Telecommunications carriers purchase services from each other in several markets. Long distance carriers pay nationwide rates, established by US regulatory policies, to local exchange carriers for access to final customers. In addition, carriers lease private lines and other facilities from each other to fill gaps in their own networks, and to interconnect their networks. A second group of firms, value-added carriers and resellers, purchase interexchange transport and switching services in volume as large customers under interexchange carriers' regular bulk-rate tariffs, such as WATS, and sell calls and message services to final subscribers at retail rates.

In Chapter 9 we discussed bulk-rate and private line tariffs for regular business customers. In this chapter we examine the carrier access rate.

Carrier access rates

Prior to 1984, the long-distance and local rate structures of AT&T were designed to transfer revenues from interstate services to local services. The 1984 divestiture of the Bell local operating companies from AT&T ended these large internal transfers. To replace them the FCC established two new prices: a Subscriber Line Charge (SLC) that final subscribers pay monthly for each local exchange line, and a carrier access charge that AT&T and other interexchange carriers pay to local exchange carriers (LECs) for access to their originating and terminating facilities.

The carrier access charges are levied as rates per minute of interexchange calling. The charges fall into two categories: the carrier common line (CCL) charge that recovers nontraffic-sensitive (local loop) costs and the other access charges that recover traffic-sensitive (local network) costs.

To calculate the CCL for a given year, industry accounting formulas assign an agreed-upon fraction of the local exchange carriers' local loop costs to a nationwide cost pool. The total sales of interexchange minutes of all interexchange carriers are also calculated.