2014 Kentucky Revised Statutes CHAPTER 278 - PUBLIC SERVICE COMMISSION 278.516 Alternative regulation process for small telephone utilities -- Findings -- Definitions -- Procedures -- Withdrawal.
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278.516 Alternative regulation process for small telephone utilities -- Findings
-- Definitions -- Procedures -- Withdrawal.
(1)
(2)
The legislature finds and determines that:
(a) Small telephone utilities lack the resources to fully participate in the
existing regulatory processes, particularly under traditional rate of return
and certificate of public convenience and necessity regulation;
(b) Regulation, if not tailored specifically to the needs of small telephone
utilities, can retard the growth and development of small telephone utilities
by requiring the expenditure of excessive time and money responding to
and addressing regulatory processes instead of devoting those resources
to customer service and more productive business concerns and issues;
and
(c) It is in the public interest to provide regulatory flexibility to small telephone
utilities to better enable them to adjust to the competition and innovation
that has come and is coming to the telecommunications industry as found
and determined by the legislature at KRS 278.512(1).
In addition to the definitions set forth at KRS 278.010, the following definitions
shall apply to this section:
(a) "Telephone utility" means a telephone utility as defined at KRS
278.010(3)(e) except that it includes local exchange carriers only;
(b) "Local exchange carrier" means a traditional wireline telephone utility
which provides its subscribers with access to the national public switched
telephone network;
(c) "Traditional wireline telephone utility" means one whose delivery of its
telephone utility services is characterized by the predominant use of wire
or wireline connections carrying communications transmissions between
the subscriber of the utility and the national public switched telephone
network;
(d) "Small telephone utility" means a local exchange carrier providing
telephone utility service and having not more than fifty thousand (50,000)
access lines in Kentucky;
(e) "Largest telephone utility" means the local exchange carrier providing
telephone utility service in Kentucky and having the greatest number of
access lines in Kentucky;
(f) "Access lines" mean the telephone lines provided by a local exchange
carrier. In calculating the number of access lines provided by a local
exchange carrier, the number of access lines provided by all telephone
utilities under common ownership or control, as defined in KRS
278.020(6), with that telephone utility shall be counted;
(g) "GDP" means the real Gross Domestic Product Price Index, as it may be
amended from time to time, as it is published by the Bureau of Economic
Analysis of the United States Department of Commerce;
(h) "Annual percent change in the GDP" means, for any given calendar year,
the annul percentage change in the GDP as it is calculated by the Bureau
of Economic Analysis of the United States Department of Commerce;
(i)
(3)
"Basic business rate" and "basic residential rate" mean the total rates or
charges which must be paid by a business or residential subscriber,
respectively, to a local exchange carrier in order to receive, outside of a
standard metropolitan statistical area, telephone utility service within a
specified geographic area for local calling and for which tariffed rates or
charges are assessed, regardless of the amount of use of local calling;
(j) "Standard metropolitan statistical area" means any area in Kentucky
designated as such, or as a part thereof, pursuant to 44 U.S.C. sec.
3504(d)(3) and 31 U.S.C. sec. 1104(d), as they may be amended, by the
Office of Management and Budget of the Executive Office of the
President of the United States; provided, however, that for purposes of
this section, "standard metropolitan statistical area" shall include only the
two (2) largest, as measured by population, standard metropolitan
statistical areas, regardless of whether that area is located wholly or
partially in Kentucky;
(k) "Basic business service" or "basic residential service" means the service
for which basic business rates or basic residential rates are charged;
(l) "Average basic business or residential rate, including zone charges,"
means the total revenues which should be produced by the imposition of
those rates or charges divided by the number of access lines to which
those rates or charges are applicable;
(m) "Zone charges" mean mileage or zone charges and are the charges
assessed by a telephone utility on the basis of a subscriber's distance
from a central office in order that the subscriber may receive basic
business or residential services;
(n) "Subscriber" means the person or entity legally and financially
responsible for the bill rendered by a telephone utility for its services;
(o) "Intrastate access charges" mean the charges assessed for use of the
telecommunications facilities of one telephone utility by another person or
entity in order to deliver to the public for compensation telephone
messages originating and terminating within Kentucky;
(p) "Interstate access charges" mean the charges assessed for use of the
telecommunications facilities of one (1) telephone utility by another
person or entity in order to deliver to the public for compensation
telephone messages originating or terminating, but not both, in Kentucky;
and
(q) "Pic charges" are charges assessed by a local exchange carrier in order
to implement a change in a subscriber's long distance carrier.
(a) If a small telephone utility elects to be regulated as provided in subsection
(7) of this section, a small telephone utility once during any twenty-four
(24) month period may adjust or implement each of the following rates or
charges: basic business rate; basic residential rate; zone charges; or
installation charges for basic business or basic residential services by an
amount not to exceed the sum of the annual percentage changes in the
GDP for the immediately preceding two (2) calendar years multiplied by
the existing rate or charge to be adjusted. However, in no event shall a
small telephone utility so adjust:
1.
