News Release

April 16, 2008

KCC Petitions FCC for Ruling on State Procedures

The Kansas Corporation Commission (KCC) today filed a petition for a declaratory ruling with the Federal Communications Commission (FCC). The KCC asked the FCC to declare that states are not preempted from adopting reasonable procedures for certifying that Eligible Telecommunications Carriers (ETCs) have properly used funds received from the federal Universal Service Fund (USF) and that the KCC's procedure is a permissible interpretation of the Telecommunications Act of 1996.

USCOC of Nebraska/Kansas, LLC (US Cellular) and RCC Atlantic, Inc., wireless Competitive Eligible Telecommunications Carriers (CETCs) that provide service in Kansas, challenged the KCC procedure in the U.S. District Court for the District of Kansas. At the request of the KCC, the District Court referred the matter to the FCC, concluding the preemption issue had "broad policy implications" and was "better suited for determination by the FCC."

The KCC requires ETCs to use federal USF support to benefit customers in areas of the state that the FCC has determined are high cost and need support to ensure local telephone rates are affordable and reasonably comparable to rates in urban areas. These wireless carriers argue that they should be allowed to spend federal USF support anywhere in the state, including areas the FCC has determined do not need support to provide affordable local telephone service to customers. The KCC concluded that the FCC's rules require carriers to expend federal USF support to provide service to customers in high cost areas of the state and that allowing carriers to use federal USF support outside of these designated "supported" areas runs afoul of the FCC's requirements that federal support be competitively neutral.

The KCC believes the FCC is in the best position to interpret FCC rulings regarding whether state commissions have authority to develop such procedures to certify proper use of federal USF support.