§  51.909   Transition of rate-of-return carrier access charges.

   (a) Notwithstanding any other provision of the Commission's rules, on
   December 29, 2011, a Rate-of-Return Carrier shall:

   (1) Cap the rates for all rate elements for services contained in the
   definitions of End Office Access Service, Tandem Switched Transport
   Access Service, and Dedicated Transport Access Service, as well as all
   other interstate switched access rate elements, in its interstate
   switched access tariffs at the rate that was in effect on the December
   29, 2011; and

   (2) Cap, in accordance with §  51.505(b)(2), the rates for rate all
   elements in its intrastate switched access tariffs associated with the
   provision of terminating End Office Access Service and terminating
   Tandem-Switched Transport Access Service at the rates that were in
   effect on the December 29, 2011,

   (i) Using the terminating rates if specifically identified; or

   (ii) Using the rate for the applicable rate element if the tariff does
   not distinguish between originating and terminating.

   (3) Except as provided in paragraph (b)(4) of this section, nothing in
   this section obligates or allows a Rate-of-Return Carrier that has
   intrastate rates lower than its functionally equivalent interstate
   rates to make any intrastate tariff filing or intrastate tariff
   revisions raising such rates.

   (b) Step 1. Beginning July 1, 2012, notwithstanding any other provision
   of the Commission's rules:

   (1) Each Rate-of-Return Carrier shall file intrastate access tariff
   provisions, in accordance with §  51.505(b)(2), that set forth the rates
   applicable to Transitional Intrastate Access Service in each state in
   which it provides Transitional Intrastate Access Service.

   (2) Each Rate-of-Return Carrier shall establish the rates for
   Transitional Intrastate Access Service using the following methodology:

   (i) Calculate total revenue from Transitional Intrastate Access Service
   at the carrier's interstate access rates in effect on December 29,
   2011, using Fiscal Year 2011 intrastate switched access demand for each
   rate element.

   (ii) Calculate total revenue from Transitional Intrastate Access
   Service at the carrier's intrastate access rates in effect on December
   29, 2011, using Fiscal Year 2011 intrastate switched access demand for
   each rate element.

   (iii) Calculate the Step 1 Access Revenue Reduction. The Step 1 Access
   Revenue Reduction is equal to one-half of the difference between the
   amount calculated in (b)(2)(i) of this section and the amount
   calculated in (b)(2)(ii) of this section.

   (iv) A Rate-of-Return Carrier may elect to establish rates for
   Transitional Intrastate Access Service using its intrastate access rate
   structure. Carriers using this option shall establish rates for
   Transitional Intrastate Access Service such that Transitional
   Intrastate Access Service revenue at the proposed rates is no greater
   than Transitional Intrastate Access Service revenue at the intrastate
   rates in effect as of December 29, 2011 less the Step 1 Access Revenue
   Reduction, using Fiscal Year 2011 intrastate switched access demand.
   Carriers electing to establish rates for Transitional Intrastate Access
   Service in this manner shall notify the appropriate state regulatory
   authority of their election in the filing required by §  51.907(b)(1).

   (v) A Rate-of-Return Carrier may elect to apply its interstate access
   rate structure and interstate rates to Transitional Intrastate Access
   Service. In addition to applicable interstate access rates, the carrier
   may, between July 1, 2012 and July 1, 2013, assess a transitional
   per-minute charge on Transitional Intrastate Access Service end office
   switching minutes (previously billed as intrastate access). The
   transitional per-minute charge shall be no greater than the Step 1
   Access Revenue Reduction divided by Fiscal Year 2011 Transitional
   Intrastate Access Service end office switching minutes. Carriers
   electing to establish rates for Transitional Intrastate Access Service
   in this manner shall notify the appropriate state regulatory authority
   of their election in the filing required by §  51.907(b)(1).

   (3) Except as provided in paragraph (b)(4) of this section, nothing in
   this section obligates or allows a Rate-of-Return carrier that has
   intrastate rates lower than its functionally equivalent interstate
   rates to make any intrastate tariff filing or intrastate tariff
   revisions raising such rates.

