§ 51.915   Recovery mechanism for price cap carriers.

   (a) Scope. This section sets forth the extent to which Price Cap
   Carriers may recover certain revenues, through the recovery mechanism
   outlined below, to implement reforms adopted in FCC 11-161 and as
   required by § 20.11(b) of this chapter, and § § 51.705 and 51.907.

   (b) Definitions. As used in this section and § 51.917, the following
   terms mean:

   (1) CALLS Study Area. A CALLS Study Area means a Price Cap Carrier
   study area that participated in the CALLS plan at its inception. See
   Access Charge Reform, Price Cap Performance Review for Local Exchange
   Carriers, Low-Volume Long-Distance Users, Federal-State Joint Board on
   Universal Service, Sixth Report and Order in CC Docket Nos. 96-262 and
   94-1, Report and Order in CC Docket No. 99-249, Eleventh Report and
   Order in CC Docket No. 96-45, 15 FCC Rcd 12962 (2000).

   (2) CALLS Study Area Base Factor. The CALLS Study Area Base Factor is
   equal to ninety (90) percent.

   (3) CMRS Net Reciprocal Compensation Revenues. CMRS Net Reciprocal
   Compensation Revenues means the reduction in net reciprocal
   compensation revenues required by § 20.11 of this chapter associated
   with CMRS traffic as described in § 51.701(b)(2), which is equal to its
   Fiscal Year 2011 net reciprocal compensation revenues from CMRS
   carriers.

   (4) Expected Revenues for Access Recovery Charges. Expected Revenues
   for Access Recovery Charges are calculated using the tariffed Access
   Recovery Charge rate for each class of service and the forecast demand
   for each class of service.

   (5) Initial Composite Terminating End Office Access Rate. Initial
   Composite Terminating End Office Access Rate means Fiscal Year 2011
   terminating interstate End Office Access Service revenue divided by
   Fiscal Year 2011 terminating interstate end office switching minutes.

   (6) Lifeline Customer. A Lifeline Customer is a residential lifeline
   subscriber as defined by § 54.400(a) of this chapter that does not pay a
   Residential and/or Single-Line Business End User Common Line Charge.

   (7) Net Reciprocal Compensation. Net Reciprocal Compensation means the
   difference between a carrier's reciprocal compensation revenues from
   non-access traffic less its reciprocal compensation payments for
   non-access traffic during a stated period of time. For purposes of the
   calculations made under § § 51.915 and 51.917, the term does not include
   reciprocal compensation revenues for non-access traffic exchanged
   between Local Exchange Carriers and CMRS providers; recovery for such
   traffic is addressed separately in these sections.

   (8) Non-CALLS Study Area. Non-CALLS Study Area means a Price Cap
   Carrier study area that did not participate in the CALLS plan at its
   inception.

   (9) Non-CALLS Study Area Base Factor. The Non-CALLS Study Area Base
   Factor is equal to one hundred (100) percent for five (5) years
   beginning July 1, 2012. Beginning July 1, 2017, the Non-CALLS Price Cap
   Carrier Base Factor will be equal to ninety (90) percent.

   (10) Price Cap Carrier Traffic Demand Factor. The Price Cap Carrier
   Traffic Demand Factor, as used in calculating eligible recovery, is
   equal to ninety (90) percent for the one-year period beginning July 1,
   2012. It is reduced by ten (10) percent of its previous value in each
   subsequent annual tariff filing.

   (11) Rate Ceiling Component Charges. The Rate Ceiling Component Charges
   consists of the federal end user common line charge and the Access
   Recovery Charge; the flat rate for residential local service (sometimes
   know as the “1FR” or “R1” rate), mandatory extended area service
   charges, and state subscriber line charges; per-line state high cost
   and/or state access replacement universal service contributions, state
   E911 charges, and state TRS charges.

   (12) Residential Rate Ceiling. The Residential Rate Ceiling, which
   consists of the total of the Rate Ceiling Component Charges, is set at
   $30 per month. The Residential Rate Ceiling will be the higher of the
   rate in effect on January 1, 2012, or the rate in effect on January 1
   in any subsequent year.

   (13) True-up Revenues for Access Recovery Charge. True-up revenues for
   Access Recovery Charge are equal to (projected demand minus actual
   realized demand for Access Recovery Charges) times the tariffed Access
   Recovery Charge. This calculation shall be made separately for each
   class of service and shall be adjusted to reflect any changes in
   tariffed rates for the Access Recovery Charge. Realized demand is the
   demand for which payment has been received by the time the true-up is
   made.

