Utah Admin. Code R746-347-4 - Cost-Based Pricing

A. Cost-Based Study -- If the threshold criteria specified in R746-347-3 are clearly met, the Commission shall direct the incumbent telephone corporations to conduct a study determining cost-based prices of providing EAS to the petitioned route. The study shall determine a precise cost-based EAS rate for both the petitioning and non- petitioning exchanges. These prices shall be used in the survey conducted pursuant to R746-347-5.

B. Costing and Pricing Methodology -- The incumbent carrier shall comply with a uniform EAS costing and pricing methodology for EAS rate development, which shall be jointly defined by the local exchange carrier, the Division and the Committee. The EAS costing and pricing methodology shall comport in all material respects with Total Service Long Run Incremental Cost, as required by Subsections 54-8b-2(13) and 54-8b-3.3.

C. Route-Specific Assumptions -- EAS cost studies shall reflect route-specific assumptions of demand and direct costs attributable to facilities investment and operating expenses.

D. Lost Toll Revenue -- Calculation of the incremental EAS price attributable to expansion of a local calling area may not include as a cost element any estimate of lost toll revenue.

E. Stimulation Factor -- The engineered cost of trunk and circuit facilities converted from toll to local calling may include a specified stimulation factor to reflect carriage of larger traffic volumes resulting from the substitution of flat-rated EAS for usage-sensitive toll rates. In deriving the stimulation factor, consideration shall be given estimated toll traffic provided by the local exchange carriers, foreign exchange lines, and toll resellers.

F. Filing of Study -- The local exchange carrier shall conduct the route-specific EAS cost and pricing analysis and shall file the study promptly upon completion.

Notes

Utah Admin. Code R746-347-4