202 KAR 6:020. CMRS provider cost
recovery.
RELATES TO: KRS 65.7621-65.7643,, 47
U.S.C. 153(27), 332(d)
STATUTORY AUTHORITY: KRS 65.7633
NECESSITY, FUNCTION, AND CONFORMITY: KRS
64.7631(4) requires the CMRS Board to distribute a portion of the revenues deposited
into the CMRS fund to CMRS providers (carriers) licensed to do business in the
Commonwealth, solely for the purpose of reimbursing the actual expenses
incurred by the CMRS providers in complying with the wireless E911 service
requirements established by the FCC order and any rules and regulations which
are or may be adopted by the Federal Communications Commission in carrying out
the FCC order. KRS 65.7633 requires the CMRS Board to promulgate administrative
regulations to implement KRS 65.7621 to 65.7643. This administrative regulation
establishes the process by which CMRS carriers may obtain cost recovery for
those expenses.
Section 1. A provider shall file a cost
recovery plan with the CMRS Board in order to receive reimbursement for NRCs and
RCs.
Section 2. Cost Recovery Plan Submission.
(1) Upon receipt of a written request for wireless E911 service from a PSAP (public
safety answering point) that has been certified by the board in accordance with
KRS 65.7631(5)(a), the CMRS carrier shall:
(a) Acknowledge receipt of the request
back to the PSAP within thirty (30) days; and
(b) Develop a comprehensive detailed plan
for implementation of E911 service for:
1. The requesting PSAP; or
2. The appropriate service area if the
CMRS carrier’s switch serves more than one (1) PSAP.
(2) A CMRS provider shall provide the
technical aspects of the plan to the requesting certified PSAP. The CMRS
provider shall submit the plan and the associated cost structure to the board,
including a completed "Kentucky CMRS Provider Data Sheet". The board
shall request from the provider, if necessary to reach a decision:
(a) Additional information; or
(b) A presentation.
(3) Only carrier costs directly
attributable to wireless E911 call completion shall be considered for recovery,
in accordance with Section 8 of this administrative regulation.
Section 3. Cost Recovery Plan
Requirements. A plan submitted to the board shall contain the following
information:
(1) The provider's good faith estimate of
its total cost recovery reimbursement claim for providing wireless E911 service
in the area served by the requesting PSAP or the appropriate service area for
the carrier’s switch;
(2) Specific detail for each NRC and RC
the carrier expects to recover;
(a) An RC shall be described as
subscriber-based or nonsubscriber-based;
(b) An RC shall be based on a calendar
month unless a provider chooses a different period on which to base its RCs. If
a different period is chosen, the provider shall state the period used and the
reasons for using that period;
(3) A description of the technology
solution the CMRS provider has elected to implement and the projected
implementation dates;
(4) A map or other detailed description
of the coverage area affected by the plan;
(5) A list of the PSAPs affected by the
provider; and
(6) The carrier must identify the name(s)
and office(s) of the individual(s) who is authorized by the carrier to submit
sworn paid invoices to the board for reimbursement.
Section 4. Cost Recovery Plan Approval.
(1) A cost recovery plan submitted to the CMRS Board shall be stamped
"Confidential" and proprietary information received shall be filed
and maintained so as to preserve its confidentiality in accordance with KRS
65.7639.
(2) A cost recovery plan submitted to the
board shall be approved or disapproved within ninety (90) days of its receipt
by a simple majority vote of the board.
(3) Within ten (10) business days of its
approval or disapproval, notice of the decision shall be sent to the provider and
affected PSAPs, in writing, by certified mail, return receipt requested.
Section 5. Rejection of a Cost Recovery
Plan. (1) If a plan is rejected, the board shall include with the decision
specific reasons for its rejection.
(2) The carrier may submit a revised plan
to the board.
(3) The provider may appeal the board’s
rejection in accordance with KRS Chapter 13B.
