4 CCR 723-41
BASIS, PURPOSE AND STATUTORY AUTHORITY.
These rules are issued under the general authority of §§40-2-103(2) C.R.S., § 40-3-102 C.R.S. and § 40- 15-208 C.R.S. They establish the process to be used and the information required by the Commission to implement the provisions of § 40-15-208 C.R.S.
Pursuant to Sections 40-15-502 et seg. C.R.S., the General Assembly of the State of Colorado mandated that local exchange telecommunications markets be open to competition while maintaining the goal of affordable and just and reasonably priced basic service. To accomplish that goal the General Assembly directed the Commission to establish a system of universal service support mechanisms to be funded on a nondiscriminatory, competitively neutral basis.
On May 23, 2001 the Federal Communications Commission released its Fourteenth Report and Order, Twenty-Second Order on Reconsideration and Further Notice of Proposed Rulemaking in CC Docket No. 96-45. In this Order the FCC modified its rules for providing high-cost universal service support to rural telephone companies for the next five years based upon the proposals made by the Rural Task Force established by the Federal-State Joint Board on Universal Service. These rule are also intended to be consistent with the FCC's May 23, 2001 order. These amendments are necessary to ensure that eligible providers continue to receive support under the HCSM and that the Commission and its contractors are reimbursed for any expenses incurred.
RULE 4 CCR 723-41-1. APPLICABILITY.
These rules and regulations govern the operation of the Colorado High Cost Support Mechanism (“HCSM”) and the Colorado High Cost Administration Fund and shall apply to all providers of intrastate telecommunications services.
RULE 4 CCR 723-41-2. DEFINITIONS.
The meaning of terms used within these Rules shall be consistent with their general usage in the telecommunications industry unless specifically defined by Colorado statute or this Rule. In addition to the definitions in this section, the statutory definitions apply. In the event the general usage of terms in the telecommunications industry or the definitions in this Rule conflict with statutory definitions, the statutory definitions control. As used in these Rules, unless the context indicates otherwise, the following definitions shall apply:
723-41-2.1 Access Line. The connection of the end user customer to the public switched network. This definition is not limited to wireline or to any other technology. 723-41-2.2 Administrator. The Commission, or a designee employed by the Commission pursuant to § 40-15-208(3) C.R.S. that performs the administrative functions of the HCSM under the direction of the Commission.
723-41-2.3 Average Schedule Rural Telecommunications Service Providers. Rural Telecommunications Service Providers which are average schedule companies as defined and used in 47 CFR 69.605 to 69.610.
723-41-2.4 Colorado High Cost Administration Fund. (“Fund”) A fund created in the state treasury for the purpose of reimbursing the Commission acting as Administrator for its expenses incurred in the administration of the HCSM.
723-41-2.5 Commission. The Colorado Public Utilities Commission. 723-41-2.6 Common Carrier. For the purpose of this Rule, a Common Carrier is a telecommunications service provider that offers telecommunication services to the public, or to such classes of users as to be effectively available to the public, on a nondiscriminatory basis. 723-41-2.7 Eligible Provider. A basic local exchange provider who has been designated by the Commission pursuant to Rule 4 CCR 723-41-8 as qualified to receive disbursements from the HCSM.
723-41-2.8 Geographic Area. A Commission-defined area of land usually smaller than an incumbent provider's wire center serving area contained wholly within the incumbent's wire center boundaries.
723-41-2.9 High Cost Support Mechanism. (“HCSM”) The HCSM is one mechanism created by statute for the support of universal service within a rural, high-cost geographic support area. 723-41-2.10 Geographic Support Area. A Geographic Area where the Commission has determined that the furtherance of universal basic service requires that support be provided by the HCSM. 723-41-2.11 Provider of Last Resort (POLR). A Commission-designated telecommunications provider that carries the responsibility to offer basic local exchange service to all consumers who request it within a Geographic Area.
723-41-2.12 Proxy Cost. A per Access Line estimate of the revenue required to compensate a telecommunications service provider for providing specific supported services and features based upon the level of investment as generated by the Commission approved Proxy Cost Model. 723-41-2.12.1 Intrastate Proxy Cost. That portion of Proxy Cost that is jurisdictionally applicable to the provision of intrastate supported services. Pursuant to § 40-15-108 C.R.S., the Intrastate Proxy Cost is produced by applying the separation factors of 47 CFR Part 36 to the estimated investments produced by the Commission approved Proxy Cost Model. 723-41-2.13 Proxy Cost Model. A model which produces a per access line estimate of the reasonable, required level of investment in a particular Geographic Area. The proxy cost model produces an estimate of the required investment for a defined set of telephone services or features assuming efficient engineering and design criteria, and deployment of current state-of-the-art technology using the current national local exchange network topology. The proxy cost model shall not favor one type of technology over another. The Proxy Cost Model estimate will be computed using the total number of Access Lines in the geographic area.
