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KUSFKansas Universal Service Fund (Topeka, KS)
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The Kansas Act requires all telecommunications carriers, including wireless, providing intrastate services to contribute to the KUSF on an equitable and nondiscriminatory basis.(173) The Kansas Act was later amended to relieve wireless carriers from contributions based on the portion of their intrastate revenue derived from services provided exclusively over a wireless network.(174) By statute, carriers are permitted to pass through contributions to their customers.(175) Carriers can request supplemental funding from the KUSF based on additional lines.
The KCC adopted an Order implementing the Kansas Plan on December 27, 1996.(178) The Order implements the statutory requirement that state universal service support be provided from the KUSF on a revenue-neutral basis.(179) This means that incumbent carriers would be entitled to recover the decline in their intrastate access charge revenues from the KUSF.
First, in federal district court wireless carriers challenged the Kansas Act's requirement that they contribute to the KUSF.(185) The challengers argued that the contribution requirement regulated wireless carriers without proper authority.
The Kansas Court of Appeals remanded the case back to the KCC with instructions to make the Order consistent with section 254(f), (i), and (k).(193) The court also remanded the issue of whether it is competitively neutral for wireless carriers to subsidize ILECs through the KUSF.(194) The court determined that the KCC's allocation of 100 percent of the loop costs to the intrastate jurisdiction was inconsistent with section 254(k) of the Act.(195) Because approximately 75 percent of loop costs can be attributed to the cost of providing local service, the KCC was ordered to ensure reasonable apportionment on remand.(196)
We do not have before us the federal regulations concerning the Federal Act."(197) As a result, the court held that the Kansas Act does not conflict with the KCC's statutory duty to regulate and ensure just and reasonable rates and charges to consumers.(198) Finally, with regard to the challenge of requiring wireless carriers to contribute to the KUSF, the court relied on the FCC determination that "section 332(c)(3) does not preclude states from requiring CMRS providers to contribute to state support mechanisms."(199) The court concluded that the law denying the KCC jurisdiction over wireless carriers did not conflict with the provision assessing KUSF contributions on wireless carriers.
Specifically, the Kansas Plan's reliance on revenue neutrality as a means for sizing the KUSF and the limitation on statewide high-cost support for CLECs are arguably inconsistent with several of these principles.
Instead, the amount of support in the KUSF is based on the principle of revenue neutrality.