Section 6. Implementation of Additional
Service Using an Approved Plan. (1) After initial approval of a CMRS provider plan
by the board, if the provider wishes to implement service to an additional area
in the state using the existing approved plan, the carrier:
(a) Shall send a letter to the board, by
certified mail, return receipt requested, proposing the provider's intention to
use an approved plan for the implementation of additional service;
(b) Shall include with the letter to the
board a map of the area to be served by the planned additional implementation;
and
(c) Need not make an additional
presentation to the committee if the board agrees that the provider's intention
fits within the existing approved plan.
(2) The board shall:
(a) Decide within ninety (90) days of its
receipt of the provider's letter if it agrees that the provider's intention to
use an approved plan is appropriate for the additional service implementation;
(b) Within ten (10) business days of its
decision, notify the provider, in writing, by certified mail, return receipt
requested; and
(c) Accept the cost recovery outlined in
the approved plan as sufficient to submit a claim for reimbursement.
(3) If the board concludes that the
inclusion of the additional service implementation is not appropriate under the
approved plan, the board shall:
(a) Within ten (10) business days of its
decision, notify the provider, in writing, by certified mail, return receipt
requested, identifying its specific concerns; and
(b) Schedule the earliest possible date
to meet with the carrier and discuss the identified concerns.
(4) If the board concludes that the
inclusion of the additional service implementation is not appropriate under the
approved plan, the provider may appeal the board’s decision in accordance with
KRS Chapter 13B.
Section 7. Revision of an Approved Plan.
(1) In addition to the process established in Section 6 of this administrative
regulation, after a cost recovery plan is approved, a subsequent change may be
requested by either the CMRS provider or the board.
(2) The board may review an existing plan
and request re-substantiation, new documentation, and reapproval of an existing
cost recovery plan, or may revoke approval of a plan as necessary, to maintain
the integrity of:
(a) The wireless E911 system as new
technologies are deployed; and
(b) The CMRS fund.
(3) A provider may submit a revised plan
or a change in reimbursement rate as business needs and new technologies
dictate.
(4) The party requesting revision of a
plan shall send written notice of the requested changes to the other party by
certified mail, return receipt requested.
(5) An existing approved plan shall
remain in effect until a review and decision regarding a requested change is
made.
(6) Except as stated in subsection (7) of
this section, if the board revokes approval of a plan, reimbursements from the
CMRS fund shall cease immediately, except for RCs and NRCs for which the
carrier is obligated by a previously signed contract.
(7) Failure of a carrier to respond in
writing to a board request within the time frame indicated in the request, may
be considered cause for the board to revoke approval of a previously approved
plan and to cease reimbursement payments to the carrier.
Section 8. Appropriate Costs for
Recovery. (1) For the purpose of differentiating between CMRS carrier costs and
PSAP costs, the point of demarcation shall be the selective router of the
contracted wireline E9-1-1 service provider, or similarly placed functional
equipment within the E9-1-1 call completion hierarchy. The board shall
determine, based upon industry standards, what equipment is to be considered
"similarly placed functional equipment".
(2) Recoverable RCs and NRCs shall
include:
(a) Trunking;
(b) Connection fees between carrier
switches or other interface equipment to a selective router;
(c) Facilities: T-1’s, selective router
ports;
(d) Routing charges;
(e) Operations;
(f) Engineering;
(g) Switch upgrades;
(h) Network design;
(i) Test plan development;
(j) P-ANI administration;
(k) Database management;
(l) Reporting requirements;
(m) Software required for the operation
of wireless E-911;
(n) Call counting;
(o) Amortization and carrying costs;
(p) Costs of complying with CMRS audit;
and
(q) Other costs attributed to wireless
E911 call completion and approved by the board. The CMRS provider shall provide
full rationale for other costs submitted.
(3) Submission of costs for activities
that occurred more than twenty-four (24) months prior to submission of an
invoice by the carrier to the CMRS board shall not be reimbursed.