723-41-2.14 Retail Revenues. For the purpose of this Rule, retail revenues are those revenues collected from the sale of intrastate telecommunications services to end users. Intrastate telecommunications services include, but are not limited to, all types of local exchange service; non-basic, vertical or discretionary services, also known as Advanced Features, or Premium Services,- ***such as, but not limited to, call waiting, call forwarding, and caller ID; listing services; directory assistance service; cellular telephone and paging services; mobile radio services; personal communications services (PCS) ; both optional and non-optional operator services; wide area telecommunications services (WATS) and WATS-like services; toll-free service; 900 service and other informational services; message telephone service (MTS or toll) ; private line service; special access service; special arrangements; special assemblies; CENTREX, Centron and centron-like services; telex; telegraph; video and/or teleconferencing services; satellite service; the resale of intrastate telecommunications services; payphone services; any services regulated by the Commission under §40-15-305(2) C.R.S.; and such other services as the Commission may by order designate from time to time as equivalent or similar to the services listed above. 723-41-2.14.1 Revenues associated with the sale of cable services identified in § 40-15-401 (1)
1) the weighted average monthly revenues per residential line for all types of residential basic local exchange service in that Geographic Area (such as, but not limited to flat, measured or message service); plus 2) one-half of the average residential revenues per line in that Geographic Area from non-basic, vertical, or discretionary services (such as, but not limited to call waiting, call forwarding, and caller ID.); plus 3) zone or mileage charges; plus 4} the average intrastate residential carrier common line access charges and imputed carrier common line access charges in intrastate Message Toll Service; plus 5) such other revenues as the Commission may, by appropriate order, deem included. 723-41-2.15.2 Business Revenue Benchmark. A Business Benchmark for each Geographic Area shall be calculated as the sum of the following types of revenues received by the incumbent local exchange provider that serves the relevant Geographic Area as of the previous January 1 of the previous year:
1) the weighted average monthly revenues per business line for all types of business basic local exchange service in that Geographic Area (such as, but not limited to flat, measured or message service); plus 2) one-half of the average business revenues per line in that Geographic Area from non-basic, vertical or discretionary services (such as, but not limited to call waiting, call forwarding, and caller ID); plus 3) zone or mileage charges; plus 4} the average intrastate business carrier common line access charges and imputed carrier common line access charges in intrastate Message Toll Service; plus 5) such other revenues as the Commission may, by appropriate order, deem included. 723-41-2.16 Rural Telecommunications Service Provider. A telecommunications service provider which serves only rural exchanges of ten thousand or fewer access lines and meets at least one of the following four criteria:
723-41-2.16.1 provides common carrier service to any local exchange carrier study area that does not include either:
723-41-2.17 Small LEC. A local exchange carrier (LEC) or provider who was certified before July 1, 1996 and who serves a total of fewer than fifty thousand access lines in the State. This is a cumulative statewide total, and therefore not all basic local exchange providers that serve only rural exchanges of ten thousand or fewer access lines are Small LECs. Rural providers that serve a total of more than fifty thousand access lines statewide are not considered Small LECs. 723-41-2.18 Universal Service, Universal Basic Service, Universal Basic Local Exchange Service. The goal that basic local exchange service be available and affordable to all citizens of the State of Colorado.
RULE 4 CCR 723-41-3. GENERAL.
Toward the ultimate goal of universal service, the High Cost Support Mechanism is hereby created and shall be coordinated with the Federal Communications Commission (FCC) Universal Service Fund (USF), as described by regulations found at 47 CFR 36.601 to 36.641, 47 CFR. 54.1 to 54.707 and any other Universal Service Support Mechanism. that may be adopted by the FCC pursuant, to 47 U.S.C. 254 of the Communications Act, as amended by Section 101 of the “Telecommunications Act of 1996.rdquo; 723-41-3.1 The HCSM shall operate on a calendar year basis. The Commission shall, by November 30 of each year, adopt a budget for the HCSM containing:
A) the proposed benchmarks;
B) the proposed contributions to be collected through a rate element assessment by each telecommunications provider; and C) the proposed total amount of the HCSM from which distributions are to be made for the following calendar year.
723-41-3.2 If the budget prepared pursuant to Rule 3.1 and submitted to the General Assembly pursuant to Rule 10.16 contains a proposal for an increase in any of the amounts listed in Rule 3.1 A) through C), such increase shall be suspended until March 31 of the following year. RULE 4 CCR 723-41-4. [Reserved for Future Use].
RULE 4 CCR 723-41-5 SPECIFIC SERVICES AMD FEATURES SUPPORTED BY THE HCSM. The services and features supported by the HCSM are an evolving level of telecommunications services established by the Commission and periodically updated under § 40-15-502(2) C.R.S., to take into account advances in telecommunications and information technologies and services. Until revised, the HCSM will support such services as defined in 4 CCR 723-2, Rule 17.1 of the Rules Regulating Telecommunications Service Providers and Telephone Utilities. In addition, the HCSM will support access to 911 service and such other elements, functions, services, standards or levels necessary to attain Commission described service quality standards or other criteria established pursuant to statute or Commission rule.
RULE 4 CCR 723-41-6. AFFORDABLE PRICE STANDARD FOR BASIC SERVICE. For the purpose of this Rule, the prices in effect for basic local exchange service, excluding outside base rate area zone charges, if any, in each Geographic Area on the effective date of this Rule shall be deemed affordable. Pursuant to § 40-15-502(3} C.R.S., a different level may be set by the Commission and designated as a benchmark price.
RULE 4 CCR 723-41-7. CONTRIBUTORS; REPORTING REQUIREMENTS; RATE ELEMENT CALCULATION; APPLICATION OF RATE ELEMENT TO CUSTOMER BILLINGS; AND REMITTANCE OF CONTRIBUTIONS.
723-41-7.1 Contributors. Every provider of intrastate telecommunications service to the public, or to such classes of users as to be effectively available to the public, every provider of intrastate telecommunications that offers telecommunications for a fee on a non-common carrier basis, and payphone providers that are aggregators not falling within the de minimis exemption of Rule
7.2.1.2 must contribute to the HCSM.
