{"data":{"id":"us-ky/krs-278.516","jurisdiction":"us-ky","citation":"KRS 278.516","heading":"Alternative regulation process for small telephone utilities -- Findings","body":"-- Definitions -- Procedures -- Withdrawal.\n(1) The legislature finds and determines that:\n(a) Small telephone utilities lack the resources to fully participate in the\nexisting regulatory processes, particularly under traditional rate of return\nand certificate of public convenience and necessity regulation;\n(b) Regulation, if not tailored specifically to the needs of small telephone\nutilities, can retard the growth and development of small telephone utilities\nby requiring the expenditure of excessive time and money responding to\nand addressing regulatory processes instead of devoting those resources\nto customer service and more productive business concerns and issues;\nand\n(c) It is in the public interest to provide regulatory flexibility to small telephone\nutilities to better enable them to adjust to the competition and innovation\nthat has come and is coming to the telecommunications industry as found\nand determined by the legislature at KRS 278.512(1).\n(2) In addition to the definitions set forth at KRS  278.010, the following definitions\nshall apply to this section:\n(a) \"Telephone  utility\" means  a  telephone utility as  defined at KRS\n278.010(3)(e) except that it includes local exchange carriers only;\n(b) \"Local exchange carrier\" means  a traditional wireline telephone utility\nwhich provides its subscribers with access to the national public switched\ntelephone network;\n(c) \"Traditional wireline telephone utility\" means  one whose delivery of its\ntelephone utility services is characterized by the predominant use of wire\nor wireline connections carrying communications transmissions between\nthe subscriber of the utility and the national public switched telephone\nnetwork;\n(d) \"Small telephone utility\" means  a local exchange  carrier providing\ntelephone utility service and having not more than fifty thousand (50,000)\naccess lines in Kentucky;\n(e) \"Largest telephone utility\" means  the local exchange carrier providing\ntelephone utility service in Kentucky and having the greatest number of\naccess lines in Kentucky;\n(f) \"Access lines\" mean  the telephone lines provided by a local exchange\ncarrier. In calculating the number  of access lines provided by a local\nexchange  carrier, the number of access lines provided by all telephone\nutilities under common  ownership or control, as  defined in KRS\n278.020(7), with that telephone utility shall be counted;\n(g) \"GDP\"  means the real Gross Domestic Product Price Index, as it may be\namended  from time to time, as it is published by the Bureau of Economic\nAnalysis of the United States Department of Commerce;\n(h) \"Annual percent change in the GDP\" means, for any given calendar year,\nthe annul percentage change in the GDP  as it is calculated by the Bureau\nof Economic Analysis of the United States Department of Commerce;\n(i) \"Basic business rate\" and \"basic residential rate\" mean the total rates or\ncharges which must be paid by a business or residential subscriber,\nrespectively, to a local exchange carrier in order to receive, outside of a\nstandard metropolitan statistical area, telephone utility service within a\nspecified geographic area for local calling and for which tariffed rates or\ncharges are assessed, regardless of the amount of use of local calling;\n(j) \"Standard metropolitan statistical area\" means  any area in Kentucky\ndesignated as such, or as a part thereof, pursuant to 44 U.S.C. sec.\n3504(d)(3) and 31 U.S.C. sec. 1104(d), as they may be amended, by the\nOffice of Management  and  Budget of the Executive Office of the\nPresident of the United States; provided, however, that for purposes of\nthis section, \"standard metropolitan statistical area\" shall include only the\ntwo  (2) largest, as measured  by population, standard metropolitan\nstatistical areas, regardless of whether that area is located wholly or\npartially in Kentucky;\n(k) \"Basic business service\" or \"basic residential service\" means the service\nfor which basic business rates or basic residential rates are charged;\n(l) \"Average basic business or residential rate, including zone charges,\"\nmeans  the total revenues which should be produced by the imposition of\nthose rates or charges divided by the number of access lines to which\nthose rates or charges are applicable;\n(m) \"Zone  charges\" mean  mileage or zone charges and are the charges\nassessed by a telephone utility on the basis of a subscriber's distance\nfrom a central office in order that the subscriber may  receive basic\nbusiness or residential services;\n(n) \"Subscriber\" means  the person  or  entity legally and  financially\nresponsible for the bill rendered by a telephone utility for its services;\n(o) \"Intrastate access charges\" mean  the charges assessed for use of the\ntelecommunications facilities of one telephone utility by another person or\nentity in order to deliver to the public for compensation telephone\nmessages  originating and terminating within Kentucky;\n(p) \"Interstate access charges\" mean  the charges assessed for use of the\ntelecommunications facilities of one  (1) telephone utility by another\nperson  or entity in order to deliver to the public for compensation\ntelephone messages originating or terminating, but not both, in Kentucky;\nand\n(q) \"Pic charges\" are charges assessed by a local exchange carrier in order\nto implement a change in a subscriber's long distance carrier.\n(3) (a) If a small telephone utility elects to be regulated as provided in subsection\n(7) of this section, a small telephone utility once during any twenty-four\n(24) month period may adjust or implement each of the following rates or\ncharges: basic business rate; basic residential rate; zone charges; or\ninstallation charges for basic business or basic residential services by an\namount  not to exceed the sum of the annual percentage changes in the\nGDP  for the immediately preceding two (2) calendar years multiplied by\nthe existing rate or charge to be adjusted. However, in no event shall a\nsmall telephone utility so adjust:\n1. Its basic business rate, including zone charges, if the resulting\naverage basic business rate, including zone charges, would thereby\nexceed the average basic business rate, including zone charges, of\nthe largest telephone utility;\n2. Its basic residential rate, including zone charges, if the resulting\naverage basic residential rate would thereby exceed the average\nbasic  residential rate including zone  charges, of the largest\ntelephone utility; or\n3. If its average basic business rate, including zone charges, its\naverage  basic residential rate, including zone  charges, or its\ninstallation charges for basic business or basic residential services\nwould be increased by more than twenty percent (20%).