Union Telephone Company v. The Wyoming Public Service Commission and It's Wyoming Universal Support Fund Manager and All West Communication, Inc. Dubois Telephone Exchange, Inc. Range Telephone Cooperative, Inc. Rt Communications, Inc. Silver Star Telephone Tri County Telephone, Inc. ( 2022 )

IN THE SUPREME COURT, STATE OF WYOMING
2022 WY 55APRIL TERM, A.D. 2022
April 26, 2022
UNION TELEPHONE COMPANY,
Appellant
(Petitioner),
v.
THE WYOMING PUBLIC SERVICE
COMMISSION AND ITS WYOMING
UNIVERSAL SUPPORT FUND MANAGER,
Appellee
(Respondent), S-21-0149
and
ALL WEST COMMUNICATION, INC.;
DUBOIS TELEPHONE EXCHANGE, INC.;
RANGE TELEPHONE COOPERATIVE,
INC.; RT COMMUNICATIONS, INC.;
SILVER STAR TELEPHONE; TRI
COUNTY TELEPHONE, INC.,
Appellees
(Intervenors).
W.R.A.P. 12.09(b) Certification
from the District Court of Laramie County
The Honorable Steven K. Sharpe, Judge
Representing Appellant:
Bruce S. Asay of Associated Legal Group, LLC, Cheyenne, Wyoming. Argument
by Mr. Asay.
Representing Appellee, The Wyoming Public Service Commission:
Bridget L. Hill, Wyoming Attorney General; Brandi Lee Monger, Deputy Attorney
General; Karl D. Anderson, Senior Assistant Attorney General; Patrick Miller,
Assistant Attorney General. Argument by Mr. Miller.
Representing Intervenors All West Communication, Inc.; Dubois Telephone Exchange,
Inc.; Range Telephone Exchange, Inc.; RT Communications, Inc.; Silver Star
Telephone; and, Tri-Telephone Association, Inc.
Elizabeth Therese Zerga of Jubin & Zerga, LLC, Cheyenne, Wyoming. Argument
by Ms. Zerga.
Before FOX, C.J., and DAVIS*, KAUTZ, BOOMGAARDEN, and GRAY, JJ.
*
Justice Davis retired from judicial office effective January 16, 2022, and, pursuant to Article 5, § 5 of
the Wyoming Constitution and Wyo. Stat. Ann. § 5-1-106(f) (LexisNexis 2021), he was reassigned to
act on this matter on January 18, 2022.
NOTICE: This opinion is subject to formal revision before publication in Pacific Reporter Third.
Readers are requested to notify the Clerk of the Supreme Court, Supreme Court Building, Cheyenne,
Wyoming 82002, of any typographical or other formal errors so that correction may be made before
final publication in the permanent volume.
BOOMGAARDEN, Justice.
[¶1] Union Telephone Company filed a petition for review of agency action with the
district court, asserting the Wyoming Public Service Commission’s (PSC’s) order
administering the Wyoming Universal Service Fund (WUSF) for the 2020-2021 fiscal year
was unlawful and should be set aside. “Universal Service” refers to the availability of
reasonably affordable communication services to all users, especially those in rural, high
cost areas. This case involves the interplay between the Federal Universal Service Fund
(FUSF) and the WUSF—complimentary funding programs collectively intended to
develop voice and broadband services and promote the emergence of competition among
carriers.
[¶2] The PSC’s order adopted a methodology for calculating WUSF disbursements that
treated a portion of the 2019 support each Wyoming telecommunications company 1
received from the federal Alternative Connect America Cost Model (A-CAM) programs
as “contributions from the [FUSF]” under Wyo. Stat. Ann. § 37-15-501 (LexisNexis 2021).
Union claimed that the order “rejected existing law,” violated Wyo. Stat. Ann. § 16-3-
114(c), and materially prejudiced Union. On the PSC’s request, the district court certified
the matter to this Court pursuant to W.R.A.P. 12.09. We affirm.
ISSUES
[¶3] We reorganize and restate the parties’ issues and sub-issues. 2
I. Did collateral estoppel prevent the PSC from adopting a
WUSF calculation methodology that considered A-CAM
funds to be FUSF contributions?
II. Is the PSC’s 2021 order lawful under the Wyoming
Administrative Procedure Act § 16-3-114(c)?
A. Is the order supported by substantial evidence?
B. Is the order arbitrary and capricious?
C. Is the order in accordance with law?
1
“‘Telecommunications company’ means a person engaged in the furnishing of telecommunications
service within this state[.]” Wyo. Stat. Ann. § 37-15-103(a)(xi).
2
The parties to this appeal include Union; the PSC; and Appellee Intervenors All West Communication,
Inc.; Dubois Telephone Exchange, Inc.; Range Telephone Cooperative, Inc.; RT Communications, Inc.;
Silver Star Telephone; and Tri County Telephone, Inc. (collectively, the Rural Companies). Union and the
Rural Companies are all Wyoming telecommunications companies that were granted intervenor status in
the PSC proceedings and “will be directly impacted by the outcome of any appellate court review and
determination[.]”
1
III. Did the PSC abuse its discretion when it admitted certain
of the Rural Companies’ exhibits and witness testimony during
the contested hearing?
FACTS
[¶4] Because this appeal involves consideration of FUSF support—and more
specifically, A-CAM support—in calculating WUSF disbursements, we provide an
overview of the federal and state funding framework for context.
