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X' X\ #C\  P6Q/P##XP\  P6QXP# ''SS   X'''SSProposed Formula:  Xe4 \X ,''SS Settlement = $1,518  For each end office with SP or SSP equipment in SS   [[N  service with full connectivity to the nationwide SS   [[N  signalling network.T$'  X\   X 4 \X ,''SS Settlement = $ 698  For each end office with SP or SSP equipment in SS   [[N  service not yet having full connectivity to the SS   [[N  nationwide signalling network.T$'  X\  "! 0*%%ZZ"  X'''SS 9. Database Query and Interim NXX Translation:   X' ''SS Current Formula:  \X ,''SS Settlement = Interstate Charges Paid to Providers of 800 Databases for 800 SS Database Queries and Earned Access Revenues for Interim NXX Translation.T$' ,'',SS''T$S  X_' X\ 'S  [ ck!s#%S   ck!s#% SS Proposed Formula:  \X XSSX SS(# XSSX Settlement = Interstate Charges Paid to Providers of Databases for Translation Queries and Earned Access Revenues for Interim NXX Translation.(# XSSX SS(#  X 'XSSS   ck!s#%S   ck!s#X X  WG  XccX'X^XkkXkk^'cc  W   SS C. AVERAGE SCHEDULE USF LOOP COST FORMULA (#  X\ S   ck!s#S   ck!s#%  X ' SS Current Formula  SS For Study Areas with 685.86127 or Fewer Loops per Exchange: SS Cost per Loop = $1,081.88 $127.07 x Natural Log of Loops per Exchange SS For Study Areas with More Than 685.86127 Loops per Exchange: SS Cost per Loop = $252.06  X' SS Proposed Formula:  X4  SS For study areas with 629.8 or fewer loops per exchange: SS Cost per loop = $1,207.90 $146.76 x Natural Log of Loops per Exchange SS For study areas with more than 629.8 loops per exchange: SS Cost per loop = $262.01 "e 0*%%ZZ "  X4SS   W  cc'^kkATTACHMENT 2s#s#8 SS  X' \\  SS   Comparison of Common Line Settlement Models Y ddx !ddx  Y       Xc4o Models 4c yO'#c PE37/P#э#c PE37/P#The settlement formulas were developed by estimating models with NECA's simulated revenue requirements as dependent variables and access lines per exchange as independent variables.4 ă  !" Xc'Qb RSquared  c  yO4'#c PE37/P##c PE37/P#эThe R represents a measure of "goodnessoffit" for a regression. The higher the R the better a model  yO'will fit the data.  ~p ~p ~p!" Xc'X % Difference of  ~Proposed Settlement vs. Revenue =Requirement for  U 1   1 U Table 1 ! Table 1 Sample  X'Companies x yO'#c PE37/P#э#c PE37/P#These percentages represent the difference between the settlements determined by application of the respective average schedule formulas and the simulated revenue requirements. These percentages were calculated over NECA's sample, not the entire population, because NECA simulates revenue requirements only for sample companies.  " Xc4 Total Settlement #c` Q yOt'#c PE37/P##c PE37/P#эTotal Settlement was determined by adding the estimated settlements using the respective average schedule formula over the population of average schedule companies.# q     XJ ' NECA SplineXJ oF yO'#c PE37/P#э#c PE37/P#For study areas with an average number of access lines per exchange less than 385.55: Settlement per access line = $15.085712 (0.018762 x access line per exchange. For study areas with an average number of access lines per exchange greater than or equal to 385.55: Settlement per access line = $7.852010. 3 "q0.163 " >5.4%3 "n$239,800,296q q    X ' BestFit Spline X oF yOD'#c PE37/P#э#c PE37/P#For study areas with an average number of access lines per exchange less than 1103: Settlement per access line = $10.90203273 0.00321256 x access lines per exchange. For study areas with an average number of access lines per exchange greater than 1103: Settlement per access line = $7.35857905.  "q0.19 " >0.8% "n$232,210,066q q 3   X, ' Reciprocal , oF yO '#c PE37/P#э#c PE37/P#Settlement per access line = $7.166204 + $728.054152 x 1/(access lines per exchange). "q0.20" >1.4%"n$232,006,652q        X' Log Reciprocal /G yO#'#c PE37/P#э#c PE37/P#1Natural Log(Settlement per access line) = 1.947679 + 82.688502 x 1/(access lines per exchange). "q0.17"ԩ1.5%" X4n $225,409,994   X4" 0*%%ZZ "ԌSS   W  cc'^kkATTACHMENT 3  X' \\  \\   SS FCC APPROVED FORMULAScc'^kk   X'A. SSCOMMON LINE FORMULAS   Xv'SS 1. Common Line  :  X_4   SSSettlement = Access Lines x Settlement Per Access Line SSSettlement Per Access Line = $7.166204 + $728.054152 x 1/(Access Lines Per SSExchange)  X 'SS 2. Common Line Rate of Return:  X 4SSMonthly Common Line settlements are adjusted to reflect the Rate of Return (ROR) s#s#8achieved SSby the total NECA Common Line pool.  