   (4) If a Rate-of-Return Carrier must make an intrastate switched access
   rate reduction pursuant to paragraph (b)(2) of this section, and that
   Rate-of-Return Carrier has an intrastate rate for a rate element that
   is below the comparable interstate rate for that element, the
   Rate-of-Return Carrier shall:

   (i) Increase the rate for any intrastate rate element that is below the
   comparable interstate rate for that element to the interstate rate no
   later than July 1, 2013;

   (ii) Include any increases made pursuant to paragraph (b)(4)(i) of this
   section in the calculation of its eligible recovery for 2012.

   (c) Step 2. Beginning July 1, 2013, notwithstanding any other provision
   of the Commission's rules:

   (1) Transitional Intrastate Access Service rates shall be no higher
   than the Rate-of-Return Carrier's interstate Terminating End Office
   Access Service and Terminating Tandem-Switched Transport Access Service
   rates and subject to the same rate structure and all subsequent rate
   and rate structure modifications. Except as provided in paragraph
   (c)(2) of this section, nothing in this section obligates or allows a
   Rate-of-Return Carrier that has intrastate rates lower than its
   functionally equivalent interstate rates to make any intrastate tariff
   filing or intrastate tariff revisions to increase such rates.

   (2) If a Rate-of-Return Carrier made an intrastate switched access rate
   reduction in 2012 pursuant to paragraph (b)(2) of this section, and
   that Rate-of-Return Carrier has an intrastate rate for a rate element
   that is below the comparable interstate rate for that element, the
   Rate-of-Return Carrier shall:

   (i) Increase any intrastate rate element that is below the comparable
   interstate rate to the interstate rate by July 1, 2013; and

   (ii) Include any increases made pursuant to paragraph (c)(2)(i) of this
   section in the calculation of its eligible recovery for 2013.

   (d) Step 3. Beginning July 1, 2014, notwithstanding any other provision
   of the Commission's rules:

   (1) Notwithstanding the rate structure rules set forth in §  69.106 of
   this chapter or anything else in the Commission's rules, a
   Rate-of-Return Carrier shall establish separate originating and
   terminating interstate and intrastate rate elements for all components
   within interstate End Office Access Service. For fixed charges, the
   Rate-of-Return Carrier shall divide the amount based on relative
   originating and terminating end office switching minutes. If sufficient
   originating and terminating end office switching minute data is not
   available, the carrier shall divide such charges equally between
   originating and terminating elements.

   (2) Nothing in this Step shall affect Tandem-Switched Transport Access
   Service or Dedicated Transport Access Service.

   (3) Each Rate-of-Return Carrier shall establish rates for interstate
   and intrastate terminating End Office Access Service using the
   following methodology:

   (i) Each Rate-of-Return Carrier shall calculate the 2011 Baseline
   Composite Terminating End Office Access Rate. The 2011 Baseline
   Composite Terminating End Office Access Rate means the Composite
   Terminating End Office Access Rate calculated using Fiscal Year 2011
   interstate demand and the interstate End Office Access Service rates at
   the levels in effect on December 29, 2011.

   (ii) Each Rate-of-Return Carrier shall calculate its 2014 interstate
   Target Composite Terminating End Office Access Rate. The 2014
   interstate Target Composite Terminating End Office Access Rate means
   $0.005 per minute plus two-thirds of any difference between the 2011
   Baseline Composite Terminating End Office Access Rate. and $0.005 per
   minute.

   (iii) Beginning July 1, 2014, no Rate-of-Return Carrier's interstate or
   intrastate Composite Terminating End Office Access Rate shall exceed
   its 2014 interstate Target Composite Terminating End Office Access
   Rate. In the alternative, any Rate-of-Return Carrier may elect to
   implement a single per minute rate element for terminating End Office
   Access Service no greater than the 2014 interstate Target Composite
   Terminating End Office Access Rate.

   (4) Nothing in this section obligates or allows a Rate-of-Return
   Carrier that has intrastate rates lower than its functionally
   equivalent interstate rates to make any intrastate tariff filing or
   intrastate tariff revisions raising such rates.

   (e) Step 4. Beginning July 1, 2015, notwithstanding any other provision
   of the Commission's rules:

   (1) Each Rate-of-Return Carrier shall establish rates for interstate
   and intrastate terminating End Office Access Service using the
   following methodology:

   (i) Each Rate-of-Return Carrier shall calculate its 2015 interstate
   Target Composite Terminating End Office Access Rate. The 2015
   interstate Target Composite Terminating End Office Access Rate means
   $0.005 per minute plus one-third of any difference between the 2011
   Baseline Composite Terminating End Office Access Rate and $0.005 per
   minute.

