Citizens' Utility Ratepayer Bd. v. State Corp. Com'n of State of Kan.

• Decision Date: 13 March 1998
• Docket Number: Nos. 78548,78822,78823,78834,s. 78548
• Citation: 956 P.2d 685,264 Kan. 363
• Parties: CITIZENS' UTILITY RATEPAYER BOARD, Appellant, v. The STATE CORPORATION COMMISSION OF the STATE OF KANSAS, Appellee. MULTIMEDIA HYPERION TELECOMMUNICATIONS and Kansas City Fiber Network L.P., Appellants, v. The STATE CORPORATION COMMISSION OF the STATE OF KANSAS, Appellee. CMT PARTNERS, Topeka Cellular Telephone Company, Inc., and Airtouch Cellular of Kansas, Inc., Appellants, v. The STATE CORPORATION COMMISSION OF the STATE OF KANSAS, Appellee.
• Court: Kansas Supreme Court

Page 685

956 P.2d 685

264 Kan. 363

CITIZENS' UTILITY RATEPAYER BOARD, Appellant, v.The STATE CORPORATION COMMISSION OF the STATE OF KANSAS, Appellee.

MULTIMEDIA HYPERION TELECOMMUNICATIONS and Kansas City Fiber

Network L.P., Appellants, v.The STATE CORPORATION COMMISSION OF the STATE OF KANSAS, Appellee.

CMT PARTNERS, Topeka Cellular Telephone Company, Inc., andAirtouch Cellular of Kansas, Inc., Appellants, v.The STATE CORPORATION COMMISSION OF the STATE OF KANSAS, Appellee.

Nos. 78548, 78823, 78834, 78822.

Supreme Court of Kansas.

March 13, 1998.

Syllabus by the Court

1.The legislature determines utility policy, and so long as a legislative act does not contravene federal or state law, courts should not interfere with it, even though the action taken appears, to the court, to be unsound and not the best way, or even a good way, to carry out the stated purpose of the act.

2.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.

3.In interpreting a statute, a court must give effect to its plain and unambiguous language, without determining what the law should be.

4.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.

5.A tax is a forced contribution to raise revenue for the maintenance of government services offered to the general public.

6.A strict application of the separation of powers doctrine is inappropriate today in a complex state government where administrative agencies exercise many types of power and where legislative, executive, and judicial powers are often blended together in the same administrative agency.

7.A statute should express the law in general terms and delegate the power to apply it to an executive agency under standards provided by the legislature.What is a sufficient standard must necessarily vary somewhat according to the complexity of the area sought to be regulated.Standards may be implied from the statutory purpose.The modern trend is to require less detailed standards and guidance to the administrative agencies in order to facilitate the administration of laws in areas of complex social and economic problems.

8.In a Kansas Corporation Commission(KCC) rate case, the record is examined and it is held: (1) A revenue neutral concept is not prohibited by or contrary to the Federal Telecommunications Act of 1996;(2) the Kansas Telecommunications Act of 1996 does not prevent a subsequent audit and earnings study; (3) the Kansas Act does not conflict with the KCC's statutory duty to regulate and ensure just and reasonable rates and charges to consumers; (4) by failing to include what it would have presented at the technical hearings in its motion for KCC reconsideration, CMT waived the issue of improper notice of the hearings; (5)K.S.A.1996 Supp. 66-2008(b)andK.S.A. 66-1,143(b) do not conflict; (6)K.S.A.1996 Supp. 66-2008 is a delegation of administrative power, not legislative power, to the KCC; (7) the KCC did not order and was not required to order a local service rate increase or rate rebalancing, and the initial funding amount for the Kansas Universal Service Fund (KUSF) is appropriate; and (8) the KCC orders allowing a setoff procedure are not inequitable or discriminatory.

Walker Hendrix, Consumer Counsel, Topeka, argued the cause, and Allen Brady Cantrell, Consumer Counsel, Topeka, was with him on the briefs for appellantCitizens' Utility Ratepayer Board.

Mark P. Johnson, of Sonnenschein Nath & Rosenthal, Kansas City, MO, argued the cause, and Tamara Seyler-James, Lisa C Creighton, and Amy E. Bauman, of the same firm, were with him on the briefs for appellantsKansas City Fiber Network L.P. and Multimedia Hyperion Telecommunications.

Marc E. Elkins and Lisa J. Hansen, of Morrison & Hecker L.L.P., Kansas City, MO, were on the briefs for appellantsCMT Partners, Topeka Cellular Telephone Company, Inc., and Airtouch Cellular of Kansas, Inc.

Eva Powers, Assistant General Counsel, argued the cause, and Glenda Cafer, General Counsel, and Marianne Deagle, Susan Stanley, and Janette Corazzin, Assistant General Counsels, Topeka, were with her on the briefs for appelleeKansas Corporation Commission.

