Session of 1999
HOUSE BILL No. 2539
By Committee on Federal and State Affairs
2-25
9 AN ACT concerning telecommunications; relating to rate rebalancing
10 and access to the Kansas universal service fund; amending K.S.A. 1998
11 Supp. 66-1,187, 66-2001, 66-2002, 66-2003, 66-2005, 66-2008 and 66-
12 2009 and repealing the existing sections; also repealing K.S.A. 1998
13 Supp. 66-2012 and 66-2013.
14
15 Be it enacted by the Legislature of the State of Kansas:
16 Section 1. K.S.A. 1998 Supp. 66-1,187 is hereby amended to read as
17 follows: 66-1,187. As used in this act:
18 (a) "Broadband" means the transmission of digital signals at rates
19 equal to or greater than 1.5 megabits per second.
20 (b) "CLASS services" means custom local area signaling services,
21 which include automatic callback, automatic recall, calling number iden-
22 tification, selective call rejection, selective call acceptance, selective call
23 forwarding, distinctive ringing and customer originated trace.
24 (c) "Commission" means the state corporation commission.
25 (d) "Dialing parity" means that a person that is not an affiliate of a
26 local exchange carrier is able to provide telecommunications services in
27 such a manner that customers have the ability to route automatically,
28 without the use of any access code, their telecommunications to the tel-
29 ecommunications carrier of the customer's designation from among two
30 or more telecommunications carriers, including such local exchange
31 carrier.
32 (e) "Federal act" means the federal telecommunications act of 1996,
33 P.L. 104-104 (amending the communications act of 1934, 47 U.S.C. 151,
34 et seq.)
35 (f) "ISDN" means integrated services digital network which is a net-
36 work and associated technology that provides simultaneous voice and data
37 communications over a single communications channel.
38 (g) "LATA" has the meaning ascribed to it in the federal act.
39 (h) "Local exchange carrier" means any telecommunications public
40 utility or its successor providing switched telecommunications service
41 within any local exchange service area, as approved by the commission
42 on or before January 1, 1996. However, with respect to the Hill City
43 exchange area, in which multiple carriers were certified by the commis-
44 sion prior to January 1, 1996, the commission's determination, subject to
45 any court appeals, of which authorized carrier shall serve as the carrier
46 of last resort will determine which carrier shall be deemed the local
47 exchange carrier for that exchange.
48 (i) "Number portability" has the meaning ascribed to it in the federal
49 act.
50 (j) "1 + intraLATA dialing parity" means the ability of a local exchange
51 service customer to specify the telecommunications or local exchange
52 carrier that will carry the intraLATA long distance messages when that
53 customer dials either "1" or "0" plus a 10-digit number.
54 (k) "Operating area" means:
55 (1) In the case of a rural telephone company, operating area or service
56 area means such company's study area or areas as approved by the federal
57 communications commission;
58 (2) in the case of a local exchange carrier, other than a rural telephone
59 company, operating area or service area means such carrier's local
60 exchange service area or areas as approved by the commission.
61 (l) "Rural telephone company" has the meaning ascribed to it in the
62 federal act, excluding any local exchange carrier which together with all
63 of its affiliates has 20,000 or more access lines in the state.
64 (m) "Telecommunications carrier" means a corporation, company,
65 individual, association of persons, their trustees, lessees or receivers that
66 provides a telecommunications service, including, but not limited to, in-
67 terexchange carriers and competitive access providers, but not including
68 local exchange carriers certified before January 1, 1996.
69 (n) "Telecommunications public utility" means any public utility, as
70 defined in K.S.A. 66-104, and amendments thereto, which owns, controls,
71 operates or manages any equipment, plant or generating machinery, or
72 any part thereof, for the transmission of telephone messages, as defined
73 in K.S.A. 66-104, and amendments thereto, or the provision of telecom-
74 munications services in or throughout any part of Kansas.
75 (o) "Telecommunications service" means the provision of a service
76 for the transmission of telephone messages, or two-way video or data
77 messages.
78 (p) "Universal service" means telecommunications services and fa-
79 cilities which include: single party, two-way voice grade calling; stored
80 program controlled switching with vertical service capability; E911 ca-
81 pability; tone dialing; access to operator services; access to directory as-
82 sistance; and equal access to long distance services; and toll blocking or
83 toll control.
