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 May 19, 1998, the Commission filed a Notice of Proposed Rulemaking (CR-102) 
and issued a notice of opportunity to submit written comments on the proposed 
rule to reform intrastate access charges.  In response to that notice, TRACER 
respectfully submits the following brief comments.
 TRACER generally supports the Commission's efforts to reduce intrastate 
switched access charges, make explicit the support for affordable basic 
telecommunications service in high-cost areas, and improve the opportunities 
for fair and efficient competition in markets throughout the state.  However, 
TRACER is concerned that the proposed rule, as it is currently written, is 
incomplete and would create unwarranted and immediate pressure to significantly 
increase residential local exchange rates.  It should not be adopted without 
further revision.
 In its Fifteenth Supplemental Order in Docket No. UT-950200, the last U S WEST 
Communications, Inc. general rate case, the Commission determined correctly 
that the cost of the local loop is a shared cost that should be recovered in 
the rates for all the services using the loop, i.e., carrier access, toll 
service, vertical features, and local service.  Notwithstanding that 
determination, the proposed rule is written in a way that would effectively 
remove all contribution to the cost of the local loop from switched access 
charges and, presumably, toll rates.
 Subsection (1) of the proposed rule provides that terminating switched access 
charges shall not exceed (a) the lowest rate for local interconnection service, 
or (b), if no local interconnection service is provided or is provided only 
under a bill and keep arrangement, total service long-run incremental cost 
(TSLRIC) plus a reasonable contribution to common or overhead costs. 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 (toll) service, and 
features, its cost is not included in the TSLRIC of any of these services.  
Nothing is said about contribution to shared costs.  The effect of this 
requirement, then, is to prohibit terminating switched access charges from 
containing any contribution to covering the cost of the local loop.
 The proposed rule is silent, at least with respect to LECs that do not qualify 
as "small businesses", about any change to originating switched access 
charges.  Since present originating switched access charges are low and do not 
carry any meaningful contribution to the cost of the local loop, the effect of 
this "silence" is to completely remove any contribution to the cost of the 
local loop from switched access charges, and, consequently, from toll rates.
 Since, as a practical matter, features prices cannot be increased sufficiently 
to make up this lost contribution, the only source of contribution left is 
local service rates.  For residential loops, this is likely to mean that 
significant residential local service rate increases will be required, if 
cross-subsidy for that group of residential services is to be avoided. Business 
local exchange prices are sufficiently high to cover the TSLRIC of local 
service plus the cost of the business local loop.
 TRACER submits that the rule should be revised to clarify that (1) switched 
access charges, and toll rates, must continue to contribute to the cost of the 
local loop, and (2) that contribution must be included in the charges for 
originating switched access.  Without these revisions, the proposed rule should 
not be adopted.
 Respectfully submitted this 12th day of June, 1998.
       ATER WYNNE, LLP

       By:                                     Arthur A. Butler
        WSBA #04678
       Attorneys for TRACER