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Bluestem Telephone Co. v. Kansas Corp. Commission4/8/2005
entage increase in access lines over the 12-month period prior to the request. . . . Additional funding also may be requested [under various specified circumstances]. . . .
"(e) Prior to June 30, 2006, for each local exchange carrier electing . . . to operate under traditional rate of return regulation, all KUSF support, including any adjustment thereto pursuant to this section, shall be based on such carrier's embedded costs, revenue requirements, investments and expenses.
"(f) Additional supplemental funding from the KUSF, other than as provided in subsection (d), may be authorized at the discretion of the commission. However, the commission may require approval of such funding to be based upon a general rate case filing." (Emphasis added.)
Our scope of review concerning a statutory interpretation is unlimited. Interpretation of a statute is a question of law. An appellate court is not bound by the district court's interpretation of a statute and is obligated to interpret a statute de novo. Cooper v. Werholtz, 277 Kan. 250, 252, 83 P.3d 1212 (2004).
Furthermore, under the doctrine of operative construction, the interpretation of a statute by an administrative agency charged with the responsibility of enforcing that statute is entitled to judicial deference, especially if the agency is one of "'"special competence and experience." [Citation omitted.]'" Blue Cross & Blue Shield of Kansas, Inc. v. Praeger, 276 Kan. 232, 247, 75 P.3d 226 (2003). Although given deference, an agency's interpretation of a statute is not binding and the final construction of a statute lies with the appellate courts. Rural Telephone Service Co., 31 Kan. App. 2d at 765. If the reviewing court finds that the administrative body's interpretation is erroneous as a matter of law, the court "'should take corrective steps.' [Citation omitted.]" Board of Ness County Comm'rs v. Bankoff Oil Co., 265 Kan. 525, 537, 960 P.2d 1279 (1998).
The statute is not ambiguous. Subsection (e) of K.S.A. 66-2008 applies only to rural LECs that continue to operate on a rate of return basis. This subset of LECs must have their KUSF distribution computed on their embedded costs, revenue requirements, investments, and expenses. The two flanking provisions of the law, subsections (d) and (f), apply to all qualified carriers. More significantly, subsection (e) clearly limits the methodology for supplemental funding for rural carriers under (d) and (f) by explicitly stating "all KUSF support, including any adjustment thereto pursuant to this section, shall be based on such carrier's embedded costs . . . ." (Emphasis added.) Although subsections (d) and (f) seem to incorporate provisions to KUSF adjustments without requiring consideration of "embedded costs," these provisions are not inconsistent with subsection (e) because they apply to the larger set of carriers.
The fundamental rule of statutory construction is that the intent of the legislature governs when that intent can be ascertained from the statute. In re Doe, 277 Kan. 795, 800, 90 P.3d 940 (2004). We agree with the district court when it stated that this "language is not equivocal. Any adjustment in support means an increase or decrease. It appears the legislature acknowledges that there must be recognition of the cost factors in addition to the per-line access issues."
On appeal, the Commission challenges the district court's interpretation of K.S.A. 66-2008(e), contending the statute "plainly does not require a full determination of costs for every single adjustment of support but instead allows adjustments consistent with the clear language of other subsections of K.S.A. 66-2008." The Commission asserts the language
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