KRS 278.514: Exempted service not to be subsidized by nonexempted, regulated

telecommunications services.

(1) Revenues derived from nonexempted, regulated telecommunications services,

whether essential or nonessential, shall not be used to subsidize or otherwise g ive

advantage to any person providing an exempted service. The commission shall

require a provider of any exempted service to keep separate accounts, to allocate

cost in accordance with procedures established by the commission, and may require

other acts t hat will assist the commission in enforcing this section. Any person

requesting an exemption or providing a service exempted pursuant to KRS 278.512

shall have the burden of proof to show compliance with this requirement.

(2) (a) Except as provided in subs ection (2)(b) of this section, any

telecommunications utility that willfully violates subsection (1) of this section

shall be subject to a penalty no greater than the revenue requirement effect of

moneys determined to have been misallocated in the violatio n. For the

purpose of calculating the penalty under this section, the commission shall not

use a period longer than five (5) years.

(b) A local exchange carrier with fewer than thirty -five thousand (35,000) access

lines who willfully violates subsection (1 ) of this section shall be subject to

the penalties prescribed in KRS 278.990(1).