KRS 278.543: Adoption of price regulation plan -- Rate caps and adjustments --

Jurisdiction of commission -- Exemptions -- Withdrawal from regulation

under KRS 278.541 to 278.544.

Any telephone utility, at its discretion and without commission approval, may elect to

adopt the price regulation plan set forth below.

(1) An election under this section shall be effective immediately upon written

notification from the electing utility to the commission. The election shall remain

effective until withdrawn by the electing utility.

(2) The rate for basic local exchange service for an electing utility, other than an

electing small telephone utility as defined in KRS 278.516, shall be capped for a

period of sixty (60) months from the date of the election. Subject to the limit ations

in KRS 278.541 to 278.544, an electing utility may seek a rate adjustment for basic

local exchange services according to the terms of regulation applicable to the basic

local exchange services of any ILEC on June 30, 2006, or a previously approved o r

new price regulation proposal for basic service pursuant to KRS 278.512. These rate

adjustments may become effective on or after the day following the end of the sixty

(60) months.

(3) Electing utilities shall retain on file with the commission tariffs f or basic local

exchange services and intrastate switched -access services. Tariffs filed in

accordance with subsection (2) of this section shall be deemed valid and binding

upon the effective date stated in the tariff.

(4) An electing utility's rates for in trastate switched-access service shall not exceed its

rates for this service that were in effect on the day prior to the date the utility filed

its notice of election.

(5) The commission shall have original jurisdiction over complaints as to basic local

exchange service of any electing telephone utility, except that the commission shall

not have jurisdiction to set, investigate, or determine rates as to any electing

telephone utility other than as set forth in this section. Upon a complaint in writing

made against any electing telephone utility by any person stating that basic local

exchange service in which that complainant is directly interested is unreasonable,

unsafe, insufficient, or unjustly discriminatory, or that basic local exchange service

is inadequate or cannot be obtained, the commission shall proceed, with or without

notice, to make such investigation as it deems necessary or convenient. The

commission may also make such an investigation on its own motion. No order

concerning a complaint shall b e entered by the commission without a formal public

hearing. A person may intervene in accordance with commission administrative

regulations. The commission shall fix the time and place for the hearing and shall

provide notice to the electing telephone uti lity and the complainant not less than

twenty (20) days in advance. The commission may dismiss any complaint without a

hearing if it decides that a hearing is not necessary, in the public interest, or for the

protection of substantial rights. The complaina nt and the electing telephone utility

shall be entitled to be heard in person or by an attorney and to introduce evidence.

(6) An electing utility's rates, charges, earnings, and revenues shall be deemed to be just

and reasonable under KRS 278.030 and admi nistrative regulations promulgated

thereunder upon election. Except as set forth in KRS 278.542(1)(a) and (b), an

electing telephone utility shall be exempt from KRS 278.190, 278.192, 278.200,

278.230(3), 278.255, 278.260, 278.270, 278.280, 278.290, and 27 8.300 and

administrative regulations promulgated thereunder. The utility shall also be exempt

from any rules, orders, or regulations of the commission requiring the retention or

filing of financial reports, classifications, depreciation or other schedules, or any

other information not required by the Federal Communications Commission.

(7) An electing small telephone utility, as defined in KRS 278.516, may withdraw from

being so regulated by providing written notice of withdrawal to the commission.

(8) Under the following circumstances, any electing utility may withdraw from being so

regulated by providing written notice to the commission:

(a) Upon the approval pursuant to KRS 278.512 of a company-specific alternative

regulation plan; or

(b) Upon filing notic e with the commission of its adoption of the applicable

provisions of any alternative regulation plan previously approved by the

commission. The adoption shall become effective upon filing of the notice.

(9) The rates for basic local exchange service for a n electing small telephone utility as

defined in KRS 278.516 shall be capped for a period of twelve (12) months from

the date of the election. Annually thereafter, an electing small telephone utility may

not increase rates for an individual basic local exc hange service by more than the

increase in the annual average of the Consumer Price Index for all urban consumers

for the most recent calendar year as published by the United States Department of

Labor, Bureau of Labor Statistics.