Federal Funding
[¶5] The federal government has sought to promote “a rapid, efficient, Nation-wide . . .
communication service with adequate facilities at reasonable charges” since it passed the
Federal Communications Act of 1934 (FCA). 47 U.S.C. § 151. The FCA established the
Federal Communications Commission (FCC) and “empower[ed] [it] to create programs to
advance universal telecommunications services in the United States.” Id.; Virgin Mobile
USA, L.P. v. Keen, 447 F. Supp. 3d 1071, 1086 (D. Kan. 2020) (footnote omitted). The
FCC created the FUSF to provide funding to telecommunications companies to ensure that
individuals, especially “those who live in rural and high-cost areas, and those who meet
certain low-income criteria, [have] access to telecommunications services at affordable
rates.” Keen, 447 F. Supp. 3d at 1083; see 47 U.S.C. § 254.
[¶6] Prior to 2011, the FCC provided “high-cost [universal service] support” “through a
complicated patchwork of programs” that only supported voice services. In re FCC 11-
161, 753 F.3d 1015, 1037 (10th Cir. 2014) (citation omitted). In the late 2000s, however,
the FCC sought to develop a new, more efficient, funding model that would also support
broadband development. Id. at 1037–38. As a result, the FCC created the Connect
America Fund (CAF) to “address the broadband availability gap” and to replace the older
“patchwork of programs.” Id. at 1038–40.
[¶7] The FCC implemented A-CAM I, the first version of CAF support relevant to this
appeal, in 2016. See In the Matter of Connect Am. Fund, 31 F.C.C. Rcd. 3087 (2016); In
the Matter of Connect Am. Fund, 33 FCC Rcd. 11893, 11896 (2018). A-CAM I was
designed to provide support to companies over a longer period of time and obligated them
to deploy broadband “to a pre-determined number of eligible locations” at one of three
speeds. Connect Am. Fund, 33 FCC Rcd. at 11896. Union elected to receive A-CAM I
support in 2017. In December 2018, in a continued effort to increase access to high-speed
internet, the FCC created (1) a revised version of A-CAM I (Revised A-CAM I) to provide
additional support to companies who had elected A-CAM I, conditioned on increased
deployment obligations; and (2) a second A-CAM program (A-CAM II), that had slightly
different obligations regarding deployment areas and required speeds. Id. at 11898–915.
2
Union subsequently switched to the Revised A-CAM I program, and all but one of the
Rural Companies have since elected to receive support under A-CAM II.
State Funding
[¶8] Since 1995, Wyoming has provided state level universal service support through the
WUSF. 1995 Wyo. Sess. Laws ch. 181; Wyo. Stat. Ann. §§ 37-15-501 et seq. The purpose
of the WUSF is to ensure that telecommunications customers located in areas of Wyoming
where rates for essential telecommunications services 3 are high—generally rural areas—
“pay no more than 130 percent of the statewide average price for basic local exchange
service.” 4 Pub. Serv. Comm’n of Wyo. v. Qwest Corp., 2013 WY 48, ¶ 8, 299 P.3d 1176,
1178 (Wyo. 2013) (citing Wyo. Stat. Ann. § 37-15-501(c), (d)).
[¶9] The PSC requires all telecommunications companies that provide services in
Wyoming to pay an assessment, calculated by the PSC, to the WUSF each year. 5 Id. (citing
Wyo. Stat. Ann. § 37-15-501(a), (b)). Once customers in high-cost areas “have paid for
3
“‘Essential telecommunications service’ means a customer’s access to service that is necessary for the
origination or termination, or both, of two-way, switched telecommunications for both residential and
business service within a local exchange area.” Wyo. Stat. Ann. § 37-15-103(a)(iv) (LexisNexis 2021).
These services are limited to:
(A) Access to interexchange services provided by interexchange
telecommunications companies;
(B) Single line flat-rate or single line measured residence or business voice
service;
(C) Transmission service and facilities necessary for the connection
between the end user’s or customer’s premises and local network
switching facility including the necessary signaling service used by
customers to access essential telecommunications services;
(D) Services necessary to connect 911 emergency services to the local
network;
(E) Switched access, which for the purposes of this chapter shall mean the
switching and transport necessary to connect an interexchange
telecommunications company with the local exchange central office for
the purpose of originating or terminating, or both, the interexchange
telecommunications company’s switched telecommunications service.
Id.4
“‘Local exchange service’ means the provision of essential telecommunications service within a local
exchange area[.]” Wyo. Stat. Ann. § 37-15-103(a)(viii). A local exchange area is “a geographic territorial
unit established by the commission for providing telecommunications services[.]” Wyo. Stat. Ann. § 37-
15-103(a)(vii).
5
The assessment is passed on to customers in their bill. See Wyo. Stat. Ann. § 37-15-501(b) (“The
commission shall authorize a monthly charge to customers, in the amount specified by the commission, to
recover each contributor’s required payment to the universal service fund.”).
