Session of 2000
HOUSE BILL No. 2743
By Select Committee on Information Management
1-27
9 AN ACT
relating to telecommunications; concerning the deployment of
10 enhanced universal
services; amending K.S.A. 1999 Supp. 66-1,187
11 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,
digital subscriber line or the techno-
42 logical equivalent; full-fiber
interconnectivity, or the technological equiv-
43 alent, between central offices; and
broadband capable facilities to: All
3
1 schools accredited pursuant to K.S.A.
72-1101 et seq., and amendments
2 thereto; hospitals as defined in
K.S.A. 65-425, and amendments thereto;
3 public libraries; and state and local
government facilities which request
4 broadband services.
5 Sec.
2. K.S.A. 1999 Supp. 66-2005 is hereby amended to read as
6 follows: 66-2005. (a) Each local
exchange carrier shall file a network in-
7 frastructure plan with the commission
on or after January 1, 1997, and
8 prior to January 1, 1998. Each plan,
as a part of universal service protec-
9 tion, shall include schedules, which
shall be approved by the commission,
10 for deployment of universal service
capabilities by July 1, 1998, and the
11 deployment of enhanced universal service
capabilities by July 1, 2003, as
12 defined pursuant to subsections (p) and (q)
of K.S.A. 1999 Supp. 66-1,187
13 and amendments thereto, respectively. With
respect to enhanced univer-
14 sal service, such schedules shall provide
for deployment of ISDN, or its
15 technological equivalent, or broadband
facilities, only upon a firm cus-
16 tomer order for such service, or for
deployment of other enhanced uni-
17 versal services by a local exchange
carrier. After receipt of such an order
18 and upon completion of a deployment plan
designed to meet the firm
19 order or otherwise provide for the
deployment of enhanced universal
20 service, a local exchange carrier shall
notify the commission. The com-
21 mission shall approve the plan unless the
commission determines that the
22 proposed deployment plan is unnecessary,
inappropriate, or not cost ef-
23 fective, or would create an unreasonable or
excessive demand on the
24 KUSF. The commission shall take action
within 90 days. If the commis-
25 sion fails to take action within 90 days,
the deployment plan shall be
26 deemed approved. This approval process
shall continue until July 1, 2000.
27 Prior to July 1, 2003, upon a firm
customer order for digital subscriber
28 line service, the local exchange carrier
shall comply with the customer
29 order within 12 months. If the local
exchange carrier fails or refuses to
30 fill the order within 12 months,
telecommunications carriers with a cer-
31 tificate of convenience and necessity
for the service area of the local
32 exchange carrier granted by the
commission, any other provisions of this
33 act notwithstanding, shall be permitted
to offer or purchase and resell
34 such service at discounted prices close
to, but not below, long-run incre-
35 mental cost that would be incurred by
the local exchange carrier. Local
36 exchange carriers that are subject to
rate of return regulation and tele-
37 communications carriers offering the
service by means other than resale
38 shall be entitled to recover the actual
costs of providing digital subscriber
39 line service from KUSF. For purposes of
this section, "digital subscriber
40 line" means modems on either end of
ordinary twisted-pair telephone lines
41 that transmit audio, video, image or
data information to subscribers at
42 data rates of up to 1.5 mbps. Each
plan shall demonstrate the capability
43 of the local exchange carrier to comply on
an ongoing basis with quality
4
1 of service standards to be adopted by
the commission no later than Jan-
2 uary 1, 1997.
3 (b) In
order to protect universal service, facilitate the transition
to
4 competitive markets and stimulate the
construction of an advanced tel-
5 ecommunications infrastructure, each
local exchange carrier shall file a
6 regulatory reform plan at the same
time as it files the network infrastruc-
7 ture plan required in subsection (a).
