[Federal Register Volume 59, Number 43 (Friday, March 4, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-4672]


[[Page Unknown]]

[Federal Register: March 4, 1994]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 61 and 69

[CC Docket No. 91-213, FCC 94-9]

 

Transport Rate Structure and Pricing

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: This order modifies certain features of the price cap 
regulatory system applicable to local exchange carriers (LECs) to 
complement the FCC's recent restructure of the LECs' local transport 
rates. Specifically, the order moves transport services, including all 
the transmission-related elements, the tandem switching charge, and the 
interconnection charge, out of the price cap basket for traffic 
sensitive services, and places them into a combined ``trunking'' basket 
containing transport and special access services. The order realigns 
the service categories and subcategories within the trunking basket, 
and adapts the pricing bands applicable to these categories and 
subcategories, to reflect the similarities between certain special 
access and flat-rated transport services, and to accommodate the new 
density zone pricing system that the Commission adopted for both 
special access and transport. These rule changes encourage the LECs to 
align their transport rates to reflect more closely how costs are 
incurred, thus promoting more efficient usage and deployment of the 
country's telecommunications networks, advancing competition in both 
the long-distance and local access markets, and ultimately reducing 
access charges and long-distance rates and stimulating the economy by 
increasing demand for these services.

EFFECTIVE DATE: March 4, 1994.

FOR FURTHER INFORMATION CONTACT:
David L. Sieradzki, Common Carrier Bureau, Policy & Program Planning 
Division, 202-632-1304.

SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's 
Second Report and Order in CC Docket No. 91-213, adopted on January 19, 
1994 and released on January 31, 1994. The complete text of this Second 
Report and Order is available for inspection and copying during normal 
business hours in the FCC Reference Center, 1919 M St. NW., room 230, 
Washington, DC 20554.