723-41-7.1.1 Revenues associated with the sale of cable services identified in § 40-15-401 (1) (a) C.R.S. shall not be considered when determining a provider's assessment. 723-41-7.2 Process for Determining the HCSM Rate Element. 723-41-7.2.1 Contributor Reporting Requirements. Each telecommunications service provider shall provide to the Administrator a verified accounting of its Retail Revenues, and such other revenues as the Administrator shall request for purposes of determining contributions and disbursements under these Rules. The accounting shall be submitted via the form known as the HCSM Worksheet. The completed HCSM Worksheet shall be submitted to the Administrator twice a year. The HCSM Worksheet shall be due March 31, of each year, containing data for the prior calendar year. The HCSM Worksheet shall be due September 1, of each year, containing data for the six-month period from January 1 through June 30 for the current calendar year.
723-41-7.2.2 Eligible Provider Reporting Requirements.
723-41-7.2.4 Rate Element Calculation. The Administrator shall estimate the total amount of HCSM support that will be needed for the next quarter (including support needed under the Part I Rules and the Part II Rules, and administrative expenses) and shall determine the quarterly factor. This estimate shall be based on the information provided to the Administrator by telecommunications service providers, Eligible Providers, incumbent local exchange service providers, and the information available from the Cost Proxy Model and such other information as the Administrator may gather from the Commission and such providers. The factor shall be equal to the ratio of total statewide HCSM requirement to total statewide Retail Revenues for the period. The appropriate factor shall be converted to a HCSM rate element which shall be applied to the Retail Revenues of each telecommunications service provider. The Commission shall issue an order establishing the appropriate HCSM rate element at least 15 days prior to the first day of each quarter and shall post notice of the setting of such rate element on the Commission's web site. Such HCSM rate element shall be collected and contributed by each telecommunications provider as specified in these Rules. 723-41-7.2.5 The Commission may increase the rate element factor by an amount it reasonably estimates to be necessary to compensate for uncollectible assessments. Such increase shall generally not exceed 5% of the total statewide HCSM requirement. 723-41-7.2.6 Eligible Provider's Net Contribution. The Administrator shall send a notice to each Eligible Provider specifying that the Administrator has determined that either: 723-41-7.2.6.1 the Eligible Provider is an estimated net contributor (estimated contribution is greater than its estimated support) for the quarter; each provider so notified shall remit its actual net contribution as specified in Rule 723-41-7.4; or 723-41-7.2.6.2 the Eligible Provider is an estimated net recipient (estimated contribution is less than its estimated support) for the quarter; each provider so notified shall receive support as specified in Rule 9.6.
723-41-7.3 Application of the Rate Element to Customer Billings. The HCSM rate element shall be applied to the Retail Revenues of each telecommunications service provider's end-user and shall appear as a line item on the monthly bill of each such end-user, except that telecommunications service providers falling within the de minimis exemption of Rule 7.2.1.2 shall not apply the HCSM rate element, nor collect such contribution from their end-users. Where an end-user service location receiving the bill and an end-user service location receiving the service differ, the location of the telecommunication service delivery shall be used to determine whether the HCSM rate element applies.
723-41-7.4 Remittance of Contributions. All telecommunications service providers not falling within the de minimis exemption of Rule 7.2.1.2 shall be responsible for collecting and remitting quarterly the HCSM rate element receipts according to the following procedure: 723-41-7.4.1 Each quarter, or as necessary, the Commission acting as Administrator shall issue an order designating which Eligible Provider(s) each telecommunications service provider is to remit its HCSM rate element receipts. The Commission may direct that certain providers remit their HCSM rate element receipts to the Administrator who will forward the funds thus remitted to the Colorado State Treasurer's Office for deposit to the Fund account.
723-41-7.4.2 The HCSM rate element revenues billed by the telecommunications service provider, net of the amount estimated to be owing to the provider from the HCSM, if any, shall be remitted as directed by the Administrator no more than 30 calendar days after the end of each quarter. If the amount or net amount owed is not remitted by that date, the Administrator shall bill the telecommunications service provider a late payment charge equal to one percent per month of the late amount. If the provider establishes a history of making late contributions, the Commission may issue an order to show cause or other appropriate process to ascertain and implement proper corrective measures including, but not limited to, withholding future support from the HCSM and/or penalties pursuant to §§ 40-7-101, et seg., C.R.S.
723-41-7.4.3 Reconciliation. The Administrator shall perform a review of each Eligible Provider's HCSM account transactions. The review shall consist of a reconcilement of HCSM rate element contributions, HCSM support receipts, and other projected account transactions to the actual HCSM entitlement, as provided in Rule 723-41-9.7. The Administrator shall analyze any deviation between the estimated amount and the verifiably accurate collections and receipts. Adjustments to the standard quarterly transaction amount or any other reconcilable adjustments will be performed in the next quarter. 723-41-7.5 CONTINUING CUSTOMER EDUCATION. Commencing with the first billing cycle of the third quarter of 2000, and annually thereafter, each rate jurisdictional provider collecting the rate element (also known as the “Colorado Universal Service Charge”) shall provide to each of its customers, by message directly printed on the bill, by bill insert, or by separate first class mail, or any combination of these alternatives, the continuing customer education material as may be ordered by the Commission acting as administrator.
RULE 4 CCR 723-41-8. ELIGIBILITY TO RECEIVE SUPPORT FROM THE COLORADO HIGH COST FUND.
723-41-8.1 As a prerequisite for eligibility to receive support from the HCSM, a provider shall be in 'substantial compliance with the Commission's rules applicable to the provision of basic local exchange service.
