In July, the Federal Communications Commission (FCC) released a Further Notice of Proposed Rulemaking (FNPRM) seeking comment on a proposal that would extend the current “jurisdictional separations” freeze extension set to expire on December 31, 2018. The Commission also sought comment on: (1) whether to alter the scope of issues referred to the Joint Board; and (2) allowing rate-of-return carriers that elected to freeze their category relationships in 2001 a “one-time” opportunity to opt out of that freeze so that they can categorize their costs based on current circumstances rather than their circumstances in 2000.
In 2001, the Commission froze the jurisdictional separations rules to allow time for the Federal-State Joint Board on Jurisdictional Separations to develop recommendations on comprehensive separations reforms. Jurisdictional separations rules were first put in place in the 1970s to divide the costs of providing service between the interstate and intrastate jurisdictions. Specifically, these rules were designed to ensure that rate-of-return incumbent local exchange carriers (LECs) apportion the costs of their regulated services between the interstate and intrastate jurisdictions in a manner that reflects the relative use of their networks to provide interstate or intrastate services. However, over the years, the significance of jurisdictional separations results has declined, first as a result of technological advancements in how networks are structured and the services utilized by consumers, but also as a consequence of Commission action to reduce the role a carrier’s costs play in the regulation of rates and in the distribution of high-cost universal service support.
Earlier this week, the FCC extended the jurisdictional separations freeze for up to six years so that the Commission and the Joint Board “can devote their resources to substantive reform, rather than to extending artificial deadlines.” Further, it will allow rate-of-return carriers that elected to freeze their separations category relationships in 2001 to opt out of that freeze.