3
services up to the 130 percent benchmark,[ 6] the WUSF distributes funds to the companies
[providing services in those areas] to the extent that their basic local exchange service
prices exceed the benchmark[.]” Id. Before distributing WUSF funds, however, the PSC
must “tak[e] into account any contributions [a company received] from the [FUSF]” to
ensure that Wyoming consumers are not assessed for costs that are already covered through
a federal program. Id.; see Wyo. Stat. Ann. § 37-15-501(d), (g). 7
[¶10] The PSC administers the WUSF each fiscal year—July 1 through June 30—
pursuant to §§ 37-15-501 et seq. and Chapter 5 of the Wyoming Public Service
Commission Rules. The process begins when the Fund Manager—a PSC employee—
requests certain data from Wyoming telecommunications companies, including their rates
for the past year, the essential services they provided, and their FUSF receipts. Qwest
Corp., ¶ 9, 299 P.3d at 1179. The Fund Manager analyzes the data, formulates
recommendations on how best to administer funds for the upcoming fiscal year, and
submits findings and recommendations concerning the appropriate methodology to the
6
Currently, this “benchmark” is $30. Wyo. Stat. Ann. § 37-15-501(h). Beginning on July 1, 2019, the PSC
“shall review the price benchmark one (1) time every four (4) years and, after review, shall adjust the
benchmark as necessary to assure that it approximates one hundred thirty percent (130%) of the weighted
statewide average essential local exchange service price.” Id.7
Companies can elect to receive WUSF support pursuant to subsection (d) or (g). Both subsections require
the PSC to consider FUSF contributions when calculating WUSF distributions.
(d) In accordance with the method of distribution determined by the
commission, a telecommunications company shall, unless it elects to
receive Wyoming universal service funds pursuant to the method set forth
in subsection (g) of this section, receive funds under this section to the
extent that its noncompetitive essential local exchange service prices,
after consideration of any contributions from the federal universal
service fund, exceed the price benchmark established in subsection (h) of
this section.
....
(g) A telecommunications company that undertakes the requirements set
forth in this subsection may make a one-time, irrevocable before July 1,
2023, election in writing to the commission to receive Wyoming universal
service funds pursuant to this subsection rather than pursuant to subsection
(d) of this section . . . A telecommunications company which elects to
receive Wyoming universal service funds pursuant to this subsection shall
receive funds to the extent that its loop costs, as reflected in the company’s
most recent annual filing of unseparated loop costs filed with the Universal
Service Administration Company, exceed the company’s most recent
annual federal universal service funds receipts and annual local
revenues.
Wyo. Stat. Ann. § 37-15-501(d), (g) (emphasis added). The differences between the two distribution
mechanisms are not significant for the purposes of this appeal.
4
PSC. Id. When the PSC receives the Fund Manager’s report, it must “set[] a hearing and
provide[] notice to the companies that they may appear and comment on the [F]und
[M]anager’s findings and recommendations.” Id.; see Wyo. Stat. Ann. § 37-15-501.
[¶11] The PSC must annually determine “the method by which the contributions shall be
calculated, collected and distributed.” Wyo. Stat. Ann. § 37-15-501(b); Wyoming Public
Service Commission Rules, Chapter 5. In doing so, it may simply rely on the Fund
Manager’s recommendations and any comments received. See Qwest Corp., ¶ 9, 299 P.3d
at 1179; Wyo. Stat. Ann. § 37-15-501. Or, if requested, the PSC must hold a contested
case hearing to receive evidence and hear argument. Qwest Corp., ¶¶ 1, 29–30, 299 P.3d
at 1177, 1183. The method selected must be “fair” and “promote the emergence of
competition in providing local exchange service.” Wyo. Stat. Ann. § 37-15-501(c).
2018 and 2020 Administrative Proceedings
[¶12] During the 2018 administrative process, the PSC considered whether A-CAM I
receipts should be considered “contributions from the [FUSF]” for purposes of calculating
WUSF fund distributions for the 2018-2019 fiscal year. At that time, only Union, and one
other company who is not a party to this appeal, received A-CAM I funds. The Fund
Manager’s report recommended that the PSC should not consider A-CAM I receipts
“contributions from the FUSF.” At a public hearing, Union generally agreed with the Fund
Manager, and the Rural Companies disagreed. No telecommunications company requested
a contested case hearing. Consequently, relying on the representations of the Fund
Manager in her report, public comment, and analysis and recommendations from PSC staff,
the PSC issued an order summarily concluding it would not consider A-CAM I receipts as
FUSF contributions when calculating WUSF distributions.
[¶13] The Fund Manager’s April 2020 report for the 2020-2021 fiscal year explained that,
because more companies were receiving A-CAM support, the continued exclusion of those
funds from WUSF calculations “would significantly increas[e] both the potential
distribution amounts under Wyo. Stat. § 37-15-501(d), and the imputed benchmark rate,
which [would] in turn drive[] an increased assessment rate.” The report analyzed several
potential methods for considering A-CAM support and recommended a method that
considered 25 percent of each company’s A-CAM receipts as FUSF contributions. After
receiving the report, the PSC initiated its WUSF docket, set a hearing for May 5, and issued
a notice setting procedural deadlines.
[¶14] The Rural Companies submitted written comment in favor of treating A-CAM
receipts as FUSF contributions and Union filed a motion to enforce the 2018 order and
strike the Rural Companies’ comments as inconsistent with that order. On May 5, the PSC
denied Union’s motion, adopted the Fund Manager’s recommended methodology on an
interim basis, and welcomed “requests for a contested case hearing” on the issue.
