Ill. Admin. Code tit. 83, § 791.20 - Terminology
a) The long-run service
incremental cost of a service ("LRSIC") is the forward-looking additional costs
incurred by the telecommunications carrier ("carrier") to provide the entire output
of a service, including additional resources such as labor, plant, and equipment.
Long-run service incremental cost excludes any costs, including common costs, that
would be incurred if the service is not produced.
b) Long-run costs are the economic costs over a
planning horizon long enough so that there are no sunk inputs or costs.
c) Forward-looking costs are the costs to be
incurred by a carrier in the provision of a service. These costs shall be calculated
as if the service were being provided for the first time and shall reflect planned
adjustments in the firm's plant and equipment. Forward-looking costs ignore embedded
or historical costs; rather, they are based on the least cost technology currently
available whose cost can be reasonably estimated based on available data, as such
forward-looking cost estimates must reflect assumptions and technologies that are
currently operational, that is, able to be used and available in the
marketplace.
d) Volume-insensitive costs
are costs that do not vary with changes in output.
e) Volume-sensitive costs are costs that vary with
changes in output of a particular service.
f) A group of services that is referenced in this
Part consists of those services that share a common network technology, element, or
business function that is necessary and unique to the provision of all services in
the group, and where that common network technology, element, or business function
cannot be attributed to any one service or subgroup of services in the
group.
g) LRSIC of a group of services:
Where additional resources are used in common and are necessary to provide a group
of services, the long-run service incremental cost of that group of services
includes the cost caused by the portion of such additional resources used solely by
that group of services, including the LRSIC's of the individual services. Resources
include labor, plant, and equipment.
h)
Common costs are those costs that a carrier must incur in order to operate that are
not directly attributable to any particular service or to any group of services
smaller than the group of services consisting of all the services of the carrier.
Common costs shall not be included in the LRSIC for a service.
i) Ad valorem taxes are those which are levied on
the value of plant as determined by a governmental taxing authority (e.g., local
property taxes levied against telephone plant).
j) Capital costs are the recurring costs that
result from expenditures that are capitalized. These annual capital costs include
depreciation, cost of capital (return), and income taxes.
k) Expenses are the cost or resources consumed in
the production of revenue that are expensed rather than capitalized in accordance
with the Uniform System of Accounts applicable to the carrier (83 Ill. Adm. Code
710).
l) Investment is a long-term
capital asset (normally with a life exceeding one year) which is depreciated rather
than expensed in accordance with the Uniform System of Accounts applicable to the
carrier (83 Ill. Adm. Code 710).
m)
Recurring costs are costs which will continue throughout the revenue producing life
of the service. They include capital costs and expenses.
n) Usable capacity is the maximum physical
capacity of the equipment or resource less any capacity required for maintenance,
testing or administrative purposes.
Notes
Amended at 27 Ill. Reg. 4535, effective April 1, 2003
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