Synopsis of Second Report and Order

    1. The Commission adopts its proposal to remove the transport 
service categories from the traffic sensitive basket and place them 
into a combined basket that also contains special access services. The 
Commission renames this merged basket the ``trunking basket.'' The 
Commission is placing the tandem switching charge in the newly formed 
trunking basket, and keeping it in the same service category as tandem-
switched transport. The Commission is placing the interconnection 
charge service category in the trunking basket.
    2. The Commission is adopting a modified version of its proposal in 
the Further Notice in this proceeding, 57 FR 54205 (Nov. 17, 1992), on 
the arrangement of service categories within the newly formed trunking 
basket. The Commission concludes that flat-rated transport (entrance 
facilities, direct-trunked transport, and dedicated signalling 
transport) should be incorporated into the corresponding special access 
service categories. Thus, demand for voice grade flat-rated transport 
will be assigned to the existing voice grade-WATS-metallic-telegraph 
service category in the current special access basket for the purposes 
of computing the service band index (SBI) and pricing bands for that 
category. Demand for DS1 and DS3 flat-rated transport will be assigned, 
respectively, to the DS1 and DS3 subcategories of the high capacity-DDS 
service category in the current special access basket for purposes of 
computing the SBIs and bands for those subcategories. Tandem-switched 
transport (including the tandem switching element) and the 
interconnection charge will be separate service categories in the 
trunking basket.
    3. The Commission concludes that the density pricing zone 
subcategories within the flat-rated transport service category should 
be incorporated into the existing zone subcategories within the 
existing DS3 and DS1 special access subcategories, with one exception. 
In some cases, a LEC might implement density zone pricing for transport 
in a different tariff year than it implemented density zone pricing for 
special access. In such circumstances, the Commission will require LECs 
to retain separate zone bands for special access and flat-rated 
transport services until the end of the tariff year following the 
tariff year in which density pricing was implemented for the later 
service. After that time, the zone bands for special access and 
transport can be consolidated.
    4. The Commission is not modifying the pricing bands applicable to 
the transport or special access service categories at this time. The 
service category bands constrain the LECs' ability to offset rate 
reductions in some categories with rate increases in other categories.
    5. The Commission is setting forth the details of establishing the 
indexes and banding limits for the new trunking basket and the 
realigned service categories within that basket. First, the 2% upper 
and 5% lower bands for tandem-switched transport and the 0% upper band 
for the interconnection charge apply to changes from the initial rates 
for these services as of the transport rate restructure, regardless of 
whether the LECs raised or lowered their local transport rates prior to 
the rate restructure. (``Initial rates'' refers to the rates that 
became effective as a result of the September 1, 1993 initial 
restructured transport tariff filing, or rates that subsequently go 
into effect as the result of the mid-course correction.) Thus, the LECs 
should set their initial bands and SBIs for the tandem-switched 
transport and interconnection charge service categories using the 
baseline of the initial restructured rate levels.
    6. Because 47 CFR part 61 does not explicitly address the manner in 
which service categories are to be merged, the Commission adopts 
transition rules governing how the initial banding limits and indexes 
should be set for the new trunking basket and the realigned service 
categories within that basket. The initial degree of pricing 
flexibility for the trunking basket will be set by taking into account 
both the pricing flexibility currently available in the special access 
basket and the pricing flexibility available in the traffic sensitive 
basket (which currently includes transport). Thus, while the pre-
existing actual price index (API) for the special access basket will be 
used as the initial API for the trunking basket, the PCI for the 
trunking basket should be set as follows. LECs should calculate the 
ratio between the pre-existing PCI for the special access basket and 
the API for that basket, and the ratio between the pre-existing PCI for 
the traffic sensitive basket and the API for that basket. A weighted 
average of these ratios should be derived using the base period revenue 
weights of the special access and transport services included in the 
trunking basket, respectively. This weighted average should be 
multiplied by the pre-existing API for the special access basket to 
derive the PCI for the trunking basket. (Base period demand for flat-
rated transport elements (i.e., demand for the 1992 base year) should 
correspond with the historical demand used in computing the initial 
interconnection charge. The rates used in this formula should be the 
rates effective on the date that the transport rate restructure became 
effective, or rates that subsequently go into effect as the result of 
the mid-course correction.)
    7. Similarly, adjustments to the upper and lower pricing bands 
applicable to the existing voice grade and high capacity/DDS service 
categories and the DS1 and DS3 subcategories are necessary to reflect 
the incorporation of comparable flat-rated transport rate elements. 
While the SBIs for these categories are to remain the same, the upper 
and lower bands should reflect a weighted average of the pre-existing 
upper and lower bands for the special access services and the 5% upper 
and lower bands for the flat-rated transport services. This weighted 
average should be calculated using the base period revenue weights of 
the special access and transport services included in each service 
category and subcategory. A comparable procedure will be used to 
incorporate transport services into a density pricing zone category 
that has already been established for special access services (or vice 
versa).
    8. The changes adopted in the order necessitate adjustments to the 
price cap indexes. Accordingly, the Commission directs all LECs subject 
to the price cap rules to recalculate their price cap indexes pursuant 
to the decisions in the order. The LECs should file such recalculated 
indexes with the Commission in a special filing not accompanied by rate 
changes. The Commission delegates authority to the Chief, Common 
Carrier Bureau, to specify the format and timing of this filing. In 
addition, such recalculated indexes should be used as the basis of any 
price cap filing that changes rates of services in the trunking or 
traffic sensitive baskets.
    9. Finally, the Commission clarifies some miscellaneous 
implementation matters. First, the Commission clarifies that its 
decision in the Second Reconsideration Order, 58 FR 45266 (Aug. 27, 
1993) (requiring use of historical demand for all components of the 
formula for computing the inter-connection charge) applies only to 
price cap LECs. Rate-of-return LECs continue to be subject to 47 CFR 
61.38 and 61.39, and should continue to use projected demand to set 
transport rates. Consistent with the First Reconsideration Order, 58 FR 
41184 (Aug. 3, 1993), however, these projections should only forecast 
demand growth, and should not attempt to forecast IXCs' 
reconfigurations in response to the transport rate restructure. Second, 
due to the difficulty of applying non-premium charges to flat-rate 
transport elements, the Commission modifies its rules to clarify that 
non-premium charges must be established only for the interconnection 
charge, and not for the facility-based transport elements. Third, the 
Commission modifies the rules to clarify that the LECs must waive 
certain non-recurring charges for a six-month period following the 
effective date of their restructured transport tariffs. Finally, the 
Commission is making limited technical changes to 47 CFR part 69.
    10. In the Further Notice in this proceeding, 57 FR 54205 (Nov. 17, 
1992), the Commission certified that the proposed rule changes would 
not have a significant economic impact on a substantial number of small 
business entities, as defined by section 601(3) of the Regulatory 
Flexibility Act. Neither the Chief Counsel for Advocacy of the Small 
Business Administration nor any commenting party disagreed with that 
analysis. The Secretary shall send a copy of this Report and Order, 
including the certification, to the Chief Counsel for Advocacy of the 
Small Business Administration in accordance with section 605(b) of the 
Regulatory Flexibility Act, Public Law No. 69-354, 94 Stat. 1164, 5 
U.S.C. 601 et seq. (1981).