84 (q) "Enhanced universal service" means telecommunications serv-
85 ices, in addition to those included in universal service, which shall include:
86 Signaling system seven capability, with CLASS service capability; basic
87 and primary rate ISDN capability, or the technological equivalent; full-
88 fiber interconnectivity, or the technological equivalent, between central
89 offices; and broadband capable facilities to: All schools accredited pur-
90 suant to K.S.A. 72-1101 et seq., and amendments thereto; hospitals as
91 defined in K.S.A. 65-425, and amendments thereto; public libraries; and
92 state and local government facilities which request broadband services,
93 without regard to any transmission, media or technology, high-speed,
94 switched, broadband telecommunications capability that enables users to
95 originate and receive high-quality voice, data, graphics and video tele-
96 communications using any technology.
97 Sec. 2. K.S.A. 1998 Supp. 66-2001 is hereby amended to read as
98 follows: 66-2001. It is hereby declared to be the public policy of the state
99 to:
100 (a) Ensure that every Kansan will have access to a first class telecom-
101 munications infrastructure that provides excellent services at an afforda-
102 ble price;
103 (b) ensure that conditions exist for consumers throughout the state
104 to realize the benefits of competition through increased services and im-
105 proved telecommunications facilities and infrastructure at reduced rea-
106 sonable rates;
107 (c) promote consumer access to a full range of telecommunications
108 services, including advanced telecommunications services that are com-
109 parable in urban and rural areas throughout the state;
110 (d) advance the development of a statewide telecommunications in-
111 frastructure that is capable of supporting applications, such as public
112 safety, telemedicine, services for persons with special needs, distance
113 learning, public library services, access to internet providers and others;
114 and
115 (e) protect consumers of telecommunications services from fraudu-
116 lent business practices and practices that are inconsistent with the public
117 interest, convenience and necessity.; and
118 (f) foster conditions for continuous innovation of information net-
119 working and telecommunications.
120 Sec. 3. K.S.A. 1998 Supp. 66-2002 is hereby amended to read as
121 follows: 66-2002. The commission shall:
122 (a) Adopt a definition of "universal service" and "enhanced universal
123 service," pursuant to subsections (p) and (q) of K.S.A. 1998 Supp. 66-
124 1,187;
125 (b) (a) Authorize any requesting telecommunications carrier to pro-
126 vide local exchange or exchange access service pursuant to subsection (a)
127 of K.S.A. 1998 Supp. 66-2003, and amendments thereto;
128 (c) (b) on or before July 1, 1996, the commission shall initiate a pro-
129 ceeding to adopt guidelines to ensure that all telecommunications carriers
130 and local exchange carriers preserve and enhance universal service, pro-
131 tect the public safety and welfare, ensure the continued quality of tele-
132 communications services and safeguard the rights of consumers;
133 (d) review, approve and ensure compliance with network infrastruc-
134 ture plans submitted by local exchange carriers pursuant to K.S.A. 1998
135 Supp. 66-2005, and amendments thereto;
136 (e) (c) review, approve and ensure compliance with regulatory plans
137 submitted by local exchange carriers pursuant to K.S.A. 1998 Supp. 66-
138 2005, and amendments thereto;
139 (f) (d) on or before January 1, 1997, establish, pursuant to K.S.A. 1998
140 Supp. 66-2006, and amendments thereto, the Kansas lifeline service pro-
141 gram, hereinafter referred to as the KLSP;
142 (g) (e) initiate and complete a proceeding by January 1, 1997, to es-
143 tablish a competitively neutral mechanism or mechanisms to fund: dual
144 party relay services for Kansans who are speech or hearing impaired;
145 telecommunications equipment for persons with visual impediments; and
146 telecommunications equipment for persons with other special needs. This
147 funding mechanism or mechanisms shall be implemented by March 1,
148 1997;
149 (h) (f) on or before January 1, 1997, establish the Kansas universal
150 service fund pursuant to K.S.A. 1998 Supp. 66-2008, and amendments
151 thereto, hereinafter referred to as the KUSF, and make various deter-
152 minations relating to the implementation of such fund;
153 (i) (g) authorize all local exchange carriers to provide internet access
154 as outlined in K.S.A. 1998 Supp. 66-2011, and amendments thereto, and
155 report on the status of the implementation provisions to specified legis-
156 lative committees;
157 (j) review the federal act and adopt additional standards and guide-
158 lines as necessary for enforcing slamming restrictions;
159 (k) (h) commencing on June 1, 1997, and periodically thereafter, re-
160 view and, to the extent necessary, modify the definition of universal serv-
161 ice and enhanced universal service, and adjust the KUSF as necessary,
162 taking into account advances in telecommunications and information
163 technology and services;
164 (l) (i) on or before January 1, 1997, initiate and complete a proceeding
165 to establish minimum quality of service standards which will be equally
166 applicable to all local exchange carriers and telecommunications carriers
167 in the state; any local exchange carrier or telecommunications carrier
168 violating such standards, for each occurrence, shall forfeit and pay a pen-
169 alty of not less than $100, nor more than $5,000; violations of such stan-
170 dards shall be enforced in accordance with provisions of K.S.A. 66-138
171 and 66-177, and amendments thereto; and
172 (m) (j) on January 1, 2000, prepare and submit a report to the leg-
173 islature. The report shall include an analysis of the manner in which the
174 regulatory framework has served to: Protect consumers; safeguard uni-
175 versal service; ensure that consumers have reaped the benefits of com-
176 petition; maximize the use of market forces; and promote development
177 of the telecommunications infrastructure throughout the state. The com-
178 mission also shall recommend if and how the KUSF should be modified.
