Step 4 Filing Requirements

High Cost Model

High Cost Model (HCM) support, also known as forward-looking support, is available only to non-rural incumbent carriers (mostly price-cap carriers) and competitive carriers providing service in the eligible wire centers of these non-rural companies.

Required Cost Data Filings

All incumbent local exchange carriers are required to submit certain investment and expense data, including line count information, to the National Exchange Carrier Association, Inc. (NECA) on July 31 of each year. Section 36.611 of the FCC's rules (47 C.F.R. § 36.611) lists the specific cost, investment, and line count information that must be submitted to NECA.

Interim Hold Harmless (IHH)

Non-rural carriers that do not receive HCM support, but that are projected to receive High Cost Loop (HCL) and Long Term Support (LTS) support, may receive support under the Interim Hold Harmless (IHH) provision. The IHH provision ensures that, on an interim basis, a non-rural carrier receives the greater of the amount provided to that carrier under the forward-looking mechanism that went into effect on January 1, 2000 or the amount provided by the mechanism in place prior to that date.

The IHH mechanism was designed as an interim measure to protect customers in high cost areas from potential rate shocks as a result of any sudden, significant increases in rates during the shift to the new, forward-looking mechanism. IHH support is also targeted to the highest cost wire centers. On January 1, 2001, IHH started phasing-down by $1.00 reduction in average monthly, per-line support. This phase-down will continue every year until there is no more IHH support.

Due to the discontinuance of Long Term Support in 2004 and the $5.00 High Cost Loop phase-down as of January 1, 2005, it is anticipated that non-rural carriers will no longer receive support under the IHH provision.