Ordering Clauses

    11. Accordingly, it is ordered that pursuant to authority contained 
in sections 1, 4(i) and (j), 201-205, 220, and 403 of the 
Communications Act of 1934, as amended, 47 U.S.C. Secs. 151, 154(i) and 
(j), 201-205, 220, and 403, parts 61 and 69 of the Commission's rules 
are Amended as set forth below.
    12. It is further ordered that the policies and rules adopted 
herein shall be effective upon publication in the Federal Register. 
Because the initial restructured transport rates went into effect on 
December 30, 1993, thus allowing LECs subject to price cap regulation 
to propose rate changes that do not comply with the policies adopted 
herein in the absence of these rule changes, good cause exists to make 
these rules effective less than 30 days from publication in the Federal 
Register.
    13. It is further ordered that the Chief, Common Carrier Bureau is 
delegated the authority specified herein.

List of Subjects in 47 CFR Parts 61 and 69

    Communications common carriers, Reporting and recordkeeping 
requirements. Telephone.


Federal Communications Commission.
William F. Caton,
Acting Secretary.

Amendatory Text

    47 CFR parts 61 and 69 are amended as follows:

PART 61--TARIFFS

    1. The authority citation for part 61 continues to read as follows:


    Authority: Sec. 4, 48 Stat. 1066, as amended; 47 U.S.C. 154. 
Interpret or apply sec. 203, 48 Stat. 1070; 47 U.S.C. 203.

    2. Section 61.3 is amended by redesignating paragraphs (jj) and 
(kk) as paragraphs (kk) and (ll), respectively, and adding a new 
paragraph (jj), to read as follows:


Sec. 61.3  Definitions.

* * * * *
    (jj) Tariff year. The period from the day in a calendar year on 
which a carrier's annual access tariff filing is scheduled to become 
effective through the preceding day of the subsequent calendar year.
* * * * *
    3. Section 61.42 is amended by removing paragraphs (e)(1)(iii), 
(e)(1)(iv), and (e)(1)(v); redesignating paragraphs (e)(1)(vi) and 
(e)(1)(vii) as paragraphs (e)(1)(iii) and (e)(1)(iv), respectively; 
revising paragraph (d)(3), redesignated paragraph (e)(1)(iii), the 
introductory text of paragraph (e)(2), paragraph (e)(2)(i), paragraph 
(e)(2)(iii), and paragraph (e)(2)(iv); and adding paragraphs (e)(2)(v) 
and (e)(2)(vi), to read as follows:


Sec. 61.42  Price cap baskets and service categories.

