP# #c PE37P#NECA Further Modification replies at 7.#Xw PE37[hXP#2  Y0 `   ` ` 15. AT&T and MCI oppose the request that the Commission approve a one P" time settlement to permit average schedule companies to recover the costs associated with the  Y0 P"@ Commission's USF data request.^9y Y0 I. A. 1. a.(1)(a) i) a) I. A. 1. a.(1)(a) i) a)#Xw PA7[hXP#` hp x (#%'0*,.8135@8:UAC m u%}- "5%')=,.0E357M:<>UACX` hp x (#%'0*,.8135@8:UAC #c PE37P#AT&T Further Modification comments at 1, MCI Further Modification opposition at 1.#Xw PE37[hXP#^ AT&T states that costs relating to compliance with  P" Commission regulations are already embedded in current and proposed average schedule  P"P" formulas, and adds that recent activities associated with the USF proceeding are no different than  Y`0 P"0" the wide range of legal and regulatory costs already contained in the average schedules.4:`* Y; 0 I. A. 1. a.(1)(a) i) a) I. A. 1. a.(1)(a) i) a)#Xw PB7[hXP#` hp x (#%'0*,.8135@8:UAC m u%}- "5%')=,.0E357M:<>UACX` hp x (#%'0*,.8135@8:UAC #c PE37P#AT&T Further Modification comments at 2.#Xw PE37[hXP#4 AT&T  P" asserts that the 1995 costs of the representative sample of average schedule companies will  P"" include, among other things, the costs of providing the USF data to NECA and that the potential  P" builtin lag in cost compensation does not differ from that experienced by all rate of return  Y 0 P" companies whose rates are set on a historic test year basis.;  Y0 I. A. 1. a.(1)(a) i) a) I. A. 1. a.(1)(a) i) a)#Xw PC7[hXP#` hp x (#%'0*,.8135@8:UAC m u%}- "5%')=,.0E357M:<>UACX` hp x (#%'0*,.8135@8:UAC#Xw P7[hXP# #c PE37P#Id. at 23.#Xw PE37[hXP# AT&T argues that allowing the  P"! onetime settlement requested by NECA would result in a double recovery of these expenses by  Y 0the average schedule companies.<  Y0 I. A. 1. a.(1)(a) i) a) I. A. 1. a.(1)(a) i) a)#Xw PD7[hXP#` hp x (#%'0*,.8135@8:UAC m u%}- "5%')=,.0E357M:<>UACX` hp x (#%'0*,.8135@8:UAC#Xw P7[hXP# #c PE37P#Id.#Xw PE37[hXP# ` `  Y 0 `   ` ` 16.  MCI states that NECA has made no showing that these costs were so large  P"! as to fall outside the expected range of the costs of complying with the regulatory requirements,  P" and further, NECA has not explained why average schedule companies should be allowed to  P"! identify and recover these specific costs, when the purpose of the average schedule is to relieve  YL0 P"@! them of the burden of having to identify their own individual company costs.5=L=  Y:0 I. A. 1. a.(1)(a) i) a) I. A. 1. a.(1)(a) i) a)#Xw PE7[hXP#` hp x (#%'0*,.8135@8:UAC m u%}- "5%')=,.0E357M:<>UACX` hp x (#%'0*,.8135@8:UAC #c PE37P#MCI Further Modification opposition at 2.#Xw PE37[hXP#5 MCI adds that  P"! before the Bureau can allow this onetime settlement to go into effect, it must require NECA to  P"`" provide more detailed cost data on the actual hours worked and wage rates of the employees who  Y0 P"`! performed the work.>  Y 0 I. A. 1. a.(1)(a) i) a) I. A. 1. a.(1)(a) i) a)#Xw PF7[hXP#` hp x (#%'0*,.8135@8:UAC m u%}- "5%')=,.0E357M:<>UACX` hp x (#%'0*,.8135@8:UAC#Xw P7[hXP# #c PE37P#Id. at 3. #Xw PE37[hXP# Further, MCI argues that NECA must explain why the existing average  P" ! schedule settlements do not recover these costs, and why the costs of complying with the USF  Y0data request were so unusually large as to justify this special treatment.?  Y)$0 I. A. 1. a.(1)(a) i) a) I. A. 1. a.(1)(a) i) a)#Xw PG7[hXP#` hp x (#%'0*,.8135@8:UAC m u%}- "5%')=,.0E357M:<>UACX` hp x (#%'0*,.8135@8:UAC#c PE37P#Id. and n.5.#Xw PE37[hXP#  Y0 `  ` ` 17.  In reply, NECA states that contrary to claims by AT&T and MCI, neither  P" the current average schedule formulas nor the formulas proposed in its 1994 Filing include" P?0*(("  Y0 P" ! compensation for the costs of responding to the USF data request.x@ xPy0ԍ NECA Further Modification replies at 5.#Xw PE37[hXP#x NECA states that because  P"" the average schedule revenue requirement data that it used to compute the current formulas were  P"p! from periods during which no similar costs were incurred, these costs were not included in the  P" ! accounting data underlying the current formulas (for example, in legal and regulatory expense  Y0 P"0! account data).AX zP0ԍ #c PE37P#Id.