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March 10, 2016

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March 10, 2016 COMMONWEALTH OF KENTUCKY BEFORE THE PUBLIC SERVICE COMMISSION In the Matter of: AN INQUIRY INTO THE STATE CASE NO. UNIVERSAL SERVICE FUND 2016·00059 ORDER On February 1, 2016, the Commission, on its own motion, initiated this administrative proceeding to investigate the current and future funding, distribution, and administration of the Kentucky Universal Service Fund ("KUSF") , which provides supplemental support for authorized telecommunications carriers that also participate in the federal Lifeline program. The Commission stated that the need for the investigation arose from the projected depletion of the KUSF by April 2016, at which time the fund will no longer be able to meet its monthly obligation, absent action to increase funding or reduce spending. The Commission named as parties the Attorney General's office; all Local Exchange Carriers; all commercial mobile radio service providers; and all eligible telecommunications carriers, and established a procedural schedule providing for the filing of testimony by parties, discovery, and an opportunity for a hearing. In initiating this investigation, the Commission's February 1, 2016 Order cited the need to maintain the solvency of the KUSF and proposed to either temporarily raise the KUSF per-line surcharge from $0.08 to $0.14 or to temporarily lower the amount of state support. Any comments addressing either proposal were required to be filed no later than February 22, 2016. The Commission received a total of nine joint and/or individual comments from the parties to the case, as well as three comments from members of the public. Four joint and/or individual comments 1 expressed support for the Commission's proposal to temporarily raise the per-line monthly surcharge from $0.08 to $0.14. Three joinVand or individual comments2 were neutral regarding the proposed Commission action. Only East Kentucky Wireless, LLC d/b/a Appalachian Wireless supported reducing the KUSF support to $2.00. The Attorney General proposed applying the "principles of gradualism," and suggested that the Commission increase the surcharge to $0.12 and decrease the amount of KUSF support to $2.75. Based upon the recommendations, the Commission finds that the surcharge should be raised to $0.14 on an interim basis while this proceeding is pending. We base our decision on a variety of factors, most notably the proportional impact of the increase in the surcharge versus a decrease in support. A six-cent increase in an average wireless customer's monthly bill is an approximate 0.13 percent increase. By comparison, a $1 .50 decrease in the amount of state support would result in a ' These comments are: 1) The joint comments of Airvoice Wireless. American Broadband and Telecommumcal!ons Company, Blue Jay Wireless. LLC. Budget Wireless, 1-wireless LLC. Ready Wireless. and Telnte Corporation; 2) The joint comments of Ballard Rural Telephone Cooperattve Corporation. Inc.. Brandenburg Telephone Company, Inc., Duo County Telephone Cooperative Corporation, Inc .• Foothills Rural Telephone Cooperative Corporation, Inc.. Gearheart Commumcations Company, Inc., Highland Telephone Cooperative, Inc., Logan Telephone Cooperative , Inc., Mountain Rural Telephone Cooperative Corporation. Inc., North Central Telephone Cooperative Corporation, Peoples Rural Telephone Cooperative CorporatiOn, Inc .• South Central Rural Telephone Cooperative Corporation, Inc., Thacker-Grigsby Telephone Company, Inc., and West Kentucky Rural Telephone Cooperative Corporation, Inc.; 3) The Individual comments of Cincinnati Bell Telephone Company LLC; and 4) The individual comments of Total Call Mobile, Inc. 2 These comments are: 1) The JOint comments of McleodUSA Telecommunications Serv1ces, LLC. Network Telephone, LLC, Talk America, LLC, The Other Phone Company, LLC, US LEC of Tennessee, LLC, Windstream Communications, LLC, PAETEC Communications. LLC, Windstream KDL, LLC, Windstream Kentucky East, LLC, Windstream Kentucky West, LLC, Windstream Nortight, LLC, Wlndstream NTI, LLC, and Windstream NuVox, LLC; 2) The individual comments of BeiiSouth Telecommunications, LLC d/b/a AT&T Kentucky; and 3) The joint comments of MCIMetro Access Transmission Services LLC and CellCo Partnership. ·2· Case No. 2016·00059 significant rate increase in a Lifeline customer's bill. For example, Cincinnati Bell offers a Lifeline discount of $12.75 per line for voice service. Cincinnati Bell offers basic local exchange service at $18.30 a month, meaning that a Lifeline customer now pays approximately $5.55 per month for basic service. A reduction of $1.50 from the KUSF would lead to an approximate rate increase of 27 percent to the Lifeline customer's bill. Also weighing heavily on our decision is that the majority