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Federal Communications Commission
1919 - M Street, N.W.
Washington, D.C. 20554
News media information 202 / 418-0500
Fax-On-Demand 202 / 418-2830
Internet: http://www.fcc.gov


CC Dockets Nos. 96-45 and 97-160
Released: August 4, 1997

DA 97-1663

On July 18, 1997, the Commission released a Further Notice of Proposed Rulemaking on the Forward-Looking Mechanism for High Cost Support for Non-Rural LECs (FNPRM).(1) The FNPRM seeks further comment on the mechanism that should be selected to estimate the forward-looking economic costs that non-rural local exchange carriers (LECs) would incur to provide universal service in rural, insular, and high cost areas. To assist parties in responding to the FNPRM and in developing cost models, the Common Carrier Bureau is releasing data about digital switches that was extracted from depreciation rate studies submitted to the Commission by the Regional Holding Companies (RHCs).(2)

Large incumbent LECs file depreciation rate reports with the Commission pursuant to 47 C.F.R. section 43.43. Prior to filing these reports, companies generally submit depreciation rate studies that include data for each digital switch in operation. The switches in this data set consist of all of the RHCs' digital switches that were reported as installed between 1983 and 1995 in the states specified, with certain exceptions. To increase the reliability of analyses using these data, the following switches were removed from the data set: (1) switches for which there were no lines of capacity, such as those functioning solely as tandem switches; (2) switches with fewer than 1000 lines of capacity; and (3) switches that were deemed to be "outliers" because of unusually high or low per-line costs.(3) The data set contains at least one state from the area served by each RHC.

The data are presented on an Excel 4.0 spreadsheet and include the following information for each switch: the location of the office in which the switch is installed; the model designation of the switch; the year the switch was first installed; the lines of capacity; the installed cost of the switch; and the switch's cost per line. The spreadsheet also incorporates additional variables to facilitate econometric calculations.

Interested parties may obtain these data by submitting five (5) blank 3 1/2" computer diskettes to Leo Bridge (202-418-7377), Universal Service Branch, Accounting and Audits Division, Common Carrier Bureau, 2100 M Street, N.W., 8th Floor, Washington, D.C. 20554. Parties submitting diskettes should also arrange for their return after the data have been copied onto them.


1. Federal-State Joint Board on Universal Service, Forward-Looking Mechanism for High Cost Support for Non-Rural LECs, CC Docket Nos. 96-45 and 97-160, Further Notice of Proposed Rulemaking, FCC 97-256 (rel. Jul. 18, 1997).

2. The RHCs include Ameritech, BellSouth, Bell Atlantic, NYNEX, SBC Communications Inc., and U S WEST.

3. The following procedures were used to identify outliers: (1) if there was a gap of 20% or more between the per-line cost of a switch and the next lower, or higher, cost switch, the switch and any others with lower, or higher, per-line cost were excluded; (2) a low-priced switch that failed test 1 was nevertheless retained in the data set if a lower per-line switch cost would have passed test 1 in a previous year; (3) a high-priced switch that failed test 1 was retained in the data set if a higher per-line switch cost would have passed test 1 in a subsequent year. These rules removed about 40 outliers from a data set containing per-line cost data for nearly 3600 switches. In addition, a small number of switches associated with apparent inconsistencies in the studies were not included in the set. In particular, for several locations in California, switches at the same location of different capacities, types, and years of installation were reported as having the same per-line costs. These anomalies were judged to be the results of averaging by the respondent and the switches in these locations were excluded from the data set.