As part of its regulatory reform plan,
8 a local exchange carrier may elect
traditional rate of return regulation or
9 price cap regulation. Carriers that
elect price cap regulation shall be ex-
10 empt from rate base, rate of return and
earnings regulation. However,
11 the commission may resume such regulation
upon finding, after a hearing,
12 that a carrier that is subject to price cap
regulation has: violated minimum
13 quality of service standards pursuant to
subsection (l) of K.S.A. 1999
14 Supp. 66-2002 and amendments thereto; been
given reasonable notice
15 and an opportunity to correct the
violation; and failed to do so. Regulatory
16 reform plans also shall include:
17 (1) A commitment
to provide existing and newly ordered point-to-
18 point broadband services to: Any hospital
as defined in K.S.A. 65-425,
19 and amendments thereto; any school
accredited pursuant to K.S.A. 72-
20 1101 et seq., and amendments thereto; any
public library; or other state
21 and local government facilities at
discounted prices close to, but not be-
22 low, long-run incremental cost; and
23 (2) a commitment
to provide basic rate ISDN service, or the tech-
24 nological equivalent, at prices which are
uniform throughout the carrier's
25 service area. Local exchange carriers shall
not be required to allow retail
26 customers purchasing the foregoing
discounted services to resell those
27 services to other categories of customers.
Telecommunications carriers
28 may purchase basic rate ISDN services, or
the technological equivalent,
29 for resale in accordance with K.S.A. 1999
Supp. 66-2003 and amendments
30 thereto. The commission may reduce prices
charged for services outlined
31 in provisions (1) and (2) of this
subsection, if the commitments of the
32 local exchange carrier set forth in those
provisions are not being kept.
33 (c) Subject to
the commission's approval, all local exchange carriers
34 shall reduce intrastate access charges to
interstate levels as provided
35 herein. Rates for intrastate switched
access, and the imputed access por-
36 tion of toll, shall be reduced over a
three-year period with the objective
37 of equalizing interstate and intrastate
rates in a revenue neutral, specific
38 and predictable manner. The commission is
authorized to rebalance local
39 residential and business service rates to
offset the intrastate access and
40 toll charge reductions. Any remaining
portion of the reduction in access
41 and toll charges not recovered through
local residential and business serv-
42 ice rates shall be paid out from the KUSF
pursuant to K.S.A. 1999 Supp.
43 66-2008 and amendments thereto. Rural
telephone companies shall re-
5
1 duce their intrastate switched access
rates to interstate levels on March
2 1, 1997, and every two years
thereafter, as long as amounts equal to such
3 reductions are recovered from the
KUSF.
4
(d) Beginning March 1, 1997, each rural telephone company
shall
5 have the authority to increase
annually its monthly basic local residential
6 and business service rates by an
amount not to exceed $1 in each 12
7 month period until such monthly rates
reach an amount equal to the
8 statewide rural telephone company
average rates for such services. The
9 statewide rural telephone company
average rates shall be the arithmetic
10 mean of the lowest flat rate as of March 1,
1996, for local residential
11 service and for local business service
offered by each rural telephone
12 company within the state. In the case of a
rural telephone company which
13 increases its local residential service
rate or its local business service rate,
14 or both, to reach the statewide rural
telephone company average rate for
15 such services, the amount paid to the
company from the KUSF shall be
16 reduced by an amount equal to the
additional revenue received by such
17 company through such rate increase. In the
case of a rural telephone
18 company which elects to maintain a local
residential service rate or a local
19 business service rate, or both, below the
statewide rural telephone com-
20 pany average, the amount paid to the
company from the KUSF shall be
21 reduced by an amount equal to the
difference between the revenue the
22 company could receive if it elected to
increase such rate to the average
23 rate and the revenue received by the
company.
24 (e) For
regulatory reform plans in which price cap regulation has
25 been elected, price cap plans shall have
three baskets: Residential and
26 single-line business, including touch-tone;
switched access services; and
27 miscellaneous services. The commission
shall establish price caps at the
28 prices existing when the regulatory plan is
filed subject to rate rebalancing
29 as provided in subsection (c) for
residential services, including touch-tone
30 services, and for single-line business
services, including touch-tone serv-
31 ices, within the residential and
single-line business service basket. The
32 commission shall establish a formula for
adjustments to the price caps.
33 The commission also shall establish price
caps at the prices existing when
34 the regulatory plan is filed for the
miscellaneous services basket. The
35 commission shall approve any adjustments to
the price caps for the mis-
36 cellaneous service basket, as provided in
subsection (f).
