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States Set Rates for LEC Interconnection Services

Fortnightly Magazine - July 1 1997

existing local exchange carriers to make network services available to any requesting carrier. The services must be unbundled and nondiscriminatory.

The Federal Communications Commission has determined that prices for these services should be based on the "total element long-run incremental cost," or TELRIC model, along with some reasonable, forward-looking common costs. (The FCC's pricing provisions have been stayed by court order, but form the basis of pricing presented to regulators in both states.) TELRIC is often called an adaptation of the "total service long-run incremental cost," or TSLRIC method, under which individual network elements are priced rather than specific services.

Using these methods, regulators must determine how a carrier would efficiently structure its network and how much it costs a carrier to offer a particular service or network element. Regulators must then add some amount for company overhead costs. Considerable disagreement exists over what type of technology might be chosen for the new network.

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