FCC and State Pricing Requirements

The rules that govern the accounting for affiliate transactions involving an ILEC are outlined in the Affiliate Transaction Policy (ATP) located on the Verizon intranet site

http://baimsa.verizon.com/corporate/regcompl/atp/index.shtml

For states which follow pricing rules different from the FCC pricing rules, refer to the ATP for regulatory state reporting requirements.

Section I

I. A. Pricing of products or services provided by the ILEC to a non-regulated affiliate¹

1. The organization responsible for providing the service (Service Provider) applies the FCC pricing hierarchy, as detailed in the ATP, to determine the pricing category for the transaction.

2. Based on the pricing category determined in the previous step, the Service Provider follows the noted steps under the applicable pricing category.

A. Tariff

When a product or service is currently offered pursuant to a tariff, the non-regulated affiliate receives the service at the same tariff rate. Non-tariff services provided pursuant to publicly-filed agreements (interconnection agreements) are provided to the non-regulated affiliate using the rates appearing in such publicly-filed agreements.

Identify and obtain tariff pages

· Products or services pursuant to a tariff provided to Section 272 and Advanced Services Affiliates require the Service Provider to obtain a copy of applicable tariff pages for inclusion in the Officer Certification Package and Public Disclosure.

· Products or services provided to a non-regulated affiliate pursuant to publicly- filed agreements are priced through the same method as non-affiliate arrangements.

B. Prevailing Market Price (PMP)

If no tariff or publicly filed agreement exists for product or service being provided to a non-regulated affiliate, the product or service offering must be assessed to determine if it meets the PMP criteria as outlined in Section II, the following steps must be followed: