That’s right, just when you thought the FCC’s terminating switched access reforms to a bill-and -keep regime would make your life simpler, it turns out things are much more complex – and error prone – than ever. For example, in one New York state Local Access and Transport Area (LATA) terminating switched access cost per minute (CPM) can range from $0.00070000 to $0.00883148, that’s over twelve times higher! We’ll share the gory details later in the blog, but first some background.

The July 1, 2017 access filings added a brand-new twist to terminating access rate management, the notion of “affiliation”. Simply put, if the access tandem (AT) and the terminating end office (EO) are owned by the same incumbent local exchange carrier (ILEC) , i.e. affiliated and are price cap regulated - one set of rate elements apply; if the access tandem and the terminating end office are owned by two different ILECs, i.e. non-affiliated, another set of rate element apply.

Affiliation is the first determinant. Next you must know if the incumbent exchange carriers involved are subject to price cap regulation or rate of return (ROR) regulation.  Here’s why. When the FCC’s access reform plan was enacted the schedules and rate steps to move to bill-and -keep were different for price cap and ROR ILECs, with the ROR rate steps being smaller and the length to implement longer. Factor in all of the mergers and consolidations of ILECs over the last several years, determining affiliation is exceedingly complex.

Then you need to scour through the tariffs filed by each of the ILECs – or determine if the ILEC is a member of the National Exchange Carrier Association (NECA) – to find each of the appropriate rate elements. You also must know the critical “telecom geography” that underpins switched access networks including the Common Language Location Indictor (CLLI) codes of the AT and EO, the wire center (WC) vertical & horizontal coordinates (V&H), and the LATA.  

Lastly, you need to bring each of these elements and factors together to derive the correct CPM for any one EO. Remember there are 44,142 end offices, 1,099 access tandems, 259 price cap exchange carriers, 1,001 ROR exchange carriers (not to mention about 1,200 CLECS), so the chances of an error, a misapplied rate or incorrect “affiliation” are manifold. And those errors translate to tens of thousands of dollars on your bottom line!

As promised, here’s a small slice of the detail behind the New York LATA 136 example I called out earlier:

In this set of data above for one LATA in New York, you can see that for a combination of an end office and access tandem – both owned by Verizon - the CPM is $0.0007000, but for a combination of an end office owned by Nicholville Tel. and a Verizon owned access tandem, the cost per minute is $0.00883148, over twelve times higher! Even the non-affiliated price cap combination of a Verizon access tandem and a Frontier end office results in cost per minute almost four time higher. And this is just one example, similar situations exist in just about every LATA across the country.

The July 1, 2017 access filings added an amazing complex set of new parameters to the effective cost management of terminating switched costs…with a bewildering array of combinations and permutations of ILECs, regulatory treatment, access tandems and end offices to consider. (Authors Note: This column does not address the even more complex issue of terminating switched access provided by competitive local exchange carriers (CLECs)…look for that in an upcoming blog).

Collecting, organizing, compiling and applying correctly all the variables is a daunting task…and that’s where CCMI can help. CCMI’s NetExpress Rate Database pulls it all together for you, eliminating hours of work and giving you an accurate, up-to-date view of every end office and access tandem in the country. Click on the button below to get additional information!