179 The commission may submit the report by posting the report's contents
180 on the commission's internet homepage and notifying the legislature of
181 the report's availability.
182 Sec. 4. K.S.A. 1998 Supp. 66-2003 is hereby amended to read as
183 follows: 66-2003. (a) On or before September 1, 1996, the commission
184 shall begin to authorize applications for certificates of public convenience
185 and necessity to provide local exchange or exchange access service.
186 (b) A local exchange carrier shall be required to offer to allow rea-
187 sonable resale of its retail telecommunications services and to sell un-
188 bundled local loop, switch and trunk facilities to telecommunications car-
189 riers, as required by the federal act and pursuant to negotiated
190 agreements or a statement of terms and conditions generally available to
191 telecommunications carriers.
192 (c) To encourage telecommunications carriers to build or install tel-
193 ecommunications facilities, including, but not limited to, local loop and
194 switching facilities in the state, and except as otherwise negotiated by a
195 local exchange carrier and a telecommunications carrier, the prices for
196 such unbundled facilities shall be determined by the commission, on a
197 nondiscriminatory basis, to permit the recovery of costs and a reasonable
198 profit. The commission shall determine wholesale rates on the basis of
199 retail rates charged subscribers for the telecommunications service re-
200 quested, excluding the portion thereof attributable to any marketing, bill-
201 ing, collection and other costs, that will be avoided by the local exchange
202 carrier. The commission shall approve resale restrictions proposed by any
203 local exchange carrier which prohibit resellers from purchasing retail tel-
204 ecommunications services offered by that local exchange carrier to one
205 category of customers and reselling those retail services to a different
206 category of customers. Upon a finding that such practice would be anti-
207 competitive, anticonsumer or detrimental to the quality of the network
208 infrastructure, the commission may prohibit the resale of retail services
209 at a rate lower than the wholesale rate. The commission shall approve any
210 other reasonable limitation on resale to the extent permitted by the fed-
211 eral act.
212 (d) As provided in the federal act, in order for telecommunications
213 carriers to provide local exchange service and exchange access service,
214 local exchange carriers shall provide the means to interconnect their re-
215 spective customers, including, but not limited to, toll access, access to
216 operator services, access to directory listings and assistance, and access to
217 E911 service.
218 (e) Customers shall be accorded number portability and local and toll
219 dialing parity in conformance with national standards to the extent eco-
220 nomically and technically feasible the federal act and federal communi-
221 cation commission rules and regulations. Terms and prices for intercon-
222 nection, unbundled facilities and resale of existing retail
223 telecommunications services shall be negotiated in good faith between
224 the parties. During the period from the 135th through the 160th day after
225 the date on which an incumbent local exchange carrier receives a request
226 for negotiation under this section, the carrier or any other party to the
227 negotiation may petition the commission to arbitrate any open issues.
228 Arbitration shall occur in conformance with the provisions of section 252
229 of the federal act.
230 (f) The commission shall require, consistent with the terms of the
231 federal act, that 1 + intraLATA dialing parity be provided by all local
232 exchange carriers and telecommunications carriers coincidentally with the
233 provision of in-region interLATA toll services in the state by local
234 exchange carriers with more than 150,000 access lines or their affiliates.