5
[¶15] Union and the Rural Companies each filed motions to intervene and requested a
contested case hearing. The PSC granted the motions. After a lengthy prehearing process
involving discovery, the exchange of written testimony, and a first and second amended
report from the Fund Manager, the PSC held an exhibit conference and a formal contested
case hearing on November 19, 2020.
[¶16] At the exhibit conference, Union and the Rural Companies introduced exhibits in
support of their proposed alternative methodologies for dealing with A-CAM receipts.
Union objected to the Rural Companies’ Exhibits 301 through 314, which consisted of
reports Union had filed with various regulatory agencies, as irrelevant and unduly
repetitious. The hearing examiner admitted the exhibits over Union’s objection.
[¶17] At the hearing, the PSC heard the parties’ arguments and witnesses’ testimony.
Union objected to Donald Jackson’s oral testimony, arguing it went beyond the scope of
his pre-filed testimony. The hearing examiner allowed the testimony.
[¶18] At the PSC’s request, the parties filed post-hearing briefs in December. Union
remained steadfast that the PSC’s 2018 decision was binding, and the PSC could not now
consider A-CAM I receipts when calculating WUSF distributions. Union argued that A-
CAM II differed from A-CAM I and Revised A-CAM I and therefore the PSC could treat
funds from only A-CAM II as FUSF contributions. Accordingly, Union urged the PSC to
adopt the Fund Manager’s Analysis 10, under which a portion of the Rural Companies’ A-
CAM II receipts would be considered FUSF contributions when calculating WUSF
distributions, but Union’s Revised A-CAM I receipts would not be considered FUSF
contributions and its WUSF distribution would remain unchanged.
[¶19] The Rural Companies argued that the 2018 order was not binding because it only
applied to the 2018-2019 fiscal year. They also maintained that the A-CAM programs
served the same core purpose—“supporting the provision, maintenance, and operation of
a voice and broadband-capable network in high-cost areas”—and therefore should be
treated the same when calculating WUSF distributions. The Rural Companies advocated
for either of two methodologies set forth in their Exhibits 322 and 323, each of which
considered a portion of any A-CAM funding a company received to be FUSF contributions.
[¶20] After holding public deliberations in December, the PSC issued its order in January
2021. First, it concluded it was not bound by its 2018 order because new facts were in
issue in 2020 and the 2018 order only applied to the 2018-2019 fiscal year. Then, it adopted
the methodology proposed in the Rural Companies’ Exhibit 323 (Methodology 323),
finding that it was “the most appropriate methodology to account for A-CAM funds,”
because it was “A-CAM and Wyoming centric, while also meeting the critically important
statutory policy goals of being equitable, predictable, and transparent.”
6
[¶21] The PSC denied Union’s request for rehearing. This appeal comes to us on
certification pursuant to W.R.A.P. 12.09.
DISCUSSION
I. The PSC was not collaterally estopped from adopting a WUSF calculation
methodology that considered A-CAM funds to be FUSF contributions.
[¶22] As noted above, the PSC is required to administer the WUSF annually based on
recommendations from the Fund Manager and comments or evidence submitted by
Wyoming companies and PSC staff. See Wyo. Stat. Ann. § 37-15-501(e)(ii), (g)
(discussing “distributions from the universal service fund in any fiscal year” and “annual”
filings, receipts, and revenues); see also Wyoming Public Service Commission Rules ch.
5 (4/16/18). Accordingly, the PSC’s 2018 order specifically stated that “[t]he purpose of
this proceeding is to establish a final WUSF assessment level for the twelve-month period
beginning July 1, 2018, pursuant to Chapter 5, Section 3(b) of the Commission’s Rules.”
Union nevertheless argues that collateral estoppel applies in this case and bars the PSC’s
2021 ruling. 8
[¶23] Union asserts that because the PSC determined that A-CAM I receipts would not be
considered FUSF contributions for the purposes of calculating WUSF distributions in
2018, collateral estoppel precluded the PSC from adopting a WUSF calculation
methodology that treats a portion of each company’s A-CAM receipts as FUSF
contributions for the 2020-2021 WUSF fiscal year. The PSC rejected this argument and
concluded it was not bound by its 2018 order. We review the application of collateral
estoppel de novo. Mattheis v. Mulligan, 2021 WY 14, ¶ 10, 479 P.3d 1213, 1217 (Wyo.
2021) (citing In re Robert & Irene Redland Family Tr., Dated Aug. 10, 1989, 2019 WY
17, ¶ 15, 435 P.3d 349, 356 (Wyo. 2019)).
8
Union also discusses the doctrine of res judicata and asserts that the PSC’s 2018 ruling was legal precedent,
thus alluding to the doctrine of stare decisis. Because Union does not present cogent argument or citation
to authority supporting the application of either of these doctrines, we decline to address them. See Reyes
v. State, 2022 WY 41, ¶ 27, 505 P.3d 1264, 1271 (Wyo. 2022) (citing Silva v. State, 2014 WY 155, ¶ 7,
338 P.3d 934, 936 (Wyo. 2014)).
Additionally, Union suggests that the PSC engaged in statutory interpretation in its 2018 order when it
decided not to consider A-CAM funds “contributions from the FUSF” for the 2018-2019 WUSF fiscal year.