Robert A. Fox, of Foulston & Siefkin, L.L.P., Topeka, argued the cause, and Dana Bradbury Green, of the same firm, and Michael J. Jewell, Austin, TX, were with him on the briefs for intervenor AT & T Communications of the Southwest, Inc.

William R. Drexel, Topeka, argued the cause, and Michael C. Cavell and Lori A. Fink, Topeka, and Frank A. Caro, of Polsinelli, White, Vardeman & Shalton, Overland Park, were with him on the brief for intervenorSouthwestern Bell Telephone Company.

Stephen D. Minnis, Overland Park, argued the cause, and Martha Jenkins, Kansas City, MO, was with him on the briefs for intervenor United Telephone Companies of Kansas d/b/a Sprint Communications.

Mark E. Caplinger and James M. Caplinger, of James M. Caplinger, Chartered, Topeka, and Thomas E. Gleason, Jr., of Gleason & Doty, Chartered, Ottawa, were on the briefs for intervenors State Independent Alliance and Independent Telecommunications Group, Columbus, et al.

ABBOTT, Justice.

This case is before the Supreme Court on petitions for review by various parties and intervenors, viz., appelleeKansas Corporation Commission(KCC), intervenor Southwestern Bell Telephone, intervenor Sprint Communications/United Telephone Companies, intervenor State Independent Alliance, intervenor Independent Telecommunications Group, Columbus, et al., and appellants/cross-petitioners for review CMT Partners, et al.

SWBT and Sprint/United are incumbent local exchange carriers (LECs) in Kansas.State Independent Alliance and Independent Telecommunications Group, Columbus, et al., are special interest groups representing rural independent LECs (ILECs).The rural ILECs represented by these two groups provide local exchange services throughout Kansas.CMT Partners, et al., are business entities and radio common carriers providing commercial mobile radio service in Kansas (wireless service providers).Multimedia Hyperion Telecommunications and Kansas City Fiber Network L.P. are providers of private line and competitive access services in Kansas.

In general, the Court of Appeals in 24 Kan.App.2d 222, 943 P.2d 494(1997), invalidated certain portions of the Kansas Telecommunications Act of 1996 (Kansas Act)(L.1996, ch. 268, § 1 through § 12, codified at K.S.A.1996 Supp. 66-2001 et seq.) and the KCC orders implementing that Act on grounds they were inconsistent with the Federal Telecommunications Act of 1996 (Federal Act), Pub.L. No. 104-104,110 Stat. 56(1996), and also inconsistent with certain provisions of Kansas law.The Court of Appeals also held K.S.A. 66-1,143(b) does not prevent the KCC from requiring wireless service providers to contribute to the Kansas Universal Service Fund (KUSF); wireless service providers were not given proper notice of the proceedings and a reasonable opportunity to prepare for the hearings before the KCC; and the legislature's authorization to the KCC to determine the appropriate level of funding contribution and regulation of the KUSF pursuant to K.S.A.1996 Supp. 66-2008 is not an unconstitutional delegation of legislative power to an administrative agency.

The KCC, SWBT, and Sprint are seeking to uphold the KCC orders and the provisions of the Kansas Act that the Court of Appeals found offensive.Citizens' Utility Ratepayer Board(CURB), Multimedia Hyperion/KCFN, and AT & T Communications of the Southwest, Inc., (AT & T) are seeking to have the provisions in question invalidated.CMT Partners, et al., also seek to invalidate these provisions.They believe they should not be required to contribute to the KUSF based on the fact that, as wireless service providers, they are not subject to KCC oversight and control.The real interest of State Independent Alliance and Independent Telecommunications Group, Columbus, et al., seems to be that, however this matter ends up, they do not want to lose any revenues in the process.

This court ordered a prehearing conference conducted by Chief Justice, Retired, David Prager.The only issues properly before this court for decision at the present time are the eight issues set out in the prehearing conference order.Sections 253and254(e) of the Federal Act are not at issue, nor are KUSF distributions.

At the outset, we make three observations.First, although the underlying KCC regulations may ultimately increase competition, the underlying legislation appears to be largely a cost shift between consumers, with no actual reduction in the total cost of service.Second, the ultimate issues in this case will, for the most part, be determined by the federal courts under federal law, which will render most of this opinion as a suggestion to the federal courts for such consideration as they choose to give it, if any.Third, the appeal seems, in most part, to be premature.As we view the briefs, no actual harm is alleged, only potential or the possibility of harm.However, we do have jurisdiction and thus will decide the case.

BACKGROUND

By way of background, the KCC scheduled a Competition Docket in 1994.In Phase I of the KCC's Competition Docket, the KCC conducted hearings and established task forces regarding competition in the telecommunications industry in Kansas.Several telecommunications providers participated in Phase I, but appellant CMT, a wireless service provider, did not participate in any of these activities, nor did any other wireless service provider.On April 4, 1996, after the Federal...