Price Cap Performance Review for Local Exchange Carriers; Treatment of Video Dialtone Services Under Price Cap Regulation

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On October 20, 1994, the Commission adopted a Memorandum Opinion and Order concluding that the basic video dialtone offerings of local exchange carriers (LECs) would be subject to the existing price cap rules. In the order, the Commission stated it would initiate a rulemaking proceeding on whether to create a separate price cap basket for LEC video dialtone service. On February 7, 1995 the Commission issued a notice of proposed rulemaking in this docket seeking comment on whether to establish a separate price cap basket for LEC video dialtone service. In a companion order adopted today the Commission established a separate price cap basket for video dialtone and required LECs to segregate video dialtone costs and revenues from those for telephony service for purposes of sharing and the low-end adjustment once LEC provision of video dialtone exceeds a de minimis threshold. In the Order, the Commission also declined to establish sharing and low end-adjustments for the video dialtone basket for LECs exceeding the threshold. The Order initiated this Further Notice to obtain comment on the specific level for the de minimis threshold as well as on the procedures for allocating costs to t