235 Sec. 5. K.S.A. 1998 Supp. 66-2005 is hereby amended to read as
236 follows: 66-2005. (a) Each local exchange carrier shall file a network in-
237 frastructure plan with the commission on or after January 1, 1997, and
238 prior to January 1, 1998. Each plan, as a part of universal service protec-
239 tion, shall include schedules, which shall be approved by the commission,
240 for deployment of universal service capabilities by July 1, 1998, and the
241 deployment of enhanced universal service capabilities by July 1, 2003, as
242 defined pursuant to subsections (p) and (q) of K.S.A. 1998 Supp. 66-1,187
243 and amendments thereto, respectively. With respect to enhanced univer-
244 sal service, such schedules shall provide for deployment of ISDN, or its
245 technological equivalent, or broadband facilities, only upon a firm cus-
246 tomer order for such service, or for deployment of other enhanced uni-
247 versal services by a local exchange carrier. After receipt of such an order
248 and upon completion of a deployment plan designed to meet the firm
249 order or otherwise provide for the deployment of enhanced universal
250 service, a local exchange carrier shall notify the commission. The com-
251 mission shall approve the plan unless the commission determines that the
252 proposed deployment plan is unnecessary, inappropriate, or not cost ef-
253 fective, or would create an unreasonable or excessive demand on the
254 KUSF. The commission shall take action within 90 days. If the commis-
255 sion fails to take action within 90 days, the deployment plan shall be
256 deemed approved. This approval process shall continue until July 1, 2000.
257 Each plan shall demonstrate the capability of the local exchange carrier
258 to comply on an ongoing basis with quality of service standards to be
259 adopted by the commission no later than January 1, 1997. The commission
260 shall establish rules and regulations by June 30, 2000, to address access
261 to enhanced telecommunications and information services that are rea-
262 sonably comparable between urban and rural areas throughout the state.
263 Such rules shall establish a method by which telecommunications services
264 providers may request supplemental funding for enhanced universal serv-
265 ices. Those local exchange carriers that have deployed enhanced universal
266 service will be eligible for reimbursement from the KUSF pending veri-
267 fication of the expenditure, the timing of the expenditure and the associ-
268 ated costs.
269 (b) In order to protect universal service, facilitate the transition to
270 competitive markets and stimulate the construction of an advanced tel-
271 ecommunications infrastructure, each local exchange carrier shall file a
272 regulatory reform plan at the same time as it files the network infrastruc-
273 ture plan required in subsection (a). As part of its regulatory reform plan,
274 a local exchange carrier may elect traditional rate of return regulation or
275 price cap regulation. Carriers that elect price cap regulation shall be ex-
276 empt from rate base, rate of return and earnings regulation for the pur-
277 pose of establishing rates. However, the commission may resume such
278 regulation upon finding, after a hearing, that a carrier that is subject to
279 price cap regulation has: violated minimum quality of service standards
280 pursuant to subsection (l) of K.S.A. 1998 Supp. 66-2002 and amendments
281 thereto; been given reasonable notice and an opportunity to correct the
282 violation; and failed to do so. Regulatory reform plans also shall include:
283 (1) A commitment to All telecommunications public utilities shall pro-
284 vide existing and newly ordered point-to-point broadband services to: Any
285 hospital as defined in K.S.A. 65-425, and amendments thereto; any school
286 accredited pursuant to K.S.A. 72-1101 et seq., and amendments thereto;
287 any public library; or other state and local government facilities at dis-
288 counted prices close to, but not below, long-run incremental cost; and
289 (2) a commitment to provide basic rate ISDN service, or the tech-
290 nological equivalent, at prices which are uniform throughout the carrier's
291 service area. Local exchange carriers shall not be required to allow retail
292 customers purchasing the foregoing discounted services to resell those
293 services to other categories of customers. Telecommunications carriers
294 may purchase basic rate ISDN services, or the technological equivalent,
295 for resale in accordance with K.S.A. 1998 Supp. 66-2003 and amendments
296 thereto. The commission may reduce prices charged for services outlined
297 in provisions (1) and (2) of this subsection, if the commitments of the
298 local exchange carrier set forth in those provisions are not being kept.
299 (c) Subject to the commission's approval, all local exchange carriers
300 shall reduce intrastate access charges to interstate levels as provided
301 herein. Rates for intrastate switched access, and the imputed access por-
302 tion of toll, shall be reduced over a three-year period with the objective
303 of equalizing interstate and intrastate rates in a revenue neutral, specific
304 and predictable manner. Subsequent reductions in intrastate access rates
305 may be ordered by the commission in order to maintain parity with in-
306 terstate access rates. The commission is authorized to rebalance local
307 residential and business service rates to offset the initial three-year phase
308 in of the intrastate access and toll charge reductions and to offset any
309 subsequent intrastate access and toll charge reductions, to the extent jus-
310 tified, based on a cost of service investigation. Any remaining portion of
311 the initial three-year phase in of the reduction in access and toll charges
312 not recovered through local residential and business service rates shall be
313 paid out from the KUSF pursuant to K.S.A. 1998 Supp. 66-2008 and
314 amendments thereto. Thereafter, any remaining portion of subsequent
315 intrastate access and toll charge reductions not recovered through local
316 residential and business service rates shall be paid out from the KUSF, to
317 the extent justified based upon cost of service studies. Rural telephone
318 companies shall reduce their intrastate switched access rates to interstate
319 levels on March 1, 1997, and every two years thereafter, as long as
320 amounts equal to such reductions are recovered from the KUSF.