The PSC summarized the PSC staff’s statutory analysis in its 2018 order, but it did not adopt or incorporate
that analysis into its decision or engage in any independent statutory analysis. Instead, it summarily
concluded that A-CAM I funds would not be considered contributions from the FUSF for the 2018-2019
WUSF fiscal year. That conclusion must be considered in the context of the 2018 proceedings, which did
not include a contested case hearing and occurred before A-CAM was revised and participation in the
various A-CAM programs became more widespread. See supra ¶ 12, infra ¶¶ 28–29.
7
[¶24] Collateral estoppel bars parties from relitigating “previously litigated issues and is
a principle of law that generally applies to issues adjudicated before an administrative
agency.” Lower v. Peabody Powder River Servs., LLC, 2020 WY 33, ¶ 14, 459 P.3d 443,
447 (Wyo. 2020) (citation omitted); see also Slavens v. Bd. of Cty. Comm’rs for Uinta Cty.,
854 P.2d 683, 685–86 (Wyo. 1993) (explaining that collateral estoppel applies in the
administrative context). Collateral estoppel bars consideration of an issue when four
elements are satisfied:
(1) the issue decided in the prior proceeding must be identical
to the issue presented in the present action; (2) the prior
proceeding must have resulted in a judgment on the merits;
(3) the party against whom collateral estoppel is asserted must
have been a party to or in privity with a party to the prior
adjudication; and (4) the party against whom collateral
estoppel is asserted must have had a “full and fair opportunity
to litigate the issue in the prior proceeding.”
Mattheis, ¶ 13, 479 P.3d at 1217–18 (quoting Casiano v. State ex rel. Wyo. Dep’t of
Transp., 2019 WY 16, ¶ 10, 434 P.3d 116, 120 (Wyo. 2019)).
[¶25] Determining whether collateral estoppel applies requires that we “compare the prior
adjudication with the present action.” Id. ¶ 14, 479 P.3d at 1218 (citation omitted); see
also In re Adoption of ADA, 2006 WY 49, ¶ 12, 132 P.3d 196, 201 (Wyo. 2006) (explaining
that collateral estoppel requires comparing the prior and present actions); 1A Stuart M.
Speiser et al., The American Law of Torts § 5:24 (Mar. 2020 Update) (“In applying the
doctrine of collateral estoppel, the court must ascertain the issues necessarily decided by
the prior judgment and determine which of those issues, if any, are germane to the present
litigation.”).
[¶26] A comparison of the 2018 and 2020 PSC proceedings reveals that the issues in the
two actions were not identical. In 2018 the PSC determined whether two companies’ 2017
A-CAM I receipts should be considered FUSF contributions when calculating WUSF
support for the 2018-2019 WUSF fiscal year. The PSC did not attempt to revisit or change
that specific ruling in the recent proceedings. Instead, the PSC more recently considered
the issue of whether a portion of the 2019 Revised A-CAM I and A-CAM II support
received by eight Wyoming companies should be treated as FUSF contributions when
calculating WUSF support for the 2020-2021 WUSF fiscal year. Because the issues
considered by the PSC in the two proceedings were not identical, collateral estoppel does
not apply. See Taylor v. State, ex rel., Wyo. Workers’ Safety and Comp. Div., 2010 WY
76, ¶¶ 16–20, 233 P.3d 583, 587–88 (Wyo. 2010) (concluding collateral estoppel did not
apply because “[t]he issue determined in 1998 was whether Mr. Taylor’s chiropractic
treatment . . . was related to the 1991 work injury[,]” while the later litigation “determined
whether Mr. Taylor’s treatment in 2007 was related to the 1991 work injury”).
8
[¶27] Furthermore, we have held that collateral estoppel will not apply when the essential
facts have changed since the first adjudication. See Worman v. Carver, 2002 WY 59, ¶ 22,
44 P.3d 82, 88 (Wyo. 2002) (“[C]hanges in facts essential to a judgment will render
collateral estoppel inapplicable in a subsequent action raising the same issues.” (quoting
Montana v. United States, 440 U.S. 147, 159, 99 S.Ct. 970, 976, 59 L.Ed.2d 210 (1979)));
Albretch v. Zwaanshoek Holding En Financiering, B.V., 816 P.2d 808, 814 (Wyo. 1991)
(collateral estoppel does not apply “if the facts have changed since the previous suit”)
(citation omitted)); Osborn v. Manning, 798 P.2d 1208, 1211 (Wyo. 1990); see also 50
C.J.S. Judgments § 1043, Westlaw (database updated Mar. 2022) (“The estoppel of a
judgment extends only to the facts in issue as they existed at the time the judgment was
rendered, and does not prevent a reexamination of the same questions where in the interval
the facts have changed[.]”).
[¶28] The facts and circumstances—specifically, the number of companies utilizing A-
CAM programs, the versions of A-CAM programs available, and the impact of excluding
A-CAM funds from the WUSF calculations—had changed significantly during the interim
between the 2018 and 2020 proceedings. During the 2018 proceedings, only A-CAM I
was in existence, and only Union and one other Wyoming company received A-CAM I
funding. That year, the Fund Manager recommended the PSC adopt a WUSF calculation
methodology that did not consider A-CAM funds. The Fund Manager opined that this
would not negatively impact the benchmark price paid by rural customers or the assessment
rate imposed on companies, and passed on to customers, to fund the WUSF. When the
PSC adopted the recommended methodology, the benchmark price remained $30 and the
assessment rate was 1.7 percent.
