Session of 2000
Substitute for HOUSE BILL No. 2743
By Select Committee on Information Management
3-2
9 AN ACT
concerning telecommunications; relating to the deployment of
10 high speed data
transmission services; amending K.S.A. 1999 Supp.
11 66-1,187 and 66-2005
and repealing the existing sections.
12
13 Be it enacted by the Legislature of the
State of Kansas:
14 Section
1. K.S.A. 1999 Supp. 66-1,187 is hereby amended to read as
15 follows: 66-1,187. As used in this act:
16 (a) ``Broadband''
means the transmission of digital signals at rates
17 equal to or greater than 1.5 megabits per
second.
18 (b) ``CLASS
services'' means custom local area signaling services,
19 which include automatic callback, automatic
recall, calling number iden-
20 tification, selective call rejection,
selective call acceptance, selective call
21 forwarding, distinctive ringing and
customer originated trace.
22
(c) ``Commission'' means the state corporation commission.
23 (d) ``Dialing
parity'' means that a person that is not an affiliate of a
24 local exchange carrier is able to provide
telecommunications services in
25 such a manner that customers have the
ability to route automatically,
26 without the use of any access code, their
telecommunications to the tel-
27 ecommunications carrier of the customer's
designation from among two
28 or more telecommunications carriers,
including such local exchange
29 carrier.
30 (e) ``Federal
act'' means the federal telecommunications act of 1996,
31 P.L. 104-104 (amending the communications
act of 1934, 47 U.S.C. 151,
32 et seq.)
33 (f) ``ISDN''
means integrated services digital network which is a net-
34 work and associated technology that
provides simultaneous voice and data
35 communications over a single communications
channel.
36 (g) ``LATA'' has
the meaning ascribed to it in the federal act.
37 (h) ``Local
exchange carrier'' means any telecommunications public
38 utility or its successor providing switched
telecommunications service
39 within any local exchange service area, as
approved by the commission
40 on or before January 1, 1996. However, with
respect to the Hill City
41 exchange area, in which multiple carriers
were certified by the commis-
42 sion prior to January 1, 1996, the
commission's determination, subject to
43 any court appeals, of which authorized
carrier shall serve as the carrier
2
1 of last resort will determine which
carrier shall be deemed the local
2 exchange carrier for that
exchange.
3
(i) ``Number portability'' has the meaning ascribed to it in
the federal
4 act.
5 (j) ``1 +
intraLATA dialing parity'' means the ability of a local
exchange
6 service customer to specify the
telecommunications or local exchange
7 carrier that will carry the intraLATA
long distance messages when that
8 customer dials either ``1'' or ``0''
plus a 10-digit number.
9
(k) ``Operating area'' means:
10 (1) In the case
of a rural telephone company, operating area or service
11 area means such company's study area or
areas as approved by the federal
12 communications commission;
13 (2) in the case
of a local exchange carrier, other than a rural telephone
14 company, operating area or service area
means such carrier's local
15 exchange service area or areas as approved
by the commission.
16 (l) ``Rural
telephone company'' has the meaning ascribed to it in the
17 federal act, excluding any local exchange
carrier which together with all
18 of its affiliates has 20,000 or more access
lines in the state.
19
(m) ``Telecommunications carrier'' means a corporation,
company,
20 individual, association of persons, their
trustees, lessees or receivers that
21 provides a telecommunications service,
including, but not limited to, in-
22 terexchange carriers and competitive access
providers, but not including
23 local exchange carriers certified before
January 1, 1996.
24
(n) ``Telecommunications public utility'' means any public
utility, as
25 defined in K.S.A. 66-104, and amendments
thereto, which owns, controls,
26 operates or manages any equipment, plant or
generating machinery, or
27 any part thereof, for the transmission of
telephone messages, as defined
28 in K.S.A. 66-104, and amendments thereto,
or the provision of telecom-
29 munications services in or throughout any
part of Kansas.
30
(o) ``Telecommunications service'' means the provision of a
service
31 for the transmission of telephone messages,
or two-way video or data
32 messages.
33 (p) ``Universal
service'' means telecommunications services and fa-
34 cilities which include: single party,
two-way voice grade calling; stored
35 program controlled switching with vertical
service capability; E911 ca-
36 pability; tone dialing; access to operator
services; access to directory as-
37 sistance; and equal access to long distance
services.