   (14) Intrastate 2014 Composite Terminating End Office Access Rate. The
   Intrastate 2014 Composite Terminating End Office Access Rate as used in
   this section is determined by

   (i) If a separate terminating rate is not already generally available,
   developing separate intrastate originating and terminating end office
   rates in accordance with § 51.907(d)(1) using end office access rates at
   their June 30, 2014, rate caps;

   (ii) Multiplying the existing terminating June 30, 2014, intrastate end
   office access rates, or the terminating rates developed in paragraph
   (b)(14)(i) of this section, by the relevant Fiscal Year 2011 intrastate
   demand; and

   (iii) Dividing the sum of the revenues determined in paragraph
   (b)(14)(ii) of this section by 2011 Fiscal Year intrastate terminating
   local switching minutes.

   (c) 2011 Price Cap Carrier Base Period Revenue. 2011 Price Cap Carrier
   Base Period Revenue is equal to the sum of the following three
   components:

   (1) Terminating interstate end office switched access revenues and
   interstate Tandem-Switched Transport Access Service revenues for Fiscal
   Year 2011 received by March 31, 2012;

   (2) Fiscal Year 2011 revenues from Transitional Intrastate Access
   Service received by March 31, 2012; and

   (3) Fiscal Year 2011 reciprocal compensation revenues received by March
   31, 2012, less fiscal year 2011 reciprocal compensation payments made
   by March 31, 2012.

   (d) Eligible recovery for Price Cap Carriers. (1) Notwithstanding any
   other provision of the Commission's rules, a Price Cap Carrier may
   recover the amounts specified in this paragraph through the mechanisms
   described in paragraphs (e) and (f) of this section.

   (i) Beginning July 1, 2012, a Price Cap Carrier's eligible recovery
   will be equal to the CALLS Study Area Base Factor and/or the Non-CALLS
   Study Area Base Factor, as applicable, multiplied by the sum of the
   following three components:

   (A) The amount of the reduction in Transitional Intrastate Access
   Service revenues determined pursuant to § 51.907(b)(2) multiplied by the
   Price Cap Carrier Traffic Demand Factor;

   (B) CMRS Net Reciprocal Compensation Revenues multiplied by the Price
   Cap Carrier Traffic Demand Factor; and

   (C) A Price Cap Carrier's reductions in Fiscal Year 2011 net reciprocal
   compensation revenues resulting from rate reductions required by
   § 51.705, other than those associated with CMRS traffic as described in
   § 51.701(b)(2), which may be calculated in one of the following ways:

   (1) Calculate the reduction in Fiscal Year 2011 net reciprocal
   compensation revenue as a result of rate reductions required by § 51.705
   using Fiscal Year 2011 reciprocal compensation demand, and then
   multiply by the Price Cap Carrier Traffic Demand Factor;

   (2) By using a composite reciprocal compensation rate as follows:

   (i) Establish a composite reciprocal compensation rate for its Fiscal
   Year 2011 reciprocal compensation receipts and its Fiscal Year 2011
   reciprocal compensation payments by dividing its Fiscal Year 2011
   reciprocal compensation receipts and payments by its respective Fiscal
   Year 2011 demand excluding demand for traffic exchanged pursuant to a
   bill-and-keep arrangement;

   (ii) Calculate the difference between each of the composite reciprocal
   compensation rates and the target reciprocal compensation rate set
   forth in § 51.705 for the year beginning July 1, 2012 multiply by the
   appropriate Fiscal Year 2011 demand, and then multiply by the Price Cap
   Carrier Traffic Demand Factor; or

   (3) For the purpose of establishing its recovery for net reciprocal
   compensation, a Price Cap Carrier may elect to forgo this step and
   receive no recovery for reductions in net reciprocal compensation. If a
   carrier elects this option, it may not change its election at a later
   date.