* * * * *
    (d) * * *
    (3) A basket for trunking services as described in Secs. 69.110, 
69.111, 69.112, 69.114, 69.124, and 69.125 of this chapter;
* * * * *
    (e)(1) * * *
    (iii) Data base access services; and
* * * * *
    (2) The trunking basket shall contain such transport and special 
access services as the Commission shall permit or require, including 
the following service categories and subcategories:
    (i) Voice grade entrance facilities, voice grade direct-trunked 
transport, voice grade dedicated signalling transport, voice grade 
special access, WATS special access, metallic special access, and 
telegraph special access services;
* * * * *
    (iii) High capacity flat-rated transport, high capacity special 
access, and DDS services, including the following service 
subcategories:
    (A) DS1 entrance facilities, DS1 direct-trunked transport, DS1 
dedicated signalling transport, and DS1 special access services; and
    (B) DS3 entrance facilities, DS3 direct-trunked transport, DS3 
dedicated signalling transport, and DS3 special access services;
    (iv) Wideband data and wideband analog services;
    (v) Tandem-switched transport, as described in Sec. 69.111 of this 
chapter; and
    (vi) Interconnection charge, as described in Sec. 69.124 of this 
chapter.
* * * * *
    4. Section 61.47 is amended as follows:
    a. Paragraphs (f) and (g) are redesignated as paragraphs (f)(1) and 
(f)(2).
    b. Paragraph (h)(1) is redesignated as paragraph (g)(1).
    (c) Paragraph (i) is redesignated as paragraph (g)(4).
    d. Paragraphs (e)(2) and (e)(3) are redesignated as paragraphs 
(g)(2) and (g)(3) and are revised.
    e. Paragraph (h) is revised.
    f. Headings are added to paragraphs (f) and (g).
    g. The designation (1) in paragraph (e) is removed and paragraph 
(e) is revised.
    (h) Add the words ``or subcategories'' after the words ``service 
categories'' in paragraphs (a) and (b).
    i. Add the words ``or subcategory'' after the words ``service 
category'' in paragraphs (a) and (c).
    j. Remove the words ``Notwithstanding paragraphs (e) and (f) of 
this section'' from redesignated paragraph (f)(2) and add in their 
place ``Notwithstanding paragraph (f)(1) of this section''.
    k. Remove the words ``Notwithstanding paragraph (e) of this 
section,'' from redesignated paragraphs (g)(1) and (g)(4) and 
capitalizing the word ``the'' in each sentence when the phrase is 
removed.
    As amended above, Sec. 61.47 reads as follows:


Sec. 61.47  Adjustments to the SBI; pricing bands.

* * * * *
    (e) Pricing bands shall be established each tariff year for each 
service category and subcategory within a basket. Except as provided in 
paragraphs (f), (g), and (h) of this section, each band shall limit the 
pricing flexibility of the service category or subcategory, as 
reflected in its SBI, to an annual increase or decrease of five 
percent, relative to the percentage change in the PCI for that basket, 
measured from the levels in effect on the last day of the preceding 
tariff year.
    (f) Dominant interexchange carriers.
* * * * *
    (g) Local exchange carriers--Service categories and subcategories.
* * * * *
    (2) The upper pricing band for the tandem-switched transport 
service category shall limit the annual upward pricing flexibility for 
this service category, as reflected in its SBI, to two percent, 
relative to the percentage change in the PCI for the trunking basket, 
measured from the levels in effect on the last day of the preceding 
tariff year. The lower pricing band for the tandem-switched transport 
service category shall limit the annual downward pricing flexibility 
for this service category, as reflected in its SBI, to five percent, 
relative to the percentage change in the PCI for the trunking basket, 
measured from the levels in effect on the last day of the preceding 
tariff year.
    (3) The upper pricing band for the interconnection charge service 
category shall limit the annual upward pricing flexibility for this 
service category, as reflected in its SBI, to zero percent, relative to 
the percentage change in the PCI for the trunking basket, measured from 
the levels in effect on the last day of the preceding tariff year. 
There shall be no lower pricing band for the interconnection charge.
* * * * *
    (h) Local exchange carriers--Density pricing zones.
    (1) In addition to the requirements of paragraphs (g)(1) and (g)(2) 
of this section, those local exchange carriers subject to price cap 
regulation that have established density pricing zones pursuant to 
Sec. 69.123 of this chapter shall use the methodology set forth in 
paragraphs (a) through (d) of this section to calculate separate 
subindexes in each zone for each of the following groups of services:
    (i) DS1 entrance facilities, DS1 direct-trunked transport, DS1 
dedicated signalling transport, and DS1 special access services;
    (ii) DS3 entrance facilities, DS3 direct-trunked transport, DS3 
dedicated signalling transport, and DS3 special access services;
    (iii) Voice grade entrance facilities, voice grade direct-trunked 
transport, and voice grade dedicated signalling transport, and (if the 
Commission, by order, designates such services as subject to 
competition) voice grade special access;
    (iv) Tandem-switched transport; and
    (v) Such other special access services that the Commission may 
designate by order.
    (2) The annual pricing flexibility for each of the subindexes 
specified in paragraph (h)(1) of this section shall be limited to an 
annual increase of five percent or an annual decrease of ten percent, 
relative to the percentage change in the PCI for the trunking basket, 
measured from the levels in effect on the last day of the preceding 
tariff year.
    5. Section 61.48 is amended by revising paragraphs (g) and (h) and 
adding paragraph (i), to read as follows:


Sec. 61.48  Transition rules for price cap formula calculations.