38 (q) ``Enhanced
universal service'' means telecommunications serv-
39 ices, in addition to those included in
universal service, which shall include:
40 Signaling system seven capability, with
CLASS service capability; basic
41 and primary rate ISDN capability, or the
technological equivalent; full-
42 fiber interconnectivity, or the
technological equivalent, between central
43 offices; and broadband capable facilities
to: All schools accredited pur-
3
1 suant to K.S.A. 72-1101 et
seq., and amendments thereto; hospitals as
2 defined in K.S.A. 65-425, and
amendments thereto; public libraries; and
3 state and local government facilities
which request broadband services.
4
(r) ``High speed data transmission'' means a
telecommunications serv-
5 ice capable of transmission rates
of not less than 128 kilobits per second.
6 Sec.
2. K.S.A. 1999 Supp. 66-2005 is hereby amended to read as
7 follows: 66-2005. (a) Each local
exchange carrier shall file a network in-
8 frastructure plan with the commission
on or after January 1, 1997, and
9 prior to January 1, 1998. Each plan,
as a part of universal service protec-
10 tion, shall include schedules, which shall
be approved by the commission,
11 for deployment of universal service
capabilities by July 1, 1998, and the
12 deployment of enhanced universal service
capabilities by July 1, 2003, as
13 defined pursuant to subsections (p) and (q)
of K.S.A. 1999 Supp. 66-1,187
14 and amendments thereto, respectively.
With respect to enhanced univer-
15 sal service, such schedules shall
provide for deployment of ISDN, or its
16 technological equivalent, or
broadband facilities, only upon a firm cus-
17 tomer order for such service, or
for deployment of other enhanced uni-
18 versal services by a local exchange
carrier. After receipt of such an order
19 and upon completion of a deployment
plan designed to meet the firm
20 order or otherwise provide for the
deployment of enhanced universal
21 service, a local exchange carrier
shall notify the commission. The com-
22 mission shall approve the plan
unless the commission determines that the
23 proposed deployment plan is
unnecessary, inappropriate, or not cost ef-
24 fective, or would create an
unreasonable or excessive demand on the
25 KUSF. The commission shall take
action within 90 days. If the commis-
26 sion fails to take action within 90
days, the deployment plan shall be
27 deemed approved. This approval
process shall continue until July 1, 2000.
28 Each plan shall demonstrate the capability
of the local exchange carrier
29 to comply on an ongoing basis with quality
of service standards to be
30 adopted by the commission no later than
January 1, 1997.
31 (1) Prior to
July 1, 2003, upon a firm customer order for high-speed
32 data transmission service, a local
exchange carrier shall have 90 days to
33 determine whether to fulfill such order.
If the local exchange carrier elects
34 to fulfill the firm customer order, the
local exchange carrier shall deploy
35 the service within 12 months. If the
local exchange carrier elects not to
36 provide the service, the carrier shall
notify the customer promptly in writ-
37 ing. The decision by a rural telephone
company to provide high-speed
38 transmission service outside of its
service area shall not constitute the
39 provision of local exchange or exchange
access services for purposes of
40 subsection (e) of K.S.A. 66-2004 and
amendments thereto. The guidelines
41 for competitive entry into the service
area of such a local exchange carrier,
42 as adopted by the commission pursuant to
subsection (b) of K.S.A. 66-
43 2004 and amendments thereto, shall still
apply. The price charged for
4
1 high-speed data transmissions
services to customers by local exchange
2 carriers shall not vary by more
than 10% in any service area. If after 90
3 days, the local exchange carrier
elects not to fill the firm order for high-
4 speed data transmission service,
any telecommunications carrier, regard-
5 less of whether such carrier is a
qualified telecommunications carrier for
6 purposes of K.S.A. 66-2009 and
amendments thereto, capable of providing
7 high-speed data transmission
service through any technology may fulfill
8 such request and shall be granted
access to the telecommunications facil-
9 ities and network infrastructure
of the customer's local exchange carrier,
10 if appropriate for the
telecommunications carrier's technology, in a man-
11 ner approved by the commission. Local
exchange carriers that are subject
12 to rate of return regulation shall be
entitled to recover the actual costs of
13 providing the high-speed transmission
service from the KUSF.
14 (2) Each local
exchange carrier, telecommunications carrier or wire-
15 less telecommunications carrier shall
inform its customers of the availa-
16 bility of high-speed data transmission
services and the means by which
17 to order such services.