   (ii) Beginning July 1, 2013, a Price Cap Carrier's eligible recovery
   will be equal to the CALLS Study Area Base Factor and/or the Non-CALLS
   Study Area Base Factor, as applicable, multiplied by the sum of the
   following three components:

   (A) The cumulative amount of the reduction in Transitional Intrastate
   Access Service revenues determined pursuant to § 51.907(b)(2) and (c)
   multiplied by the Price Cap Carrier Traffic Demand Factor; and

   (B) CMRS Net Reciprocal Compensation Revenues multiplied by the Price
   Cap Carrier Traffic Demand Factor; and

   (C) A Price Cap Carrier's cumulative reductions in Fiscal Year 2011 net
   reciprocal compensation revenues other than those associated with CMRS
   traffic as described in § 51.701(b)(2) resulting from rate reductions
   required by § 51.705 may be calculated in one of the following ways:

   (1) Calculate the cumulative reduction in Fiscal Year 2011 net
   reciprocal compensation revenue as a result of rate reductions required
   by § 51.705 using Fiscal Year 2011 reciprocal compensation demand and
   then multiply by the Price Cap Carrier Traffic Demand Factor;

   (2) By using a composite reciprocal compensation rate as follows:

   (i) Establish a composite reciprocal compensation rate for its Fiscal
   Year 2011 reciprocal compensation receipts and its Fiscal Year 2011
   reciprocal compensation payments by dividing its Fiscal Year 2011
   reciprocal compensation receipts and payments by its respective Fiscal
   Year 2011 demand excluding demand for traffic exchanged pursuant to a
   bill-and-keep arrangement;

   (ii) Calculate the difference between each of the composite reciprocal
   compensation rates and the target reciprocal compensation rate set
   forth in § 51.705 for the year beginning July 1, 2013, using the
   appropriate Fiscal Year 2011 demand, and then multiply by the Price Cap
   Carrier Traffic Demand Factor; or

   (3) For the purpose of establishing its recovery for net reciprocal
   compensation, a Price Cap Carrier may elect to forgo this step and
   receive no recovery for reductions in net reciprocal compensation. If a
   carrier elects this option, it may not change its election at a later
   date.

   (iii) Beginning July 1, 2014, a Price Cap Carrier's eligible recovery
   will be equal to the CALLS Study Area Base Factor and/or the Non-CALLS
   Study Area Base Factor, as applicable, multiplied by the sum of the
   amounts in paragraphs (d)(1)(iii)(A) through (d)(1)(iii)(E), of this
   section, and then adding the amount in paragraph (d)(1)(iii)(F) of this
   section to that amount:

   (A) The amount of the reduction in Transitional Intrastate Access
   Service revenues determined pursuant to § 51.907(b)(2) and (c)
   multiplied by the Price Cap Carrier Traffic Demand Factor; and

   (B) The reduction in interstate switched access revenues equal to the
   difference between the 2011 Baseline Composite Terminating End Office
   Access Rate and the 2014 Target Composite Terminating End Office Access
   Rate determined pursuant to § 51.907(d) using Fiscal Year 2011
   terminating interstate end office switching minutes, and then multiply
   by the Price Cap Carrier Traffic Demand Factor;

   (C) If the carrier reduced its 2014 Intrastate Terminating End Office
   Access Rate(s) pursuant to § 51.907(d)(2), the reduction in revenues
   equal to the difference between either the Intrastate 2014 Composite
   Terminating End Office Access Rate and the Composite Terminating End
   Office Access Rate based on the maximum terminating end office rates
   that could have been charged on July 1, 2014, or the 2014 Target
   Composite Terminating End Office Access Rate, as applicable, using
   Fiscal Year 2011 terminating intrastate end office switching minutes,
   and then multiply by the Price Cap Carrier Traffic Demand Factor;

   (D) CMRS Net Reciprocal Compensation Revenues multiplied by the Price
   Cap Carrier Traffic Demand Factor; and

   (E) A Price Cap Carrier's cumulative reductions in Fiscal Year 2011 net
   reciprocal compensation revenues other than those associated with CMRS
   traffic as described in § 51.701(b)(2) resulting from rate reductions
   required by § 51.705 may be calculated in one of the following ways:

   (1) Calculate the cumulative reduction in Fiscal Year 2011 net
   reciprocal compensation revenue as a result of rate reductions required
   by § 51.705 using Fiscal Year 2011 reciprocal compensation demand, and
   then multiply by the Price Cap Carrier Traffic Demand Factor;

   (2) By using a composite reciprocal compensation rate as follows:

   (i) Establish a composite reciprocal compensation rate for its Fiscal
   Year 2011 reciprocal compensation receipts and its Fiscal Year 2011
   reciprocal compensation payments by dividing its Fiscal Year 2011
   reciprocal compensation receipts and payments by its respective Fiscal
   Year 2011 demand excluding demand for traffic exchanged pursuant to a
   bill-and-keep arrangement;

   (ii) Calculate the difference between each of the composite reciprocal
   compensation rates and the target reciprocal compensation rate set
   forth in § 51.705 for the year beginning July 1, 2014, using the
   appropriate Fiscal Year 2011 demand, and then multiply by the Price Cap
   Carrier Traffic Demand Factor; or

   (3) For the purpose of establishing its recovery for net reciprocal
   compensation, a Price Cap Carrier may elect to forgo this step and
   receive no recovery for reductions in net reciprocal compensation. If a
   carrier elects this option, it may not change its election at a later
   date.

