NEW YORK PSC TO REDUCE ORIGINATING ACCESS RATES
The New York Public Service Commission (“PSC”) has today issued an Order that would require originating access charges of all carriers to transition to a rate of zero over a seven-year period. The PSC’s transition largely mirrors the approach taken by the FCC in phasing-out terminating access charges in the 2011 Connect America Fund/Intercarrier Compensation Order.
The PSC Order proposes the access charge reductions, and requires carriers to “show cause why these reforms should not be implemented in accordance with the process and schedule” set forth in the order, summarized below.
Year 1: Intrastate rates for originating access would be capped as of June 30, 2014. Carriers
will file tariffs, effective July 1, 2014, to reduce intrastate originating switched end office and
transport rates, if above the carrier’s interstate access rates, by 50 percent of the differential
between the rates and the carrier’s interstate access rates for comparable service.(1)
Year 2: Intrastate originating switched end office and transport rates, if above the carrier’s
interstate access rates, are reduced to parity with the interstate access rates.
Year 3: Originating switched end office rates are reduced by one-third of the differential
between end office rates and $0.0007.
Year 4: Originating switched end office rates are reduced by an additional one-third of the original differential between them and $0.0007.
Year 5: Originating switched end office rates are reduced to $0.0007.
The PSC states that “one notable difference between this plan and the terminating charge reduction is that in Year 1, the 50 percent reduction will not be based on net revenues but instead be a simple 50 percent rate reduction,” as that is “a simple approach that is easy for [the PSC] to monitor” and is consistent with the remainder of the transition.
Year 6: Originating switched end office rates are reduced to zero. Originating switched end
office and transport rates are reduced to $0.0007 for all originating traffic within the tandem
serving area when the originating carrier owns the serving tandem switch.
Year 7: Originating switched end office and transport rates are reduced to zero for all originating
traffic within the tandem serving area when the originating carrier owns the tandem switch.
The PSC directs that “all carriers who will experience originating access charge revenue reductions pursuant to the proposal set forth in this order shall show cause why the proposed originating access charge reductions should not be implemented pursuant to the schedule and recovery mechanism proposed” in the Order and set the following filing deadlines:
- Carrier responses (and comments by other interested parties) due February 28, 2014.
- Replies to initial filings due March 24, 2014.
- Tariff Revisions to be filed June 1, 2014, with effective date of July 1, 2014
Notably, the PSC will be considering these reforms under a notice-and-comment process. The PSC is apparently taking this approach based on staff’s view that “the need for hearings was extremely unlikely and that a hearing process would be unsatisfactory in resolving the issue, while leaving open the possibility that an initial round of comments might demonstrate a need for evidentiary hearings.” Given the very short timeframe for implementation adopted by the PSC, the chances of a hearing being held are very slim.
With a former Session Counsel to the N.Y. PSC Chairman at the firm, we remain active in telecom proceedings at the N.Y. Commission. As we continue to work with the PSC and its Staff on this and other matters, we would be pleased to provide further information or assistance in preparing comments.
ANDY KLEIN 202-289-6955 AKLEIN@KLEINLAWPLLC.COM
PHILIP MACRES 202-289-6956 PMACRES@KLEINLAWPLLC.COM
ALLEN ZORACKI 518-336-4300 AZORACKI@KLEINLAWPLLC.COM