18 (b) In order to
protect universal service, facilitate the transition to
19 competitive markets and stimulate the
construction of an advanced tel-
20 ecommunications infrastructure, each local
exchange carrier shall file a
21 regulatory reform plan at the same time as
it files the network infrastruc-
22 ture plan required in subsection (a). As
part of its regulatory reform plan,
23 a local exchange carrier may elect
traditional rate of return regulation or
24 price cap regulation. Carriers that elect
price cap regulation shall be ex-
25 empt from rate base, rate of return and
earnings regulation. However,
26 the commission may resume such regulation
upon finding, after a hearing,
27 that a carrier that is subject to price cap
regulation has: violated minimum
28 quality of service standards pursuant to
subsection (l) of K.S.A. 1999
29 Supp. 66-2002 and amendments thereto; been
given reasonable notice
30 and an opportunity to correct the
violation; and failed to do so. Regulatory
31 reform plans also shall include:
32 (1) A commitment
to provide existing and newly ordered point-to-
33 point broadband services to: Any hospital
as defined in K.S.A. 65-425,
34 and amendments thereto; any school
accredited pursuant to K.S.A. 72-
35 1101 et seq., and amendments thereto; any
public library; or other state
36 and local government facilities at
discounted prices close to, but not be-
37 low, long-run incremental cost; and
38 (2) a commitment
to provide basic rate ISDN service, or the tech-
39 nological equivalent, at prices which are
uniform throughout the carrier's
40 service area. Local exchange carriers shall
not be required to allow retail
41 customers purchasing the foregoing
discounted services to resell those
42 services to other categories of customers.
Telecommunications carriers
43 may purchase basic rate ISDN services, or
the technological equivalent,
5
1 for resale in accordance with K.S.A.
1999 Supp. 66-2003 and amendments
2 thereto. The commission may reduce
prices charged for services outlined
3 in provisions (1) and (2) of this
subsection, if the commitments of the
4 local exchange carrier set forth in
those provisions are not being kept.
5 (c) Subject
to the commission's approval, all local exchange carriers
6 shall reduce intrastate access
charges to interstate levels as provided
7 herein. Rates for intrastate switched
access, and the imputed access por-
8 tion of toll, shall be reduced over a
three-year period with the objective
9 of equalizing interstate and
intrastate rates in a revenue neutral, specific
10 and predictable manner. The commission is
authorized to rebalance local
11 residential and business service rates to
offset the intrastate access and
12 toll charge reductions. Any remaining
portion of the reduction in access
13 and toll charges not recovered through
local residential and business serv-
14 ice rates shall be paid out from the KUSF
pursuant to K.S.A. 1999 Supp.
15 66-2008 and amendments thereto. Rural
telephone companies shall re-
16 duce their intrastate switched access rates
to interstate levels on March
17 1, 1997, and every two years thereafter, as
long as amounts equal to such
18 reductions are recovered from the KUSF.
19 (d) Beginning
March 1, 1997, each rural telephone company shall
20 have the authority to increase annually its
monthly basic local residential
21 and business service rates by an amount not
to exceed $1 in each 12
22 month period until such monthly rates reach
an amount equal to the
23 statewide rural telephone company average
rates for such services. The
24 statewide rural telephone company average
rates shall be the arithmetic
25 mean of the lowest flat rate as of March 1,
1996, for local residential
26 service and for local business service
offered by each rural telephone
27 company within the state. In the case of a
rural telephone company which
28 increases its local residential service
rate or its local business service rate,
29 or both, to reach the statewide rural
telephone company average rate for
30 such services, the amount paid to the
company from the KUSF shall be
31 reduced by an amount equal to the
additional revenue received by such
32 company through such rate increase. In the
case of a rural telephone
33 company which elects to maintain a local
residential service rate or a local
34 business service rate, or both, below the
statewide rural telephone com-
35 pany average, the amount paid to the
company from the KUSF shall be
36 reduced by an amount equal to the
difference between the revenue the
37 company could receive if it elected to
increase such rate to the average
38 rate and the revenue received by the
company.
39 (e) For
regulatory reform plans in which price cap regulation has
40 been elected, price cap plans shall have
three baskets: Residential and
41 single-line business, including touch-tone;
switched access services; and
42 miscellaneous services. The commission
shall establish price caps at the
43 prices existing when the regulatory plan is
filed subject to rate rebalancing
6
1 as provided in subsection (c) for
residential services, including touch-tone
2 services, and for single-line
business services, including touch-tone serv-
3 ices, within the residential and
single-line business service basket. The
4 commission shall establish a formula
for adjustments to the price caps.
