Medicine Park Telephone Co. v. Oklahoma Corporation Comm.

Medicine Park Telephone Company appeals the Oklahoma Corporation Commission's denial of its application for reimbursement from the Oklahoma Universal Services Fund for reasonable investments and expenses incurred in providing primary universal service to its customers. The FCC created the Interstate Common Line Support (ICLS) program, which was paid from the federal Universal Service Fund. ICLS was available to, among others, rural incumbent carriers and was designed to help such carriers recoup some of the high fixed costs of providing telephone service in areas with fewer customers while also ensuring that their subscriber line charges remained affordable to their customers. Effective January 1, 2012, the FCC changed its rules to limit the operations expenses that may be included in an ICLS calculation. The FCC did not, however, eliminate the legal requirement that Medicine Park and other carriers of last resort continue to provide such services. After its federal ICLS support was eliminated by FCC order, Medicine Park submitted an application for reimbursement to recover losses because of its mandate; he PUD Administrator ultimately recommended that Medicine Park receive a lump-sum payment of $309,016.90 for calendar year 2014, and monthly recurring payments of $25,751.41, to begin January 1, 2015. Despite the recommendation from the PUD Administrator and the outside consulting firm independently hired by PUD to assist in the process, the Commission rejected the Administrator's final determination. By a vote of 2-1, following a two-day hearing on the merits, the Commission denied Medicine Park's application in full. The Commission found that Medicine Park included requests for reimbursement of expenses and investments that were not incurred entirely for the provision of primary universal services, that the Administrator did not determine whether Medicine Park's rates for primary universal services were reasonable and affordable, that the company did not seek alternative funding, and that recurring funding should not be awarded. Although the Commission was not bound by the Administrator's recommendation, the Oklahoma Supreme Court found the record reflected ample evidence with which to support the Administrator's determination. The Administrator, the independent expert hired by PUD to provide a neutral investigation, and one dissenting Commissioner all agreed that Medicine Park was entitled to funding, albeit at a reduced rate of its initial request. The Commission's wholesale denial of any funding was in error. View "Medicine Park Telephone Co. v. Oklahoma Corporation Comm." on Justia Law