723-41-8.2 To be designated an Eligible Provider within a Geographic Support Area, a provider must file an application with the Commission, pursuant to this Rule. 723-41-8.2.1 Contents of Application. The application must provide evidence sufficient to establish that:
723-41-8.2.1.3 The provider has the managerial qualifications, financial resources, and technical competence to provide basic local exchange service throughout the specified support area regardless of the availability of facilities or the presence of other providers in the area;
723-41-8.2.1.4 The provider is not receiving funds from the HCSM or any other source that together with revenues, as defined by the Commission-adopted revenue benchmark, exceed the reasonable cost of providing basic local exchange service to customers of such provider; and 723-41-8.2.1.5 The granting of the application serves the public convenience and necessity, as defined in §§ 40-15-101, 40-15-501, and 40-15-502 C.R.S. 723-41-8.2.2 Process for Determining Eligibility.
723-41-8.2.2.1 The Commission will process applications in accordance with the Rules of Practice and Procedure found at 4 CCR 723-1.
723-41-8.2.2.2 An application filed pursuant to Rule 8.2 may be filed contemporaneously with an application for certification, operating authority, or specific forms of price regulation. In addition, an application to be certified as an eligible provider may be filed in a combined application to be designated a provider of last resort or an eligible telecommunications carrier pursuant to4 CCR 723-42. 723-41-8.3 Reseller Eligibility. A provider which provisions its service to end-users solely through purchases of a finished service from a facilities-based provider, and then sells that same service or that service with other services is not eligible to receive support from the HCSM for customers which are served entirely through resale. Rather, the facilities-based provider may be eligible to receive any applicable HCSM support.
723-41-8.4 Eligibility of Service Provider through the Use of UNEs. An Eligible Provider which serves a customer via a combination of its facilities and another's unbundled facilities or solely through the use of unbundled network elements, shall be eligible to receive HCSM support, not to exceed the cost of the unbundled elements used to provide the supported services. If an Eligible Provider provides an unbundled element to another Eligible Provider which is used to provide supported services, the Eligible Provider of the unbundled element shall be eligible to receive HCSM support for the difference between the amount it is receiving for the unbundled element and the element's Proxy Cost.
723-41-8.5 Portability of Support. HCSM support shall be portable between any Eligible Provider chosen by the end-user.
723-41-8.6 Providers certified as a Provider of Last Resort who, on the effective date of these Rules, served only rural exchanges with ten thousand or fewer Access Lines shall be deemed to have met the application requirements in Rules 8.2.1.1, 8.2.1.2, 8.2.1.3, and 8.2.1.5 for the Geographic Support Areas within their service territories as of the effective date of these Rules. 723-41-8.7 Each Eligible Provider, prior to the initial receipt of support from the HCSM shall, as appropriate:
723-41-8.7.1 If the provider i. not subject to Commission rate regulation, the Eligible Provider shall file an application with the Commission providing evidence sufficient to establish that the provider is not receiving funds from the HCSM or any other source that together with revenues, as defined by the Commission-adopted revenue benchmark, exceed the reasonable cost of providing basic local exchange service to customers of such provider. 723-41-8.7.2 If the provider is subject to Commission rate regulation and said rates are filed at the Commission in a tariff or if the provider has been granted a specific form of price regulation that includes price ceilings, the Eligible Provider shall simultaneously file two advice letters and if the provider has been granted a specific form of price regulation, a transmittal letter proposing price changes. Each filing shall propose rates or prices that will lower its overall regulated revenues in an amount equal to the sum of: 1) the initial support from the HCSM; plus 2) the amount of support from any federal program supporting universal service not previously accounted for in setting filed tariff rates, if any. This sum shall be referred to as the “Initial Support”. 723-41-8.7.2.1 The first advice letter filed by such Eligible Provider shall contain a general rate reduction percentage rider (“Tariff-Rider”) applicable, to the extent possible, to all rates for regulated service, excluding services receiving support in order to reduce jurisdictional revenues in the amount of the Initial Support. The amount and distribution of the rate reduction(s) produced by this Tariff-Rider may be adjusted or modified by separate Commission order in other proceedings. Generally, the tariffs proposed in this Tariff-Rider advice letter shall become effective without suspension simultaneous with the initial receipt of support from the HCSM, and shall remain in effect until the permanent rate proposal becomes effective.
723-41-8.7.3 If the Eligible Provider is subject to rate regulation, has been granted a specific form of price regulation by the Commission that does not include price ceilings, and its rates are contained in price lists, the Eligible Provider shall file a transmittal letter proposing price changes that will reduce jurisdictional revenues in the amount of the “Initial Support”.
723-41-8.8 Each Eligible Provider, prior to the effective date of a resetting of the HCSM support per Access Line by the Administrator, shall, as appropriate: 723-41-8.8.1 If the provider is not subject to Commission rate regulation, the Eligible Provider shall file an application with the Commission providing evidence sufficient to establish that the provider is not receiving funds from the HCSM or any other source that together with revenues, as defined by the Commission-adopted revenue benchmark, exceed the reasonable cost of providing basic local exchange service to customers of such provider. 723-41-8.8.2 If the provider is subject to Commission rate regulation and said rates are filed at the Commission in a tariff or if the provider has been granted a specific form of price regulation that includes price ceilings, the Eligible Provider shall file an advice letter. The filing shall adjust its overall regulated revenues in an amount equal to the sum of: 1) the current support from the HCSM, less the amount received by the Eligible Provider from the HCSM for the previous twelve months, if any; plus 2) the current support from any federal program supporting universal service, less the amount received by the Eligible Provider from said federal programs for the previous twelve months, if any. This sum shall be referred to as the “New Support”.
