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Interstate Access Tariffs-Protections Against Risk of Uncollectibles

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Federal Communications Commission.


Policy statement.


This document makes recommendations to incumbent local exchange carriers (LECs) seeking to revise the deposit provisions of their interstate access tariffs to increase protection from the risk of uncollectibles. The document recommends that incumbent LECs consider whether the following possible tariff provisions might address the risk of uncollectibles, making additional deposits unnecessary: Revise interstate access tariffs to define the “proven history of late payment” trigger for requiring a deposit to include a failure to pay the undisputed amount of a monthly bill in any two of the most recent twelve months, provided that both the past due period and the amount of the delinquent payment are more than de minimis; reduce the notice period for refusal or discontinuance of service from 30 days to some shorter period for customers that receive bills quickly enough to allow review and dispute; accelerate billing cycles from 30 days to some shorter period to reduce exposure to pre-bankruptcy petition debt and other possible nonpayment; and bill in advance for usage-based services currently billed in arrears, based on average usage over a sample period, perhaps phasing in the first advance bill over a period of several months. The policy statement does not rule on the lawfulness of various tariffs proposed by incumbent local exchange carriers to increase protections against the risk of uncollectibles and being investigated by the Wireline Competition Bureau of the Federal Communications Commission.

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Julie Saulnier, Wireline Competition Bureau, Pricing Policy Division, (202) 418-1530.

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This is a summary of the Commission's Policy Statement in WC Docket No. 02-202 released on December 23, 2002. The full text of this document is available on the Commission's website Electronic Comment Filing System and for public inspection during regular business hours in the FCC Reference Center, Room CY-A257, 445 Twelfth Street, SW., Washington, DC 20554.

Background: On July 24, 2002, Verizon filed a Petition for Emergency Declaratory and Other Relief in response to the WorldCom bankruptcy. The Wireline Competition Bureau of the Federal Communications Commission sought comment on Verizon's petition. Public Notice, WC Docket No. 02-202, DA 02-1859 (rel. July 31, 2002). The petition asks the Commission, among other things, to permit carriers expeditiously to revise their tariffs to require deposits, advance payments, and shorter notice periods where necessary to provide adequate assurance of payment by their customers. The petition also asks the Commission to take certain actions in bankruptcy proceedings and regarding customer transfers that are not addressed in this item. Concurrently with its petition, Verizon filed revisions to its interstate access tariffs to broaden its powers to seek deposits and advance payments, and to shorten the notice period before refusing new orders, stopping existing orders, and discontinuing service to customers at risk of nonpayment. Similar tariff revisions have been filed by other incumbent LECs. While current tariffs allow incumbent LECs to seek deposits from customers with a history of late payment or no established credit, the revised tariffs would allow incumbent LECs to seek deposits from such customers, as well as any customer that suffers from impaired credit worthiness, defined in a variety of ways. After balancing the interest of incumbent LECs in protecting themselves from uncollectibles against the potential burden on their customers of additional deposits in a period of tight credit, the document recommends that incumbent LECs consider whether possible tariff provisions such as advance or accelerated billing, or shortened notice periods tied to timely arrival of accurate interstate access bills, might address the risk of nonpayment, making additional deposits unnecessary.

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Federal Communications Commission.

Marlene H. Dortch,


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[FR Doc. 03-3070 Filed 2-6-03; 8:45 am]