37 (f) On or before
January 1, 1997, the commission shall issue a final
38 order in a proceeding to determine the
price cap adjustment formula that
39 shall apply to the price caps for the local
residential and single-line busi-
40 ness and the miscellaneous services baskets
and for sub-categories, if any,
41 within those baskets. In determining this
formula, the commission shall
42 balance the public policy goals of
encouraging efficiency and promoting
43 investment in a quality, advanced
telecommunications network in the
6
1 state. The commission also shall
establish any informational filing require-
2 ments necessary for the review of any
price cap tariff filings, including
3 price increases or decreases within
the caps, to verify such caps would
4 not be exceeded by any proposed price
change. The adjustment formula
5 shall apply to the price caps for the
local residential and single-line busi-
6 ness basket after December 31, 1999,
and to the miscellaneous services
7 basket after December 31, 1997. The
price cap formula, but not actual
8 prices, shall be reviewed every five
years.
9 (g) The
price caps for the residential and single-line business service
10 basket shall be capped at their initial
level until January 1, 2000, except
11 for any increases authorized as a part of
the revenue neutral rate rebal-
12 ancing under subsection (c). The price caps
for this basket and for the
13 categories in this basket, if any, shall be
adjusted annually after December
14 31, 1999, based on the formula determined
by the commission under
15 subsection (f).
16 (h) The price cap
for the switched access service basket shall be set
17 based upon the local exchange carrier's
intrastate access tariffs as of Jan-
18 uary 1, 1997, except for any revenue
neutral rate rebalancing authorized
19 in accordance with subsection (c).
Thereafter, the cap for this basket shall
20 not change except in connection with any
subsequent revenue neutral
21 rebalancing authorized by the commission
under subsection (c).
22 (i) The price
caps for the miscellaneous services basket shall be ad-
23 justed annually after December 31, 1997,
based on the adjustment for-
24 mula determined by the commission under
subsection (f).
25 (j) A price cap
is a maximum price for all services taken as a whole
26 in a given basket. Prices for individual
services may be changed within
27 the service categories, if any, established
by the commission within a
28 basket. An entire service category, if any,
within the residential and single-
29 line business basket or miscellaneous
services basket may be priced below
30 the cap for such category. Unless otherwise
approved by the commission,
31 no service shall be priced below the price
floor which will be long-run
32 incremental cost and imputed access
charges. Access charges equal to
33 those paid by telecommunications carriers
to local exchange carriers shall
34 be imputed as part of the price floor for
toll services offered by local
35 exchange carriers on a toll service
basis.
36 (k) A local
exchange carrier may offer promotions within an exchange
37 or group of exchanges. All promotions shall
be approved by the commis-
38 sion and shall apply to all customers in a
nondiscriminatory manner within
39 the exchange or group of exchanges.
40 (l) Unless the
commission authorizes price deregulation at an earlier
41 date, intrastate toll services within the
miscellaneous services basket shall
42 continue to be regulated until the affected
local exchange carrier begins
43 to offer 1 + intraLATA dialing parity
throughout its service territory, at
7
1 which time intrastate toll will be
price deregulated, except that prices
2 cannot be set below the price
floor.
3 (m) On or
before July 1, 1997, the commission shall establish guide-
4 lines for reducing regulation prior
to price deregulation of price cap reg-
5 ulated services in the miscellaneous
services basket, the switched access
6 services basket, and the residential
and single-line business basket.
7
(n) Subsequent to the adoption of guidelines pursuant to
subsection
8 (m), the commission shall initiate a
petitioning procedure under which
9 the local exchange carrier may
request rate range pricing. The commis-
10 sion shall act upon a petition within 21
days, subject to a 30-day suspen-
11 sion. The prices within a rate range shall
be tariffed and shall apply to all
12 customers in a nondiscriminatory manner in
an exchange or group of
13 exchanges.
14 (o) A local
exchange carrier may petition the commission to designate
15 an individual service or service category,
if any, within the miscellaneous
16 services basket, the switched access
services basket or the residential and
17 single-line business basket for reduced
regulation. The commission shall
18 act upon a petition for reduced regulation
within 21 days, subject to a
19 suspension period of an additional 30 days,
and upon a good cause show-
20 ing of the commission in the suspension
order, or within such shorter
21 time as the commission shall approve. The
commission shall issue a final
22 order within the 21-day period or within a
51-day period if a suspension
23 has been issued. Following an order
granting reduced regulation of an
24 individual service or service category, the
commission shall act on any
25 request for price reductions within seven
days subject to a 30-day sus-
26 pension. The commission shall act on other
requests for price cap ad-
27 justments, adjustments within price cap
plans and on new service offer-
28 ings within 21 days subject to a 30-day
suspension. Such a change will be
29 presumed lawful unless it is determined the
prices are below the price
30 floor or that the price cap for a category,
if any, within the entire basket
31 has been exceeded.