   (F) An amount equal to True-up Revenues for Access Recovery Charges for
   the year beginning July 1, 2012.

   (iv) Beginning July 1, 2015, a Price Cap Carrier's eligible recovery
   will be equal to the CALLS Study Area Base Factor and/or the Non-CALLS
   Study Area Base Factor, as applicable, multiplied by the sum of the
   amounts in paragraphs (d)(1)(iv)(A) through (d)(1)(iv)(E) of this
   section and then adding the amount in paragraph (d)(1)(iv)(F) of this
   section to that amount:

   (A) The amount of the reduction in Transitional Intrastate Access
   Service revenues determined pursuant to § 51.907(b)(2) and (c)
   multiplied by the Price Cap Carrier Traffic Demand Factor;

   (B) The reduction in interstate switched access revenues equal to the
   difference between the 2011 Baseline Composite Terminating End Office
   Access Rate and the 2015 Target Composite Terminating End Office Access
   Rate determined pursuant to § 51.907(e) using Fiscal Year 2011
   terminating interstate end office switching minutes, and then multiply
   by the Price Cap Carrier Traffic Demand Factor;

   (C) If the carrier reduced its Intrastate Terminating End Office Access
   Rate(s) pursuant to § 51.907(e)(1), the reduction in intrastate switched
   access revenues equal to the difference between either the intrastate
   2014 Composite Terminating End Office Access Rate and the Composite
   Terminating End Office Access Rate based on the maximum terminating end
   office rates that could have been charged on July 1, 2015, or the 2015
   Target Composite Terminating End Office Access Rate, as applicable,
   using Fiscal Year 2011 terminating intrastate end office switching
   minutes, and then multiply by the Price Cap Carrier Traffic Demand
   Factor; and

   (D) CMRS Net Reciprocal Compensation Revenues multiplied by the Price
   Cap Carrier Traffic Demand Factor;

   (E) A Price Cap Carrier's cumulative reductions in Fiscal Year 2011 net
   reciprocal compensation revenues other than those associated with CMRS
   traffic as described in § 51.701(b)(2) resulting from rate reductions
   required by § 51.705 may be calculated in one of the following ways:

   (1) Calculate the cumulative reduction in Fiscal Year 2011 net
   reciprocal compensation revenue as a result of rate reductions required
   by § 51.705 using Fiscal Year 2011 reciprocal compensation demand, and
   then multiply by the Price Cap Carrier Traffic Demand Factor;

   (2) By using a composite reciprocal compensation rate as follows:

   (i) Establish a composite reciprocal compensation rate for its Fiscal
   Year 2011 reciprocal compensation receipts and its Fiscal Year 2011
   reciprocal compensation payments by dividing its Fiscal Year 2011
   reciprocal compensation receipts and payments by its respective Fiscal
   Year 2011 demand excluding demand for traffic exchanged pursuant to a
   bill-and-keep arrangement;

   (ii) Calculate the difference between each of the composite reciprocal
   compensation rates and the target reciprocal compensation rate set
   forth in § 51.705 for the year beginning July 1, 2015, using the
   appropriate Fiscal Year 2011 demand, and then multiply by the Price Cap
   Carrier Traffic Demand Factor; or

   (3) For the purpose of establishing its recovery for net reciprocal
   compensation, a Price Cap Carrier may elect to forgo this step and
   receive no recovery for reductions in net reciprocal compensation. If a
   carrier elects this option, it may not change its election at a later
   date.

   (F) An amount equal to True-up Revenues for Access Recovery Charges for
   the year beginning July 1, 2013.

