| type of service. This BNF should exclude
any network functions that are already identified as other BNFs.
(7) Required BNFs for subcategory dedicated transport:
(A) Dedicated transport termination. An interface which
provides for the transmission conversions (e.g., multiplexing) required
between channel connection and dedicated transport facilities.
(B) Dedicated transport facility. The full period,
bandwidth specific (e.g., DS-0, DS-1, and DS-3), interoffice transmission
paths established between two points of dedicated transport termination.
(8) Required BNFs for subcategory switched transport:
(A) Switched transport termination. An interface which
provides for the transmission conversion (e.g., multiplexing) required
between the switching function and switched transport facilities.
(B) Switched transport facility. The temporary interoffice
transmission paths established between two points of switched transport
termination.
(C) Switched transport tandem switching. The intermediate
points of switching used as an economic surrogate to direct routing
of interoffice facilities in the provision of switched transport.
(9) Required BNFs for subcategory billing and collection:
billing and collection. The function of compiling the information
needed for customer billing, preparing the customer bill statement,
disbursing the bill and collecting the customer payments (this includes
any collection activities required for late payment or non-payment
of billing amount due).
(10) Required BNFs for subcategory measurement: measurement.
The function of assembling, collating and transmitting end office
switch recorded call data (occurrence and duration).
(11) Required BNFs for subcategory operator services:
operator services. The role of providing a number of live or mechanized
assistance functions to aid customers in the following ways: obtaining
customer telephone number, street address and ZIP code information
(directory assistance); providing new telephone numbers or explanatory
information to callers who dial numbers which have been changed or
disconnected (intercepts); providing assistance to customers in completing
operator handled toll or local calls (collect, credit card, third
party, station-to-station or person-to-person); checking busy lines
to make sure the line is not out of service (busy line verification);
and interrupting busy lines (busy line interruption). These operator
services are provided to end user customers as well as local exchange
and interexchange carriers.
(f) LRIC studies for individual BNFs. The DCTU must
perform a LRIC study for each of the BNFs identified under subsection
(e) of this section. The company must perform the LRIC studies consistent
with the principles described in subsection (d) of this section. Additionally,
the company must use the following instructions in determining the
LRIC for individual BNFs.
(1) Relevant increment of output. For the purposes
of this subsection, the relevant increment of output, as that term
is used in the definition of LRIC in §26.5 of this title (relating
to Definitions), must be the level of output necessary to satisfy
total current demand levels for all services using the BNF in question.
Adjustments to total service output may be made to reflect the presence
of new services for which demand levels can demonstrably be anticipated
to increase significantly over the course of six months.
(2) Relating expenses to BNFs. The company must avoid
the use of embedded cost data and must determine expenses consistent
with the principles of long run incremental costing.
(A) Common expenses. Common expenses that are not directly
attributable, using the cost causation principle, to the BNF must
be excluded.
(B) Nonrecurring expenses. The expenses of nonrecurring
activities must be separately identified.
(C) Taxes. Any tax expenses not directly attributable,
using the cost causation principle, must be excluded from the LRIC
study for individual BNFs. Specifically, taxes associated with the
provision of services that use more than one BNF must not be included
in the BNF LRICs.
(3) Least cost technology. LRIC studies must assume
the use of least cost technology. The choice of least cost technologies,
however, must:
(A) be restricted to technologies that are currently
available on the market and for which vendor prices can be obtained;
(B) be consistent with the level of output necessary
to satisfy current demand levels for all services using the BNF in
question; and
(C) be consistent with overall network design and topology
requirements.
(4) Network topology. LRIC studies must use the existing
or planned network topology.
(5) Cost of money. When the company uses the most recent
commission approved rate of return for the company, determined either
in a rate proceeding as described in §26.201(d)(1) of this title
(relating to Cost of Service) or a commission arbitration proceeding,
there will be a rebuttable presumption of its reasonableness. The
company may use any other forward-looking rate, but must justify its
use. The DCTU is not required to update its filing only to reflect
the most recently approved cost of money.
(6) Rate of depreciation. When the company uses the
most recent commission approved rate of depreciation for the company
there will be a presumption of reasonableness. The company must justify
the use of any other rate.
(7) Measure of unit cost. LRIC studies must identify
the appropriate measure of unit cost for a BNF (e.g., minutes of use,
access line). The measure of unit cost chosen for a BNF must correspond
to the basis upon which the costs of the BNF are incurred. The measure
of unit cost may be multidimensional; for example, it may have both
time and distance components. In identifying the appropriate measure
of unit cost, the company must ignore the current rate structure for
tariffed services using the BNF.
(8) Determination of unit cost. Using the measure of
unit cost identified under paragraph (7) of this subsection, the company
must calculate unit cost for the BNF based on the assumption of full
capacity utilization of the BNF, which should allow for any spare
capacity due to lumpy investments or technical requirements, such
as spare capacity needed for testing. The unit cost must be calculated
based on the volume sensitive costs of the BNF and exclude all costs
that are volume insensitive (as those terms are defined in §26.5
of this title).
(9) Determination of volume insensitive costs. The
company must calculate the volume insensitive costs (as defined in §26.5
of this title) for the BNF.
(10) Cost drivers. LRIC studies must identify and account
for all relevant cost drivers. LRIC studies for certain BNFs must
at a minimum account for the cost drivers specified below.
(A) Cost drivers for NA channel basic level, NA channel
DS-1 level, and NA channel DS-3 level. The LRICs for these BNFs must
systematically account for variations in costs caused by variations
in:
(i) the density of a wire center;
(ii) the size of a wire center; and
(iii) the distance.
(B) Cost drivers for NA connection basic level, NA
connection DS-1 level, and NA connection DS-3 level. The LRICs for
these BNFs must systematically account for variations in costs caused
by variations in:
(i) the density of a wire center; and
(ii) the size of a wire center.
(C) Cost drivers for intraoffice switching and interoffice
switching. The LRICs for these BNFs must systematically account for
variations in costs caused by variations in:
(i) the density of a wire center;
(ii) the size of a wire center; and
(iii) the time of day.
(D) Cost drivers for dedicated transport facilities
and termination. The LRICs for these BNFs must systematically account
for variations in costs caused by variations in:
(i) the size of a wire center; and
(ii) the distance.
(E) Cost drivers for switched transport facilities,
termination and tandem switching. The LRICs for these BNFs must systematically
account for variations in costs caused by variations in:
(i) the size of a wire center;
(ii) the distance; and
(iii) time of day.
(F) Cost drivers for measurement. The LRIC for this
BNF must systematically account for variations in costs caused by
variations in:
(i) the density of a wire center;
(ii) the size of a wire center;
(iii) the time of day; and
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