321 (d) Beginning March 1, 1997, each rural telephone company shall
322 have the authority to increase annually its monthly basic local residential
323 and business service rates by an amount not to exceed $1 in each 12
324 month period until such monthly rates reach an amount equal to the
325 statewide rural telephone company average rates for such services. The
326 statewide rural telephone company average rates shall be the arithmetic
327 mean of the lowest flat rate as of March 1, 1996, for local residential
328 service and for local business service offered by each rural telephone
329 company within the state. In the case of a rural telephone company which
330 increases its local residential service rate or its local business service rate,
331 or both, to reach the statewide rural telephone company average rate for
332 such services, the amount paid to the company from the KUSF shall be
333 reduced by an amount equal to the additional revenue received by such
334 company through such rate increase. In the case of a rural telephone
335 company which elects to maintain a local residential service rate or a local
336 business service rate, or both, below the statewide rural telephone com-
337 pany average, the amount paid to the company from the KUSF shall be
338 reduced by an amount equal to the difference between the revenue the
339 company could receive if it elected to increase such rate to the average
340 rate and the revenue received by the company.
341 (e) For regulatory reform plans in which price cap regulation has
342 been elected, price cap plans shall have three baskets: Residential and
343 single-line business, including touch-tone; switched access services; and
344 miscellaneous services. The commission shall establish price caps at the
345 prices existing when the regulatory plan is filed subject to rate rebalancing
346 as provided in subsection (c) for residential services, including touch-tone
347 services, and for single-line business services, including touch-tone serv-
348 ices, within the residential and single-line business service basket. The
349 commission shall establish a formula for adjustments to the price caps.
350 The commission also shall establish price caps at the prices existing when
351 the regulatory plan is filed for the miscellaneous services basket. The
352 commission shall approve any adjustments to the price caps for the mis-
353 cellaneous service basket, as provided in subsection (f).
354 (f) On or before January 1, 1997, the commission shall issue a final
355 order in a proceeding to determine the price cap adjustment formula that
356 shall apply to the price caps for the local residential and single-line busi-
357 ness and the miscellaneous services baskets and for sub-categories, if any,
358 within those baskets. In determining this formula, the commission shall
359 balance the public policy goals of encouraging efficiency and promoting
360 investment in a quality, advanced telecommunications network in the
361 state. The commission also shall establish any informational filing require-
362 ments necessary for the review of any price cap tariff filings, including
363 price increases or decreases within the caps, to verify such caps would
364 not be exceeded by any proposed price change. The adjustment formula
365 shall apply to the price caps for the local residential and single-line busi-
366 ness basket after December 31, 1999, and to the miscellaneous services
367 basket after December 31, 1997. The price cap formula, but not actual
368 prices, shall be reviewed every five years.
369 (g) The price caps for the residential and single-line business service
370 basket shall be capped at their initial level until January 1, 2000, except
371 for any increases authorized as a part of the revenue neutral rate rebal-
372 ancing under subsection (c). The price caps for this basket and for the
373 categories in this basket, if any, shall may be adjusted annually after De-
374 cember 31, 1999, based on the formula determined by the commission
375 under subsection (f).
376 (h) The price cap for the switched access service basket shall be set
377 based upon the local exchange carrier's intrastate access tariffs as of Jan-
378 uary 1, 1997, except for any revenue neutral rate rebalancing authorized
379 in accordance with subsection (c). Thereafter, the cap for this basket shall
380 not change except in connection with any subsequent revenue neutral
381 rebalancing authorized by the commission under subsection (c) may be
382 adjusted annually based on a formula determined by the commission un-
383 der subsection (f). Additional adjustments to the price caps may be re-
384 quired due to rebalancing authorized by the commission under subsection
385 (c).
386 (i) The price caps for the miscellaneous services basket shall be ad-
387 justed annually after December 31, 1997, based on the adjustment for-
388 mula determined by the commission under subsection (f).
