MOSS ADAMS LLP | 1 Tribal Telecom 2013 Federal Telecommunications Regulatory Updates
MOSS ADAMS LLP | 2 TRANSFORMATION ORDER IMPACTS Limitations on Capital Expenditures & Operating Expenses o Regression based limitations on costs included in the calculation of High Cost Loop Support Approximately 160 rural rate-of-return carriers were impacted (Approximately 22%) Only 1 of 9 Tribal carriers was impacted (11%) – Impacted carrier was not significantly over 1 of 2 limits – Remaining 8 were well below the limits – Non-impacted carriers eligible for redistributed support o Changes to limitations to be issued shortly
MOSS ADAMS LLP | 3 TRANSFORMATION ORDER IMPACTS Elimination of Safety Net Additive o Nominal impacts only 2 Tribal carriers Corporate Operations Expense Limitation o No publicly available data to analyze o Appears that 1 Tribal carrier may be impacted Elimination of Local Switching Support o Shifted to ICC CAF o 5% annual reduction for all carriers $250 Support Cap o No impact on Tribal carriers
MOSS ADAMS LLP | 4 TRANSFORMATION ORDER IMPACTS Increased End User Rates o Access Recovery Charge – designed to offset a portion of switched access revenue loss o Artificially Low Local Rates – must be higher than benchmark to receive full HCLS 7/1/12 - $10.00 7/1/13 - $14.00 7/1/14 – National Average Urban Rate
MOSS ADAMS LLP | 5 REPORTING REQUIREMENTS Annual Reporting Requirements – Due July 1 st o 5-Year Service Quality Improvement Plan o Detailed Network Outage Report o Unfulfilled Service Requests o Complaints per 1,000 Connections o Compliance with Service Quality Standards o Compliance with Consumer Protection Rules o Ability to Function in Emergency Situations o Price Offerings
MOSS ADAMS LLP | 6 REPORTING REQUIREMENTS Annual Reporting Requirements – Due July 1 st o Company Identification Information o Tribal Outreach and Licensing o Certification of Pricing <= 2 standard deviations above national average o Results of Network Performance Test o Financial Reporting for Privately Held Rate of Return o Additional Voice Rate Data Most requirements must be separately broken out for voice and broadband
MOSS ADAMS LLP | 7 THANK YOU Chad Duval, Principal Moss Adams LLP