Opinion ID: 1433961
Heading Depth: 2
Heading Rank: 5

Heading: K.S.A. 66-1,143(b)

Text: K.S.A. 66-1,143 provides: (a) As used in this section and K.S.A. 66-1,145 and amendments thereto, `radio common carrier' shall include all persons and associations of persons, whether incorporated or not, operating a public `for hire' radio service engaged in the business of providing a service of radio communication, including cellular radio, which is one-way, two-way or multiple, between mobile and base stations, between mobile and land stations, including land line telephones, between mobile stations or between land stations, but not engaged in the business of providing a public land line message telephone service or a public message telegraph service within this state. (b) Except as provided in this subsection and K.S.A. 66-1,145 and amendments thereto, no radio common carrier shall be subject to the jurisdiction, regulation, supervision and control of the state corporation commission. The state corporation commission shall have the power and authority granted by K.S.A. 66-1,145 and amendments thereto and the power and authority to regulate and control radio common carriers whenever it is necessary to protect the public interest against cross-subsidization of competitive goods or services by monopoly goods and services. (Emphasis added.) K.S.A. 66-1,145 provides: Except as otherwise provided in this section, each radio common carrier may interconnect its common carrier radio telephone facilities with the telephone facilities of the telephone public utility certificated to serve the exchange area in which the base station of the radio common carrier is located if an agreement can be reached between the radio common carrier and the telephone public utility providing for such interconnection. When such an agreement cannot be reached between the radio common carrier and the telephone public utility, the radio common carrier may petition the state corporation commission for the right of interconnection and if the commission finds that a necessity exists therefor such interconnection shall be ordered by the commission on such reasonable terms as shall be established and prescribed by the commission. As a part of the Kansas Act, the legislature promulgated K.S.A. 1996 Supp. 66-2008, which provides in pertinent part: On or before January 1, 1997, the commission shall establish the Kansas universal service fund, hereinafter referred to as the KUSF. .... (b) The commission shall require every telecommunications carrier, telecommunications public utility and wireless telecommunications service provider that provides intrastate telecommunications services to contribute to the KUSF on an equitable and nondiscriminatory basis. Any telecommunications carrier, telecommunications public utility or wireless telecommunications service provider which contributes to the KUSF may collect from customers an amount equal to such carrier's, utility's or provider's contribution. (Emphasis added.) CMT argues K.S.A. 66-1,143(b) applies to it and absolutely prohibits the KCC from exercising any jurisdiction over it as a radio common carrier. Then, CMT asserts that 66-2008(b), and its required KUSF assessment, is an exercise of jurisdiction over it as a radio common carrier. As such, CMT asserts that 66-2008(b) and its application to it and all other radio common carriers conflicts with K.S.A. 66-1,143(b) and should be struck down. The failure of CMT to raise this issue in the administrative proceedings does not preclude this court from deciding the issue on appeal. CMT alleges that K.S.A. 66-1,143(a), as it applies to it, prohibits the KCC from exercising jurisdiction over it as a radio common carrier. In making this argument, CMT acknowledges that the statute's prohibition from exercising any jurisdiction over radio common carriers contains two exceptions. First, the KCC may exercise jurisdiction over radio common carriers in order to adjudicate disputes concerning interconnection agreements between radio common carriers and telephone public utilities. K.S.A. 66-1,145. Second, the KCC may exercise jurisdiction over radio common carriers if it is necessary to protect the public interest against cross-subsidization of competitive goods and services by monopoly goods and services. K.S.A. 66-1,143(b). K.S.A. 1996 Supp. 66-2008(b) allows the KCC to require wireless telecommunications service providers, such as CMT, to contribute to the KUSF on an equitable and nondiscriminatory basis. Relying on this statute, the KCC adopted orders which required wireless service providers to pay a surcharge to the KUSF. CMT argues that such a requirement is an exercise of