§ 61.47   Adjustments to the SBI; pricing bands.

   (a) In connection with any price cap tariff filing proposing changes in the
   rates of services in service categories, subcategories, or density zones,
   the carrier must calculate an SBI value for each affected service category,
   subcategory, or density zone pursuant to the following methodology:

   SBIt = SBIt-1[Σi vi(Pt/Pt−1)i]

   where

   SBIt = the proposed SBI value,

   SBIt-1 = the existing SBI value,

   Pt = the proposed price for rate element “i,”

   Pt-1 = the existing price for rate element “i,” and

   vi = the current estimated revenue weight for rate element “i,” calculated
   as the ratio of the base period demand for the rate element “i” priced at
   the existing rate, to the base period demand for the entire group of rate
   elements comprising the service category priced at existing rates.

   (b)  New  services  that  are  added to existing service categories or
   subcategories must be included in the appropriate SBI calculations under
   paragraph (a) of this section beginning at the first annual price cap tariff
   filing following completion of the base period in which they are introduced.
   This index adjustment requires that the demand for the new service during
   the  base  period  must be included in determining the weights used in
   calculating the SBI.

   (c)  In  the event that the introduction of a new service requires the
   creation  of  a new service category or subcategory, a new SBI must be
   established for that service category or subcategory beginning at the first
   annual price cap tariff filing following completion of the base period in
   which the new service is introduced. The new SBI should be initialized at a
   value of 100, corresponding to the service category or subcategory rates in
   effect the last day of the base period, and thereafter should be adjusted as
   provided in paragraph (a) of this section.

   (d) Any price cap tariff filing proposing rate restructuring shall require
   an  adjustment to the affected SBI pursuant to the general methodology
   described in paragraph (a) of this section. This adjustment requires the
   conversion  of  existing rates in the rate element group into rates of
   equivalent value under the proposed structure, and then the comparison of
   the existing rates that have been converted to reflect restructuring to the
   proposed restructured rates. This calculation may require use of carrier
   data  and estimation techniques to assign customers of the preexisting
   service to those services (including the new restructured service) that will
   remain or become available after restructuring.

   (e) Pricing bands shall be established each tariff year for each service
   category and subcategory within a basket. Each band shall limit the pricing
   flexibility of the service category, subcategory, as reflected in the SBI,
   to an annual increase of a specified percent listed in this paragraph,
   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. For local
   exchanage carriers subject to price cap regulation as that term is defined
   in § 61.3(ee), there shall be no lower pricing band for any service category
   or subcategory.

   (1) Five percent:

   (i) Local Switching (traffic sensitive basket)

   (ii) Information (traffic sensitive basket)

   (iii) Database Access Services (traffic sensitive basket)

   (iv) 800 Database Vertical Services subservice (traffic sensitive basket)

   (v) Billing Name and Address (traffic sensitive basket)

   (vi) Local Switching Trunk Ports (traffic sensitive basket)

   (vii) Signalling Transfer Point Port Termination (traffic sensitive basket)

   (viii) Voice Grade (trunking and special access baskets)

   (ix) Audio/Video (special access basket)

   (x) Total High Capacity (trunking and special access baskets)

   (xi) DS1 Subservice (trunking and special access baskets)

   (xii) DS3 Subservice (trunking and special access baskets)

   (xiii) Wideband (special access basket)

   (2) Two percent:

   (i) Tandem-Switched Transport (trunking basket)

   (ii) Signalling for Tandem Switching (trunking basket)

   (f) A price cap local exchange carrier may establish density zones pursuant
   to the requirements set forth in § 69.123 of this chapter, for any service in
   the trunking and special access baskets, other than the interconnection
   charge set forth in § 69.124 of this chapter. The pricing flexibility of each
   zone shall be limited to an annual increase of 15 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. There shall be no lower
   pricing band for any density zone.

   (g)-(i)(l) [Reserved]

   (2) Effective January 1, 1998, notwithstanding the requirements of paragraph
   (a) of this section, if a price cap local exchange carrier is recovering
   interconnection charge revenues through per-minute rates pursuant to § 69.155
   of this chapter, any reductions to the PCI for the basket designated in
   § 61.42(d)(3)  resulting  from  the  application  of  the provisions of
   § 61.45(b)(1)(i) and from the application of the provisions of § § 61.45(i)(1)
   and  61.45(i)(2)  shall be directed to the SBI of the service category
   designated in § 61.42(d)(i).

   (3) [Reserved]

   (4) Effective January 1, 1998, the SBI reduction required by paragraph
   (i)(2) of this section shall be determined by dividing the sum of the dollar
   amount of any PCI reduction required by § § 61.45(i)(1) and 61.45(i)(2), by
   the  dollar  amount  associated  with the SBI for the service category
   designated in § 61.42(e)(2)(vi), and multiplying the SBI for the service
   category designated in § 61.42(e)(2)(vi) by one minus the resulting ratio.

   (5) Effective July 1, 2000, notwithstanding the requirements of paragraph
   (a) of this section and subject to the limitations of § 61.45(i), if a price
   cap local exchange carrier is recovering an ATS charge greater than its
   Target Rate as set forth in § 61.3(qq), any reductions to the PCI for the
   traffic  sensitive or trunking baskets designated in § § 61.42(d)(2) and
   61.42(d)(3) resulting from the application of the provisions of § 61.45(b),
   and the formula in § 61.45(b) and from the application of the provisions of
   § § 61.45(i)(1), and 61.45(i)(2) shall be directed to the SBIs of the service
   categories designated in § § 61.42(e)(1) and 61.42(e)(2).

   (j) [Reserved]

   (k)  In  no case shall a price cap local exchange carrier include data
   associated  with  services  offered pursuant to contract tariff in the
   calculations required by this section.

   [ 54 FR 19843 , May 8, 1989]

   Editorial Note: For Federal Register citations affecting § 61.47, see the
   List of CFR Sections Affected, which appears in the Finding Aids section of
   the printed volume and at www.fdsys.gov.

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