4 Colo. Code Regs. § 723-2-2463
Current through Register Vol. 47, No. 20, October 25, 2024
Section 4 CCR 723-2-2463 - Fully Regulated Telecommunications Services(a) Costing. (I) TSLRIC studies shall be provided at the time a service rate proposal is submitted. Other cost studies may be provided if deemed relevant. TSLRIC studies will be used to establish price floors as described below in subparagraph (b)(I). FDC studies shall be filed annually, within 120 days after the close of a provider's fiscal year. FDC studies shall be used as a component of the actual pricing process described in subparagraph (b)(IV).(II) If a provider offers a new service that uses a part of the existing investment, a surrogate for a FDC study shall be performed for the new service for the purpose of allocating an appropriate portion of that existing investment to the new service. This is termed a surrogate study because most FDC studies are performed on existing products and services using historical information. The surrogate FDC study shall allocate the existing investment and expenses that the new service uses employing either actual historical or pro forma adjusted investments and expenses. Pro forma adjusted investments and expenses will be considered in cases where the provider desires to reflect a more current view of expenses and/or investments; for example, in situations wherein the provider has obsolete investments or one-time expenses on the books of account that would be inappropriate to include in a cost study for a new service. The estimates of existing costs to be allocated to new services would reduce the total allocations of these costs to existing services by the same amount.(III) Cost studies shall be performed either for all specific service offerings or for all functional components that make up the entirety of services offered. The provider shall notify the Commission in its documentation that it is using either service level or functional component level cost studies. If functional component level cost studies are used, the provider shall also provide information sufficient to match functional components to services.(IV) The FDC studies shall use the cost accounting standards defined in paragraph 2461(g), and the TSLRIC studies shall use the standards presented in the definition of TSLRIC to properly include all costs identifiably related to a given service. Any deviation from these standards shall be clearly stated, a justification provided, and approved by the Commission.(V) Cost studies shall include, but are not limited to, the relevant costs for billing, marketing, advertising, and network costs in addition to any other relevant costs associated with the service.(VI) Cost studies for any service offerings that include, as underlying functionalities, any tariff Part II services or fully regulated Part III services must impute the tariff rates as part of the costs of the services in question.(VII) Cost studies must be approved by the Commission.(VIII) Individual cost studies for each service or functional component must have been performed within three years of being filed.(b) Pricing. (I) The Commission shall set the prices for all fully regulated telecommunications services. Such prices shall be designed to advance universal service at just and reasonable rates. The price for each service must be set to satisfy the following conditions: (A) Total revenue from the given service is equal to or greater than its total service long run incremental cost.(B) Total revenue from any group of services in which the given service appears is equal to or greater than the TSLRIC of the group of services.(C) Total revenue for the given service (or any group of services in which the given service appears) shall be equal to or less than the stand-alone cost for the service (or group of services). However, since stand-alone cost studies may be difficult and burdensome to execute, the Commission may use the FDC for the service (or group of services) plus some determined mark-up as a surrogate price ceiling. For a new service, a FDC study must be produced in accordance with subparagraph (a)(II).(D) The access loop is not a separate service but rather is an input necessary for the provision of many telecommunications services. As such, costs associated with the access loop shall not appear in the TSLRIC of any single service requiring the access loop. Rather, it shall appear as part of the total service long run incremental cost of the entire group of services requiring the loop. Consequently, prices must be set so that the sum of the revenues from all services requiring the access loop covers not only the sum of the total service long run incremental costs for the individual services but also the shared cost of the loop. Finally, regarding the computation of stand-alone costs, since each service in this group requires the access loop, the entire cost of the loop shall appear in the standalone cost for each of these services.(II) Subparagraph (b)(I) will not apply if the Commission specifically determines that, for reasons of public policy, the price for a fully regulated telecommunications service may be below the price floor or above the price ceiling established in subparagraph (b)(I).(III) When the Commission sets the price of a fully regulated telecommunications service below its respective price floor, the amount below the price floor and the source from which the resulting deficit is made up must be identified and specifically approved by the Commission.(IV) The price set by the Commission for a fully regulated telecommunications service may include some portion of the overhead costs of the provider in order to allow the provider to recover its overall revenue requirement. The amount of overhead costs to be recovered by each fully regulated telecommunications service must be specifically identified and must represent the contributions of various services to the covering of overhead costs. As part of this pricing process, the Commission will consider FDC studies. In addition, the following non-exclusive list of factors may be considered by the Commission on a case-by-case basis, depending upon the complexity of the issues and the magnitude of the net revenue involved:(B) Market studies designed to determine market structure, extent of competition, etc.(C) Elasticity of demand and supply studies;(F) Social obligations, e.g., promotion of universal service and absence of rate shock;(G) Rate continuity; and/or (H) Statutory requirements.(V) Any changes to rates for fully regulated telecommunications services shall be made through the traditional tariff review process prior to implementation. This includes, but is not limited to, revenue neutral rate changes of any fully regulated telecommunications services.(VI) Residual pricing may not be used for any services.(VII) Nothing in this paragraph shall be construed to limit the Commission's powers to do all things necessary in fulfilling its statutory duties.39 CR 21, November 10, 2016, effective 12/1/201640 CR 15, August 10, 2017, effective 9/1/201741 CR 03, February 10, 2018, effective 3/2/201842 CR 02, January 25, 2019, effective 2/14/201942 CR 07, April 10, 2019, effective 4/30/201943 CR 02, January 25, 2020, effective 2/14/202043 CR 17, September 10, 2020, effective 8/17/202044 CR 17, September 10, 2021, effective 8/11/202144 CR 18, September 25, 2021, effective 10/15/202145 CR 03, February 10, 2022, effective 12/29/202145 CR 01, January 10, 2022, effective 1/30/202246 CR 05, March 10, 2023, effective 3/30/2023