Xy4   Xb4SSCommon Line Factor = 0.695876 + (2.703324 x ROR)  X4' B.SSTRAFFIC SENSITIVE FORMULAS  :  X'SS 1. Traffic Sensitive Central Office:  X4      X4 SSSettlement = (Basic Settlement x Access Line Factor) + $1,895.24  X4 SSFor Study Areas with Minutes Per Line Less Than or Equal to 350:  X4 SSBasic Settlement = ($0.027606 x Access Minutes) + ($995.65 x Exchanges)  Xe4 SSFor Study Areas with Minutes Per Line Greater Than 350 but Less Than or Equal to SS700: SSBasic Settlement = ($0.027606 x 350 x Access Lines)  X 4SS+ {$0.022211 x [Access Minutes (350 x Access Lines)]} x High Volume Access s#s#8Line SSMultiplier SS+ ($995.65 x Exchanges)  X 4SSFor Study Areas with Minutes Per Line Greater Than 700 but Less Than or Equal to s#s#81,300: SSBasic Settlement = ($0.027606 x 350 x Access Lines) SS+ {$0.022211 x (700 350) x Access Lines SS+ $0.0115 x [Access Minutes (700 x Access Lines)]} x High Volume Access Line SSMultiplier"h$0*%%ZZ" "ԌSS+ ($995.65 x Exchanges)   SSFor Study Areas with Minutes Per Line Greater Than 1,300: SSBasic Settlement = ($0.027606 x 350 x Access Lines) SS+ {$0.022211 x (700 350) x Access Lines SS+ $0.0115 x (1,300 700) x Access Lines  \ SS+ $0.004162 x [Access Minutes (1,300 x Access Lines)]} x High Volume Access Line  X_4SSMultiplier   W  cc SS+ ($995.65 x Exchanges)  \ S   ck!s#%'S  [ ck!s#%''SSAccess Line Factor: ''SSFor Study Areas with Access Lines Less Than 10,000: ''SSAccess Line Factor = 1.870363 (0.0000870363 x Access Lines) ''SSFor Study Areas with Access Lines Greater Than or Equal to 10,000: ''SSAccess Line Factor = 1.0 ''SSHigh Volume Access Line Multiplier = (775/Common Line Access Lines)  X4' ''SS2.Intertoll Dial Switching:  X4   ''SSSettlement Per Intertoll Trunk = $13.09  X' ''SS3.Line Haul Distance Sensitive:   ''SSSettlement = ($0.938795 x Circuit Miles) + ($0.001778 x Access Minutes)  X'''SS 4.Line Haul NonDistance Sensitive:  X|4    ''SSFor study areas with Interstate Circuit Terminations Per Exchange less than 200: ''SSSettlement Per Interstate Circuit Termination = ''SS$40.00 $0.098755 x Terminations Per Exchange ''SSFor study areas with Interstate Circuit Terminations Per Exchange greater than or equal to  X4''SS200: Settlement Per Interstate Circuit Termination = $20.25   X'  X '''SS5.Special Access:   ''SSSettlement = Special Access Revenue x 0.946130 x Tariff Rate Index ''SSTariff Rate Index = 1/ (1+ Tariff Special Access Relative Rate Change Since 12/96)"h$0*%%ZZ" "Ԍ''  X'''#C\  P6Q/P##XP\  P6QXP# SS6.Traffic Sensitive Rate of Return:  \\ ,''SSMonthly Traffic Sensitive settlements are adjusted to reflect the Rate of Return (ROR) SSachieved by the total NECA Traffic Sensitive pool.P%'  X4 \\    ''SSTraffic Sensitive Factor = 0.654946 + (3.067149 x ROR)  XH'''SS 7.Equal Access Implementation:  X14    \\ 'S  [ ck!s#%'S / 7?G"s#%,''SSThe interstate portion of initial incremental equal access expenses paid in the month in SSwhich they are incurred and 0.0247 x (the interstate portion of initial incremental equal SSaccess investment) per month for 96 months.P%'  \\ 'S / 7?G"s#%'S  [ ck!s#%  X ' ''SS8.Signalling System 7:  X 4  #XP\  P6QXP#   X4 \X ,''SSSettlement = $1,518  For each end office with SP or SSP equipment in SS   [[N  service with full connectivity to the SS   [[N  nationwide signalling network. T$'  X\   X44 \X ,''SS Settlement = $ 698  For each end office with SP or SSP equipment SS   [[N  service not yet having full connectivity to the SS   [[N  nationwide signalling network.T$'  X\   X' ''SS9.Database Query and Interim NXX Translation:   X4   \\    \X ,''SSSettlement = Interstate Charges Paid to Providers of Databases for Translation SSQueries and Earned Access Revenues for Interim NXX Translation.T$' ,'',SS''T$S  Xe4 C.''AVERAGE SCHEDULE USF LOOP COST FORMULA :^  XN' X\     X74 ''SSFor study areas with 629.8 or fewer loops per exchange: ''SSCost per loop = $1,207.90 $146.76 x Natural Log of Loops per Exchange ''SSFor study areas with more than 629.8 loops per exchange: ''SSCost per loop = $262.01 ''  \X ''SS  X\  \\   \\   Xh$4 \\  \\