TELCO UNIVERSAL SERVICE FUND. Reversing an appeals court, the Kansas Supreme Court upheld a decision by the Kansas Corporation Commission that had required wireless telecommunications carriers to contribute to the state's universal service fund. It also affirmed a KCC ruling setting the initial amount of the fund in a roundabout way based on equalizing inter- and intrastate long-distance rates.
The KCC order (issued Dec. 27, 1996) had slashed intrastate toll rates by $111 million over three years. It then cut access charges by an equal amount to offset the loss to toll carriers. Finally, it added an equal amount to the USF to compensate local carriers for the loss of access charges. The appeals court said the ruling violated the federal Telecommunications Act (it found no rational link between toll rate cuts and the USF), but the high court disagreed, saying that federal law did not bar the state's revenue-
neutral concept. Citizens' Util. Ratepayer Bd. v. Kansas CC, Nos. 78545 et al., March 13, 1998, 1998 wl 110548 (Kan.).
PUC PROCEDURE. A Texas appeals court, upholding a state PUC order, ruled that state law allows the commission to vacate findings of fact by an administrative law judge without finding an error of law or instituting new policy. Reversing an ALJ ruling, the PUC had found that an electric utility burned too much coal and not enough natural gas for power generation. SW Pub. Serv. Co. v. Texas PUC, No. 03-97-00024-cv, Jan. 29, 1998 (Tex.App.).