5 The commission also shall establish
price caps at the prices existing when
6 the regulatory plan is filed for the
miscellaneous services basket. The
7 commission shall approve any
adjustments to the price caps for the mis-
8 cellaneous service basket, as
provided in subsection (f).
9 (f) On or
before January 1, 1997, the commission shall issue a final
10 order in a proceeding to determine the
price cap adjustment formula that
11 shall apply to the price caps for the local
residential and single-line busi-
12 ness and the miscellaneous services baskets
and for sub-categories, if any,
13 within those baskets. In determining this
formula, the commission shall
14 balance the public policy goals of
encouraging efficiency and promoting
15 investment in a quality, advanced
telecommunications network in the
16 state. The commission also shall establish
any informational filing require-
17 ments necessary for the review of any price
cap tariff filings, including
18 price increases or decreases within the
caps, to verify such caps would
19 not be exceeded by any proposed price
change. The adjustment formula
20 shall apply to the price caps for the local
residential and single-line busi-
21 ness basket after December 31, 1999, and to
the miscellaneous services
22 basket after December 31, 1997. The price
cap formula, but not actual
23 prices, shall be reviewed every five
years.
24 (g) The price
caps for the residential and single-line business service
25 basket shall be capped at their initial
level until January 1, 2000, except
26 for any increases authorized as a part of
the revenue neutral rate rebal-
27 ancing under subsection (c). The price caps
for this basket and for the
28 categories in this basket, if any, shall be
adjusted annually after December
29 31, 1999, based on the formula determined
by the commission under
30 subsection (f).
31 (h) The price cap
for the switched access service basket shall be set
32 based upon the local exchange carrier's
intrastate access tariffs as of Jan-
33 uary 1, 1997, except for any revenue
neutral rate rebalancing authorized
34 in accordance with subsection (c).
Thereafter, the cap for this basket shall
35 not change except in connection with any
subsequent revenue neutral
36 rebalancing authorized by the commission
under subsection (c).
37 (i) The price
caps for the miscellaneous services basket shall be ad-
38 justed annually after December 31, 1997,
based on the adjustment for-
39 mula determined by the commission under
subsection (f).
40 (j) A price cap
is a maximum price for all services taken as a whole
41 in a given basket. Prices for individual
services may be changed within
42 the service categories, if any, established
by the commission within a
43 basket. An entire service category, if any,
within the residential and single-
7
1 line business basket or miscellaneous
services basket may be priced below
2 the cap for such category. Unless
otherwise approved by the commission,
3 no service shall be priced below the
price floor which will be long-run
4 incremental cost and imputed access
charges. Access charges equal to
5 those paid by telecommunications
carriers to local exchange carriers shall
6 be imputed as part of the price floor
for toll services offered by local
7 exchange carriers on a toll service
basis.
8 (k) A local
exchange carrier may offer promotions within an exchange
9 or group of exchanges. All promotions
shall be approved by the commis-
10 sion and shall apply to all customers in a
nondiscriminatory manner within
11 the exchange or group of exchanges.
12 (l) Unless the
commission authorizes price deregulation at an earlier
13 date, intrastate toll services within the
miscellaneous services basket shall
14 continue to be regulated until the affected
local exchange carrier begins
15 to offer 1 + intraLATA dialing parity
throughout its service territory, at
16 which time intrastate toll will be price
deregulated, except that prices
17 cannot be set below the price floor.
18 (m) On or before
July 1, 1997, the commission shall establish guide-
19 lines for reducing regulation prior to
price deregulation of price cap reg-
20 ulated services in the miscellaneous
services basket, the switched access
21 services basket, and the residential and
single-line business basket.
22 (n) Subsequent to
the adoption of guidelines pursuant to subsection
23 (m), the commission shall initiate a
petitioning procedure under which
24 the local exchange carrier may request rate
range pricing. The commis-
25 sion shall act upon a petition within 21
days, subject to a 30-day suspen-
26 sion. The prices within a rate range shall
be tariffed and shall apply to all
27 customers in a nondiscriminatory manner in
an exchange or group of
28 exchanges.