* * * * *
    (g) Local Transport Restructure--Initial Rates. Local exchange 
carriers subject to price cap regulation shall set initial transport 
rates, as defined in Sec. 69.2(tt) of this chapter, according to the 
requirements set forth in Secs. 69.108, 69.110, 69.111, 69.112, 69.124, 
and 69.125 of this chapter.
    (h) Local Transport Restructure--Price Cap Transition Rules--(1) 
Definitions. The following definitions apply for purposes of paragraph 
(h) of this section:
    Effective date is March 4, 1994.
    Initial restructured rates are rates that are (or should have been) 
effective on the transport restructure date;
    Revenue weight of a given group of services included in a basket, 
service category, or subcategory is the ratio of base period demand for 
the given service rate elements included in the basket, service 
category, or subcategory priced at initial restructured rates, to the 
base period demand for the entire group of rate elements comprising the 
basket, service category, or subcategory priced at initial restructured 
rates; and
    Transport restructure date is the date on which local exchange 
carriers' initial transport rates, as defined in Sec. 69.2(tt) of this 
chapter, became effective.
    (2) Trunking Basket PCI and API. (i) On the effective date, the PCI 
value for the trunking basket, as defined in Sec. 61.42(d)(3), shall be 
computed by multiplying the API value for the special access basket on 
the day preceding the transport restructure date, by a weighted average 
of the following:
    (A) The ratio of the PCI value that applied to the special access 
basket on the day preceding the transport restructure date, to the API 
value that applied to the special access basket on the day preceding 
the transport restructure date, weighted by the revenue weight of the 
special access services included in the trunking basket; and
    (B) The ratio of the PCI value that applied to the traffic 
sensitive basket on the day preceding the transport restructure date, 
to the API value that applied to the traffic sensitive basket on the 
day preceding the transport restructure date, weighted by the revenue 
weight of the transport services included in the trunking basket.
    (ii) On the effective date, the API value for the trunking basket 
referred to in Sec. 61.42(e)(2) shall be equal to the API value for the 
special access basket on the day preceding the transport restructure 
date.
    (3) Service Category and Subcategory Pricing Bands for Flat-Rated 
Transport and Special Access. From the effective date through the end 
of the tariff year, the following shall govern instead of 
Secs. 61.47(e) and 61.47(g)(1). The pricing bands established for the 
voice grade and high capacity service categories referred to in 
Secs. 61.42(e)(2)(i) and 61.42(e)(2)(iii) and the DS1 and DS3 service 
subcategories referred to in Secs.  61.42(e)(2)(iii)(A) and 
61.42(e)(2)(iii)(B), shall limit the pricing flexibility of the service 
category or subcategory, as reflected in its SBI, as follows:
    (i) The upper pricing band shall be a weighted average of the 
following:
    (A) The upper pricing band that applied to the special access 
services included in the category or subcategory on the day preceding 
the transport restructure date, weighted by the revenue weight of the 
special access services included in the category or subcategory; and
    (B) 1.05 times the SBI value for the special access services 
included in the category or subcategory on the day preceding the 
transport restructure date, weighted by the revenue weight of the 
transport services included in the category or subcategory.
    (ii) The lower pricing band shall be a weighted average of the 
following:
    (A) The lower pricing band that applied to the special access 
services included in the category or subcategory on the day preceding 
the transport restructure date, weighted by the revenue weight of the 
special access services included in the category or subcategory; and
    (B) 0.95 times the SBI value for the special access services 
included in the category or subcategory on the day preceding the 
transport restructure date, weighted by the revenue weight of the 
transport services included in the category or subcategory.
    (iii) On the effective date, the SBI value for the category or 
subcategory shall be equal to the SBI value for the corresponding 
special access category or subcategory on the day preceding the 
effective date.
    (4) Tandem-Switched Transport and Interconnection Charge SBIs. On 
the effective date, the SBIs for the tandem-switched transport and 
interconnection charge service categories defined in Sec. 61.42(e)(2) 
(v) and (vi) shall be assigned an initial value prior to adjustment of 
100, corresponding to the initial restructured rates in those 
categories.
    (5) Tandem-Switched Transport and Interconnection Charge Service 
Category Pricing Bands. From the effective date through the end of the 
tariff year, the following shall govern instead of Sec. 61.47 (g)(2) 
and (g)(3):
    (i) The upper pricing band for the tandem-switched transport 
service category shall limit the upward pricing flexibility for this 
service category, as reflected in its SBI, to two percent, measured 
from the initial restructured rates for tandem-switched transport. The 
lower pricing band for the tandem-switched transport service category 
shall limit the downward pricing flexibility for this service category, 
as reflected in its SBI, to five percent, measured from the initial 
restructured rates for tandem-switched transport.
    (ii) The upper pricing band for the interconnection charge service 
category shall limit the upward pricing flexibility for this service 
category, as reflected in its SBI, to zero percent, measured from the 
initial restructured rate for the interconnection charge.
    (i) Transport and Special Access Density Pricing Zone Transition 
Rules--(1) Definitions. The following definitions apply for purposes of 
paragraph (i) of this section:
