Sec.  61.46   Adjustments to the API.

   (a)  Except  as provided in paragraphs (d) and (e) of this section, in
   connection with any price cap tariff filing proposing rate changes, the
   carrier must calculate an API for each affected basket pursuant to the
   following methodology:

   API[t] = APIt-1[Σi v[i] (P[t]/Pt-1)i]

   Where:

   API[t] = the proposed API value,

   APIt-1 = the existing API value,

   P[t] = the proposed price for rate element “i,”

   Pt-1 = the existing price for rate element “i,” and

   v[i] = the current estimated revenue weight for rate element “i,” calculated
   as the ratio of the base period demand for the rate element “i” priced at
   the  existing rate, to the base period demand for the entire basket of
   services priced at existing rates.

   (b) New services subject to price cap regulation must be included in the
   appropriate API calculations under paragraph (a) of this section beginning
   at the first annual price cap tariff filing following completion of the base
   period in which they are introduced. This index adjustment requires that the
   demand  for the new service during the base period must be included in
   determining the weights used in calculating the API.

   (c) Any price cap tariff filing proposing rate restructuring shall require
   an adjustment to the API pursuant to the general methodology described in
   paragraph (a) of this section. This adjustment requires the conversion of
   existing rates into rates of equivalent value under the proposed structure,
   and then the comparison of the existing rates that have been converted to
   reflect restructuring to the proposed restructured rates. This calculation
   may  require  use  of carrier data and estimation techniques to assign
   customers of the preexisting service to those services (including the new
   restructured  service)  that  will  remain  or  become available after
   restructuring.

   (d)  The  maximum allowable carrier common line (CCL) revenue shall be
   computed pursuant to the following methodology:

   CCL = CMT−EUCL−Interstate Access Universal Service Support Mechanism Per
   Line−PICC

   Where:

   CMT = Price Cap CMT Revenue as defined in  Sec. 61.3(cc).

   EUCL = Maximum allowable EUCL rates established pursuant to  Sec. 69.152 of this
   chapter multiplied by base period lines.

   Interstate  Access  Universal Service Support Per Line = the amount as
   determined by the Administrator pursuant to  Sec. 54.807 of this chapter times
   the number of base period lines for each customer class and zone receiving
   Interstate Access Universal Service support pursuant to part 54, subpart J.

   PICC = Maximum allowable PICC rates established pursuant to  Sec. 69.153 of this
   chapter multiplied by base period lines.

   (e)  In  no case shall a price cap local exchange carrier include data
   associated  with  services  offered pursuant to contract tariff in the
   calculations required by this section.

   [ 65 FR 38698 , June 21, 2000;  65 FR 57741 , 57742, Sept. 26, 2000]