BEFORE THE WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION



In the Matter of the Petition for  ) Docket No. UT-970325
Investigation into the Cost of   )  
Universal Service and to Reform  ) Comments of TRACER
Intrastate Carrier Access Charges  )
________________________________________)

 On March 13, 1998, the Commission solicited additional comments on the Staff's 
revised access charge reform proposal. In response to that solicitation, TRACER 
respectfully submits the following brief comments. 
 In its comments submitted on February 13, 1998 in this docket, TRACER 
addressed many of the issues raised by the Staff's revised proposal.  
Accordingly, TRACER incorporates those comments, with the following additions.
 First, whether the proposal in paragraph (1) that terminating access charges 
be set at total service long-run incremental cost (TSLRIC) is appropriate 
depends on whether the costs of the local loop are covered by a separate charge 
for network access or in the rates charged for other services using the loop, 
such as local exchange service and features.
 TSLRIC, by definition, includes only service-specific costs. No shared costs, 
or contributions to joint and common costs are included.  Because the local 
loop is a shared cost of local service, switched access (long distance) 
service, and features, as recognized by the Commission in its Fifteenth 
Supplemental Order in Docket No. UT-950200, its cost is not included in the 
TSLRIC of any of these services.  Nevertheless, the revenues from these 
services in total must cover not only the service-specific costs of the 
services but also the group-related, shared cost of the local loop.  How much 
of the shared loop cost each specific service in the group must cover is a 
matter for the Commission's discretion.  It follows, then, that, if the cost of 
the loop is not covered by the rates charged for the other services in the 
group, switched access rates must be set to cover the TSLRIC of switched 
access, plus make a sufficient contribution to covering the cost of the local 
loop to make up any remaining shortfall. This contribution should be included 
in the rates for both terminating and originating access.
 In addition, it is appropriate that switched access, like all other services, 
make a reasonable contribution to other joint and common costs of the firm.  
Rates for both originating and terminating access should include this 
contribution.
 Second, to the extent the proposal in paragraph (3) presumes that any 
restructuring should guarantee revenue neutrality, it is inappropriate.  Any 
request by a LEC to increase originating access charges or other rates should 
depend on a demonstration that these increases are required to cover the 
particular company's revenue requirements.  If, after the access charge 
restructuring ordered, the company will still be overearning, no offsetting 
rate increases will be warranted.
 Respectfully submitted this 8th day of April, 1998.
     ATER WYNNE HEWITT DODSON &       SKERRITT, LLP

     By:                                     
      Arthur A. Butler
      WSBA #04678

     Attorneys for TRACER