\n(b) At least sixty (60) calendar days before the effective date of such an\nadjustment of its rates or charges, a small telephone utility shall file a\ncopy of its revised rates and tariffs with the commission and shall mail\nnotice of the proposed rate adjustment to each affected subscriber and\nthe commission. The notice shall state:\n1. The GDP  for the preceding two (2) calendar years;\n2. The  amount by which any of the small telephone utility's rates or\ncharges  identified in subsection (3)(a) of this section will be\nadjusted; and\n3. The  right of subscribers to object to the adjustment and request\ncommission review by filing a letter or petition with the commission.\n(c) If by the forty-fifth calendar day following the date of the notice to\nsubscribers of such a proposed adjustment to its rates or charges, the\ncommission  has received letters or petitions requesting commission\nreview of the adjustment signed by at least five hundred (500) subscribers\nor five percent (5%) of subscribers, whichever is greater, the commission\nshall immediately notify the small telephone utility of this fact, and the\nproposed rate adjustment shall not become  effective as scheduled. The\nsmall telephone utility may  withdraw the proposed rate or charge\nadjustment, or if it decides to proceed, the commission shall review the\nproposed rate adjustment as though no election had been made pursuant\nto subsection (7) of this section.\n(4) Any  other provision of this chapter notwithstanding, a small telephone utility\nwhich has elected to be regulated pursuant to this section may adjust any of its\nrates, charges, or tariffs, except for:\n(a) Its basic business rate;\n(b) Its basic residential rate;\n(c) Its zone charges;\n(d) Its installation charges for basic business or basic residential services;\n(e) Its access charges; or\n(f) Its pic charges,\nwithout regard to the effect on its revenues, by filing its proposed rates,\ncharges, or tariffs with the commission and by notifying its subscribers, both at\nleast thirty (30) calendar days prior to the effective date of its proposed rates,\ncharges, or tariffs.\n(5) A  small telephone utility which has elected to be regulated pursuant to this\nsection shall not:\n(a) Adjust its intrastate access charges if the adjustment requires the small\ntelephone utility's access charge customers, including interexchange\ncarriers, to pay intrastate access charges at levels exceeding the small\ntelephone utility's interstate access charge levels; or\n(b) Adjust its intrastate pic charges if the adjustment requires the small\ntelephone utility's customers to pay intrastate pic charges at levels\nexceeding the small telephone utility's interstate pic charge levels.\nThe  small telephone utility may  decrease its intrastate access charges or\nintrastate pic charges to any level without restriction. Adjustments to intrastate\naccess charge rates or intrastate pic charges shall be effective thirty (30)\ncalendar days following the filing of access charge tariffs or pic charge tariffs\nwith the commission.\n(6) The  rates, charges, earnings, or revenues of a small telephone utility which\nhas elected to be regulated pursuant to this section and is in compliance with\nthe provisions of this section shall be deemed  by the commission to be in\ncompliance with KRS 278.030(1).\n(7) A  small telephone utility may  elect, at any time, to be regulated by the\nprovisions, in their entirety only, of this section by filing a verified resolution of\nthe utility's board of directors, or other governing body, so electing with the\ncommission. An election shall be effective immediately upon filing with the\ncommission  and shall remain effective until withdrawn by the filing with the\ncommission  of a verified resolution of the small telephone utility's board of\ndirectors or other governing body; provided, however, that all resolutions of\nelection or withdrawal shall remain in effect for at least one (1) year from the\ndate of their filing with the commission. A resolution electing to be regulated by\nthe provisions of this section shall mean  that the small telephone utility so\nelecting shall be regulated by this section and shall not be regulated by KRS\n278.020(1) and 278.300. Nothing in this section, however, shall be construed\nto alter the applicability of KRS  278.020(5) or 278.030(2) to small telephone\nutilities electing to be regulated by the provisions of this section.\n(8) A  small telephone utility which has elected to be regulated pursuant to this\nsection may  file an  application with the commission  pursuant to KRS\n278.020(1), and, if a utility does so, that application shall be deemed  to have\nbeen granted unless within thirty (30) calendar days following the filing of the\napplication, the commission denies the application. If the application is denied\nor none is filed, the small telephone utility electing to be regulated pursuant to\nthis section may  engage in the construction of the plant or facilities, or the\npurchase of equipment or properties, to provide the services described in KRS\n278.010(3)(e). However, if the small telephone utility subsequently files a\nresolution of withdrawal under subsection (7) of this section, the increased\nvalue of property that resulted from any construction project denied approval by\nthe commission or not submitted to the commission for approval may  be\nexcluded from the small utility's rate base for rate making purposes if the cost\nof construction exceeded one million dollars ($1,000,000) or five percent (5%)\nof the value of the small telephone utility's property as reflected in the utility's\nmost recent annual report filed with the commission.","path":["KRS Chapter 278"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=44842","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:53:30Z","sha256":"e97a23677aae7a1505d098cf7b8810c0e117194c59b79766823ce752b4f56d24","source_id":"us-ky","stale":false,"prev":"us-ky/krs-278.514","next":"us-ky/krs-278.520"},"notice":"GroundRules: Original legal text. Not legal advice."}