   (ii) Beginning July 1, 2015, no Rate-of-Return Carrier's interstate or
   intrastate Composite Terminating End Office Access Rate shall exceed
   its 2015 Target Composite Terminating End Office Access Rate. In the
   alternative, any Rate-of-Return Carrier may elect to implement a single
   per minute rate element for terminating End Office Access Service no
   greater than the 2015 interstate Target Composite Terminating End
   Office Access Rate.

   (2) [Reserved]

   (f) Step 5. Beginning July 1, 2016, notwithstanding any other provision
   of the Commission's rules, each Rate-of-Return Carrier shall establish
   interstate and intrastate per minute terminating End Office Access
   Service rates such that its Composite Terminating End Office Access
   Service rate does not exceed $0.005 per minute. Nothing in this section
   obligates or allows a Rate-of-Return Carrier that has intrastate rates
   lower than its functionally equivalent interstate rates to make any
   intrastate tariff filing or intrastate tariff revisions raising such
   rates.

   (g) Step 6. Beginning July 1, 2017, notwithstanding any other provision
   of the Commission's rules:

   (1) Each Rate-of-Return Carrier shall establish rates for terminating
   End Office Access Service using the following methodology:

   (i) Each Rate-of-Return Carrier shall calculate its 2017 interstate
   Target Composite Terminating End Office Access Rate. The 2017
   interstate Target Composite Terminating End Office Access Rate means
   $0.0007 per minute plus two-thirds of any difference between that
   carrier's Terminating End Office Access Service Rate as of July 1, 2016
   and $0.0007 per minute.

   (ii) Beginning July 1, 2017, no Rate-of-Return Carrier's interstate or
   intrastate Composite Terminating End Office Access Rate shall exceed
   its 2017 interstate Target Composite Terminating End Office Access
   Rate. In the alternative, any Rate-of-Return Carrier may elect to
   implement a single per minute rate element for terminating End Office
   Access Service no greater than the 2017 interstate Target Composite
   Terminating End Office Access Rate.

   (2) [Reserved]

   (h) Step 7. Beginning July 1, 2018, notwithstanding any other provision
   of the Commission's rules:

   (1) Each Rate-of-Return Carrier shall establish rates for terminating
   End Office Access Service using the following methodology:

   (i) Each Rate-of-Return Carrier shall calculate its 2018 interstate
   Target Composite Terminating End Office Access Rate. The 2018
   interstate Target Composite Terminating End Office Access Rate means
   $0.0007 per minute plus one-third of any difference between that
   carrier's Terminating End Office Access Service Rate as of July 1, 2016
   and $0.0007 per minute.

   (ii) Beginning July 1, 2018, no Rate-of-Return Carrier's interstate or
   intrastate Composite Terminating End Office Access Rate shall exceed
   its 2018 interstate Target Composite Terminating End Office Access
   Rate. In the alternative, any Rate-of-Return Carrier may elect to
   implement a single per minute rate element for terminating End Office
   Access Service no greater than the 2018 interstate Target Composite
   Terminating End Office Access Rate.

   (2) [Reserved]

   (i) Step 8. Beginning July 1, 2019, notwithstanding any other provision
   of the Commission's rules, each Rate-of-Return Carrier shall establish
   interstate and intrastate rates for terminating End Office Access
   Service that do not exceed $0.0007 per minute.

   (j) Step 9. Beginning July 1, 2020, notwithstanding any other provision
   of the Commission's rules, each Rate-of-Return Carrier shall, in
   accordance with a bill-and-keep methodology, revise and refile its
   federal access tariffs and any state tariffs to remove any intercarrier
   charges for terminating End Office Access Service.

   (k) As set forth in FCC 11-161, states will facilitate implementation
   of changes to intrastate access rates to ensure compliance with the
   Order. Nothing in this section shall alter the authority of a state to
   monitor and oversee filing of intrastate tariffs.

   [ 76 FR 73856 , Nov. 29, 2011, as amended at  77 FR 48452 , Aug. 14, 2012]

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