#Xw PE37[hXP#с NECA contends that it will avoid double recovery of these costs in the future  P"! because USF data request expenses will be removed from the sample average schedule company  P"" revenue requirement data before they are used to update the schedules that will become effective  Y_0 P" July 1, 1998.zB_ xP 0ԍ NECA Further Modification replies at 6. #Xw PE37[hXP#z NTCA states that waiting for 1996 to recover these costs would burden the  P"P! average schedule companies by forcing them to wait to recover their expenses and, contrary to  P" AT&T's and MCI's comments, average schedule companies, by virtue of the timing of the  P"p average schedule development process, would have to wait more than three years to recover  Y 0these unique costs, not the one year suggested.xC z xP.0ԍ NTCA Further Modification replies at 2.#Xw PE37[hXP#x  X 0 l  X 0.III. DISCUSSION ă  Y0` ` 1 . Recovery of Expenses Related to the USF Data Request  Yc0  ` ` 18. NECA's methodology derives average schedule formulas from random  YL0 P" samples of cost studies, that have been prepared by cost companies and reviewed by NECA,SDL  zP0ԍ See generally, para. 1 supra.S  P" and from aggregated account balances of average schedule companies. The USF data request  Y0 P" was released during December, 1994.YE zPk0ԍ Order, 9 FCC Rcd 7962 (1994).Y The completed data request was required to be filed  Y0 P"" during the first quarter of 1995.4F.  zP0ԍ Id. 4 As a consequence, NECA will not know the actual expenses  P"! of completing the USF data request that have been incurred by cost companies until cost studies  P"p for 1995 have been received by NECA, which will not occur until 1996. Under existing  P"` procedures, NECA would normally review those cost studies during 1996 and 1997, for  P"P possible inclusion in proposed revisions to the average schedules that would be filed during  Y0 P" 1997.MG  zP&0ԍ See 47 C.F.R.  69.606(b).M If those revisions are approved by the Commission,CHR  xP'0ԍ 47 C.F.R. 69.606(a).C the revisions would normally" H0*(( "  P" " become effective either in 1997 or 1998, depending on the date that NECA would file proposed  P"! revisions, the public comment that is received on the proposed revisions, and the Commission's decision(s) with respect to NECA's proposed revisions.  Y0 `  #X PO7[hXP#` ` 19. We agree with MCI's assessment that the interstate portion of regulatory  P" ! expenses, such as those related to completing the USF data request, are automatically included  Yv0 P" in the average schedule formulas.Iv xP0ԍ #c PE37P#MCI opposition at 2. #Xw PE37[hXP#э NECA appears to be in implicit agreement with that  P"P assessment, because NECA states that it will have to adjust future sampled average schedule  YH0revenue requirement data to eliminate these expenses, and thus avoid doublecounting.QJHX xPQ 0ԍ NECA Further Modification replies at 6.Q  Y 0  ` ` ` 20. The particular expenses incurred by cost companies and average schedule  Y 0 P" companies in completing the USF data request will, however, differ.5KX  xP0 P"ԍ We fully expect that cost companies will follow our rules and allocate the USF data request preparation  P"P expenses (as they do other cost studies) in accordance with Section 36.392(c) of the Commission's rules. 47 C.F.R.  36.392(c).5 Cost companies were  P"P! required to provide more detailed, and complicated, USF data than those that were required of  Y 0 P"@ average schedule companies.QL  zP0ԍ Order, 9 FCC Rcd 7962, 79657986.Q This difference in treatment recognized the fact that average  P"` schedule companies are subject to more streamlined regulatory requirements than are cost  P"0 companies. As a consequence, if particular average schedule companies wanted to assist the  P" Commission by providing the same level of detail as cost companies they were permitted, but  Yy0not required, to do so.EMy zP0ԍ See id. passim.E  YK0  ` ` 21. Many average schedule companies elected to provide USF data request  P"p filings that were less detailed than those of cost companies. We would thus expect that the  P" expenses of completing the USF data request will be larger, on average, for cost companies  P" that are representative of average schedule companies, than will be the case for most average  P" schedule companies. These differences will complicate the average schedule formula  P" development process in the future, and may require revisions or other modifications to insure that average schedule companies are compensated appropriately.  