389 (j) A price cap is a maximum price for all services taken as a whole
390 in a given basket. Prices for individual services may be changed within
391 the service categories, if any, established by the commission within a
392 basket. An entire service category, if any, within the residential and single-
393 line business basket or miscellaneous services basket may be priced below
394 the cap for such category. Unless otherwise approved by the commission,
395 no service shall be priced below the price floor which will be long-run
396 incremental cost and imputed access charges. Access charges equal to
397 those paid by telecommunications carriers to local exchange carriers shall
398 be imputed as part of the price floor for toll services offered by local
399 exchange carriers on a toll service basis.
400 (k) A local exchange carrier may offer promotions within an exchange
401 or group of exchanges. All promotions shall be approved by the commis-
402 sion and shall apply to all customers in a nondiscriminatory manner within
403 the exchange or group of exchanges.
404 (l) Unless the commission authorizes price deregulation at an earlier
405 date, intrastate toll services within the miscellaneous services basket shall
406 continue to be regulated until the affected local exchange carrier begins
407 to offer 1 + intraLATA dialing parity throughout its service territory, at
408 which time intrastate toll will be price deregulated, except that prices
409 cannot be set below the price floor.
410 (m) On or before July 1, 1997, the commission shall establish guide-
411 lines for reducing regulation prior to price deregulation of price cap reg-
412 ulated services in the miscellaneous services basket, the switched access
413 services basket, and the residential and single-line business basket.
414 (n) Subsequent to the adoption of guidelines pursuant to subsection
415 (m), the commission shall initiate a petitioning procedure under which
416 the local exchange carrier may request rate range pricing. The commis-
417 sion shall act upon a petition within 21 days, subject to a 30-day suspen-
418 sion. The prices within a rate range shall be tariffed and shall apply to all
419 customers in a nondiscriminatory manner in an exchange or group of
420 exchanges.
421 (o) A local exchange carrier may petition the commission to designate
422 an individual service or service category, if any, within the miscellaneous
423 services basket, the switched access services basket or the residential and
424 single-line business basket for reduced regulation. The commission shall
425 act upon a petition for reduced regulation within 21 days, subject to a
426 suspension period of an additional 30 days, and upon a good cause show-
427 ing of the commission in the suspension order, or within such shorter
428 time as the commission shall approve. The commission shall issue a final
429 order within the 21-day period or within a 51-day period if a suspension
430 has been issued. Following an order granting reduced regulation of an
431 individual service or service category, the commission shall act on any
432 request for price reductions within seven days subject to a 30-day sus-
433 pension. The commission shall act on other requests for price cap ad-
434 justments, adjustments within price cap plans and on new service offer-
435 ings within 21 days subject to a 30-day suspension. Such a change will be
436 presumed lawful unless it is determined the prices are below the price
437 floor or that the price cap for a category, if any, within the entire basket
438 has been exceeded.
439 (p) The commission may price deregulate within an exchange area,
440 or at its discretion on a statewide basis, any individual service or service
441 category upon a finding by the commission that there is a telecommuni-
442 cations carrier or an alternative provider providing a comparable product
443 or service, considering both function and price, in that exchange area.
444 The commission shall act upon a petition for price deregulation within
445 21 days, subject to a suspension period of an additional 30 days, and upon
446 a good cause showing of the commission in the suspension order, or
447 within such shorter time as the commission shall approve; provided that
448 no such petition shall be filed prior to July 1997, unless the commission
449 otherwise authorizes. The commission shall issue a final order within the
450 21-day period or within a 51-day period if a suspension has been issued.
451 (q) Upon complaint or request, the commission may investigate a
452 price deregulated service. The commission shall resume price regulation
453 of a service provided in any exchange area by placing it in the appropriate
454 service basket, as approved by the commission, upon a determination by
455 the commission that there is no longer a telecommunications carrier or
456 alternative provider providing a comparable product or service, consid-
457 ering both function and price, in that exchange area.
458 (r) The commission shall require that for all local exchange carriers
459 all such price deregulated basic intraLATA toll services be geographically
460 averaged statewide and not be priced below the price floor established
461 in subsection (j).
462 (s) Cost studies to determine price floors shall be performed as re-
463 quired by the commission in response to complaints or on the commis-
464 sion's own motion. In addition, notwithstanding the exemption in sub-
465 section (b), the commission may request information necessary to execute
466 any of its obligations under the act.
467 (t) A local exchange carrier may petition for individual customer pric-
468 ing. The commission shall respond expeditiously to the petition within a
469 period of not more than 30 days subject to a 30-day suspension.
470 (u) No audit, earnings review or rate case shall be performed with
471 reference to the initial prices filed as required herein The commission is
472 authorized to conduct audits, investigations and obtain cost and revenue
473 information as it deems necessary to carry out the commission's obliga-
474 tions under this act and the federal act.
