47 C.F.R. § 51.609

Determination of avoided retail costs

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Link to an amendment published at 91 FR 20374, Apr. 16, 2026.

(a) Except as provided in § 51.611, the amount of avoided retail costs shall be determined on the basis of a cost study that complies with the requirements of this section.

(b) Avoided retail costs shall be those costs that reasonably can be avoided when an incumbent LEC provides a telecommunications service for resale at wholesale rates to a requesting carrier.

(c) For incumbent LECs that are designated as Class A companies under § 32.11 of this chapter, except as provided in paragraph (d) of this section, avoided retail costs shall:

(1) Include as direct costs, the costs recorded in USOA accounts 6611 (product management and sales), 6613 (product advertising), 6621 (call completion services), 6622, (number services), and 6623 (customer services) (§§ 32.6611, 32.6613, 32.6621, 32.6622, and 32.6623 of this chapter);

(2) Include, as indirect costs, a portion of the costs recorded in USOA accounts 6121-6124 (general support expenses), 6720 (corporate operations expenses), and uncollectible telecommunications revenue included in 5300 (uncollectible revenue) (Secs. 32.6121 through 32.6124, 32.6720 and 32.5300 of this chapter); and

(3) Not include plant-specific expenses and plant non-specific expenses, other than general support expenses (§§ 32.6112-6114, 32.6211-6565 of this chapter).

(d) Costs included in accounts 6611, 6613 and 6621-6623 described in paragraph (c) of this section (§§ 32.6611, 32.6613, and 32.6621-6623 of this chapter) may be included in wholesale rates only to the extent that the incumbent LEC proves to a state commission that specific costs in these accounts will be incurred and are not avoidable with respect to services sold at wholesale, or that specific costs in these accounts are not included in the retail prices of resold services. Costs included in accounts 6112-6114 and 6211-6565 described in paragraph (c) of this section (§§ 32.6112-32.6114, 32.6211-32.6565 of this chapter) may be treated as avoided retail costs, and excluded from wholesale rates, only to the extent that a party proves to a state commission that specific costs in these accounts can reasonably be avoided when an incumbent LEC provides a telecommunications service for resale to a requesting carrier.

(e) For incumbent LECs that are designated as Class B companies under § 32.11 of this chapter and that record information in summary accounts instead of specific USOA accounts, the entire relevant summary accounts may be used in lieu of the specific USOA accounts listed in paragraphs (c) and (d) of this section.

[61 FR 45619, Aug. 29, 1996, as amended at 67 FR 5700, Feb. 6, 2002; 69 FR 53652, Sept. 2, 2004]

Notes of Decisions

Cited in 8 cases, 2000–2007 · leading case: BellSouth Telecomm., Inc. v. Sanford, 494 F.3d 439 (4th Cir. 2007).

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BellSouth Telecomm., Inc. v. Sanford, 494 F.3d 439 (4th Cir. 2007). · cites it 2× “costs that will be avoided by the local exchange carrier"); 47 C.F.R. § 51.609 . And with the NC Commission's order, BellSouth must again account for the expense as a discount to the retail rate when selling its services to competing LECs.”

Iowa Utils. Bd. v. Fed. Commc'ns Comm'n & United States of Am., 219 F.3d 744 (8th Cir. 2000). “” 47 C.F.R. § 51.609 (b). The petitioners challenge the FCC’s interpretation of the term “avoided retail costs.”

At & T Commc'ns of California, Inc. v. Pac. Bell Tel. Co., 228 F. Supp. 2d 1086 (N.D. Cal. 2002). “See 47 C.F.R. § 51.609 . Plaintiffs claim that Rule 51.”

At & T Commc'ns of S. States, Inc. v. GTE Florida, Inc., 123 F. Supp. 2d 1318 (N.D. Fla. 2000). “Although by rule the FCC originally required the exclusion not only of costs that "will be avoided” but also costs that "can be avoided,” 47 C.F.R. § 51.609 (b), the Eighth Circuit now has invalidated that rule, squarely holding that only actually avoided costs must be excluded…”

US West Commc'ns, Inc. v. Jennings, 304 F.3d 950 (9th Cir. 2002). “505 (b)(1), holding that the FCC’s pricing methodology based on the total element long-run incremental cost (“TELRIC”) of an element was contrary to § 252(d)(1) to the extent that it was based upon a hypothetical network standard; (2) vacated 47 C.F.R. § 51.609 , holding that…”

MCI Telecomm. Corp. v. Bell Atl.-Pennsylvania, Inc., 271 F.3d 491 (3rd Cir. 2001). · cites it 2× “The regulations define avoided retail costs as “those costs that reasonably can be avoided when an incumbent ILEC provides a telecommunication service for resale at wholesale rates to a requesting carrier.”

At & T Commc'ns of S. States, Inc. v. BellSouth Telecomm., Inc., 122 F. Supp. 2d 1305 (N.D. Fla. 2000). “” 47 C.F.R. § 51.609 (b), the Eighth Circuit now has invalidated that rule, squarely holding that only actually avoided costs must be excluded from wholesale rates.”

Iowa Utils. Bd. v. FCC (8th Cir. 2000). “" 47 C.F.R. § 51.609 (b). The petitioners challenge the FCC's interpretation of the term "avoided retail costs.”

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