jurisdiction over it by the KCC. Further, CMT asserts that this exercise of jurisdiction does not fall within either of the exceptions delineated in 66-1,143 and 66-1,145. As such, CMT asserts that 66-2008(b) allows the KCC to do that which is prohibited by K.S.A. 66-1,143(b)โexercise jurisdiction over wireless service providers/ radio common carriers without meeting the two exceptions set out in 66-1,143 and 66-1,145. As CMT points out, the Kansas Act, including 66-2008, does not purport to create a third exception to K.S.A. 66-1,143(b). Without such an exception, CMT argues that the KCC is statutorily prohibited, under 66-1,143(b), from exercising any jurisdiction over CMT, including assessing a surcharge to finance the KUSF under 66-2008(b). Thus, CMT asks this court to set aside 66-2008(b) and the KCC's orders implementing 66-2008(b) as they apply to CMT and other wireless service providers/ radio common carriers. Courts must construe all provisions of statutes in pari materia with a view of reconciling and bringing them into workable harmony, if reasonably possible to do so. Kansas-Nebraska Natural Gas Co. v. State Corporation Commission, 176 Kan. 561, Syl. ถ 1, 271 P.2d 1091 (1954). Under this rule of statutory construction, the KCC argues that the two statutes, 66-1,143(b) and 66-2008(b), can be read in harmony. 47 U.S.C. ง 332(c)(3) (1994) (Omnibus Budget Reconciliation Act of 1993) provides: STATE PREEMPTION. (A) Notwithstanding sections 152(b) and 221(b) of this title, no State or local government shall have any authority to regulate the entry of or the rates charged by any commercial mobile service or any private mobile service, except that this paragraph shall not prohibit a State from regulating the other terms and conditions of commercial mobile services. Nothing in subparagraph shall exempt providers of commercial mobile services (where such services are a substitute for land line telephone exchange service for a substantial portion of the communications within such State) from requirements imposed by a State commission on all providers of telecommunications services necessary to ensure the universal availability of telecommunications service at affordable rates. (Emphasis added.) Section 332(c)(3) prohibits states from regulating the rates of commercial mobile service providers, just as K.S.A. 66-1,143(b) prohibits the KCC from regulating radio common carriers. GTE Mobilnet of Ohio v. Johnson, 111 F.3d 469 (6th Cir. 1997). Further, compare 66-2008(b) and its requirement to assess wireless service providers a surcharge to support the KUSF to ง 254(f) of the Federal Act, which provides: (f) STATE AUTHORITY. A State may adopt regulations not inconsistent with the Commission's rules to preserve and advance universal service. Every telecommunications carrier that provides intrastate telecommunications services shall contribute, on an equitable and nondiscriminatory basis, in a manner determined by the State to the preservation and advancement of universal service in that State. A state may adopt regulations to provide for additional definitions and standards to preserve and advance universal service within that State only to the extent that such regulations adopt additional specific, predictable, and sufficient mechanisms to support such definitions or standards that do not rely on or burden Federal universal service support mechanisms. (Emphasis added.) 110 Stat. 73. The FCC recently evaluated the interaction between these two federal statutes when a party claimed that the statutes were inconsistentโallowing states to assess wireless service providers with a surcharge (ง 332[c][3]) but also prohibiting the state from regulating such wireless service providers (ง 254[f]). In addressing this issue, the FCC concluded that the two statutes were not in conflict and that ง 332 and its prohibition on rate regulation of wireless service providers does not prohibit a state from assessing wireless service providers a surcharge to support universal service under ง 254(f). In so holding, the FCC stated: 777. We agree with the Joint Board's recommendation that all telecommunications carriers that provide interstate telecommunications services must contribute to the support mechanism.... .... 