32 (p) The
commission may price deregulate within an exchange area,
33 or at its discretion on a statewide basis,
any individual service or service
34 category upon a finding by the commission
that there is a telecommuni-
35 cations carrier or an alternative provider
providing a comparable product
36 or service, considering both function and
price, in that exchange area.
37 The commission shall act upon a petition
for price deregulation within
38 21 days, subject to a suspension period of
an additional 30 days, and upon
39 a good cause showing of the commission in
the suspension order, or
40 within such shorter time as the commission
shall approve; provided that
41 no such petition shall be filed prior to
July 1997, unless the commission
42 otherwise authorizes. The commission shall
issue a final order within the
43 21-day period or within a 51-day period if
a suspension has been issued.
8
1 (q) Upon
complaint or request, the commission may investigate a
2 price deregulated service. The
commission shall resume price regulation
3 of a service provided in any exchange
area by placing it in the appropriate
4 service basket, as approved by the
commission, upon a determination by
5 the commission that there is no
longer a telecommunications carrier or
6 alternative provider providing a
comparable product or service, consid-
7 ering both function and price, in
that exchange area.
8 (r) The
commission shall require that for all local exchange carriers
9 all such price deregulated basic
intraLATA toll services be geographically
10 averaged statewide and not be priced below
the price floor established
11 in subsection (j).
12 (s) Cost studies
to determine price floors shall be performed as re-
13 quired by the commission in response to
complaints. In addition, not-
14 withstanding the exemption in subsection
(b), the commission may re-
15 quest information necessary to execute any
of its obligations under the
16 act.
17 (t) A local
exchange carrier may petition for individual customer pric-
18 ing. The commission shall respond
expeditiously to the petition within a
19 period of not more than 30 days subject to
a 30-day suspension.
20 (u) No audit,
earnings review or rate case shall be performed with
21 reference to the initial prices filed as
required herein.
22
(v) Telecommunications carriers shall not be subject to price
regu-
23 lation, except that: Access charge
reductions shall be passed through to
24 consumers by reductions in basic intrastate
toll prices; and basic toll prices
25 shall remain geographically averaged
statewide. As required under K.S.A.
26 66-131, and amendments thereto, and except
as provided for in subsec-
27 tion (c) of K.S.A. 1999 Supp. 66-2004 and
amendments thereto, telecom-
28 munications carriers that were not
authorized to provide switched local
29 exchange telecommunications services in
this state as of July 1, 1996,
30 including cable television operators who
have not previously offered tel-
31 ecommunications services, must receive a
certificate of convenience
32 based upon a demonstration of technical,
managerial and financial via-
33 bility and the ability to meet quality of
service standards established by
34 the commission. Any telecommunications
carrier or other entity seeking
35 such certificate shall file a statement,
which shall be subject to the com-
36 mission's approval, specifying with
particularity the areas in which it will
37 offer service, the manner in which it will
provide the service in such areas
38 and whether it will serve both business
customers and residential custom-
39 ers in such areas. Any structurally
separate affiliate of a local exchange
40 carrier that provides telecommunications
services shall be subject to the
41 same regulatory obligations and oversight
as a telecommunications car-
42 rier, as long as the local exchange
carrier's affiliate obtains access to any
43 services or facilities from its affiliated
local exchange carrier on the same
9
1 terms and conditions as the local
exchange carrier makes those services
2 and facilities available to other
telecommunications carriers. The com-
3 mission shall oversee
telecommunications carriers to prevent fraud and
4 other practices harmful to consumers
and to ensure compliance with
5 quality of service standards adopted
for all local exchange carriers and
6 telecommunications carriers in the
state.
7 Sec. 3. K.S.A. 1999 Supp.
66-1,187 and 66-2005 are hereby repealed.
8 Sec. 4. This act
shall take effect and be in force from and after its
9 publication in the statute book.