[¶29] By April 2020, however, at least eight Wyoming companies were receiving A-CAM
support. Union and one other company had switched from A-CAM I to Revised A-CAM
I, and almost all of the Rural Companies had elected A-CAM II. During the 2020
proceedings, the Fund Manager recommended that the PSC should begin considering a
portion of the A-CAM funds each company received as FUSF contributions. The Fund
Manager cautioned that not doing so “would significantly increase” the WUSF distribution
amounts, the benchmark rate, and in turn, the assessment rate. The Fund Manager
submitted calculations demonstrating that continuing to ignore all A-CAM support in
WUSF calculations would result in a benchmark price of $37 and an assessment rate of 2.5
percent. In effect, consumers could pay a higher fee on their bills, and companies would
receive duplicative funding.
[¶30] This different set of facts and circumstances precludes the application of the
doctrine of collateral estoppel and highlights the importance of the PSC’s annual review of
the WUSF methodology. See Sinclair Oil Corp. v. Wyo. Pub. Serv. Comm’n, 2003 WY
22, ¶ 9, 63 P.3d 887, 893 (Wyo. 2003) (the “PSC is required to give paramount
consideration to the public interest in exercising its statutory powers to regulate and
9
supervise public utilities” (citing Tri Cty. Tel. Ass’n, Inc. v. Pub. Serv. Comm’n, 11 P.3d
938, 941 (Wyo. 2000)).
[¶31] In sum, we conclude the nature of the PSC’s annual WUSF review, the lack of
identical issues between the proceedings, and the change in facts and circumstances
essential to the PSC’s rulings all preclude the application of collateral estoppel in this case.
II. The PSC’s 2021 order is lawful under Wyo. Stat. Ann. § 16-3-114(c).
[¶32] We review an administrative agency’s decision certified to this Court pursuant to
W.R.A.P. 12.09 under the standards set forth in the Wyoming Administrative Procedure
Act. Exaro Energy III, LLC v. Wyo. Oil & Gas Conservation Comm’n, 2020 WY 8, ¶ 9,
455 P.3d 1243, 1248 (Wyo. 2020) (citation omitted). In relevant part, that act provides:
(c) To the extent necessary to make a decision and when
presented, the reviewing court shall decide all relevant
questions of law, interpret constitutional and statutory
provisions, and determine the meaning or applicability of the
terms of an agency action. In making the following
determinations, the court shall review the whole record or
those parts of it cited by a party and due account shall be taken
of the rule of prejudicial error. The reviewing court shall:
....
(ii) Hold unlawful and set aside agency action, findings and
conclusions found to be:
(A) Arbitrary, capricious, an abuse of discretion or otherwise
not in accordance with law;
....
(E) Unsupported by substantial evidence in a case reviewed on
the record of an agency hearing provided by statute.
Wyo. Stat. Ann. § 16-3-114(c) (LexisNexis 2021).
[¶33] When the parties submit evidence at a contested case hearing, we start by applying
the substantial evidence standard of review to fact findings. See Reichenberg v. State ex
rel. Dept. of Workforce Servs., 2022 WY 36, ¶ 28, 506 P.3d 732, 741 (Wyo. 2022) (citing
Ross v. State ex rel. Dept. of Workforce Servs., 2022 WY 11, ¶ 9, 503 P.3d 23, 28 (Wyo.
2022)). However, even if the record “contains sufficient evidence to support the
10
administrative decision under the substantial evidence test,” we still apply “the arbitrary-
and-capricious standard as a ‘safety net’ to catch other agency action that may have violated
the Wyoming Administrative Procedures Act.” Id. ¶ 29, 506 P.3d at 742 (quoting Mirich
v. State ex rel. Bd. of Trs. of Laramie Cty. Sch. Dist. Two, 2021 WY 32, ¶ 16 n.4, 481 P.3d
627, 633 n.4 (Wyo. 2021)). We review “conclusions of law de novo and affirm only if
[they] are in accordance with the law.” Id. ¶ 30, 506 P.3d at 742 (quoting Wyo. Stat. Ann.
§ 16-3-114(c)(ii)(A)). We note in applying this standard, that Union does not challenge
the adopted methodology’s compliance with the Wyoming Telecommunications Act’s
Universal Service Fund provisions, Wyo. Stat. Ann. §§ 37-15-501 and -502.
A. The order is supported by substantial evidence.
[¶34] “Substantial evidence is relevant evidence which a reasonable mind might accept in
support of the agency’s conclusions.” Painter v. Hallingbye, 2021 WY 78, ¶ 11, 489 P.3d
684, 689 (Wyo. 2021) (quoting Exaro Energy, ¶ 10, 455 P.3d at 1248). “It is more than a
scintilla of evidence.” Id. (quoting Exaro Energy, ¶ 10, 455 P.3d at 1248). “[O]ur review
turns on whether the agency could reasonably conclude as it did, based on the evidence
before it—not whether we agree with the outcome.” Id. (citing Mirich, ¶ 16, 481 P.3d at
633). Under this limited review, “the judicial function is exhausted when we can find from
the evidence a rational view for the conclusions of the PSC.” Sinclair, ¶ 9, 63 P.3d at 893
(citing Tri Cty., 11 P.3d at 941). The burden is on the party challenging the agency decision
to establish that the decision is not supported by substantial evidence. Union Tel. Inc. v.
