§ 51.609   Determination of avoided retail costs.

   (a) Except as provided in § 51.611, the amount of avoided retail costs
   shall be determined on the basis of a cost study that complies with the
   requirements of this section.

   (b) Avoided retail costs shall be those costs that reasonably can be
   avoided when an incumbent LEC provides a telecommunications service for
   resale at wholesale rates to a requesting carrier.

   (c) For incumbent LECs that are designated as Class A companies under
   § 32.11 of this chapter, except as provided in paragraph (d) of this
   section, avoided retail costs shall:

   (1) Include as direct costs, the costs recorded in USOA accounts 6611
   (product management and sales), 6613 (product advertising), 6621 (call
   completion services), 6622, (number services), and 6623 (customer
   services) (§ § 32.6611, 32.6613, 32.6621, 32.6622, and 32.6623 of this
   chapter);

   (2) Include, as indirect costs, a portion of the costs recorded in USOA
   accounts 6121-6124 (general support expenses), 6720 (corporate
   operations expenses), and uncollectible telecommunications revenue
   included in 5300 (uncollectible revenue) (Secs. 32.6121 through
   32.6124, 32.6720 and 32.5300 of this chapter); and

   (3) Not include plant-specific expenses and plant non-specific
   expenses, other than general support expenses (§ § 32.6112-6114,
   32.6211-6565 of this chapter).

   (d) Costs included in accounts 6611, 6613 and 6621-6623 described in
   paragraph (c) of this section (§ § 32.6611, 32.6613, and 32.6621-6623
   of this chapter) may be included in wholesale rates only to the extent
   that the incumbent LEC proves to a state commission that specific costs
   in these accounts will be incurred and are not avoidable with respect
   to services sold at wholesale, or that specific costs in these accounts
   are not included in the retail prices of resold services. Costs
   included in accounts 6112-6114 and 6211-6565 described in paragraph (c)
   of this section (§ § 32.6112-32.6114, 32.6211-32.6565 of this chapter)
   may be treated as avoided retail costs, and excluded from wholesale
   rates, only to the extent that a party proves to a state commission
   that specific costs in these accounts can reasonably be avoided when an
   incumbent LEC provides a telecommunications service for resale to a
   requesting carrier.

   (e) For incumbent LECs that are designated as Class B companies under
   § 32.11 of this chapter and that record information in summary accounts
   instead of specific USOA accounts, the entire relevant summary accounts
   may be used in lieu of the specific USOA accounts listed in paragraphs
   (c) and (d) of this section.

   [ 61 FR 45619 , Aug. 29, 1996, as amended at  67 FR 5700 , Feb. 6, 2002;  69 FR 53652 , Sept. 2, 2004]

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