Prescription of Local Exchange Carrier Price Cap Productivity Offset (``X-Factor'')

Özet

This document seeks comment on the represcription of the productivity offset, or ``X-factor,'' in the local exchange carrier price cap formula. The X-factor of 6.5 percent prescribed by the Commission in the 1997 Price Cap Performance Review Order was reversed and remanded to the agency by the U.S. Court of Appeals for the D.C. Circuit. Therefore, the Commission seeks comment on the retroactive prescription of the X-factor for the period affected by the court's remand, from July 1, 1997 to June 30, 2000, and on the prospective prescription, from July 1, 2000 forward. The Further Notice of Proposed Rulemaking (``FNPRM'') identifies three studies on which the historical component of the X-factor prescription may be based: the 1997 staff total factor productivity (``TFP'') study relied upon in the 1997 order; a new 1999 staff TFP study; or a staff Imputed X study. This document also seeks comment on whether a consumer productivity dividend (``CPD'') should be included in the X-factor.