FCC Announces 2015 Rate Floor Benchmark; Rate Floor Filing Due in June

On April 16, 2015, the FCC’s Wireline Competition Bureau announced the 2015 local rate floor for rate of return carriers that receive high cost loop support (HCLS).  Based on the most recent urban rate survey, the 2015 rate floor for voice services is $21.22, up from $20.46 in 2014.

Under the FCC’s rules, in June, all recipients of HCLS must report the number of residential voice lines with monthly rates plus state fees as of June 1 that fall below the $21.22 local rate floor.  The filing must be made by July 1 with NECA, which then makes the filing with the FCC and USAC. Carriers must then file the data with their respective state commission.

Because the rate floor is being phased in (see schedule below), companies will only face a reduction of HCLS on a dollar-for-dollar basis to the extent that their local rates plus state fees are below $16.00.

The current phase-in schedule for the rate floor is:

Jan. 1, 2015 – June 30, 2016 – support reductions for rates below $16 (rates must be in effect by June 1, 2015)

July 1, 2016 – June 30, 2017 – support reductions for rates below $18 (rates must be in effect by June 1, 2016)

July 1, 2017 – June 30, 2018 – support reductions for rates below $20 (or survey amount if lower) (rates must be in effect by June 1, 2017)

July 1, 2018 – newly calculated rate floor in effect (currently $21.22, but will be recalculated annually)

JSI reminds clients that they should follow relevant state requirements for notifying customers of any rate increases associated with the FCC’s universal service and intercarrier compensation (USF/ICC) reforms, including updating your company’s tariff. Generally, you will need to notify your customers of the impending rate increase in your June bills. If your state does not have notification requirements, JSI still recommends that your company provide notice since proactively notifying your customers of rate changes is always a good business practice. JSI offers a full suite of solutions clients can use to communicate these rate increases to customers-including bill messages, website text, and scripts for customer service representatives.

If you have any questions regarding the rate floor or would like assistance in communicating rate increases with your customers, please contact John Kuykendall at 301-459-7590.

Source: Source email