723-41-8.8.3 If the Eligible Provider is subject to rate regulation, has been granted a specific form of price regulation by the Commission, and its rates are contained in price lists, the Eligible Provider shall file a transmittal letter proposing price changes that will reduce jurisdictional revenues in the amount of the “New Support” to be effective upon the implementation of the “New Support”. Any adjustments in prices other than reductions shall be done in accordance with the Eligible Provider's specific form of price regulation. RULE 4 CCR 723-41-9. SUPPORT VIA THE HCSM.
723-41-9.1 The Commission shall establish Geographic Areas for the State by order. Such Geographic Areas may be revised at the discretion of the Commission. 723-41-9.1.1 Disaggregation and Targeting of Colorado High-Cost Support by Rural Incumbent Local Exchange Providers. The disaggregation plan selected by a rural incumbent Eligible Provider for targeting Colorado high-cost support shall be the same plan as that selected by the provider and approved by the Commission pursuant to Rule 4 CCR 723- 42-10 723-41-9.2 Support via the HCSM applicable to Non-Rural Geographic Areas shall be calculated as follows:
723-41-9.2.1 By order, the Commission shall: 1) adopt a Proxy Cost Model; and 2) publish the Intrastate Proxy Cost for each non-rural Geographic Area. The Proxy Cost Model and the resultant Intrastate Proxy Costs shall be updated as necessary. The Commission shall ensure that the HCSM operates such that the basic local exchange service supported bears no more than its reasonable share of the joint and common costs of facilities used to provide those services.
723-41-9.2.2 Where the per line Intrastate Proxy Cost exceeds the applicable Revenue Benchmark in that particular non-rural Geographic Area, the Commission shall designate certain non-rural Geographic Areas as Geographic Support Areas. 723-41-9.2.3 Amount of Support: Each Eligible Provider shall receive support from the HCSM based on the number of Residential and Business Access Lines it serves in the non-rural high cost Geographic Support Areas, as designated by the Commission, multiplied by the difference between the per line Intrastate Proxy Cost in such Geographic Support Area and the applicable per Access Line Revenue Benchmark as determined by the Commission. The amount of support shall be reduced by any other amount of support received by such provider or for which such provider is eligible under support mechanisms established by the federal government and/or this State. 723-41-9.2.4 Revenue Benchmarks. Separate Revenue Benchmarks shall be determined for residential and business supported Access Lines for each Geographic Area according to the formulae defined in Rule 2.15.
723-41-9.3 Support via the HCSM applicable to Rural Geographic Areas (areas served by incumbent rural telecommunication service providers) shall be calculated as fellows: 723-41-9.3.1 By order, the Commission shall: 1) determine the amount of support per Access Line as determined by the Commission pursuant to Rule 18 (based upon the filing of the incumbent rural Eligible Provider serving that area and as modified pursuant to Rule l B.6); and 2) publish the support per access line, disaggregated into such Geographic Support Areas as may be 'designated by the Commission. The Commission shall ensure that the HCSM operates such that the basic local exchange service supported bears no more than its reasonable share of the joint and common costs of facilities used to provide those services.
723-41-9.3.2 Amount of Support: Each Eligible Provider shall receive support from the HCSM in an area served by an incumbent Rural Telecommunications Provider based upon the number of Access Lines the Eligible Provider serves in those high cost Geographic Support Areas, as designated by the Commission, multiplied by the applicable support per Access Line.
723-41-9.3.3 Additional Procedures Governing the Operation of Disaggregated Support: 723-41-9.3.3.1 The disaggregation and targeting plan adopted under Rule 9.1.1 shall be subject to the following general requirements:
723-41-9.3.3.1.6 Until a competitive Eligible Provider is designated in a study area, the quarterly payments to the rural incumbent Eligible Provider will be made based on total annual amounts for its study area divided by 4. 723-41-9.3.3.1.7 When a competitive Eligible Provider is designated anywhere in a rural incumbent Eligible Provider's study area, the per-line amounts used to determine the competitive Eligible Provider's disaggregated support shall be based on the rural incumbent Eligible Provider's then- current total support levels, lines, and disaggregated support relationships.
723-41-9.4 [Reserved for future use.] 723-41-9.5 [Reserved for future use.] 723-41-9.6 Process for Payments. The Administrator will arrange payments to be made to Eligible Providers, which are net recipients from the HCSM, within 30 days of the last calendar day of each quarter.
723-41-9.7 Reconciliation. Following receipt of each Eligible Provider's report to the Administrator pursuant to Rule 7.2.2, the Administrator shall reconcile the estimated disbursements previously authorized for such Eligible Provider for the period for which the report provides information to the actual disbursements to which such provider is entitled (as calculated by Rule 723-41-9.2 and 9.3), and shall send a statement of such reconciliation to each Eligible Provider within 60 days after the receipt of the report. The statement shall show if the provider is entitled to additional amounts from the HCSM, or if the Eligible Provider has received more than the amount of its HCSM entitlement. Such reconciling amounts shall be used by the Administrator in setting the Eligible Provider's entitlements in subsequent quarters. RULE 4 CCR 723-41-10. ADMINISTRATION.
The HCSM shall be under the direction of an Administrator. 723-41-10.1 The Commission, or its designee, shall be the Administrator of the HCSM. 723-41-10.1.1 The Commission may engage a third party entity who meets the criteria set out in this Rule to perform such duties of the Administrator as the Commission may, from time to time, deem necessary or convenient. The entity shall be selected by the Commission according to Colorado State Government contracting procedures. Until such time as an entity has been engaged, or during times when the entity is not available to fulfill its duties, the Commission shall act as the Administrator.