of parties filing comments did not oppose the surcharge increase, and that the increase is temporary, pending the outcome of this investigation. We also note that a $0.14 surcharge to support a state universal service fund is relatively modest compared to surcharges of other nearby states. For example, rather than a specific amount, Indiana and Illinois impose a monthly surcharge of 0.54 percent and 1.0941 percent respectively on the retail portions of a customers' bill. South Carolina imposes a surcharge of 2.6654 percent, and Georgia imposes one of 2.9 percent. As in the past, for carriers maintaining tariffs with the Commission, this surcharge should be shown on the customer's bill as ~ Kentucky Lifeline Surcharge." Additionally, carriers that maintain tariffs with the Commission must submit to the Commission updated tariffs no later than March 15, 2016, to reflect the change in surcharge. IT IS THEREFORE ORDERED that: 1. The surcharge for the Kentucky Lifeline Program shall, on an interim basis, be $0.14 per access line per month beginning with bills rendered on and after the date of this Order, or, as soon as allowed by applicable contracts between customers and carriers. -3- Case No. 2016-00059 2. By March 15, 2016, where applicable, carriers shall submit tariff revisions to reflect this change. By the Commission ENTERED MAR 10 2016 KENTUCKY PUBLIC SERVICE COMMISSION ATTEST: ~#~ Acting Executive Director A Case No. 2016-00059 *NGTelecom, Inc. *IPC Network Services, Inc. *Birch Telecom of the South, Inc. dba NGTelecom, Inc. IPC Network Services, Inc. Birch Telecom of the South, Inc. dba Birch 505 North Toombs Street 1 State Street Plaza, 12th Floor 2323 Grand Blvd, Suite 925 Valdosta, GA 31601 New York, NY 10004 Kansas City, MO 64108 *Wireless Telecom Cooperative, Inc. d *L Allyson Honaker *Birch Communications, Inc. Wireless Telecom Cooperative, Inc. dba Goss Samford, PLLC Birch Communications, Inc. 2317 West Chestnut Street 2365 Harrodsburg Road, Suite B325 2323 Grand Blvd, Suite 925 Louisville, KY 40211 Lexington, KENTUCKY 40504 Kansas City, MO 64108 *Wireless Telecom Cooperative, Inc. d *MCC Telephony of the South, LLC d/b/a *Birch Communications of Kentucky, LL Wireless Telecom Cooperative, Inc. dba MCC Telephony of the South, LLC d/b/a Birch Communications of Kentucky, LLC 2317 West Chestnut Street One Mediacom Way 2323 Grand Blvd, Suite 925 Louisville, KY 40211 Mediacom Park, NY 10918 Kansas City, MO 64108 *T.V. Service, Inc. *MCC Telephony of the South, LLC *RCLEC, Inc. T.V. Service, Inc. MCC Telephony of the South, LLC RCLEC, Inc. 2742 Hwy 550 E One Mediacom Way 1400 Fashion Island Blvd, 7th Floor Hindman, KY 41822 Mediacom Park, NY 10918 San Mateo, CA 94404 *S-Net Communications, Inc. *Nextel West Corporation *Tele Circuit Network Corporation S-Net Communications, Inc. Nextel West Corporation Tele Circuit Network Corporation 2860 South River Road, Suite 220 6391 Sprint Pkwy 1815 Satellite Blvd, Suite 504 Des Plaines, IL 60018 MS: KSOPHT0101-Z2400 Duluth, GA 30097 Overland Park, KS 66251-2400 *Tempo Telecom, LLC *NPCR, Inc. dba Nextel Partners *Flatel Wireless, Inc dba Zing PCS Tempo Telecom, LLC NPCR, Inc. dba Nextel Partners Flatel Wireless, Inc dba Zing PCS 2323 Grand Blvd, Suite 925 6391 Sprint Pkwy P. O. Box 211192 Kansas City, MO 64108 MS: KSOPHT0101-Z2400 Royal Palm Bch, FL 33421 Overland Park, KS 66251-2400 *Tempo Telecom, LLC *Pix Wireless, LLC *ATC Outdoor DAS, LLC Tempo Telecom, LLC Pix Wireless, LLC ATC Outdoor DAS, LLC 2323 Grand Blvd, Suite 925 21346 Saint Andrews Blvd, Suite 225 10 Presidential Way Kansas City, MO 64108 Boca Raton, FL 33433 Woburn, MA 01801 *Denotes Served by Email Service List for Case 2016-00059 *IIS Group, LLC *DeltaCom, LLC *R. Brooks Herrick IIS Group, LLC DeltaCom, LLC Dinsmore & Shohl, LLP 1015 Virginia Drive 2851 Charlevoix Drive SE, Suite 209 101 South Fifth Street Ft. Washington, PA 19034 Grand Rapids, MI 49546 Suite 2500 Louisville, KENTUCKY 40202 *Thacker-Grigsby Telephone Company, I *Stream Communications, LLC *Leslie County Telephone Company, Inc Thacker-Grigsby Telephone Company, Inc. Stream Communications, LLC Leslie County Telephone Company, Inc. 60 Communications Lane 1950 Stemmons Fwy, Suite 3000 22076 Main Street P. O. Box 789 Dallas, TX 75207 P. O. Box 969 Hindman, KY 41822 Hyden, KY 41749-0969 *Thacker-Grigsby Telephone Company, I *CampusTVs, Inc. *Lewisport Telephone Company, Inc. Thacker-Grigsby Telephone Company, Inc. CampusTVs, Inc. Lewisport Telephone Company, Inc. 60 Communications Lane 598 Boston Post Road 30 Pell Street P. O. Box 789 Weston, MA 02493 Lewisport, KY 42351 Hindman, KY 41822 *US Signal Company, LLC *UnityComm, LLC *Salem Telephone Company US Signal Company, LLC UnityComm, LLC Salem Telephone Company 201 Ionia Avenue SW 101 E Main Street 221 East Main Street Grand
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