Press Release

PUC Approves Access Charge Reform

Published on 6/30/2011

Filed under: Telecommunications

HARRISBURG – The Pennsylvania Public Utility Commission (PUC) today continued its work to further reduce intrastate carrier access rates that long-distance Interexchange Carriers (IXCs) are charged to complete telephone calls by rural local telephone companies (RLECs) in Pennsylvania.  The Commission estimates that its decision today reduces access charges by approximately $50 million for all IXC carriers and their customers.  The Commission expects the IXC carriers to pass on the savings to their end-user customers because the Commission no longer regulates the long-distance rates of the IXCs.  

The Commission voted 5-0 to approve the access charge reform resulting from investigations conducted over several years.  In accordance with Chapter 30 mandates, the Commission is directing that the access charge reductions may be recouped by local exchange carriers through increases to their residential and business customers over a four-year implementation period.  RLECs will be permitted to file rate rebalancing calculations with the Commission to determine possible  increases to their weighted average residential and business local service rates through the use of a new residential basic local exchange service rate benchmark of $23 per month. 

“While not a perfect solution, our action today attempts to strike the appropriate balance between reforming access rates and protecting rural Pennsylvanians and the companies that have provided them with reliable and affordable telephone services for over 100 years,” said Chairman Robert F. Powelson in a statement.

In a statement Commissioner Wayne E. Gardner stated, “our Global Order expressly contemplated that the Commission would progressively re-evaluate the legal and policy decisions that were made in 1999, to accomplish a more permanent solution to balance the goals of access and toll reform and universally available telecommunications service to the citizens of the Commonwealth of Pennsylvania.  I believe that time has come.” 

“Maintaining a balance between competitive telecommunications services markets, the provision of affordable universal service, and retail broadband access especially in the rural areas of Pennsylvania is a difficult challenge,” added Commissioner James H. Cawley in a verbal statement from the bench. “Our decision today is designed to meet these challenges to the best extent possible.”

The Commission also will institute a rulemaking proceeding to consider changes to the Commission’s Pennsylvania Universal Service Fund (PaUSF) regulations as a result of the decision today.  The Commission is directing an advanced notice of proposed rulemaking so that all interested parties may comment on any needed changes to the current regulations.    The PaUSF is not implicated in the current intrastate carrier access charge reform and rate rebalancing for the rural local telephone companies.
The Commission’s decision strikes a balance between the interests of competitive equity among the providers of long-distance services, the maintenance of universal telephone service for Pennsylvania end-user consumers, and the recovery of legitimate intrastate carrier access costs for the use of the rural telephone company networks.  For this purpose, the intrastate common carrier access rate element of the rural local telephone companies is gradually restructured to $2.50 per access line.

On Aug. 3, 2010, the Commission released the Administrative Law Judge’s (ALJ's) recommended decision in the RLECs’ Access Charge Investigation.  The recommended decision addressed the remaining issues in the RLEC’s Access Charge Investigation as well as those issues raised in 96 formal complaints alleging access charge violations by 32 Pennsylvania telephone companies. 
This investigation was originally initiated on Dec. 20, 2004, several years after a first round of access charge reductions directed in the Global Order (Docket Nos. P-00991648 and P-00991649), to examine whether there should be further intrastate access charge and intraLATA toll rate reductions in the RLECs’ service territories as well as to examine the rate issues/changes that should or would result if the Pennsylvania Universal Service Fund (PA USF) disbursements were reduced. 
Following the issuing of a recommended decision, parties in the case filed exceptions and reply exceptions.  These can all be accessed by searching the docket numbers listed below at the following search engine: http://www.puc.state.pa.us/general/search.aspx.
On July 23, 2009, a companion ALJ recommended decision was issued. That recommended decision reopened the then stayed RLEC access charge investigation for the limited purpose of determining, among other things, whether the current $18 benchmark rate cap, for those RLECs that draw from the PA USF, should be increased. 
The Pennsylvania Public Utility Commission balances the needs of consumers and utilities to ensure safe and reliable utility service at reasonable rates; protect the public interest; educate consumers to make independent and informed utility choices; further economic development; and foster new technologies and competitive markets in an environmentally sound manner.
For recent news releases, audio of select Commission proceedings or more information about the PUC, visit our website at www.puc.state.pa.us.
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Docket Nos. I-00040105, and C-2009-2098380 et al.

Contact:

• Denise McCracken
  Senior Communications Specialist
  717-787-5722
  demccracken@pa.gov