723-41-10.1.1.1.2 Not be a party in any matter before the Commission, nor advocate specific positions before the Commission in any telecommunications service matter;
723-41-10-1.1.1.3 Not be a member in a trade association that advocates positions before the Commission;
723-41-10.1.1.1.4 Not be an affiliate of any provider of telecommunications services;
723-41-10.1.1.1.5 Not issue a majority of its debt to, nor derive a majority of its revenues from nor hold stock in any provider(s) of telecommunications services. This prohibition also applies to any affiliates of the third party entity; and 723-41-10.1.1.1.6 The third party entity shall not have a Board of Directors that includes members with direct financial interests in entities that contribute to or receive support from the HCSM.
723-41-10.2 The reasonable expenses incurred in the administration of the HCSM shall be a cost of the HCSM and shall be paid from the funds contributed to the HCSM. 723-41-10.3 The Administrator shall determine the amount each telecommunications provider must pay into the HCSM and determine the disbursement each Eligible Provider may receive from the HCSM.
723-41-10.4 The Administrator shall net each Eligible Provider's assessment and support prior to receipt of actual funds.
723-41-10.5 To the extent the funding received from providers in any one fiscal year exceeds the cost of administering the HCSM (including such reserve as may be necessary for the proper administration of the HCSM), any unexpended and unencumbered-moneys shall remain in the Fund and shall be credited against the assessment each telecommunications service provider must pay in the succeeding fiscal year.
723-41-10.6 The Administrator shall engage and determine the compensation for such professional and technical assistance as may, in its judgment, be necessary for the ó proper administration of the fund.
723-41-10.7 If the Commission has delegated such duties, the third party entity shall have access to the books of accounts of all telecommunications service providers to the limited extent necessary to verify the intrastate Retail Revenues and other information used in determining contributions and disbursements for the HCSM.
723-41-10.8 The Administrator shall maintain a database which tracks Access Lines eligible for support based on the method through which service is provisioned and the identity of each carrier providing that service in each Geographic Area.
723-41-10.9 The Administrator will develop appropriate forms to be used by all telecommunications service providers and all Eligible Providers for reporting information as required by Rule 7. Copies of the forms will be made available on the Commission's WEB Site and at the offices of the Commission.
723-41-10.10 The Commission shall perform an annual review of HCSM fund recipients. One purpose of this review shall be a verification of continued eligibility. Another purpose shall be a verification of the receipt by each Eligible Provider of the funds to which each provider is entitled and is projected to receive from the HCSM. Subject to such reviews, the Administrator will recommend any required adjustments to HCSM contribution methods, distributions, necessary rule changes and other relevant items that should be considered in connection with the HCSM. 723-41-10.11 The quarterly reports required of each Eligible Provider under Rule 723-41-7.4.3 and 9.7 shall be the principal source for such annual reviews.
723-41-10.12 Supplemental and forecast information that may be requested by the Administrator to assure a complete review shall be provided by all telecommunications service providers to the Administrator, as formally requested, within 10 calendar days of the Administrator's written request. If those persons do not provide the data required within 10 calendar days of the request, the Commission may issue an order to show cause for applicable remedies, including withholding future support from the HCSM and/or penalties as provided in 40-7-101, et seg., C.R.S., or such other appropriate remedies within the discretion of the Commission. 723-41-10.13 The Administrator and the Fund shall operate on a fiscal year which runs from July 1 to June 30 of the succeeding year.
723-41-10.14 The Fund and the HCSM records covering both collections and disbursements shall be audited periodically at the discretion of the Commission by an independent external auditor chosen by the Commission. The costs for conducting audits shall be included in the computation of HCSM requirements.
723-41-10.15 An annual report of the Fund prepared by the Administrator shall be filed with the Commission by October 1 of each year. A copy of the Administrator's annual report shall be provided to the Legislative Audit Committee and to each telecommunications service provider which contributes to the HCSM. This report shall summarize the preceding fiscal year's activity and contain the following:
723-41-10.15.1 A record of the total cost of administration of the HCSM, and 723-41-10.15.2 The most recent audit report.
723-41-10.16 A written annual report of the HCSM, prepared by the Administrator, shall be submitted to the committees of reference in the Senate and House of Representatives that are assigned to hear telecommunications issues, in accordance with Section 24-1-136, C.R.S., by December 1 of each year. A copy of the Administrator's annual report of the HCSM shall be provided to the Legislative Audit Committee and to each telecommunications service provider which contributes to the HCSM. The Administrator may satisfy the latter requirement by notifying the telecommunications service provider of the availability of the annual report via an e-mail message directing the provider to the report on the Commission's web site. The report shall account for the operation of the HCSM during the preceding calendar year and contain the following information, at a minimum:
723-41-10.16.1 The total amount of money that the Commission determined should constitute the HCSM from which distributions would be made;
723-41-10.16.2 The total amount of money ordered to be contributed through a rate element assessment collected by each telecommunications service provider; 723-41-10.16.3 The basis on which the contribution of each telecommunications service provider was calculated;
723-41-10.16.4 The benchmarks used and the basis on which the benchmarks were determined; 723-41-10.16.5 The total amount of money that the Commission determined should be distributed from the HCSM;
723-41-10.16.6 The total amount of money distributed to each telecommunications service provider from the HCSM;
723-41-10.16.7 The basis on which the distribution to telecommunications service providers was calculated;
723-41-10.16.8 As to each telecommunications service provider receiving a distribution, the amount received by geographic support area and the type of customer, the way in which the benefit of the distribution was applied or accounted for; 723-41-10.16.9 The proposed benchmarks, the proposed contributions to be collected through a rate element assessment by each telecommunications provider, and the proposed total amount of the HCSM from which distributions are to be made for the following calendar year; and 723-41-10.16.10 The total amount of distributions made from the HCSM, directly or indirectly, and how they are balanced by rate reductions by all providers for the same period and a full accounting of and justification for any difference.
