266 XO Communications Services, Inc. revision to competitive local exchange tariff telephone Pa. P.U.C. No. 9 for an end-user access recovery charge; doc. no. R-00050342

XO Communications Services, Inc. Revision to Competitive Local Exchange Tariff Telephone Pa. P.U.C. No. 9 for an End-User Access Recovery Charge; Doc. No. R-00050342

[36 Pa.B. 794]

Public Meeting held
January 12, 2006

Commissioners Present:  Wendell F. Holland, Chairperson; James H. Cawley, Vice Chairperson; Bill Shane; Kim Pizzingrilli; Terrance J. Fitzpatrick

Order

By the Commission:

I.  BACKGROUND

   Before us is the recommendation of the Staff of the Bureau of Fixed Utility Services (FUS) regarding the Access Recovery Charge (ARC) that has been implemented by XO Communications Services, Inc. (XO or the Company) in its Competitive Local Exchange Service Tariff No. 9.¹ XO operates within the Commonwealth as a competitive local exchange carrier (CLEC).

   XO implemented its ARC through a tariff filing that was made on or about February 28, 2005 and became effective on or about April 1, 2005. According to XO this tariff filing was necessitated because of the Federal Communications Commission (FCC) actions in its Triennial Review Remand Order (TRRO).² Despite the informal contacts between the Staff and XO, the ARC has been maintained in the Company's Tariff:

II.  COMPANY FILING

   XO's ARC was filed under Sections 3.1.0 and 3.33.4 of its Competitive Local Exchange Service Tariff No. 9. The revision states:

The ARC is a monthly surcharge assessed in order to recover materially increased costs resulting from regulations adopted by the Federal Communications Commission in the Matter of Unbundled Access to Network Elements and Review of the Unbundling Obligations of Incumbent Local Exchange Carriers, (CC Docket 01-388 and WC Docket 04-313). The ARC is calculated by application of a percentage to each customer's total monthly recurring charges (MRC's). The ARC percentage to be applied will be determined by the customer's total MRC's on its monthly invoice. The Chart below shows the ARC percentage that will be applied based on the MRC's.

Total MRC	Charge Percentage	Total MRC	Charge Percentage
$0.00--100.00	10.00%	$7,500.01--10,000.00	2.50%
$100.01--200.00	9.00%	$10,000.01--20,000.00	2.20%
$200.01--400.00	8.00%	$20,000.01--30,000.00	2.00%
$400.01--600.00	7.00%	$30,000.01--40,000.00	1.80%
$600.01--800.00	6.00%	$40,000.01--50,000.00	1.60%
$800.01--1,000.00	5.00%	$50,000.01--75,000.00	1.40%
$1,000.01--1,500.00	4.00%	$75,000.01--100,000.00	1.20%
$1,500.01.01--2,500.00	3.50%	$100,000.01--250,000.00	1.00%
$2,500.01--5,000.00	3.00%	$250,000.01--500,000.00	0.90%
$5,000--7,500.01	2.75%	$500,000.01+	0.80%

III.  DISCUSSION

   XO was advised that the ARC as a separate line item is not acceptable as per 66 Pa.C.S. § 1509, which states in pertinent part that ''All bills shall be itemized to separately show amounts for basic service, Federal excise taxes, applicable State sales and gross receipts taxes.'' Likewise, 52 Pa. Code § 53.26(b) states ''All rates, charges, and the like, shall be stated, if practicable, in dollars and cents per unit; otherwise in a form reducible to dollar and cents.'' The sliding scale surcharge submitted by XO presents discrimination in pricing of basic telephone service because an end user cannot determine the rate for basic service by looking at the Company's Competitive Local Exchange Tariff. Moreover, the sliding scale surcharge allows one customer to be charged less for basic service than another customer residing in the same exchange. XO was instructed that cost recovery would be more appropriately built into the explicit rate structure.

   The related analysis of XO's ARC indicates that it may be in violation of the statutory requirements at 66 Pa.C.S. §§ 1509 (Billing Procedures) and 1304 (Discrimination in Rates), as well as this Commission's regulations at 52 Pa. Code § 53.26 (Schedule of Rates). Although the Staff strove to correct a situation that potentially violates applicable statutes and the Commission's regulations, XO did not receive a more formal notice through the timely suspension and investigation of its ARC tariff filing.

IV.  Conclusion

   We believe that it would be appropriate to initially refer this matter to the Office of Administrative Law Judge (OALJ) for timely mediation in accordance with our regulations at 52 Pa. Code § 69.392(e). The OALJ Mediator should provide the Commission with a final report on the outcome of the mediation as soon as possible.

   In the event that such mediation fails, this matter should be expeditiously referred to an ALJ for a full evidentiary adjudication and the issuance of a recommended decision. In view of the Commission's Office of Trial Staff (OS) duties under 66 Pa.C.S. § 306(b)(1), a copy of the related Commission Order should be formally served on OTS. Therefore,

It Is Ordered That:

   1.  The matter of XO's ARC, the related tariff modifications, and the issue of a potential rate refunds be referred to the Office of Administrative Law Judge for a timely mediated resolution in accordance with our regulations at 52 Pa. Code § 69.392(e).

   2.  The Office of Administrative Law Judge Mediator shall file a report with the Commission on the outcome of the mediation as soon as possible.

   3.  In the event that mediation fails, this matter will be expeditiously referred to an Administrative Law Judge for formal evidentiary adjudication addressing the outstanding material issued, and for the issuance of a recommended decision.

   4.  A copy of the related Order be published in the Pennsylvania Bulletin.

   5.  The Secretary of the Commission formally serve a copy of the related Order to the Commission's Office of Trial Staff.

JAMES J. MCNULTY,   
Secretary

[Pa.B. Doc. No. 06-266. Filed for public inspection February 10, 2006, 9:00 a.m.]

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¹  XO Tariff Telephone--Pa P.U.C. No. 9, Sec. 3.1.0., 1st Rev. Page 60, and Sec. 3.34.4, Orig. Page 428.1.

²  In the Matter of Unbundled Access to Network Elements and Review of the Section 251 Unbundling Obligations of Incumbent Local Exchange Carriers, WC Docket No. 04-313 and CC Docket No. 01-338, (FCC Rel. February 4, 2005), Order on Remand, FCC 04-290.