Wyo. Pub. Serv. Comm’n, 821 P.2d 550, 557 (Wyo. 1992) (citation omitted).
[¶35] Instead of demonstrating a lack of record evidence to support the PSC’s findings,
Union advocates consideration of its own evidence and the relative merits of Analysis 8. 9
To the extent Union argues that the PSC’s ruling is not supported by substantial evidence
because (1) its explanation is conclusory, (2) the PSC never addressed some of Union’s
concerns about Methodology 323, and (3) Methodology 323’s “tier adjustments are wholly
unsupported by any testimony or workpaper,” we conclude its arguments do not reflect or
apply the well-settled substantial evidence standard of review stated above. Our analysis
of whether the evidence provides a rational basis for the PSC’s two key conclusions
follows.
i. Substantial evidence supports the PSC’s decision to treat a portion of
A-CAM funds as FUSF contributions.
[¶36] The PSC rules define “Contributions from the Federal Universal Service Fund” as
“funds received from the FUSF as reported to the [PSC] for high cost support mechanisms
9
Going into the contested case hearing, Union supported Analysis 8. During the hearing, however, Union
abandoned its support for Analysis 8 in favor of Analysis 10. On appeal, Union argues the PSC should
have selected Analysis 8.
11
that will assist customers located in areas with relatively high rates for noncompetitive
essential local exchange service[.]” Wyoming Public Service Commission Rules ch. 5,
§ 1(c)(i). Thus, whether or not A-CAM funds should be considered FUSF contributions
depends on whether A-CAM (1) is a high cost support mechanism, (2) assists customers in
noncompetitive areas, and (3) supports essential local exchange service. See id. The PSC
found that A-CAM met this definition, stating “the purpose of A-CAM as a whole is to
assist carriers in providing service in high-cost and non-competitive areas[,] such as
providing voice and broadband-capable networks.” 10 This finding is supported by
substantial evidence in the record.
[¶37] First, Chris Reno, Union’s own witness, testified that the Connect America Fund is
“a modernized version of the High Cost FUSF.” The Rural Companies’ witness, Jason
Hendricks, the Chief Government Relations Officer for several of the Rural Companies,
testified in both his written and oral testimony that A-CAM “is a federal high cost universal
service program,” and his written testimony further explained that A-CAM was designed
to serve as a replacement for previous high-cost support programs.
[¶38] Second, as far as supporting customers in noncompetitive areas, Mr. Reno’s written
testimony established that in creating the A-CAM programs, “the FCC hoped to ‘spur new
broadband deployment in rural areas[.]’” He explained that A-CAM “[s]upport is not
available in census blocks where an unsubsidized competitor is [already] providing . . .
service.” Mr. Hendricks clarified that A-CAM support calculations specifically
“eliminate[] certain low-cost and competitive areas from eligibility.” And, at the contested
case hearing, Michelle Motzkus, of Silver Star Communications, testified that the A-CAM
model provides funding that enables companies “to provide noncompetitive voice services
at reasonable prices.”
[¶39] The final inquiry, whether A-CAM supports essential local exchange service,
requires a deeper dive into statutory definitions. As noted above, see supra n.4, Wyo. Stat.
Ann. § 37-15-103(a)(viii) defines “local exchange service” as “the provision of essential
10
In concluding that a portion of A-CAM support should be considered FUSF contributions for the purpose
of calculating WUSF funds, the PSC also found:
The legislative intent expressed in Wyo. Stat. [§] 37-15-501(a) & (c), is to
both promote the emergence of competition and support only non-
competitive essential local exchange services, which requires us to
consider a portion of A-CAM, as we have here, in determining the
appropriate level of WUSF support to be provided to qualified
telecommunications companies. The evidence indicates that a portion of
A-CAM supports the same non-competitive essential local exchange
services the WUSF is intended to support under the statute. Without
consideration of a portion of A-CAM, the assessment paid by customers
of all Wyoming telecommunications companies would unnecessarily
increase, to replicate a portion of, rather than supplement federal support.
12
telecommunications service within a local exchange area[.]” Subsection (a)(iv) provides
an exhaustive list of what qualifies as “essential telecommunications service.” Included
within that list is “residence or business voice service[,]” see § 37-15-103(a)(iv)(B), and,
in this regard, the pertinent question during the PSC proceedings was whether A-CAM
funds support voice service—an essential local exchange service.
[¶40] Ms. Motzkus testified in both her written testimony and at the hearing that “ACAM
funding supports voice and broadband networks[.]” Also at the hearing, Mr. Hendricks
explained that when the FCC developed the A-CAM models, it did not remove the
requirement that qualifying companies must provide voice services. And, when directly
asked whether A-CAM receipts should be considered in WUSF calculations, Jack
Walkenhorst, of All West Communications, responded “[y]es, because a carrier who
receives ACAM is required to provide voice services and ACAM supports voice services.”
[¶41] Collectively, this testimony amounts to more than a scintilla of evidence which a
reasonable mind might accept to support the PSC’s decision to treat a portion of A-CAM
funds as FUSF contributions when calculating WUSF distributions.
ii. Substantial evidence supports the PSC’s decision to adopt
Methodology 323.