   (v) Beginning July 1, 2016, a Price Cap Carrier's eligible recovery
   will be equal to the CALLS Study Area Base Factor and/or the Non-CALLS
   Study Area Base Factor, as applicable, multiplied by the sum of the
   amounts in paragraphs (d)(1)(v)(A) through (d)(1)(v)(E), of this
   section and then adding the amount in paragraph (d)(1)(v)(F) of this
   section to that amount:

   (A) The amount of the reduction in Transitional Intrastate Access
   Service revenues determined pursuant to § 51.907(b)(2) and (c)
   multiplied by the Price Cap Carrier Traffic Demand Factor;

   (B) The reduction in interstate switched access revenues equal to the
   difference between the 2011 Baseline Composite Terminating End Office
   Access Rate and $0.0007 determined pursuant to § 51.907(f) using Fiscal
   Year 2011 terminating interstate end office switching minutes, and then
   multiply by the Price Cap Carrier Traffic Demand Factor;

   (C) If the carrier reduced its Intrastate Terminating End Office Access
   Rate(s) pursuant to § 51.907(f), the reduction in revenues equal to the
   difference between either the Intrastate 2014 Composite Terminating End
   Office Access Rate and $0.0007 based on the maximum terminating end
   office rates that could have been charged on July 1, 2016, or the 2016
   Target Composite Terminating End Office Access Rate, as applicable,
   using Fiscal Year 2011 terminating intrastate end office minutes, and
   then multiply by the Price Cap Carrier Traffic Demand Factor;

   (D) CMRS Net Reciprocal Compensation Revenues multiplied by the Price
   Cap Carrier Traffic Demand Factor;

   (E) A Price Cap Carrier's cumulative reductions in Fiscal Year 2011 net
   reciprocal compensation revenues other than those associated with CMRS
   traffic as described in § 51.701(b)(2) resulting from rate reductions
   required by § 51.705 may be calculated in one of the following ways:

   (1) Calculate the cumulative reduction in Fiscal Year 2011 net
   reciprocal compensation revenue as a result of rate reductions required
   by § 51.705 using Fiscal Year 2011 reciprocal compensation demand, and
   then multiply by the Price Cap Carrier Traffic Demand Factor;

   (2) By using a composite reciprocal compensation rate as follows:

   (i) Establish a composite reciprocal compensation rate for its Fiscal
   Year 2011 reciprocal compensation receipts and its Fiscal Year 2011
   reciprocal compensation payments by dividing its Fiscal Year 2011
   reciprocal compensation receipts and payments by its respective Fiscal
   Year 2011 demand excluding demand for traffic exchanged pursuant to a
   bill-and-keep arrangement;

   (ii) Calculate the difference between each of the composite reciprocal
   compensation rates and the target reciprocal compensation rate set
   forth in § 51.705 for the year beginning July 1, 2016, using the
   appropriate Fiscal Year 2011 demand, and then multiply by the Price Cap
   Carrier Traffic Demand Factor; or

   (3) For the purpose of establishing its recovery for net reciprocal
   compensation, a Price Cap Carrier may elect to forgo this step and
   receive no recovery for reductions in net reciprocal compensation. If a
   carrier elects this option, it may not change its election at a later
   date.

   (F) An amount equal to True-up Revenues for Access Recovery Charges for
   the year beginning July 1, 2014.

   (vi) Beginning July 1, 2017, a Price Cap Carrier's eligible recovery
   will be equal to ninety (90) percent of the sum of the amounts in
   paragraphs (d)(1)(vi) through (d)(1)(vi)(F) of this section, and then
   adding the amount in paragraph (d)(1)(vi)(G) f this section to that
   amount:

   (A) The amount of the reduction in Transitional Intrastate Access
   Service revenues determined pursuant to § 51.907(b)(2) and (c)
   multiplied by the Price Cap Carrier Traffic Demand Factor; and

   (B) The reduction in interstate switched access revenues equal to the
   2011 Baseline Composite Terminating End Office Access Rate using Fiscal
   Year 2011 terminating interstate end office switching minutes, and then
   multiply by the Price Cap Carrier Traffic Demand Factor;

   (C) The reduction in revenues equal to the intrastate 2014 Composite
   terminating End Office Access Rate using Fiscal Year 2011 terminating
   intrastate end office switching minutes, and then multiply by the Price
   Cap Carrier Traffic Demand Factor;

   (D) The reduction in revenues resulting from reducing the terminating
   Tandem-Switched Transport Access Service rate to $0.0007 pursuant to
   § 51.907(g)(2) using Fiscal Year 2011 terminating tandem-switched
   minutes, and then multiply by the Price Cap Carrier Traffic Demand
   Factor;

   (E) CMRS Net Reciprocal Compensation Revenues multiplied by the Price
   Cap Carrier Traffic Demand Factor; and

   (F) A Price Cap Carrier's cumulative reductions in Fiscal Year 2011 net
   reciprocal compensation revenues other than those associated with CMRS
   traffic as described in § 51.701(b)(2) resulting from rate reductions
   required by § 51.705 may be calculated in one of the following ways:

