Westelcom Gets FCC Waiver of Rural CLEC Tariff Rules

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The FCC has released an order granting a limited and temporary conditional waiver of the Commission’s rules to allow Westelcom Network, Inc. (Westelcom) an opportunity to transition from the maximum rates that a rural competitive location exchange carrier (Rural CLEC) may charge to the maximum rates that a competitive LEC that is not a Rural CLEC (Non-Rural CLEC) may charge.  In 2001, the Commission established tariff rules governing CLEC interstate switched access charges.  Specifically, the Commission established “market-based” safe harbor benchmarks, which constituted a tariff ceiling for competitive LECs offering switched access services.  The benchmarks have always been based on rates for “similar services” provided by competing ILECs, rather than an FCC analysis of actual CLEC costs, and all CLEC rates at or below the benchmarks are considered presumptively just and reasonable.  In order to foster competition and network deployments, the Commission adopted an “exemption” from this tariff ceiling which effectively allowed Rural CLECs to charge more than rural ILECs for the same services, provided, however, that the Rural CLEC was not violating Section 61.26(a)(6) of the Commission’s rules by serving subscribers in  “incorporated places” with more than 50,000 inhabitants or “urbanized areas” as defined by the Census Bureau.  Westelcom, which provides services to Watertown, NY and rural parts of upstate New York, found that after the 2010 Census, Watertown qualified as an “urbanized area” due to inclusion of adjacent Fort Drum.  Unfortunately for Westelcom, because of federal laws, it was unable to even offer telecommunications services on the military base.  Furthermore, because it lost its exemption under the Commission’s rules, Westelcom faced an immediate 96 percent reduction in its interstate access revenues, a direct result of losing its Rural CLEC exemption.  The Commission has determined that it is in the public interest to grant Westelcom a limited and temporary waiver of Section 61.26(a)(6)(ii) on a “transitional” basis, that effectively lowers Westelcom’s revenues in a gradual process thru June 30, 2019, provided Westelcom keep its tariffs at or below the benchmarks established in the order.

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