    Earlier date is the earlier of the special access zone date and the 
transport zone date.
    Earlier service is special access if the special access zone date 
precedes the transport zone date, and is transport if the transport 
zone date precedes the special access zone date.
    Later date is the later of the special access zone date and the 
transport zone date.
    Later service is transport if the special access zone date precedes 
the transport zone date, and is special access if the transport zone 
date precedes the special access zone date.
    Revenue weight of a given group of services included in a zone 
category is the ratio of base period demand for the given service rate 
elements included in the category priced at existing rates, to the base 
period demand for the entire group of rate elements comprising the 
category priced at existing rates.
    Special access zone date is the date on which a local exchange 
carrier tariff establishing divergent special access rates in different 
zones, as described in Sec. 69.123(c) of this chapter, becomes 
effective.
    Transport zone date is the date on which a local exchange carrier 
tariff establishing divergent switched transport rates in different 
zones, as described in Sec. 69.123(d) of this chapter, becomes 
effective.
    (2) Simultaneous Introduction of Special Access and Transport 
Zones. Local exchange carriers subject to price cap regulation that 
have established density pricing zones pursuant to Sec. 69.123 of this 
chapter, and whose special access zone date and transport zone date 
occur on the same date, shall initially establish density pricing zone 
SBIs and bands pursuant to the methodology in Sec. 61.47(h).
    (3) Sequential Introduction of Zones in the Same Tariff Year. 
Notwithstanding Sec. 61.47(h), local exchange carriers subject to price 
cap regulation that have established density pricing zones pursuant to 
Sec. 69.123 of this chapter, and whose special access zone date and 
transport zone date occur on different dates during the same tariff 
year, shall, on the earlier date, establish density pricing zone SBIs 
and pricing bands using the methodology described in Sec. 61.47(h), but 
applicable to the earlier service only. On the later date, such 
carriers shall recalculate the SBIs and pricing bands to limit the 
pricing flexibility of the services included in each density pricing 
zone category, as reflected in its SBI, as follows:
    (i) The upper pricing band shall be a weighted average of the 
following:
    (A) The upper pricing band that applied to the earlier services 
included in the zone category on the day preceding the later date, 
weighted by the revenue weight of the earlier services included in the 
zone category; and
    (B) 1.05 times the SBI value for the services included in the zone 
category on the day preceding the later date, weighted by the revenue 
weight of the later services included in the zone category.
    (ii) The lower pricing band shall be a weighted average of the 
following:
    (A) The lower pricing band that applied to the earlier services 
included in the zone category on the day preceding the later date, 
weighted by the revenue weight of the earlier services included in the 
zone category; and
    (B) 0.90 times the SBI value for the services included in the zone 
category on the day preceding the later date, weighted by the revenue 
weight of the later services included in the zone category.
    (iii) On the later date, the SBI value for the zone category shall 
be equal to the SBI value for the category on the day preceding the 
later date.
    (4) Introduction of Zones in Different Tariff Years. 
Notwithstanding Sec. 61.47(h), those local exchange carriers subject to 
price cap regulation that have established density pricing zones 
pursuant to Sec. 69.123 of this chapter, and whose special access zone 
date and transport zone date do not occur within the same tariff year, 
shall, on the earlier date, establish density pricing zone SBIs and 
pricing bands using the methodology described in Sec. 61.47(h), but 
applicable to the earlier service only.
    (i) On the later date, such carriers shall use the methodology set 
forth in paragraphs (a) through (d) of Sec. 61.47 to calculate separate 
SBIs in each zone for each of the following groups of services:
    (A) DS1 special access services;
    (B) DS3 special access services;
    (C) DS1 entrance facilities, DS1 direct-trunked transport, and DS1 
dedicated signalling transport;
    (D) DS3 entrance facilities, DS3 direct-trunked transport, and DS3 
dedicated signalling transport;
    (E) Voice grade entrance facilities, voice grade direct-trunked 
transport, and voice grade dedicated signalling transport;
    (F) Tandem-switched transport; and
    (G) Such other special access services as the Commission may 
designate by order.
    (ii) From the later date through the end of the following tariff 
year, the annual pricing flexibility for each of the subindexes 
specified in paragraph (i)(4)(i) of this section shall be limited to an 
annual increase of five percent or an annual decrease of ten percent, 
relative to the percentage change in the PCI for the trunking basket, 
measured from the levels in effect on the last day of the tariff year 
preceding the tariff year in which the later date occurs.
    (iii) On the first day of the second tariff year following the 
tariff year during which the later date occurs, the local exchange 
carriers to which this paragraph applies shall establish the separate 
subindexes provided in Sec. 61.47(h)(1), and shall set the initial SBIs 
for those density pricing zone categories that are combined (specified 
in paragraphs (i)(4)(i)(A) and (i)(4)(i)(C), (i)(4)(i)(B) and 
(i)(4)(i)(D), and (i)(4)(i)(E) and (i)(4)(i)(G) of this section) by 
computing the weighted averages of the SBIs that applied to the 
formerly separate zone categories, weighted by the revenue weights of 
the respective services included in the zone categories.


