Federal Communications Commission DA 16-480
Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of
National Exchange Carrier Association, Inc.
2016 Modification of Average Schedules
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WC Docket No. 15-298
ORDER
Adopted: May 3, 2016 Released: May 3, 2016
By the Chief, Pricing Policy Division, Wireline Competition Bureau:
1. On December 23, 2015, the National Exchange Carrier Association, Inc. (NECA) filed with 
the Commission its proposed modification of average schedule formulas for interstate settlements, 
pursuant to section 69.606 of the Commission’s rules.
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  NECA proposes to revise the formulas for 
average schedule interstate settlement disbursements in connection with the provision of interstate access 
services for the period beginning July 1, 2016, through June 30, 2017.  Overall, NECA proposes formula 
changes that would increase settlement rates by 2.6 percent, at constant demand.
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The proposed 
settlement formulas reflect the same general structures and methods as current formulas.  For the reasons 
set forth below, we approve the average schedule formulas as proposed by NECA. 
2. According to NECA, the effects of the proposed formula changes on individual average 
schedule companies will vary depending on each company’s size and demand characteristics.
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  NECA 
calculates that 267 companies are expected to experience increases in settlement rates and 46 study areas 
are expected to experience decreases in settlement rates, at constant demand.
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  According to NECA, 
“most of the settlement increases are attributed to special access formulas across all line-size groups,” 
and the “increases in special access DSL and Non-DSL formulas are attributed to higher account growth
and a continued increase in account allocations to the special access category especially for account COE 
4.2.”
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  NECA also states that a “projected significant reduction in Non-DSL demand has contributed to 
an increase of the Non-DSL formula, while a projected increase in DSL demand has partially offset the 
increase of the DSL formula.”
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Letter from Richard A. Askoff, Executive Director, Regulatory, NECA, to Marlene H. Dortch, Secretary, FCC, 
WC Docket No. 15-298, Attach (filed Dec. 23, 2015) (NECA Proposed 2016 Modification of Average Schedules); 
see 47 CFR § 69.606(b).  
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NECA Proposed 2016 Modification of Average Schedules at Summary-1.
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Id.
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Id. at I-5.
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Id. at I-6.
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Id.
Federal Communications Commission DA 16-480
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3. By Public Notice released January 21, 2016, we sought comment on NECA’s filing.
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  No 
comments were filed. 
4. We have reviewed the unopposed NECA filing and find that its proposed formulas are 
reasonable.  NECA revised the average schedule formulas using procedures that reflect the same general 
structures and methods as current formulas.
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5. Accordingly, IT IS ORDERED, pursuant to sections 0.91, 0.291, and 69.606(a) of the 
Commission’s rules, 47 CFR §§ 0.91, 0.291, and 69.606(a), that the average schedule formulas proposed 
by the National Exchange Carrier Association, Inc., on December 23, 2015, SHALL BECOME 
EFFECTIVE July 1, 2016, and remain in effect through June 30, 2017.
6. IT IS FURTHER ORDERED, pursuant to section 1.102(b) of the Commission’s rules, 47 
CFR § 1.102(b), that this Order SHALL BE EFFECTIVE upon release.
FEDERAL COMMUNICATIONS COMMISSION
Pamela S. Arluk
Chief
Pricing Policy Division
Wireline Competition Bureau
                                                     
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National Exchange Carrier Association, Inc.’s Proposed 2016 Modification of Average Schedule Formulas, 
Public Notice, 31 FCC Rcd 234 (WCB 2016).
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We note that on March 30, 2016, the Commission released the Rate-of-Return Reform Order, which, among 
other things, represcribed the authorized rate of return from 11.25 percent to 9.75 percent.  See Connect America 
Fund; ETC Annual Reports and Certifications; Developing a Unified Intercarrier Compensation Regime, Report 
and Order, Order and Order on Reconsideration, and Further Notice of Proposed Rulemaking, FCC 16-33 at 7, 85-
126, paras. 10, 226-326 (Mar. 30, 2016) (Rate-of-Return Reform Order).  The rate of return is a key input in the 
rate-of-return revenue requirement calculation, which is the basis for a rate-of-return incumbent local exchange 
carrier’s common line and special access rates, and high-cost support as applicable.  Id. at 7, para. 10.  Beginning 
July 1, 2016, the current 11.25 percent rate of return will be reduced by 25 basis points per year until July 1, 2021, 
when it arrives at the 9.75 percent rate of return. Id. at 126, para. 326. We do not believe that it is necessary for 
NECA to further revise the average schedule formulas in order to implement the annual rate-of-return reductions 
contemplated by the Rate-of Return Reform Order beginning July 1, 2016.