   (1) Calculate the cumulative reduction in Fiscal Year 2011 net
   reciprocal compensation revenue as a result of rate reductions required
   by § 51.705 using Fiscal Year 2011 reciprocal compensation demand, and
   then multiply by the Price Cap Carrier Traffic Demand Factor;

   (2) By using a composite reciprocal compensation rate as follows:

   (i) Establish a composite reciprocal compensation rate for its Fiscal
   Year 2011 reciprocal compensation receipts and its Fiscal Year 2011
   reciprocal compensation payments by dividing its Fiscal Year 2011
   reciprocal compensation receipts and payments by its respective Fiscal
   Year 2011 demand excluding demand for traffic exchanged pursuant to a
   bill-and-keep arrangement;

   (ii) Calculate the difference between each of the composite reciprocal
   compensation rates and the target reciprocal compensation rate set
   forth in § 51.705 for the year beginning July 1, 2017, using the
   appropriate Fiscal Year 2011 demand, and then multiply by the Price Cap
   Carrier Traffic Demand Factor; or

   (3) For the purpose of establishing its recovery for net reciprocal
   compensation, a Price Cap Carrier may elect to forgo this step and
   receive no recovery for reductions in net reciprocal compensation. If a
   carrier elects this option, it may not change its election at a later
   date.

   (G) An amount equal to True-up Revenues for Access Recovery Charges for
   the year beginning July 1, 2015.

   (vii) Beginning July 1, 2018, a Price Cap Carrier's eligible recovery
   will be equal to ninety (90) percent of the sum of the amounts in
   paragraphs (d)(1)(vii)(A) though (d)(1)(vii)(G) of this section, and
   then adding the amount in paragraph (d)(1)(vii)(H) of this section to
   that amount:

   (A) The amount of the reduction in Transitional Intrastate Access
   Service revenues determined pursuant to § 51.907(b)(2) and (c)
   multiplied by the Price Cap Carrier Traffic Demand Factor; and:

   (B) The reduction in interstate switched access revenues equal to the
   2011 Baseline Composite Terminating End Office Access Rate using Fiscal
   Year 2011 terminating interstate end office switching minutes, and then
   multiply by the Price Cap Carrier Traffic Demand Factor;

   (C) The reduction in revenues equal to the intrastate 2014 Composite
   terminating End Office Access Rate using Fiscal Year 2011 terminating
   intrastate end office switching minutes, and then multiply by the Price
   Cap Carrier Traffic Demand Factor;

   (D) The reduction in revenues resulting from reducing the terminating
   Tandem-Switched Transport Access Service rate to $0.0007 pursuant to
   § 51.907(g)(2) using Fiscal Year 2011 terminating tandem-switched
   minutes, and then multiply by the Price Cap Carrier Traffic Demand
   Factor;

   (E) The reduction in revenues resulting from moving from a terminating
   Tandem-Switched Transport Access Service rate tariffed at a maximum of
   $0.0007 to removal of intercarrier charges pursuant to § 51.907(h), if
   applicable, using Fiscal Year 2011 terminating tandem-switched minutes,
   and then multiply by the Price Cap Carrier Traffic Demand Factor;

   (F) CMRS Net Reciprocal Compensation Revenues multiplied by the Price
   Cap Carrier Traffic Demand Factor; and

   (G) A Price Cap Carrier's cumulative reductions in Fiscal Year 2011 net
   reciprocal compensation revenues other than those associated with CMRS
   traffic as described in § 51.701(b)(2) resulting from rate reductions
   required by § 51.705 may be calculated in one of the following ways:

   (1) Calculate the cumulative reduction in Fiscal Year 2011 net
   reciprocal compensation revenue as a result of rate reductions required
   by § 51.705 using Fiscal Year 2011 reciprocal compensation demand, and
   then multiply by the Price Cap Carrier Traffic Demand Factor;

   (2) By using a composite reciprocal compensation rate as follows:

   (i) Establish a composite reciprocal compensation rate for its Fiscal
   Year 2011 reciprocal compensation receipts and its Fiscal Year 2011
   reciprocal compensation payments by dividing its Fiscal Year 2011
   reciprocal compensation receipts and payments by its respective Fiscal
   Year 2011 demand excluding demand for traffic exchanged pursuant to a
   bill-and-keep arrangement;

   (ii) Calculate the difference between each of the composite reciprocal
   compensation rates and the target reciprocal compensation rate set
   forth in § 51.705 for the year beginning July 1, 2018, using the
   appropriate Fiscal Year 2011 demand, and then multiply by the Price Cap
   Carrier Traffic Demand Factor; or

   (3) For the purpose of establishing its recovery for net reciprocal
   compensation, a Price Cap Carrier may elect to forgo this step and
   receive no recovery for reductions in net reciprocal compensation. If a
   carrier elects this option, it may not change its election at a later
   date.