Sec. 61.49  [Amended]

    6. Section 61.49(c) is amended by removing the cite 
``Secs. 61.47(e) and (f)'' and adding, in their place, the cite 
``Sec. 61.47(e), (f)(1), (g), and (h)''; and by removing the cite 
``Sec. 61.47(g)'' and adding in their place, the cite 
``Sec. 61.47(f)(2)''.
    7. Section 61.49(d) is amended by removing the cite 
``Sec. 61.47(e)'' and adding, in their place, the cite ``Sec. 61.47(e), 
(g), and (h)''.


Sec. 61.58  [Amended]

    8. Section 61.58(c)(3) is amended by removing the cite 
``Secs. 61.47(e) and (f)'' and adding, in their place, the cite 
``Sec. 61.47(e), (f)(1), (g), and (h)''; and by removing the cite 
``Sec. 61.47(g)'' and adding in their place, the cite 
``Sec. 61.47(f)(2)''.
    9. Section 61.58(c)(4) is amended by removing the cite 
``Sec. 61.47(e)'' and adding, in their place, the cite ``Sec. 61.47(e), 
(g), and (h)''.

PART 69--ACCESS CHARGES

    1. The authority citation for part 69 continues to read as follows:

    Authority: Secs. 4, 201, 202, 203, 205, 218, 403, 48 Stat. 1066, 
1070, 1072, 1077, 1094, as amended, 47 U.S.C. 154, 201, 202, 203, 
205, 218, 403.


Sec. 69.110  [Amended]

    2. Sections 69.110(c)(1) and 69.110(c)(2) are amended by removing 
the words ``to recover the costs'' and adding, in their place, the 
words ``for use''.


Sec. 69.113  [Amended]

    3. Section 69.113(a) is amended by removing the words ``69.110, 
69.111, 69.112''.
    4. Section 69.113(d) is amended by removing the words ``Transport 
element or elements'' and adding, in their place, the words 
``interconnection charge element''.
    5. Section 69.113(e) is amended by removing the words ``transport 
or''.


Sec. 69.126  [Amended]

    Section 69.126 is amended by removing the words ``May 1, 1994'' and 
adding, in their place, the words ``six months after the effective date 
of the tariffs introducing initial transport rates''.

[FR Doc. 94-4672 Filed 3-3-94; 8:45 am]
BILLING CODE 6712-01-M