RULE (4 CCR) 723-41-11. REVIEW OF THE HCSM.
723-41-11.1 For the purpose of determining whether the HCSM mechanism should be reformed, modified or adjusted, the HCSM will be evaluated and reviewed no later than July 1, 1999. Thereafter, reviews shall occur at the discretion of the Commission, but the time period between reviews shall usually not exceed three years. and at least every three years thereafter, for the purpose of determining whether the HCSM should be adjusted.
723-41-11.2 The Commission shall consider opening dockets to consider any changes to these rules that may be necessary as a result of the commencement of the federal USF support to non-rural carriers on January 1, 1999 or as result of the commencement of the federal US? support to rural carriers.
723-41-11.3 The Commission shall consider opening a docket to consider any changes to these rules that may be necessary as a result of the conclusion of every proceeding, conducted pursuant to C.R.S.§ 40-15-502(2), to review the definition of basic service. RULE (4 CCR) 723-41-12. BASE RATS AREA SUBSIDIES.
If there are areas, as of July 1, 1996, that are receiving subsidies within a provider's base rate area, as determined by ó the Commission, such areas may continue, at the Commission's discretion, to receive subsidies or be eligible for funding under the HCSM after July 1, 1996. RULE (4 CCR) 723-41-13. ENFORCEMENT.
723-41-13.1 Holder of a Certificate.
A telecommunications service provider holding a certificate issued by this Commission that fails to make timely reports or to pay, in a timely manner, its contribution when it is due and payable under these Rules may, after notice and opportunity for hearing, have its certificate revoked as provided in Article 6 of Title 40 of the Colorado Revised Statutes (C.R.S.), be denied interconnection to the public switched network, and/or have other appropriate remedies imposed upon them by the Commission. 723-41-13.2 Uncertificated Provider. If a telecommunications service provider that does not hold a certificate from this Commission fails to make timely reports or to pay its contribution when it is due and payable under these Rules may be subject to a Commission action including but not limited to a complaint: 1) to the Federal Communications Commission (FCC) seeking an order directing the delinquent provider to make the payment or for further appropriate remedies; 2) for damages in an Appropriate Court, or 3) other appropriate remedies. 723-41-13.3 Any provider that disputes the requirement that it pay into the HCSM shall (a) post a bond in an amount determined by the Commission pending the resolution of that dispute and (b) repay all other providers with interest (at a rate determined by the Commission) in the event the Commission ó determines that the provider should have been paying into the fund. RULE (4 CCR) 723-41-14. SOCIAL PROGRAMS.
These Rules are not intended to limit or conflict with the Rules for Telecommunications Relay Service for the Disabled Telephone Users (4 CCR 723-28) or the Procedures for Administering the Low Income Telephone Assistance Fund (4 CCR 723-13).
RULE (4 CCR) 723-41-15. VARIANCE AND WAIVER.
The Commission may permit variance or waiver from these Rules, if not contrary to law, for good cause shown if it finds that compliance is impossible, impracticable or unreasonable. RULE (4 CCR) 723-41-16. INCORPORATION BY REFERENCE.
References in these Rules to Parts 32, 36, 54, 64, and 69, are rules issued by the FCC and have been incorporated by reference in these Rules. These rules may be found at 47 CFR Parts 32, 36, 54, 64, and 69, revised as of October 1, 1997 as amended by 12 FCC Rcd 17469 (1997), 62 FR 65036 (12/10/97), 63 FR 3830 (01/27/98), and 63 FR 2094 (01/13/98). References to Parts 32, 36, 54, 64, and 69 do not include later amendments to or editions of those parts. A certified copy of these parts which have been incorporated by reference are maintained at the offices of the Colorado Public Utilities Commission, 1580 Logan Street, OL-2, Denver, Colorado 80203 and are available for inspection during normal business hours. Certified copies of the incorporated rules shall be provided at cost upon request. The Director of the Public Utilities Commission, or his designee, will provide information regarding how the incorporated rules may be obtained or examined. These incorporated rules may be examined at any state publications depository library.
RULE (4 CCR) 723-41-17. CALCULATION OF AVERAGE LOOP, LOCAL SWITCHING, AND EXCHANGE TRUNK COSTS FOR FUND SUPPORT FOR RURAL TELECOMMUNICATIONS SERVICE PROVIDERS.
723-41-17.1 The averages used in calculating HCSM support in this Part II will be computed on the basis of the data reported per this Rule 17 for the preceding calendar year which may be updated at the option of the Rural Telecommunications Service Provider pursuant to 47 CFR 36.612(a). 723-41-17.2 Each basic local exchange provider shall calculate and report its average unseparated loop cost per study area per working loop as prescribed by 47 CFR 36.621, and 36.622 in its Annual Report as required by Rule 25 of the Commission's Rules of Practice and Procedure (4 CCR 723- 1) (Annual Report).
723-41-17.3 The national average unseparated loop cost per working loop shall be as calculated by the National Exchange Carrier Association, as prescribed by 47 CFR 36.622(a)(1). 723-41-17.4 Each Rural Telecommunications Service Provider shall calculate and report, in its Annual Report, its unseparated investment per study area for: 1) local switching equipment (Central Office Equipment, Category 3, [47 CFR 36.125]), and 2) its average number of working loops. 723-41-17.5 Each Rural Telecommunications Service Provider shall calculate and report, in its Annual Report, its unseparated investment per study area for exchange trunk equipment (Cable and Wire Facilities, Category 2, Exchange Trunk, [47 CFR 36.155], and Category 4.12, Exchange Trunk Circuit Equipment [47 CFR 36.126(c) (2)]) .