475 (v) Telecommunications carriers shall not be subject to price regu-
476 lation, except that: Access charge reductions shall be passed through to
477 consumers by reductions in basic intrastate toll prices; and basic toll prices
478 shall remain geographically averaged statewide. As required under K.S.A.
479 66-131, and amendments thereto, and except as provided for in subsec-
480 tion (c) of K.S.A. 1998 Supp. 66-2004 and amendments thereto, telecom-
481 munications carriers that were not authorized to provide switched local
482 exchange telecommunications services in this state as of July 1, 1996,
483 including cable television operators who have not previously offered tel-
484 ecommunications services, must receive a certificate of convenience
485 based upon a demonstration of technical, managerial and financial via-
486 bility and the ability to meet quality of service standards established by
487 the commission. Any telecommunications carrier or other entity seeking
488 such certificate shall file a statement, which shall be subject to the com-
489 mission's approval, specifying with particularity the areas in which it will
490 offer service, the manner in which it will provide the service in such areas
491 and whether it will serve both business customers and residential custom-
492 ers in such areas. Any structurally separate affiliate of a local exchange
493 carrier that provides telecommunications services shall be subject to the
494 same regulatory obligations and oversight as a telecommunications car-
495 rier, as long as the local exchange carrier's affiliate obtains access to any
496 services or facilities from its affiliated local exchange carrier on the same
497 terms and conditions as the local exchange carrier makes those services
498 and facilities available to other telecommunications carriers. The com-
499 mission shall oversee telecommunications carriers to prevent fraud and
500 other practices harmful to consumers and to ensure compliance with
501 quality of service standards adopted for all local exchange carriers and
502 telecommunications carriers in the state.
503 Sec. 6. K.S.A. 1998 Supp. 66-2008 is hereby amended to read as
504 follows: 66-2008. On or before January 1, 1997, the commission shall
505 establish the Kansas universal service fund, hereinafter referred to as the
506 KUSF.
507 (a) The initial amount of the KUSF shall be comprised of local
508 exchange carrier revenues lost as a result of rate rebalancing pursuant to
509 the initial three-year phase down of access rates as set forth in subsection
510 (c) of K.S.A. 1998 Supp. 66-2005 and amendments thereto and subsection
511 (a) of K.S.A. 1998 Supp. 66-2007 and amendments thereto. Such reve-
512 nues shall be recovered on a revenue neutral basis. The revenue neutral
513 calculation shall be based on the volumes and revenues for the 12 months
514 prior to September 30, 1996, adjusted for any rate changes.
515 (b) The commission shall require every telecommunications carrier,
516 telecommunications public utility and wireless telecommunications serv-
517 ice provider that provides intrastate telecommunications services to con-
518 tribute to the KUSF on an equitable and nondiscriminatory basis. Any
519 telecommunications carrier, telecommunications public utility or wireless
520 telecommunications service provider which contributes to the KUSF may
521 collect from customers an amount equal to such carrier's, utility's or pro-
522 vider's contribution, except that before January 1, 2000, no such carrier,
523 provider or utility shall collect from customers an amount in excess of
524 8.89% of its intrastate retail revenues as provided in commission docket
525 no. 190-492-U but such carrier, provider or utility may collect a lesser
526 amount from its customer.
527 Prior to January 1, 2000, With respect to wireless telecommunications
528 service providers, an equitable and nondiscriminatory rate shall be an
529 amount equal to the rate of contributions of wireline telecommunications
530 service providers, as determined by the commission, reduced by the per-
531 centage minutes of usage initiated and terminated entirely over the wire-
532 less network as determined by the commission. The commission shall
533 establish such rate for wireless telecommunications service providers no
534 later than December 31, 1998. Any contributions in excess of distributions
535 collected in any reporting year shall be applied to reduce the estimated
536 contribution that would otherwise be necessary for the following year.
537 (c) Pursuant to the federal act, distributions from the KUSF shall be
538 made in a competitively neutral manner to qualified telecommunications
539 public utilities, telecommunications carriers and wireless telecommuni-
540 cations providers, that are deemed eligible both under subsection (e)(1)
541 of section 214 of the federal act and by the commission.
