Access Charge Reform; Transport Rate Structure and Pricing

In the Third Report and Order, FCC 97-401, adopted and released November 26, 1997 (Third Report and Order), in its Access Charge Reform and Transport Rate Structure Pricing proceedings, the Commission amends its cost allocation rules to increase the allocation of certain general purpose computer and other general support facilities (GSF) costs by price cap local exchange carriers (LECs) to their nonregulated billing and collection categories and the Third Report and Order also requires affected price cap LECs to reduce their price cap indices (PCIs) and related basket indices to ensure that their regulated access and interexchange services do not continue to recover GSF costs attributable their nonregulated billing and collection services. These rule amendments and related exogenous adjustments are intended to reduce the subsidization of nonregulated services by regulated services, foster competition in the provision of these services, and move access charges to more economically efficient levels.