723-41-17.6 The State average unseparated local switching equipment investment per working loop shall be calculated by dividing the sum of the local switching equipment investments in the State, as reported pursuant to Rule 17.4, for all LECs, except Rural Telecommunications Service Providers as determined by the Staff . of the Commission, by the sum of the working loops in the State, as reported in Rule 17.4, and for all LECs, except Rural Telecommunications Service Providers as determined by the Staff of the Commission. The State average unseparated exchange trunk equipment investment per working loop shall be calculated by dividing the sum of the exchange trunk equipment investments in the State, as reported pursuant to Rule 17.5, and for all LECs, except Rural Telecommunications Service Providers as determined by the Staff of the Commission, by the sum of the working loops in the State, as reported in Rule 17.4, and for all LECs, except Rural Telecommunications Service Providers as determined by the Staff of the Commission.
723-41-17.7 In its Annual Report, each Rural Telecommunications Service Provider shall report to the Administrator of the HCSM the count for each month of access lines for that twelve month period that were subject to the surcharge of Rule 18.6.4.2 and the amounts collected. The count shall include all residential, business, concession and paystations access lines. ó Special access, private or dedicated circuits, and company official lines shall be excluded from the count. 723-41-17.8 In its Annual Report each Rural Telecommunications Service Provider shall report to the Administrator of the HCSM the estimated average number of working loops for the next year. 723-41-17.9 Further reporting requirements may be determined by the Commission. RULE (4 CCR) 723-41-18. CALULATION OF COLORADO HIGH COST FUND SUPPORT PER ACCESS LINE FOR INCUMBENT RURAL TELECOMMUNICATIONS SERVICE PROVIDERS. Incumbent Rural Telecommunications Service Providers, who are not Average Schedule Rural Telecommunications Service Providers, shall be eligible, upon proper showing, for support from the HCSM for high costs in three areas: a) loops, b) local switching, and 3) exchange trunks. Incumbent Average Schedule Rural Telecommunications Service Providers shall be eligible, upon proper showing, for support from the HCSM for high costs as determined by Rule 18.6.1. 723-41-18.1 SUPPORT FOR HIGH LOOP COSTS.
723-41-18.1.1 The HCSM revenue requirement for high loop costs of Rural Telecommunications Service Providers who are not Average Schedule Rural Telecommunications Service Providers shall be determined as follows:
723-41-18.1.1.2 For Rural Telecommunications Service Providers reporting an average unseparated loop cost per working loop in excess of 115 percent of the national average for this cost but not greater than 150 percent of the national average for this cost, the HCSM revenue requirement for high loop costs will be the sum of:
723-41-18.2.1 Rural Telecommunications Service Providers, who are not Average Schedule Rural Telecommunications Service Providers, shall be eligible for support for high local switching costs. The HCSM revenue requirement for high local switching cost support shall be determined as follows:
723-41-18.2.1.2 For Rural Telecommunications Service Providers reporting an average unseparated local switching equipment investment per working loop in excess of the Colorado average as determined in Rule 17.6, for this investment, the revenue requirement for high local switching cost support will be calculated by creating a new service category in the separations study and apportioning the costs of the provider to this service generally following Part 36, CFR. The service category for the HCSM high local switching cost support shall be assigned a portion of Category 3 of local switching equipment investment. The percentage of Category 3 allocated to the HCSM service category shall be known as the Colorado High Local Switching Allocation Factor and shall be calculated as one minus the sum of: (a) the Interstate factor(s), (b) the Intrastate factor(s) of Rule 4 CCR 723-27-18.2.2, and (c) the local exchange factor. The local exchange factor for each Rural Telecommunications Service Provider shall be calculated as the:
723-41-18.3 SUPPORT FOR HIGH EXCHANGE TRUNK COSTS.
723-41-18.3.1 Rural Telecommunications Service Providers, who are not Average Schedule Rural Telecommunications Service Providers, shall be eligible for support for high exchange trunk costs. The HCSM revenue requirement for high exchange trunk cost support shall be determined as follows:
723-41-18.4 SUPPORT FOR HIGH COSTS OF AVERAGE SCHEDULE RURAL TELECOMMUNICATIONS SERVICE PROVIDERS.
723-41-18.4.1 The HCSM support requirement for high cost support for Average Schedule Rural Telecommunications Service Providers shall be determined as the remainder, if positive, of the following process:
723-41-18.5 LOCAL NETWORK SERVICES TARIFF CAP.
In no event shall the local network services revenue requirement, as defined in 47 CFR 32.5000 through 32.5069 (1995), of Rural Telecommunications Service Providers, be in excess of 130 percent of the average, of such revenue requirement for local exchange providers which are not Rural Telecommunications Service Providers. Such excess shall be considered as a part of the Rural Telecommunications Service Providers HCSM support revenue requirement. 723-41-18.6 COLORADO HIGH COST FUND ADMINISTRATION.
723-41-18.6.1 The Commission, acting as Administrator, and pursuant to this Part II of the Rules, shall determine and establish by Order, for each Rural Telecommunications Service Provider, the HCSM support revenue requirement (support per Access Line) that will be effective for a period of up to six years beginning with the date of the Order. 723-41-18.6.1.1 At any time, upon the request and proper support as part of a general rate proceeding by a Rural Telecommunications Service Provider, the Commission, acting as Administrator, may revise the HCSM support revenue requirement that will be effective for a period of up to six years beginning with the date established by order. Further, as a result of a. show cause, complaint or other proceeding, the Commission, acting as Administrator, may revise the HCSM support revenue requirement that will be effective for a period of up to six years beginning with the date established by order.