   (H) An amount equal to True-up Revenues for Access Recovery Charges for
   the year beginning July 1, 2016.

   (viii) Beginning July 1, 2019, and in subsequent years, a Price Cap
   Carrier's eligible recovery will be equal to the amount calculated in
   paragraph (d)(1)(vii)(A) through (d)(1)(vii)(H) of this section before
   the application of the Price Cap Carrier Traffic Demand Factor
   applicable in 2018 multiplied by the appropriate Price Cap Carrier
   Traffic Demand Factor for the year in question, and then adding an
   amount equal to True-up Revenues for Access Recovery Charges for the
   year beginning July 1 two years earlier.

   (2) If a Price Cap Carrier recovers any costs or revenues that are
   already being recovered through Access Recovery Charges or the Connect
   America Fund from another source, that carrier's ability to recover
   reduced switched access revenue from Access Recovery Charges or the
   Connect America Fund shall be reduced to the extent it receives
   duplicative recovery. Any duplicative recovery shall be reflected as a
   reduction to a carrier's Eligible Recovery calculated pursuant to
   § 51.915(d).

   (3) A Price Cap Carrier seeking revenue recovery must annually certify
   as part of its tariff filings to the Commission and to the relevant
   state commission that the carrier is not seeking duplicative recovery
   in the state jurisdiction for any Eligible Recovery subject to the
   recovery mechanism.

   (4) If a Price Cap Carrier receives payment for Access Recovery Charges
   after the period used to measure the adjustment to reflect the
   differences between estimated and actual revenues, it shall treat such
   payments as actual revenues in the year the payment is received and
   shall reflect this as an additional adjustment for that year.

   (e) Access Recovery Charge. (1) A charge that is expressed in dollars
   and cents per line per month may be assessed upon end users that may be
   assessed an end user common line charge pursuant to § 69.152 of this
   chapter, to the extent necessary to allow the Price Cap Carrier to
   recover some or all of its eligible recovery determined pursuant to
   paragraph (d) of this section, subject to the caps described in
   paragraph (e)(5) of this section. A Price Cap Carrier may elect to
   forgo charging some or all of the Access Recovery Charge.

   (2) Total Access Recovery Charges calculated by multiplying the
   tariffed Access Recovery Charge by the projected demand for the year in
   question may not recover more than the amount of eligible recovery
   calculated pursuant to paragraph (d) of this section for the year
   beginning on July 1.

   (3) For the purposes of this section, a Price Cap Carrier holding
   company includes all of its wholly-owned operating companies that are
   price cap incumbent local exchange carriers. A Price Cap Carrier
   Holding Company may recover the eligible recovery attributable to any
   price cap study areas operated by its wholly-owned operating companies
   through assessments of the Access Recovery Charge on end users in any
   price cap study areas operated by its wholly owned operating companies
   that are price cap incumbent local exchange carriers.

   (4) Distribution of Access Recovery Charges among lines of different
   types. (i) A Price Cap Carrier holding company that does not receive
   ICC-replacement CAF support (whether because it elects not to or
   because it does not have sufficient eligible recovery after the Access
   Recovery Charge is assessed or imputed) may not recover a higher
   fraction of its total revenue recovery from Access Recovery Charges
   assessed on Residential and Single Line Business lines than:

   (A) The number of Residential and Single-Line Business lines divided by

   (B) The sum of the number of Residential and Single-Line Business lines
   and two (2) times the number of End User Common Line charges assessed
   on Multi-Line Business customers.

   (ii) For purposes of this subpart, Residential and Single Line Business
   lines are lines (other than lines of Lifeline Customers) assessed the
   residential and single line business end user common line charge and
   lines assessed the non-primary residential end user common line charge.

   (iii) For purposes of this subpart, Multi-Line Business Lines are lines
   assessed the multi-line business end user common line charge.