(4)
Its basic business rate, including zone charges, if the resulting
average basic business rate, including zone charges, would thereby
exceed the average basic business rate, including zone charges, of
the largest telephone utility;
2.
Its basic residential rate, including zone charges, if the resulting
average basic residential rate would thereby exceed the average
basic residential rate including zone charges, of the largest
telephone utility; or
3.
If its average basic business rate, including zone charges, its
average basic residential rate, including zone charges, or its
installation charges for basic business or basic residential services
would be increased by more than twenty percent (20%).
(b) At least sixty (60) calendar days before the effective date of such an
adjustment of its rates or charges, a small telephone utility shall file a
copy of its revised rates and tariffs with the commission and shall mail
notice of the proposed rate adjustment to each affected subscriber and
the commission. The notice shall state:
1.
The GDP for the preceding two (2) calendar years;
2.
The amount by which any of the small telephone utility's rates or
charges identified in subsection (3)(a) of this section will be
adjusted; and
3.
The right of subscribers to object to the adjustment and request
commission review by filing a letter or petition with the commission.
(c) If by the forty-fifth calendar day following the date of the notice to
subscribers of such a proposed adjustment to its rates or charges, the
commission has received letters or petitions requesting commission
review of the adjustment signed by at least five hundred (500) subscribers
or five percent (5%) of subscribers, whichever is greater, the commission
shall immediately notify the small telephone utility of this fact, and the
proposed rate adjustment shall not become effective as scheduled. The
small telephone utility may withdraw the proposed rate or charge
adjustment, or if it decides to proceed, the commission shall review the
proposed rate adjustment as though no election had been made pursuant
to subsection (7) of this section.
Any other provision of this chapter notwithstanding, a small telephone utility
which has elected to be regulated pursuant to this section may adjust any of its
rates, charges, or tariffs, except for:
(a) Its basic business rate;
(b) Its basic residential rate;
(c) Its zone charges;
(d) Its installation charges for basic business or basic residential services;
(e) Its access charges; or
(f) Its pic charges,
without regard to the effect on its revenues, by filing its proposed rates,
charges, or tariffs with the commission and by notifying its subscribers, both at
(5)
(6)
(7)
(8)
least thirty (30) calendar days prior to the effective date of its proposed rates,
charges, or tariffs.
A small telephone utility which has elected to be regulated pursuant to this
section shall not:
(a) Adjust its intrastate access charges if the adjustment requires the small
telephone utility's access charge customers, including interexchange
carriers, to pay intrastate access charges at levels exceeding the small
telephone utility's interstate access charge levels; or
(b) Adjust its intrastate pic charges if the adjustment requires the small
telephone utility's customers to pay intrastate pic charges at levels
exceeding the small telephone utility's interstate pic charge levels.
The small telephone utility may decrease its intrastate access charges or
intrastate pic charges to any level without restriction. Adjustments to intrastate
access charge rates or intrastate pic charges shall be effective thirty (30)
calendar days following the filing of access charge tariffs or pic charge tariffs
with the commission.
The rates, charges, earnings, or revenues of a small telephone utility which
has elected to be regulated pursuant to this section and is in compliance with
the provisions of this section shall be deemed by the commission to be in
compliance with KRS 278.030(1).
A small telephone utility may elect, at any time, to be regulated by the
provisions, in their entirety only, of this section by filing a verified resolution of
the utility's board of directors, or other governing body, so electing with the
commission. An election shall be effective immediately upon filing with the
commission and shall remain effective until withdrawn by the filing with the
commission of a verified resolution of the small telephone utility's board of
directors or other governing body; provided, however, that all resolutions of
election or withdrawal shall remain in effect for at least one (1) year from the
date of their filing with the commission. A resolution electing to be regulated by
the provisions of this section shall mean that the small telephone utility so
electing shall be regulated by this section and shall not be regulated by KRS
278.020(1) and 278.300. Nothing in this section, however, shall be construed
to alter the applicability of KRS 278.020(4) or 278.030(2) to small telephone
utilities electing to be regulated by the provisions of this section.
A small telephone utility which has elected to be regulated pursuant to this
section may file an application with the commission pursuant to KRS
278.020(1), and, if a utility does so, that application shall be deemed to have
been granted unless within thirty (30) calendar days following the filing of the
application, the commission denies the application. If the application is denied
or none is filed, the small telephone utility electing to be regulated pursuant to
this section may engage in the construction of the plant or facilities, or the
purchase of equipment or properties, to provide the services described in KRS
278.010(3)(e). However, if the small telephone utility subsequently files a
resolution of withdrawal under subsection (7) of this section, the increased
value of property that resulted from any construction project denied approval by
the commission or not submitted to the commission for approval may be
excluded from the small utility's rate base for rate making purposes if the cost
of construction exceeded one million dollars ($1,000,000) or five percent (5%)
of the value of the small telephone utility's property as reflected in the utility's
most recent annual report filed with the commission.
Effective:July 13, 2004
History: Amended 2004 Ky. Acts ch. 75, sec. 2, effective July 13, 2004. -- Created
1996 Ky. Acts ch. 71, sec. 1, effective July 15, 1996.
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