791. With respect to the issue of whether states may require CMRS providers to contribute to state universal service support mechanism, we agree with the Joint Board and find the section 332(c)(3) does not preclude states from requiring CMRS providers to contribute to state support mechanisms. Section 254(f) states that states may require telecommunications carriers that provide intrastate telecommunications services to make equitable and nondiscriminatory contributions to state support mechanisms. Section 332(c)(3) prohibits states from regulating the rates charged by CMRS providers. Section 332(c)(3) also states that `[n]othing in this subparagraph shall exempt providers of commercial mobile services (where such services are a substitute for land line telephone exchange service for a substantial portion of the communications within such [s]tate)' from state universal service requirements. Several [commentators] argue that section 332(c)(3) prohibits states from requiring CMRS providers operating within a state to contribute to state universal service programs unless the CMRS provider's service is a substitute for land line service in a substantial portion of the state. The Joint Board, however, disagreed. California PUC has adopted this interpretation and has required CMRS providers in California to contribute to the state's programs for Lifeline and high cost small companies since January 1, 1995. A Connecticut state court, however, has ruled that section 332(c)(3) prohibits Connecticut from assessing contributions against CMRS providers for intrastate universal service programs. (Emphasis added.) In the Matter of Federal-State Joint Board on Universal Service, FCC Docket 97-157, Order May 8, 1997. The United States District Court for the District of Kansas agreed with the FCC's ruling on this issue regarding whether the two federal statutes conflict. Further, the federal court held that 66-2008(b), adopted pursuant to ง 254(f), was consistent with and not preempted by 47 U.S.C. ง 332(c)(3)(A). In so holding, the federal court stated: The court finds that 47 U.S.C. งง 254(f) and 332(c)(3)(A) exist in harmony and do not conflict with each other. K.S.A. 66-2008(b), adopted in conformity with 47 U.S.C. ง 254(f), must be construed, therefore, as consistent with federal law. Accordingly, the court concludes that the KCC order requiring all commercial mobile service providers in the state to contribute to the KUSF is not preempted by federal law. Mountain Solutions v. State Corp. Com'n of KS, 966 F. Supp. 1043, 1049 (D. Kan. 1997). In order to determine if K.S.A. 66-1,143(b) and 66-2008(b) conflict, it is first necessary to determine exactly what each statute provides. All the parties seem to agree on the general interpretation of 66-2008(b). It allows the KCC to assess a surcharge from CMT, as a wireless service provider, in order to support the KUSF. However, the parties disagree on the interpretation of K.S.A. 66-1,143(b). CMT asserts that K.S.A. 66-1,143(b) prohibits the KCC from exercising any jurisdiction, regulation, supervision, or control over radio common carriers, except for the exceptions specifically enumerated in 66-1,143(b) and 66-1,145. On the other hand, the KCC and SWBT seem to interpret 66-1,143(b) in a more narrow fashion, as 47 U.S.C. ง 332(c) has been interpretedโprohibiting only the KCC's regulation of a radio common carrier's rates or market entry. In interpreting a statute, [a court] must give effect to its plain and unambiguous language, without determining what ... the law should be. State v. Reed, 23 Kan. App.2d 661, 663, 934 P.2d 157, rev. denied 262 Kan. 968 (1997). When a statute is plain and unambiguous, the appellate courts will not speculate as to the legislative intent behind it and will not read such a statute so as to add something not readily found in the statute. [Citation omitted.] State v. Lawson, 261 Kan. 964, 966, 933 P.2d 684 (1997). `In construing statutes, the legislative intention is to be determined from a general consideration of the entire act. Effect must be given, if possible, to the entire act and every part thereof. To this end, it is the duty of the court, as far as practicable, to reconcile the different provisions so as to make them consistent, harmonious, and sensible.` [Citation omitted.] KPERS v. Reimer & Koger Assocs., Inc., 262 Kan. 635, 643-44, 941 P.2d 1321 (1997). `In order to ascertain the legislative intent, courts are not permitted to consider only a certain isolated part or parts of an act, but are required to consider and construe together all parts thereof in pari materia.....' [Citation omitted.] 