   (5) Per-line caps and other limitations on Access Recovery Charges

   (i) For each line other than lines of Lifeline Customers assessed a
   primary residential or single-line business end user common line charge
   or a non-primary residential end user common line charge pursuant to
   § 69.152 of this Chapter, a Price Cap Carrier may assess an Access
   Recovery Charge as follows:

   (A) Beginning July 1, 2012, a maximum of $0.50 per month for each line;

   (B) Beginning July 1, 2013, a maximum of $1.00 per month for each line;

   (C) Beginning July 1, 2014, a maximum of $1.50 per month for each line;

   (D) Beginning July 1, 2015, a maximum of $2.00 per month for each line;
   and

   (E) Beginning July 1, 2016, a maximum of $2.50 per month for each line.

   (ii) For each line assessed a multi-line business end user common line
   charge pursuant to § 69.152 of this chapter, a Price Cap Carrier may
   assess an Access Recovery Charge as follows:

   (A) Beginning July 1, 2012, a maximum of $1.00 per month for each
   multi-line business end user common line charge assessed;

   (B) Beginning July 1, 2013, a maximum of $2.00 per month for each
   multi-line business end user common line charge assessed;

   (C) Beginning July 1, 2014, a maximum of $3.00 per month for each
   multi-line business end user common line charge assessed;

   (D) Beginning July 1, 2015, a maximum of $4.00 per month for each
   multi-line business end user common line charge assessed; and

   (E) Beginning July 1, 2016, a maximum of $5.00 per month for each
   multi-line business end user common line charge assessed.

   (iii) The Access Recovery Charge allowed by paragraph (e)(5)(i) of this
   section may not be assessed to the extent that its assessment would
   bring the total of the Rate Ceiling Component Charges above the
   Residential Rate Ceiling on January 1 of that year. This limitation
   applies only to the first residential line obtained by a residential
   end user and does not apply to single-line business customers.

   (iv) The Access Recovery Charge allowed by paragraph (e)(5)(ii) of this
   section may not be assessed to the extent that its assessment would
   bring the total of the multi-line business end user common line charge
   and the Access Recovery Charge above $12.20 per line.

   (v) The Access Recovery Charge assessed on lines assessed the
   non-primary residential line end user common line charge in a study
   area may not exceed the Access Recovery Charge assessed on residential
   end-users' first residential line in that study area.

   (vi) The Access Recovery Charge may not be assessed on lines of any
   Lifeline Customers.

   (vii) If in any year, the Price Cap Carrier's Access Recovery Charge is
   not at its maximum, the succeeding year's Access Recovery Charge may
   not increase more than $.0.50 per line per month for charges assessed
   under paragraph (e)(5)(i) of this section or $1.00 per line per month
   for charges assessed under paragraph (e)(5)(ii) of this section.

   (f) Price Cap Carrier eligibility for CAF ICC Support. (1) A Price Cap
   Carrier shall elect in its July 1, 2012 access tariff filing whether it
   will receive CAF ICC Support under this paragraph. A Price Cap Carrier
   eligible to receive CAF ICC Support subsequently may elect at any time
   not to receive such funding. Once it makes the election not to receive
   CAFF ICC Support, it may not elect to receive such funding at a later
   date.

   (2) Beginning July 1, 2012, a Price Cap Carrier may recover any
   eligible recovery allowed by paragraph (d) that it could not have
   recovered through charges assessed pursuant to paragraph (e) of this
   section from CAF ICC Support pursuant to § 54.304. For this purpose, the
   Price Cap Carrier must impute the maximum charges it could have
   assessed under paragraph (e)of this section.

   (3) Beginning July 1, 2017, a Price Cap Carrier may recover two-thirds
   ( 2⁄3 ) of the amount it otherwise would have been eligible to recover
   under paragraph (f)(2) from CAF ICC Support.

   (4) Beginning July 1, 2018, a Price Cap Carrier may recover one-third
   (1/3) of the amount it otherwise would have been eligible to recover
   under paragraph (f)(2) of this section from CAF ICC Support.

   (5) Beginning July 1, 2019, a Price Cap Carrier may no longer recover
   any amount related to revenue recovery under this paragraph from CAF
   ICC Support.

   (6) A Price Cap Carrier that elects to receive CAF ICC support must
   certify with its annual access tariff filing that it has complied with
   paragraphs (d) and (e) of this section, and, after doing so, is
   eligible to receive the CAF ICC support requested pursuant to paragraph
   (f) of this section.

   [ 76 FR 73856 , Nov. 29, 2011, as amended at  77 FR 48453 , Aug. 14, 2012;
    78 FR 26268 , May 6, ;79 2013 FR 28846 , May 20, 2014]

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