IX. Assignment of Proceeding
Michael R. Peevey is the Assigned Commissioner and Maribeth A. Bushey is the assigned ALJ in this proceeding.
Findings of Fact
1. Verizon/MCI's and SBC/AT&T's access charges include rate elements which are not based on cost.
2. The estimates of 2004 TIC and NIC revenues provided by Verizon and SBC are not reasonable forecasts of on-going revenues from these access charge elements.
3. Verizon/MCI and SBC/AT&T account for a substantial share of long distance access minutes in their respective service territories.
4. Intra-LEC and affiliate access charges are paper transactions with no revenue impact to the consolidated corporation.
5. Including intra-LEC and affiliate transactions in calculating the local rate increase necessary to offset revenue losses caused by eliminating NIC and TIC would create the potential for a substantial windfall for Verizon and SBC.
6. Excluding intra-LEC and affiliate transactions will not materially diminish Verizon's and SBC's opportunity to earn their authorized return.
Conclusions of Law
1. No hearings are necessary.
2. The NIC and TIC rate elements of access charges should be eliminated.
3. Verizon/MCI and SBC/AT&T should recover actual lost revenue from unaffiliated entities caused by suspending the NIC and TIC elements.
4. The Commission's objective in rate rebalancing is to create neither a windfall nor the loss of opportunity to achieve authorized returns.
5. The procedural schedule set out above should be adopted for local exchange carriers other than Verizon/MCI and SBC/AT&T.
6. This decision should be effective immediately.
FINAL ORDER
IT IS ORDERED that:
1. Pacific Bell Telephone Company dba SBC California, Inc. (SBC) shall eliminate the network interconnection charge element of its access charges with an advice letter filing no later than 30 days after the effective date of this decision.
2. Verizon California Inc. (Verizon) shall eliminate the transport interconnection charge element of its access charges with an advice letter filing no later than 30 days after the effective date of this decision.
3. SBC and Verizon are authorized to file the advice letters as set out in Attachment A to implement a surcharge to recover estimated lost revenues due to eliminating the rate elements described in Ordering Paragraphs 1 and 2.
4. The local exchange carriers other than SBC and Verizon shall adhere to the procedural schedule set forth above.
5. No hearings are necessary for this phase of this proceeding.
This order is effective today.
Dated _______________, at San Francisco, California.
Attachment A
Methodology for Calculating Annual Surcharge
No later than ___ of each year, SBC and Verizon shall file and serve an advice letter, as specified in General Order 96A, or its successor, setting forth the following calculations. The advice letter filing shall include all workpapers necessary to show all calculations and shall reference the source of all data relied upon. SBC and Verizon shall provide prompt responses to any requests from staff for further data.