Y0   ` ` 22. As a general matter, special reimbursements are inconsistent with the  P"0 concept of average schedule compensation. However in this case, our concern about the  P"0 integrity of that concept in all situations is offset by our concern about the unanticipated  P" expenses that were incurred by some average schedule companies, and delays that may occur  P"P before accurat ZN6g e average schedule formulas are developed to address the USF data request  P"` expense component. As a consequence, because of the potential complexity of the offsetting"  , M0*(( "  P"! adjustments that will be required in future revisions, and the heightened probability that delays  P"! will occur before those cost differences can be reflected accurately in future formulas, we have  Y0 P" decided to approve NECA's special reimbursement of $2,478 N xPK0 P" ԍ NECA's cost estimate of $2,478 per carrier was based on the simple average of end points of the range of  P"hours estimated by the Commission to complete the USF data request, multiplied by the rate per hour charged for  P" additional engineering services in a NECA tariff. There is no agreement among the parties regarding the true costs  P"of complying with the USF data request. ICORE first estimated $5,000 per carrier, and then changed its estimate  P"to $3,816 per carrier. NECA estimates $2,478 per carrier. AT&T and MCI state that it should be zero. Of the  xP30estimates before us, NECA's appears to be the most reasonable.  for each average schedule  Y0 P"! company that complied with the USF data request.O @ xP 0 P"ԍ These settlements are to be removed from the financial data of all average schedule companies that will be  P" used to develop future average schedule formulas. In addition, NECA's future cost company data shall receive  P"explict, objectively verifiable adjustments, so that the differences in expenses among average schedule and cost companies in responding to the FCC's USF data request are fully recognized. However, in recognition of the complexity  P" of this undertaking and the need to make accurate adjustments in the future, we direct NECA  P"! to consult with the Common Carrier Bureau to determine the most effective, and efficient, way  P"" to insure that average schedule companies are neither undercompensated, nor overcompensated, for the expenses of complying with the Commission's USF data request.  X10 ` ` 2. Recovery of FCC Regulatory Fees  Y 0 ` 0 ` ` 23.  NECA's 1994 Filing contains an adjustment to recover the cost of  Y 0 P" regulatory fees paid to the Commission.GP (  xP0ԍ 1994 Filing at I4 and VI19.G NECA states that the Commission established rules  P"`! for collecting annual regulatory fees related to the Commission's enforcement activities, policy  Y 0 P"! and rulemaking activities, user information services, and international activities,Q  xP'0 P"`ԍ Amendment of the Schedule of Application Fees Set Fourth in Sections 1.1102 through 1.1105. of the  zP0Commission's Rules, GEN Docket No. 86285, Order, 59 Fed. Reg. 31009 (June 16, 1994). and estimates  P"! that average schedule companies will be assessed a total of $119,200 in regulatory fees between  P"P July 1995 and June 1996. NECA proposes to recover these costs by applying an acrossthe Yy0 P" board revenue requirement adjustment to its proposed average schedule formulas.CRy xP<0ԍ 1994 Filing at I4.C Although  P" these fees are new, they are no different from the wide range of legal and regulatoryrelated  P"@! fees routinely paid today by local exchange carriers. Therefore, these new regulatory fee costs  P"  will be included in the cost company data, sampled by NECA, for future annual average  P" ! schedule company formula revisions. As a result, average schedule carriers will recover these  P"! costs as the average schedule formulas are updated through NECA normal processes of revising  P"0 the average schedules. To avoid "double recovery" of these regulatory fees, it would be  P"" necessary for NECA to remove these regulatory fees from each of the cost studies and from each  P"`! set of average schedule company data that would be used in future filings. This would impose  P" additional, and unnecessary, administrative expenses upon NECA that would be paid by" R0*(("  Y0 P" interstate ratepayers.CS xPy0ԍ 47 C.F.R.  69.605(b).C As a consequence, while we agree that average schedule companies  P" should be able to recover these interstate costs, we do not agree that the method for recovery  Y0should be through the special revenue requirement adjustment proposed by NECA. X   X0` ` 3. Modification of Traffic Sensitive Central Office Formula  Yv0 `  ` ` 24. In the Further Modification, NECA used econometric and engineering  P"! studies to conclude that companies with average switched minutes per line per month that were  P" greater than 350 should, as high traffic volume average schedule companies, be treated  Y10 P"P" differently.