262 Kan. at 644. [S]everal provisions of an act, in pari materia, must be construed together with a view of reconciling and bringing them into workable harmony and giving effect to the entire act if it is reasonably possible to do so. [Citation omitted.] State v. Le, 260 Kan. 845, 847-48, 926 P.2d 638 (1996). From a straightforward reading of K.S.A. 66-1,145(b), it prohibits the KCC from exercising any jurisdiction, regulation, supervision, or control over radio common carriers. K.S.A. 66-1,143(b) does not merely prohibit the regulation of rates or market entry over radio common carriers, as 47 U.S.C. ง 332(c) does. K.S.A. 66-1,143(b) imposes a broader prohibition on the KCC's regulation of radio common carriers than 47 U.S.C. ง 332(c) imposes on a state's regulation of radio common carriers. In comparing the language of the two statutes, K.S.A. 66-1,143(b) uses much broader language than 47 U.S.C. ง 332(c) and should be interpreted as such. However, K.S.A. 66-1,143(b) does not define exactly what an exercise of jurisdiction, regulation, supervision, or control over a radio common carrier by the KCC is. The meaning of these terms is ambiguous and defining the terms requires judicial interpretation, taking into account the court's duty to reconcile all parts of the statute. Black's Law Dictionary (6th ed. 1990) defines some of these terms. Jurisdiction is defined as power and authority of a court to hear and determine a judicial proceeding. p. 853. Regulation is defined as a rule or order prescribed for management or government. p. 1286. Supervise is defined as to inspect or to have general oversight over. p. 1438. Control is defined as [p]ower or authority to manage, direct, superintend, restrict, regulate, govern, administer, or oversee. p. 329. Determining precisely how these terms should be interpreted within K.S.A. 66-1,143(b) is not necessary. The more relevant question is whether a KUSF assessment by the KCC might fall within the general definition of the terms. The federal court found such an assessment by a state, authorized under ง 254, was not a rate regulation. However, the federal court did not determine whether the assessment qualified as a general exercise of jurisdiction or control, as opposed to a specific regulation of rates. The court simply referred to the assessment as an additional cost of doing business. This definition of a KUSF assessment does not match the definitions of any of the KCC acts prohibited by K.S.A. 66-1,143. See Mountain Solutions, 966 F. Supp. at 1048 (The mandatory KUSF contributions that the KCC has imposed on all telecommunications providers in the state do not constitute a regulation of rates or market entry. The assessments simply constitute an additional cost of doing business that the companies either may absorb themselves or pass on to their customers.). The KCC has historically exercised jurisdiction over the access rates imposed by LECs on wireless service providers for interconnecting with the wire line network. The KCC's prior regulation of access rates charged to CMT did not violate 66-1,143 and its prohibition against regulation of CMT. Thus, this regulation of access rates charged to CMT, through the KUSF contribution required under 66-2008(b), does not violate K.S.A. 66-1,143, either. In other words, 66-2008(b), together with 66-2005(c), simply manipulates the manner in which costs, traditionally paid through access rates and used to support the wire line infrastructure, are paid to local exchange carriers. The cost of supporting the wire line infrastructure is not a new one; it is simply paid by a different method under 66-2008(b). Such cost used to be paid directly to the local exchange carriers by wireless and other telecommunications providers through high access rates. Now, access rates have been mandatorily reduced, and the expense of supporting the wire line infrastructure is paid to the KUSF through an assessment on the intrastate revenues of wireless and other telecommunication providers. This fulfills the Kansas Legislature's purpose of making an implicit subsidy explicit. The KCC previously set the access rates which local exchange carriers could charge to CMT without violating K.S.A. 66-1,143(b) and its prohibition against regulation over CMT. Now, under 66-2005(c), the KCC has lowered the set access rates which local exchange carriers may charge CMT. In order to pay for the upkeep on the wire line infrastructure, which higher access rates used to pay for, the KCC, under 66-2008(b), has assessed a KUSF surcharge on CMT and other telecommunication providers. This surcharge will be paid out to LECs, to replace the lost revenues due to the reduced access rates, so the LECs can support the wire line infrastructure. Since the KCC previously set the access rates properly changeable to CMT, it makes sense that the KCC may set a KUSF surcharge for CMT to pay, pursuant to 66-2008(b), in order to cover the same cost of supporting the wire line infrastructure, without constituting an exercise of jurisdiction or control over CMT and violating K.S.A. 66-1,143(b). As such, the statutes do not conflict and neither one needs to be struck down.