|(a) Purpose. This section establishes procedures for
processing requests for extended area service (EAS) pursuant to the
Public Utility Regulatory Act (PURA), Chapter 55, Subchapter B. On
or after September 1, 2011, the commission may not require a telecommunications
provider to provide mandatory or optional extended area service to
additional metropolitan areas or calling areas.
(b) Extended Area Service. The term "utility(ies)"
in this section refers to dominant certificated telecommunications
(1) Filing requirements.
(A) In order to be considered by the commission, a
request for EAS shall be initiated by at least one of the following
(i) a petition signed by the greater of 5.0% or 100
of the subscribers in the exchange from which the petition originates;
(ii) a resolution adopted and filed with the commission
by the governing body of a political subdivision provided that said
governing body properly represents the exchange requesting EAS;
(iii) a resolution adopted and filed with the commission
by the board of directors or trustees of a community association representing
an unincorporated community; or
(iv) an application filed by one or more of the affected
(B) A request for establishment of a particular EAS
arrangement pursuant to subparagraph (A)(i), (ii), or (iii) of this
paragraph shall not be considered sooner than three years after either
a determination of the failure of a previous request to meet eligibility
requirements, or final commission action on a previously docketed
request. An exception to this requirement may be granted to any petitioning
exchange which demonstrates that a change of circumstances may have
materially affected traffic levels between the petitioning exchange
and the exchange to which EAS is desired.
(C) A request for EAS shall state the name of the exchange(s)
to which EAS is sought.
(D) The petition shall set forth the name and telephone
number of each signatory and the name of the exchange from which the
subscribers receive service.
(E) Each signature page of a petition for EAS must
contain information which clearly states that establishment of the
requested EAS route may require that subscribers to the service change
their telephone numbers and pay a monthly EAS rate in addition to
their local exchange service rates, as well as applicable service
(F) Requests for EAS into metropolitan exchanges will
be grouped by relevant metropolitan exchange. For each metropolitan
exchange, the commission staff will file a motion to docket a proceeding
for the determination of uniform EAS rate additives as directed by
paragraphs (3), (4), and (5) of this subsection for all pending EAS
requests to that metropolitan exchange. Upon the docketing of such
a proceeding, two weeks notice in a newspaper of general circulation
in the metropolitan area shall be published. The notice shall contain
such information as deemed reasonable by the presiding officer in
the proceeding. No earlier than 60 days from the date of final publication
of notice, the demand studies required by paragraph (3) of this subsection
shall be initiated. New petitions for EAS into the metropolitan exchange
may be accepted prior to the initiation of the demand studies.
(2) Community of interest.
(A) Upon receipt of a proper filing under the provisions
set out in paragraph (1) of this subsection, the utility(ies) involved
will be directed by the commission staff to initiate appropriate calling
usage studies. Within 90 days of receipt of such direction, the utility(ies)
shall provide the results of such studies to the commission staff
and to a representative of the petitioning exchange(s). The message
distribution and revenue distribution detail from the studies shall
be considered proprietary unless the parties agree otherwise and shall
not be released for use outside the context of the commission's proceedings.
The data to be provided shall be based upon a minimum 60 day study
of representative calling patterns, shall be in such form, detail,
and content as the commission staff may reasonably require and shall
include at least the following information:
(i) for business customers and residential customers
and for the combined total, the number of messages and either minutes-of-use
or billed toll revenues per customer account per month, in each direction
over the route being studied;
(ii) a detailed analysis of the distribution of calling
usage among subscribers, in each direction over the route being studied,
showing the number of subscriber accounts placing zero calls, one
call, etc., through ten calls, the number of subscriber accounts placing
between 11 and 20 calls, the number placing between 21 and 50 calls,
and the number of subscriber accounts placing more than 50 calls,
(iii) data showing, by class of service, the number
of subscriber accounts in service for each of the exchanges being
(iv) the distance between rate centers, and the average
revenue per message for the calls during the study period;
(v) the number of foreign exchange (FX) lines in service
over each route and the estimated average calling volumes on these
lines expressed as messages per month;
(vi) a listing of known interexchange carriers providing
service between the petitioning exchange and the exchange(s) to which
EAS is desired.
(B) A community of interest between exchanges shall
be considered to exist from one exchange to the other when:
(i) there is an average (arithmetic mean) of no less
than ten calls per subscriber account per month from one exchange
to the other, and
(ii) no less than two thirds of the subscribers' accounts
place at least five calls per month from one exchange to the other.
(C) A request for EAS shall be assigned a project number
and notice shall be provided, pursuant to paragraph (7) of this subsection,
when a community of interest is found to exist as described in subparagraph
(B) of this paragraph:
(i) on a bilateral basis between exchanges, or
(ii) on a unilateral basis from the petitioning exchange
to the other exchange.
(D) The project shall be established as a formal docket
upon the motion of the commission staff.
(E) Following the docketing of a request, a prehearing
conference shall be scheduled to establish the exchange(s) to which
EAS is sought, and to report any agreements reached by the parties.
The utility(ies) involved shall conduct appropriate demand and costing
analyses according to paragraphs (3) and (4) of this subsection.