542 (d) The commission shall periodically review the KUSF to determine
543 if the costs of qualified telecommunications public utilities, telecommu-
544 nications carriers and wireless telecommunications service providers to
545 provide local service justify modification of the KUSF. If the commission
546 determines that any changes are needed, the commission shall modify
547 the KUSF accordingly On the first day of the month, 60 days after the
548 effective date of this legislation, distributions from the KUSF to any price
549 cap regulated company shall be limited to the amount of support estab-
550 lished by the commission in Docket No. 190.492-U, $36.88 per high cost
551 residential and single line business loop, or any amount established by
552 subsequent modification of that order. This modification of the KUSF
553 distribution shall not alter the commission's responsibility to ensure that
554 the KUSF is based on cost consistent with the federal act. No rate rebal-
555 ancing shall occur unless justified by cost studies. The commission shall
556 have continuing responsibility to ensure that contributions to and distri-
557 butions from the KUSF are competitively neutral. Any company may file
558 an application for support in excess of $36.88. Such application shall con-
559 tain cost justification for such excess support. If an application for such
560 support is filed within 60 days of the company's reduction to $36.88 per
561 high cost residential and single line business loop, a commission order
562 granting support in excess of the $36.88 shall be retroactive to the date
563 of filing the application if justified by the cost studies.
564 (e) Any qualified telecommunications carrier, telecommunications
565 public utility, which has not elected price cap regulation or wireless tel-
566 ecommunications service provider may request supplemental funding
567 from the KUSF based upon a percentage increase in access lines over
568 the 12-month period prior to the request. The supplemental funding shall
569 be incurred for the purpose of providing services to and within the service
570 area of the qualified telecommunications carrier, telecommunications
571 public utility or wireless telecommunications service provider. Supple-
572 mental funding from the KUSF shall be used for infrastructure expend-
573 itures necessary to serve additional customers within the service area of
574 such qualifying utility, provider or carrier. All affected parties shall be
575 allowed to review and verify a request of such a qualified utility, carrier
576 or provider for supplemental funding from the KUSF, and to intervene
577 in any commission proceeding regarding such request. The commission
578 shall issue an order on the request within 120 days of filing. Additional
579 funding also may be requested for: The recovery of shortfalls due to
580 additional rebalancing of rates to continue maintenance of parity with
581 interstate access rates; shortfalls due to changes to access revenue
582 requirements resulting from changes in federal rules; additional invest-
583 ment required to provide universal service and enhanced universal serv-
584 ice, deployed subject to subsection (a) of K.S.A. 66-2005, and amend-
585 ments thereto; and for infrastructure expenditures in response to facility
586 or service requirements established by any legislative, regulatory or ju-
587 dicial authority. Such requests shall be subject to simplified filing pro-
588 cedures and the expedited review procedures, as outlined in the stipu-
589 lation attached to the order of November 19, 1990 in docket no.
590 127,140-U (Phase IV).
591 Supplemental funding from the KUSF for price cap regulated compa-
592 nies may be requested to cover upward exogenous cost adjustments. Sup-
593 plemental funding for exogenous adjustments shall be approved by the
594 commission at the commission's discretion.
595 (f) Additional supplemental funding from the KUSF, other than as
596 provided in subsection (e) of this section, may be authorized at the dis-
597 cretion of the commission. However, the commission may require ap-
598 proval of such funding to be based upon a general rate case filing. With
599 respect to any request for additional supplemental funding from the
600 KUSF, the commission shall act expeditiously, but shall not be subject to
601 the 120 day deadline set forth in subsection (e).
602 Sec. 7. K.S.A. 1998 Supp. 60-2009 is hereby amended to read as
603 follows: 60-2009. (a) Local exchange carriers that provided switched local
604 exchange services in the state prior to January 1, 1996, or their successors,
605 shall serve as the carrier of last resort in their exchanges and shall be
606 eligible to receive KUSF funding. However, with respect to the Hill City
607 exchange area in which multiple carriers were certified prior to January
608 1, 1996, the commission's determination, subject to court appeals, shall
609 determine which authorized carrier shall serve as carrier of last resort.
610 The local exchange carrier serving as the carrier of last resort shall remain
611 the carrier of last resort and shall be entitled to recover the costs of serving
612 as carrier of last resort.
613 (b) Beginning March 1, 1997, the amount of KUSF funds owed to
614 each qualifying telecommunications carrier, telecommunications public
615 utility or wireless telecommunications service provider in the state, based
616 upon the revenue requirements assigned to the funds for such qualifying
617 utility, carrier or provider, shall be allocated by the fund administrator in
618 equal monthly installments.
619 Sec. 8. K.S.A. 1998 Supp. 66-1,187, 66-2001, 66-2002, 66-2003, 66-
620 2005, 66-2008, 66-2009, 66-2012 and 66-2013 are hereby repealed.
621 Sec. 9. This act shall take effect and be in force from and after its
622 publication in the Kansas register.