Ark. Code Ann. § 23-17-407 (2026)

1. 1. The rates for basic local exchange service and switched-access services that were in effect in the date twelve (12) months prior to the date of filing of a notice of election by a local exchange carrier pursuant to § 23-17-406 shall be the maximum that the electing local exchange carrier may charge for the services for a period of three (3) years after the date of filing, excluding rate increases ordered by the Arkansas Public Service Commission pursuant to § 23-17-404.
   2. 1. An electing company may decrease or, subsequent to a decrease, increase up to the rate that was effective at the time of election pursuant to this section.
      2. The rate changes shall be effective immediately, without commission approval, by filing a tariff or notice with the commission.
2. 1. After the expiration of the three-year period, the rates for basic local exchange services and switched-access services, excluding the intrastate carrier common line charge, may be adjusted by the electing company filing a price list with the commission, as long as:
      1. The rates remain at or below the inflation-based rate cap; or
      2. The rate increase results from the provision of extended area services required as the result of customer election under commission rules.
   2. Inflation shall be measured by the year-over-year percent change in the gross domestic product price index calculated by the United States Department of Commerce, or any successor to the index.
   3. The electing company is authorized to adjust the rate cap for each basic local exchange service and switched-access service by seventy-five percent (75%) of this inflation measure, adjusted for exogenous changes specified in subsection (e) of this section, and excluding rate increases ordered by the commission pursuant to § 23-17-404.
   4. The rate cap may only be adjusted one (1) time each twelve (12) months beginning at the expiration of the three-year period after the date of initial filing to be regulated pursuant to this section and §§ 23-17-406 and 23-17-408.
3. As long as an electing company is in compliance with subsections (a) and (b) of this section, such rates are deemed just and reasonable.
4. Notwithstanding the provisions of this section, if, at any time following the date of election pursuant to this section, another telecommunications provider is providing basic local exchange service or switched-access service within an electing company's local exchange area, the electing company within any exchange of the electing company in which another telecommunications provider is providing these services may commence determining its rates for basic local exchange service and switched-access services in the same manner that it determines its rates for services other than basic local exchange service and switched-access service, pursuant to § 23-17-408(c).
5. As used in this section, the term “exogenous change” means a cumulative impact on a local exchange carrier's intrastate regulated revenue, expenses, or investment of more than three percent (3%) over a twelve-month period, that is attributable to changes in federal, state, or local government mandates, rules, regulations, or statutes.

History. Acts 1997, No. 77, § 7; 2003, No. 1764, § 3; 2007, No. 385, § 6.

A.C.R.C. Notes. Acts 2007, No. 385, § 1, provided:

“Legislative findings.

“The General Assembly finds that:

“(1) The development of an administratively streamlined universal service fund based upon high cost support is important public policy;

“(2) It is administratively efficient to use financial data submitted by eligible telecommunications companies to federal agencies, made under penalty of law, and when appropriate, cost proxies, for the high-cost support mechanism, to be called the ‘Arkansas High Cost Fund’, thereby eliminating the need for extensive financial review and the high administrative costs created by such reviews;

“(3) A five-year transition from the Arkansas Universal Service Fund to the Arkansas High Cost Fund is important public policy due to the shift from a revenue replacement fund based upon current changes to a high-cost fund using financial data that is two (2) or more years old;

“(4) Due to the complex nature and ever-changing administration of telecommunications at the federal level, potential changes in how access charges are collected could disrupt support for eligible telecommunications companies serving rural areas;

“(5) Eligible telecommunications company members of the AICCLP are more adversely affected by sudden changes in regulation, access charges, and statutory changes; and”