MEMORANDUM
TO:
MIC Member Companies
DATE:
May 2, 2014
RE:
Important Access Charge Changes effective 7-1-14
From:
Tom Farm, Tom Campbell, and Pat Holton
CC:
Rick Johnson, Cecelia Ray, Brent Christensen
Overview:
This memo details important changes impacting your access charge billing effective July 1, 2014.
Each of these items will require coordination between your company and your billing department or
billing vendor.
Please contact us with any questions related to these changes. Our contact information is listed
below.
Originating Intrastate VoIP Access Billing.
You may recall that the original FCC Access Order required the application of Interstate Access
Rates to both originating and terminating Intrastate VoIP traffic. In a subsequent Second Order on
Reconsideration effective July 13, 2012, the FCC delayed the application of Interstate Access rates
to Intrastate Originating VoIP traffic until July 1, 2014. Based on these FCC orders, the Minnesota
Independent Intrastate Access Tariffs and individual ILEC access tariffs that were filed by Olsen
Thielen were modified as needed to reflect the application of Interstate rates to Intrastate VoIP
traffic with the delay in the application of the Interstate Access rates for originating VoIP traffic until
July 1, 2014. Therefore, effective July 1, 2014, the PVU (Percent VoIP Usage) factors supplied by
Interexchange Carriers will need to be applied against intrastate originating usage.
By applying PVU factors against intrastate originating usage, this usage will be separated between
VoIP and non-VoIP usage. Intrastate originating non-VoIP usage will continue to have your
originating intrastate access rates applied. Intrastate originating VoIP usage will have your
originating interstate access rates applied.
Unfortunately the reductions for Intrastate originating VoIP usage billed at originating interstate
access rates will go directly to your ILEC’s bottom line since the FCC did not establish any method
of recovering such reductions from CAF ICC Support comparable to what happens to Intrastate
Terminated VoIP reductions.
Since the delay in the application of Interstate Access rates to Originating VoIP usage was
effective there has been somewhat limited impetus for ILECs to monitor or challenge the VoIP
Factors supplied by IXC’s since effective July 1, 2012 terminating Intrastate VoIP and Non-VoIP
access revenues have been pooled and effective July 1, 2013 Interstate access rates were
applicable to both VoIP and Non-VoIP terminating intrastate access minutes.
Originating Intrastate VoIP Access Billing (cont’d)
Since the VoIP factors will be applied to originating Intrastate VoIP usage effective July 1, 2014 and
will directly impact your access revenue streams we would encourage you to become more familiar
with the VoIP factors that are being provided by IXCs. To the extent that the factors appear to be
higher than what you would anticipate, you may want to dispute them and attempt to get the IXC to
reduce them prior to when they will be applied to Originating VoIP traffic effective July 1, 2014.
Interstate Access Rates:
If you are a NECA pool participant, you should have received the attached email from NECA
regarding their upcoming rate changes effective July 1, 2014. The July 1, 2014 NECA filing
implements the first step of a three-year reduction in terminating End Office rates towards the target
rate of $0.005 per MOU effective July 1, 2016. This transition will be followed by another three-year
decline towards the target End Office target rate of $0.0007 per MOU effective July 1, 2019. A final
target End Office rate of $0.00 per MOU will be effective July 1, 2020. Per the existing FCC Access
Orders, throughout these transitions, Interstate Common and Dedicated Switched Transport rates
(which were generally mirrored for Intrastate terminating traffic effective July 2, 2013) are scheduled
to remain frozen. This may of course change based on new FCC access orders.
Per the attached NECA E-mail, effective July 1, 2014, NECA will be combining the terminating Local
Switching and Information Surcharge rates into one terminating Local Switching rate per MOU. The
Information Surcharge rate will no longer apply to interstate terminating usage effective July 1,
2014. NECA will establish a combined terminating rate each of the eight Local Switching rate
bands. The rate that will be used will be based on the Local Switching rate band assigned by
NECA. Interstate originating Local Switching and Information Surcharge will remain as two
individual rate elements.
Intrastate Access Rates:
For Intrastate originating access, you will continue to bill Local Switching and Information Surcharge
as two individual rate elements per your existing Intrastate Access Tariffs. The Minnesota
Independent Intrastate Access Tariff (AKA -the MIC Access Tariff) and Individual ILEC access tariffs
that were filed by Olsen Thielen for MIC Members, effective July 2, 2013, were modified to point to
the terminating rates filed by NECA in the FCC Tariff No. 5 for NECA ILECs or to individual
Interstate Tariffs for non-NECA companies rather than containing specific rates. The filings were
handled in this way so that access rate filings would not need to be made as terminating access
rates transition downward in step with Interstate Access rates. Per the anticipated MN Commission
order in the Intrastate Access Docket No. 14-15 there will be a requirement for some sort of letter
filing indicating that no access filing, effective July 1, 2014, is needed since rates are at interstate
rate levels and will continue to decrease as Interstate rates decrease. We currently anticipate that
this letter could be done on a collective basis for most if not all ILECs that are issuing carriers of the
Minnesota Independent Intrastate Access Tariff (AKA -the MIC Access Tariff)
CLEC Impacts:
For those MIC members with CLEC operations there will be similar implications for their access
rates and billing as for ILECs. For those CLECs for which Olsen Thielen completed your Intrastate
Access filing effective July 2, 2014, these filings were also made pointing to the CLEC’s Interstate
Access tariffs for rates rather than including specific rates. Based on this, we do not anticipate that
Intrastate access tariff filings will be needed to implement the terminating Intrastate access rate
reductions for these companies. As with the ILECs, it is anticipated that the MN Commission will
require some sort of letter filing indicating that no access filing is needed since rates are at
interstate rate levels and will continue to decrease as Interstate rates decrease. For those CLECs
that participate in the OLSEN THIELEN & CO., LTD. MINNESOTA CLEC INTRASTATE ACCESS
TARIFF we anticipate that this can be done collectively for the Issuing Carriers. For those CLECs
with stand-alone-Intrastate access tariffs the letters will most likely need to be filed individually for
each CLEC, but we may be able to coordinate a joint filing letter if it appears worthwhile.
Coordination of billing changes with CABs billing:
We recommend that if you have not received correspondence from whomever does your access
billing that they are aware of these changes and are planning on implementing them, that you
contact them to verify these changes in billing will be implemented on timely basis.
Please contact us if you have any specific questions or would like to discuss these issues in more
detail
Sincerely
Tom Farm
[email protected]
651-621-8786
Tom Campbell
[email protected]
651-621-8511
Patrick Holton
[email protected]
651-621-8631