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Fund Support
Overview

The schedule of support for each Incumbent Local Exchange Carrier (ILEC) and for Warm Springs is set by the UM 1481, Phase III stipulation. For the Rural companies, this schedule began mid-year 2016; for the Non-rural companies, this schedule begins January 2017. Both schedules run to December 31, 2021.

For Competitive Local Exchange Carriers (CLECs), their support is determined by the wire center serving the area where their customers reside and how they are providing services: resale, Unbundled Network Elements (UNEs), or their own facilities. The Phase III stipulation calls for a year-to-year reduction in the support amounts. The original support amounts can be found in an attached spreadsheet. The current amounts can be obtained by contacting Roger White at Roger.White@state.or.us.

The original OUS support amounts were calculated for each wire center. The support was paid for each basic service line reported each month for the high cost wire centers of eligible local exchange carriers (LECs). 
  
The support amount was calculated based on several key factors. The first factor was the benchmark. The benchmark was an economic cost of basic local exchange service below which OUS funds would not be paid. The benchmark was calculated based on the average economic cost per-line per-month for the Oregon service territories of Qwest and Verizon. These two companies served over 85 percent of the lines in the state and their service territories encompass all of the urban areas. As such, the average economic cost of these two companies represents a reasonable starting point for the fund. Based on this calculation, the PUC set the benchmark at $21 per line per month. 
  
The second factor was the specific cost of each wire center. 
  
The third factor was the amount of federal support per line per month for each incumbent ILEC. This amount represents interstate access rates and subscriber line charges that recover the allocated interstate component of the subscriber loop plus federal universal service support. 

The OUS support per line by wire center was calculated by simply subtracting the statewide benchmark and the federal support amounts from the wire center economic cost. 

Shared Lines

CLECs may become eligible to receive OUS support. If the CLEC owns the lines, it would receive the full amount of OUS support available. If the CLEC leases the lines from the ILEC, the per line OUS support amount would be shared with the ILEC depending upon the lease cost. If the CLEC merely resells finished services from the ILEC, it is not eligible to receive OUS support. 
  
The lease cost is the price the ILEC charges the CLEC for leasing various network elements (referred to as UNEs) required to provide basic local service. The sharing of OUS support is based on a comparison of the composite or platform UNE price for the basic service network elements and the economic cost of the wire center.  Note that the UNE price paid by CLECs is determined in the interconnection agreement they negotiate with Qwest or Verizon. 
  
The ILEC's percentage share of the OUS support is calculated as the difference between the economic cost and the UNE price charged by the ILEC divided by the difference between the economic cost and the benchmark. The CLEC's percentage share of the support is calculated as the difference between the UNE price and the benchmark divided by the difference between the economic cost of the wire center and the benchmark.  A hypothetical example is as follows: 

  • $31 = Economic cost of the specific wire center in question
  • $27 = UNE price as charged by the ILEC
  • $21 = Benchmark (average economic cost of Qwest and Verizon wire centers in Oregon)
  • $10 = OUS support for the specific wire center in question ($31 economic cost - $21 benchmark)
  • 40% = ILEC share of OUS support ($31 economic cost -$27 UNE price) / ($31 economic cost - $21 benchmark)
  • 60% = CLEC share of OUS support ($27 UNE price - $21 benchmark) / ($31 economic cost - $21 benchmark)
  • $4 = Actual OUS support received by ILEC (40% * $10 OUS support)
  • $6 = Actual OUS support received by CLEC (60% * $10 OUS support)

Support by Wire Center
OUS Support for ILEC Wire Centers in Oregon provides a complete list of all ILEC wire centers in Oregon and the corresponding original OUS support amount for each wire center, if any.  Qwest and Verizon appear first on the list followed by rural ILECs organized from largest to smallest.  For Qwest and Verizon, an allocation percentage is provided for instances where a CLEC provides basic telephone service by leasing unbundled network elements.  This information is not provided for rural ILECs because they are not required to lease unbundled network elements to competitors. 

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