Section 9. Use of Reimbursed Funds. A
CMRS carrier shall use money received from the CMRS fund only for those
expenditures and purposes authorized in KRS 64.7631(4), listed in invoices accepted
by the board and as previously authorized in an approved cost recovery plan.
Section 10. Claims for Reimbursement. (1)
After a cost recovery plan is approved, a CMRS provider may file a claim for
reimbursement of NRCs and RCs defined in the plan by submitting an invoice or
other documentation, as defined in the plan.
(2) An invoice submitted by a CMRS
provider which is consistent with the then-current approved plan shall be paid
by the board.
(3) A carrier may appeal a rejected
invoice in accordance with KRS Chapter 13B.
(4) The board shall suspend payment of a
claim, including a claim previously approved but unpaid by the board, from a
carrier who fails to comply with the requirements for remittance as specified
by KRS 65.7635, until the carrier complies.
Section 11. Amount of Reimbursement. (1)
The amount of payments by the board to a carrier shall be determined by one (1)
of the following methods, as set out in the approved cost recovery plan:
(a) By submission of NRCs necessary for
the realization of the carrier’s approved plan and actually incurred by the
carrier;
(b) By submission of the predefined
calendar period’s nonsubscriber-based RCs;
(c) By submission of the predefined
calendar period’s subscriber-based RCs; or
(d) By a combination of methods in
paragraphs (a), (b), and (c) of this subsection, as previously approved by the
board.
(2) To document costs requested to be reimbursed,
a carrier shall submit:
(a) A sworn paid invoice for actual costs
or purchases from other vendors or suppliers; and approved documentation for
internal costs (e.g., time slips for actual work performed by the carrier’s
employees) sufficient to establish the internal costs as reasonable and
necessary; or
(b) other appropriate documentation
approved by the board as part of the cost recovery plan.
(3) The subscriber count reported monthly
by a carrier with the CMRS fund remittance and reporting process shall be used
to determine the total for subscriber-based RCs. The subscriber count shall be
subject to audit by the board, in accordance with KRS 65.7629(13).
Section 12. Payment Frequency. At least
once per calendar quarter, the CMRS Board shall approve and pay claims
submitted by carriers for reimbursement that are consistent with approved cost
recovery plans.
Section 13. Prorated Payments. If the
board determines that the total amount of invoices submitted by CMRS carriers
and approved by the board exceeds the amount of revenue in the fund in a month
or other payment period, the board shall pay a prorated share of the available
funds to carriers who have submitted board-approved invoices for the relevant
period. The priority of payment shall be as follows:
(1) The balance of approved unpaid
invoices, including additional carrying charges at a rate established in the
approved plan, shall be paid first; and
(2) Current invoices approved by the
board shall then be paid.
Section 14. Amortization of Costs. (1)
Nonrecurring costs may be amortized over a period not longer than twenty-four
(24) months, until the amounts claimed for NRCs are fully recouped by the CMRS
carrier.
(2) The board may reject a cost recovery
plan or revised cost recovery plan if the amortization period of NRCs selected
by the carrier is not long enough to ensure adequate monthly surcharge revenues
with which to meet the carrier’s monthly reimbursement demands.
(3) The interest rate for carrying
unreimbursed NRCs shall be established and fully documented in the carrier's
cost recovery plan.
(4) The actual cost of borrowing to fund
NRCs shall be a legitimate recoverable RC.
(5) Only NRCs shall be amortized.
Section 15. Incorporation by Reference.
(1) "Kentucky CMRS Provider Data Sheet" (07/09/2007) is incorporated
by reference.
(2) This material may be inspected,
copied, or obtained, subject to applicable copyright law, at the CMRS Board,
200 Mero Street, Frankfort, Kentucky 40601, Monday through Friday, 8 a.m. to
4:30 p.m.(26 Ky.R. 2105; Am. 27 Ky.R. 68; 1770; eff. 12-7-2000; 29 Ky.R. 1010;
1524; eff. 12-18-02; 33 Ky.R. 4214; 34 Ky.R. 233; eff. 8-31-07.)