(3) Demand analysis.
(A) The utility(ies) involved shall conduct analyses
of anticipated demand for the requested EAS. The data shall be in
such form, detail, and content as the commission staff may reasonably
require and shall include, at a minimum, the following information:
(i) the number of subscribers who are expected to take
the requested service at the estimated rates recommended pursuant
to paragraph (5) of this subsection and the associated probability
of that level of subscribership;
(ii) how call traffic within the requested extended
area is expected to change given the rates and subscribership under
clause (i) of this subparagraph; and
(iii) the total volume of traffic upon which to base
the anticipated switching and trunking requirements resulting from
clauses (i) and (ii) of this subparagraph.
(B) Unless the utility(ies) demonstrates good cause
to expand the time schedule, the utility(ies) shall provide to the
commission staff and to other parties to the proceeding, no later
than 120 days after the prehearing conference, the results of these
analyses, together with supporting schedules and detailed documentation
needed to understand and verify the study results.
(4) Determination of costs.
(A) The utility(ies) involved shall conduct studies
necessary to determine the changes in costs and revenues which may
reasonably be expected to result from establishment of the requested
EAS. These studies shall consider and develop the long run incremental
costs as follows:
(i) switching and trunking costs associated with existing
toll traffic which converts to EAS traffic plus the costs of switching
and trunking required to handle the additional traffic as determined
in paragraph (3)(A)(ii) of this subsection;
(ii) the increases and decreases in expenses resulting
from the new service and the net effect on operating expenses; and
(iii) direct costs incurred by the utility(ies) in
conducting demand analyses in compliance with paragraph (3) of this
(B) The utility(ies) may analyze the effect on toll
revenues in order to present evidence on the overall revenue effects
of providing the requested EAS. Revenue effects supported by such
evidence, if presented, may be included in the EAS rate additives
specified in paragraph (5)(D) of this subsection.
(C) The utility(ies) shall file with the commission's
Filing Clerk and serve copies on commission staff and other parties
to the proceeding the results of these studies, together with supporting
schedules and detailed documentation needed to understand and verify
the study results according to the following schedule, unless the
utility(ies) can demonstrate that good cause exists to expand the
time schedule for a particular study:
(i) incremental costs identified in this paragraph
shall be filed no later than 90 days from the filing of the results
of the demand analysis conducted pursuant to paragraph (3) of this
(ii) toll revenue effects, if analyzed pursuant to
subparagraph (B) of this paragraph, shall be filed no later than 90
days from the filing of the results of the incremental costs, pursuant
to clause (i) of this subparagraph.
(5) EAS rate additives.
(A) Coincident with the filing of cost study results,
or coincident with the toll revenue effect results, if filed, the
utility(ies) shall file recommendations for proposed incremental rate
additives, by class of service, necessary to support the cost of the
added service, as well as to support the toll revenue effect, if such
effect is filed.
(i) EAS rate additives to be assessed on EAS subscribers
in the petitioning exchange(s) are to recover the incremental cost
of providing the service according to paragraph (4)(A) of this subsection
plus 10% of the incremental cost.
(ii) The rate additives to be assessed on subscribers
in the metropolitan exchange for which EAS has been requested are
to recover revenues determined by the following formula: net lost
toll multiplied by percent outbound toll and multiplied by the estimated
EAS take rate. The terms in the formula are defined as follows:
(I) net lost toll - lost toll revenue calculated according
to paragraph (4)(B) of this subsection less the revenue recovered
through the EAS rate additive identified in clause (i) of this subparagraph;
(II) percent outbound toll - this factor is calculated
by dividing toll minutes of use originating in the metropolitan exchange
and terminating in the petitioning exchanges by the total number of
toll minutes of use between the metropolitan exchange and the petitioning
(III) estimated EAS take rate - the estimated number
of EAS subscribers in the petitioning exchanges divided by the total
number of subscribers in the petitioning exchange(s).
(B) Service connection charges will be applicable.
(C) A non-recurring charge to defray the direct incremental
costs of the demand analyses identified in paragraph (4)(A)(iii) of
this subsection shall be charged to subscribers who order the service
within 12 months from the time it is first offered. The non-recurring
charge shall not exceed $5.00 per access line.
(D) The EAS rate additive to be used in the affected
exchange(s) must meet the following standards.
(i) No increase in rates shall be incurred by the subscribers
of non-benefiting exchanges, that is, by subscribers whose calling
scopes are not affected by the requested EAS service.
(ii) If the petitioning exchange demonstrated a unilateral
but not a bilateral community of interest through the requirements
of paragraph (2)(C)(ii) of this subsection, the EAS arrangements shall
be priced using those rate increments designed to recover the added
costs for each route, plus the toll revenue effect, if reasonably
substantiated. The total increment chargeable to subscribers within
an exchange shall be the sum of the increments of all new EAS routes
established for that exchange.
(iii) If the petitioning exchange demonstrated a bilateral
community of interest through the requirements of paragraph (2)(C)(i)
of this subsection and requested that the costs be borne on a bilateral
basis, the additional cost for the new EAS route shall be divided
between the two participating exchanges according to the ratio of
calling volumes between the two exchanges.