#c Pn7P#HT1Xk zP 0ԍ Id. at IV12 and IV32.H#Xw Pq7[hXP# Out of the population of 621 average schedule companies used for the 1994 Filing,  P"P! NECA identified 15 companies that met NECA's criterion for being categorized as high traffic  Y 0 P" volume average schedule companies.<U  zP0ԍ Id. at II3.< NECA concluded that, on average, the TSCO formula  P" proposed in its 1994 Filing would overcompensate these high traffic volume companies by  Y 0 P"! providing more than 125% of their actual central office costs.V" | xP0 P" ԍ On IV12 of the Further Modification, NECA reports that the actual costs of high traffic volume companies  P"is 79% of what the 1994 central office formula would have estimated, Put somewhat differently, this means that  zP0 P"0the 1994 central office formula overestimates a typical high traffic volume company's costs by 26.58% [i.e., (1.0/.79) 1.0 = .2658]. NECA devised revisions to the  P"! TSCO formula to address that concern. Those revisions were calculated on the basis of monthly  P"! measurements of traffic volumes that necessarily included, and were based upon monthly (rather  Y0than annual, or seasonal) measurements of central office utilization.Wf  zP0 P"0 ԍ Compare supra note 38 (ICORE contends that an annual "true up" would provide more accurate settlements. ICORE Further Modification comments at 6).  Yb0  p ` ` 25. NECA's March 17, 1995 revisions to the TSCO formula are not opposed  YK0 P"! by any commenting party.KXK  zP0 P" ԍ Although ICORE contends that annual measurements would be more accurate,  supra note 94 and references  P"cited therein, we have concluded that attempting to perform annual "trueups" would vitiate the statistical validity  P"@of the TSCO formula revisions proposed by NECA and that annual "trueups" would introduce excessive  zP!0 P"complexity in the administration of the TSCO formulas that NECA has proposed. Accord NECA Further Modification replies at 79.K That notwithstanding, and while recognizing that NECA's March  P" ! 17 proposed modifications to the TSCO formula are a significant improvement over the TSCO  P" formula that NECA proposed on December 30, 1994, we are not convinced that the traffic  P" sensitive formulas that NECA has proposed are the best that can be devised. Accordingly,  P"0! NECA is directed to consult with the Common Carrier Bureau with respect to efforts that can  P"! be undertaken by NECA to improve the accuracy of the average schedule formulas. Pending  P"! further modification, however, the unopposed TSCO formula that NECA proposed on March"tX0*((" 17, 1995 is approved with an effective date of July 1, 1995. ` `   Y0t, IV. CONCLUSION  Y0 `  ` ` 26. We conclude that with the exception of the inclusion of NECA's estimate  P"@ of new regulatory fees, NECA's Proposed Modifications to the Interstate Average Schedule  P" Formulas, filed on December 30, 1994 as revised in NECA's March 17, 1995 filing, shall  Y`0become effective on July 1, 1995. -V. ORDERING CLAUSES  Y 0 ` p ` ` 27. ACCORDINGLY, pursuant to the authority that is contained in Sections  P"! 0.91 and 0.291 of the Commission's rules, 47 C.F.R. 0.91 and 0.291, IT IS ORDERED that  P" NECA's December 30, 1994 Proposed Modifications to the Interstate Average Schedule  P"! Formulas, as modified in NECA's March 17, 1995 filing, ARE APPROVED TO THE EXTENT STATED HEREIN, with an effective date of July 1, 1995.  Yz0 `  ` ` 28. So that the modifications to the average schedule formulas that have been  P" approved can become effective July 1, 1995, IT IS FURTHER ORDERED that THIS ORDER IS EFFECTIVE JUNE 30, 1995.   Y0 `  ` ` 29. IT IS FURTHER ORDERED that on July 14, 1995, NECA SHALL FILE  P"  REVISIONS TO ITS TARIFFS to become effective August 1, 1995, that fully reflect the  P"p reductions in revenue requirements that result from the disapproval of the regulatory fees adjustment claimed by NECA.    ` ` 30. IT IS FURTHER ORDERED that NECA shall immediately consult with  P" the Common Carrier Bureau so that it can develop, and file, proposed improvements to the average schedule formulas.  YO0 `  ` ` 31. IT IS FURTHER ORDERED that NECA shall immediately consult with  P"@! the Common Carrier Bureau so that it can develop procedures, and administrative mechanisms,  P"! to insure that average schedule companies are not overcompensated for the costs of completing the USF data request. ` ` ` `  hh,FEDERAL COMMUNICATIONS COMMISSION ` `   ` `  hh,Kathleen M.H. Wallman ` `  hh,Chief, Common Carrier Bureau