FCC GIVES SOME LECs ADDITIONAL TIME FOR LNP COST RECOVERY

BellSouth asked the FCC in Nov. to let ILECs assess a “federal user charge” on customers to recover wireless LNP costs and to waive recovery limits for end-user charges. BellSouth sought a waiver to modify its current end-user LNP charge by either extending the recovery period beyond a 5- year cap or increasing its LNP charge for the rest of the period. In Feb. 1999, the FCC let ILECs recover LNP costs via a tariffed monthly charge on end users, with a cap of 5 years. BellSouth began charging end users for wireline LNP in May 1999 at a rate of 35 cents per month, which is to expire next month. The company said it was aware it would incur costs to roll out wireless LNP, but those costs weren’t known at the time it created the end-user charge. In its latest order, the FCC noted wireline LNP costs are the only ones BellSouth will have recovered from end-users in the about-to-expire charge. Wireless LNP took effect in the top 100 markets Nov. 24 after the deadline was delayed several times, starting with an extension in 1999. Wireline LNP began in 1998.

The FCC granted a waiver to all LECs that didn’t include the initial costs of implementing intermodal LNP in cost recovery tariffs already on file. Any ILEC that hasn’t yet filed a tariff to recover these implementation costs will still be subject to the 5-year rule, the FCC said: “Thus, carriers that have not yet begun to recover LNP costs should ensure that future tariff filings include the costs of implementing intermodal LNP.” The order designed the relief to ILECS so end-user charges wouldn’t be increased as these carriers recover the costs of intermodal LNP. LECs covered by the relief set out in the rule “should propose a new, levelized intermodal LNP end-user charge to begin when the original charge sunsets,” the order said.

The FCC didn’t set out a specific recovery period for the additional LNP charge, instead giving each carrier the flexibility to propose its own recovery period as long as the existing charge wasn’t increased. The FCC will review carriers’ proposals in the tariffing process. Each carrier should propose an intermodal LNP end user recovery period as outlined in an earlier LNP cost recovery order, the Commission said. This will let carriers recover “costs in a timely fashion, help produce reasonable charges for customers and avoid imposing such charges over an unduly long period,” it said. “Although we expect costs to vary among carriers, for the vast majority, the intermodal recovery period should be measured in months, not years, and the charge should be levelized at or lower than the individual carrier’s original LNP charge.”

The Commission turned down requests by CenturyTel and Sprint that it declare that costs connected to any future changes to intermodal LNP requirements are recoverable through a new LNP charge without seeking a special waiver.

Copps said the situation that carriers like BellSouth have faced concerning LNP cost recovery has been unfair because the period for recovery will run its course before intermodal costs can be taken into consideration. Based on this and the “Commission’s past failure to be precise about number portability obligations and permissible costs, I support today’s action,” he said. “Now the burden shifts to carriers seeking additional cost recovery. They will have to file detailed cost data to support tariff revisions.” Copps said the FCC will have to assess these numbers carefully before allowing further recovery: “Our careful review is all the more critical when you consider that these tariff revisions are destined for line items on consumer bills.” He reiterated concerns that the FCC needs to take a closer look at truth-in-billing policies to eliminate customer confusion. “We are overdue for an overhaul of our billing rules,” he said.

Adelstein also stressed the FCC has a duty to ensure that carriers seeking to recover intermodal LNP costs adhere to strict standards. He noted that FCC rules require these carriers to file detailed cost support data to demonstrate that such costs are reasonable. “Our review of these filings is essential because it is consumers who ultimately bear these costs,” he said. Adelstein said he hoped the FCC makes a priority out of concerns that consumer advocates have been raising about the legitimacy of line item charges on telecom bills.

BellSouth has said that if it can assess a new charge, it would seek to recover $38 million in additional costs for intermodal LNP. The carrier argued this means that it could charge end users 22 cents over a 6-month period, 43 cents over 3 months or impose a one-time charge of $1.21. “We do not believe that allowing such limited additional recovery harms the policy underlying the five-year rule,” said the order, which was approved Thurs. and released Tues.: “It does not produce unreasonable charges for customers or impose them for an unduly long period.” The order also acknowledged that repeated delays in the implementation of intermodal LNP made cost recovery impractical for carriers that deployed wireline LNP earlier and on schedule.