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Local Telephone Company Loses Appeal in District Court

Posted: Wednesday, October 31st, 2012 at 4:19 pm
Author: KCII News - Nathan Swenson

A local telephone service provider has lost its case against a government agency in appeals court. Kalona Cooperative Telephone Company (KCTC) provides the connection between the person calling to the person receiving the call, they also connect local callers to long distance companies. Long distance companies like AT&T are charged by companies like KCTC, when they use KCTC’s long distance services.

According to court documents in 2008 the Iowa Utilities Board issued an order that reduced those rates. In early 2009, instead of continuing with those rates they filed their own proposed rate changes with the Iowa Utilities Board. Companies like AT&T and Verizon resisted the proposed changes.

After a test run with these new rates in September 2010 the Board rejected the proposed rate increase and the corresponding cost study. The Board found Kalona’s study submitted in support of the increase did not include specific information regarding their actual costs of providing the service.

Kalona filed for a rehearing and requested the Board’s final order be halted in the mean time. Again AT&T and Verizon resisted, this time joined by the Office of the Consumer Advocate. The Iowa Utilities Board denied the rehearing.

KCTC then filed a petition for judicial review of the Board’s decision. In late 2011 the district court affirmed the Board’s final decision. The Court found the Board’s decision was not done arbitrarily and without reason, but based on their study that was found to lack credibility.

The case paperwork was filed by the Iowa Court of Appeals today.