29 (o) A local
exchange carrier may petition the commission to designate
30 an individual service or service category,
if any, within the miscellaneous
31 services basket, the switched access
services basket or the residential and
32 single-line business basket for reduced
regulation. The commission shall
33 act upon a petition for reduced regulation
within 21 days, subject to a
34 suspension period of an additional 30 days,
and upon a good cause show-
35 ing of the commission in the suspension
order, or within such shorter
36 time as the commission shall approve. The
commission shall issue a final
37 order within the 21-day period or within a
51-day period if a suspension
38 has been issued. Following an order
granting reduced regulation of an
39 individual service or service category, the
commission shall act on any
40 request for price reductions within seven
days subject to a 30-day sus-
41 pension. The commission shall act on other
requests for price cap ad-
42 justments, adjustments within price cap
plans and on new service offer-
43 ings within 21 days subject to a 30-day
suspension. Such a change will be
8
1 presumed lawful unless it is
determined the prices are below the price
2 floor or that the price cap for a
category, if any, within the entire basket
3 has been exceeded.
4 (p) The
commission may price deregulate within an exchange area,
5 or at its discretion on a statewide
basis, any individual service or service
6 category upon a finding by the
commission that there is a telecommuni-
7 cations carrier or an alternative
provider providing a comparable product
8 or service, considering both function
and price, in that exchange area.
9 The commission shall act upon a
petition for price deregulation within
10 21 days, subject to a suspension period of
an additional 30 days, and upon
11 a good cause showing of the commission in
the suspension order, or
12 within such shorter time as the commission
shall approve; provided that
13 no such petition shall be filed prior to
July 1997, unless the commission
14 otherwise authorizes. The commission shall
issue a final order within the
15 21-day period or within a 51-day period if
a suspension has been issued.
16 (q) Upon
complaint or request, the commission may investigate a
17 price deregulated service. The commission
shall resume price regulation
18 of a service provided in any exchange area
by placing it in the appropriate
19 service basket, as approved by the
commission, upon a determination by
20 the commission that there is no longer a
telecommunications carrier or
21 alternative provider providing a comparable
product or service, consid-
22 ering both function and price, in that
exchange area.
23 (r) The
commission shall require that for all local exchange carriers
24 all such price deregulated basic intraLATA
toll services be geographically
25 averaged statewide and not be priced below
the price floor established
26 in subsection (j).
27 (s) Cost studies
to determine price floors shall be performed as re-
28 quired by the commission in response to
complaints. In addition, not-
29 withstanding the exemption in subsection
(b), the commission may re-
30 quest information necessary to execute any
of its obligations under the
31 act.
32 (t) A local
exchange carrier may petition for individual customer pric-
33 ing. The commission shall respond
expeditiously to the petition within a
34 period of not more than 30 days subject to
a 30-day suspension.
35 (u) No audit,
earnings review or rate case shall be performed with
36 reference to the initial prices filed as
required herein.
37
(v) Telecommunications carriers shall not be subject to price
regu-
38 lation, except that: Access charge
reductions shall be passed through to
39 consumers by reductions in basic intrastate
toll prices; and basic toll prices
40 shall remain geographically averaged
statewide. As required under K.S.A.
41 66-131, and amendments thereto, and except
as provided for in subsec-
42 tion (c) of K.S.A. 1999 Supp. 66-2004 and
amendments thereto, telecom-
43 munications carriers that were not
authorized to provide switched local
9
1 exchange telecommunications services
in this state as of July 1, 1996,
2 including cable television operators
who have not previously offered tel-
3 ecommunications services, must
receive a certificate of convenience
4 based upon a demonstration of
technical, managerial and financial via-
5 bility and the ability to meet
quality of service standards established by
6 the commission. Any
telecommunications carrier or other entity seeking
7 such certificate shall file a
statement, which shall be subject to the com-
8 mission's approval, specifying with
particularity the areas in which it will
9 offer service, the manner in which it
will provide the service in such areas
10 and whether it will serve both business
customers and residential custom-
11 ers in such areas. Any structurally
separate affiliate of a local exchange
12 carrier that provides telecommunications
services shall be subject to the
13 same regulatory obligations and oversight
as a telecommunications car-
14 rier, as long as the local exchange
carrier's affiliate obtains access to any
15 services or facilities from its affiliated
local exchange carrier on the same
16 terms and conditions as the local exchange
carrier makes those services
17 and facilities available to other
telecommunications carriers. The com-
18 mission shall oversee telecommunications
carriers to prevent fraud and
19 other practices harmful to consumers and to
ensure compliance with
20 quality of service standards adopted for
all local exchange carriers and
21 telecommunications carriers in the
state.
22 Sec. 3. K.S.A. 1999 Supp.
66-1,187 and 66-2005 are hereby repealed.
23 Sec. 4. This act shall
take effect and be in force from and after its
24 publication in the statute book.