[¶42] Once it determined that A-CAM funds qualify as FUSF contributions for the
purposes of calculating WUSF support, the PSC had to determine which calculation
methodology was the most appropriate for the 2020-2021 WUSF fiscal year. The PSC
ultimately selected Methodology 323, finding that it was “the most appropriate
methodology to account for A-CAM funds in making WUSF disbursements” because it
was “A-CAM and Wyoming centric, while also meeting the critically important statutory
policy goals of being equitable, predictable, and transparent.” The record contains
substantial evidence to support this finding.
[¶43] Mr. Hendricks, an A-CAM cost model expert, testified that he developed the two
methodologies set forth in Exhibits 322 and 323. He explained that after analyzing the
other proposed methodologies, he sought to develop one that was A-CAM based, equitable,
predictable, transparent, carrier specific, treated similarly situated companies similarly, and
which would eliminate each carrier’s out of state A-CAM receipts from the WUSF
calculations. The other rural companies supported both methodologies.
[¶44] Mr. Hendricks and Nathan Weber, another witness for the Rural Companies, each
explained that both methodologies start with a company’s specific A-CAM award data
accessed through public FCC documents to promote transparency. Then, through a series
of calculations both methodologies isolate each company’s Wyoming-specific A-CAM
funded locations, and further isolate the Wyoming locations that are deemed by the FCC
13
to be fully funded. 11 The primary difference between the two methodologies is that while
322 begins with a carrier’s full A-CAM receipts (which may include funding for locations
in other states), Methodology 323 first isolates each carrier’s A-CAM receipts attributable
only to Wyoming locations. The methodologies then utilize different ratios—
Methodology 323 looks at a company’s fully funded A-CAM locations in Wyoming
against its total Wyoming A-CAM support amount—to determine each company’s
allocation tier and that tier is used to calculate the company’s WUSF support amount.
Because Methodology 323 starts by considering less federal support, it generally produces
a smaller FUSF contribution and, therefore, a larger WUSF contribution.
[¶45] Mr. Hendricks’ testimony reinforces that Methodology 323 is A-CAM and
Wyoming centric as the calculations are designed to isolate those portions of A-CAM funds
that support locations in Wyoming that are fully funded by the FCC, and deducts only a
portion of that support in its WUSF calculations. His testimony also clearly supports the
Commission’s findings as to why the methodology was superior to the others presented:
The Rural Companies’ proposed ACAM allocation method is
transparent because anyone can access the FCC data used as
inputs, see the formulas used in the calculations, and replicate
the results. There is nothing hidden in a black box behind the
veil of confidentiality. The proposed ACAM allocation
methodology is predictable because ACAM recipients will
know exactly how much ACAM will count as Federal High
Cost Support in WUSF calculations for the foreseeable future.
The proposed ACAM allocation methodology is equitable
because the same formulas are used for all ACAM recipients
and similarly situated companies are treated similarly.
[¶46] Rather than directly challenge the PSC’s adoption of Methodology 323 on a
substantial evidence basis, Union argues on appeal that Analysis 8 was a more appropriate
method for calculating WUSF support. Notably, however, the record reflects that both
Union and the Rural Companies criticized Analysis 8 prior to and during the hearing.
Union’s witness, Douglas Meredith, filed testimony criticizing the calculations upon which
Analysis 8 was based. The Rural Companies took issue with the fact that it used inputs
and formulas from older FUSF programs as a proxy to determine A-CAM contributions
and argued that the older programs had no bearing on A-CAM awards as the programs
were based on different concepts and data. Furthermore, the inputs for Analysis 8 were
unreliable and not transparent because the financial inputs were company generated and
some companies arrived at those inputs based on data they considered proprietary and
11
Fully-funded locations are those considered by the FCC “to have enough support to cover the cost of
providing broadband to the locations after ten years.”
14
confidential. In fact, Union abandoned its support for Analysis 8 during the contested case
hearing in favor of analysis 10.
[¶47] There is no question the evidence of record in support of Methodology 323 is
substantial and Union failed its burden to prove otherwise.
B. The order is not arbitrary and capricious.
[¶48]
The arbitrary and capricious test requires the reviewing court
to review the entire record to determine whether the agency
reasonably could have made its finding and order based upon
all the evidence before it. The arbitrary and capricious
standard is more lenient and deferential to the agency than the
substantial evidence standard because it requires only that
there be a rational basis for the agency’s decision.
Reichenberg, ¶ 29, 506 P.3d at 742 (quoting Matter of Worker’s Compensation Claim of
Vinson, 2020 WY 126, ¶ 27, 473 P.3d 299, 309 (Wyo. 2020)). This standard “is not meant
to apply to true evidentiary questions.” Id. (quoting McIntosh v. State ex rel. Wyo.
Workers’ Safety & Comp. Div., 2013 WY 135, ¶ 31, 311 P.3d 608, 616 (Wyo. 2013)). It
instead applies “when, for example, the agency failed to admit testimony or other evidence
that was clearly admissible, or failed to provide appropriate findings of fact or conclusions
of law.” Id. (quoting McIntosh, ¶ 31, 311 P.3d at 616).
[¶49] Union asserts the PSC’s decision to adopt Methodology 323 is arbitrary and
capricious in several ways. Mostly, Union argues the decision is arbitrary because it
ignored the PSC’s 2018 order. We disagree. We have already concluded that the PSC was
not collaterally estopped from changing the methodology it adopted in 2018, and that
substantial evidence supported both the PSC’s finding that A-CAM receipts could be
considered FUSF contributions and its adoption of Methodology 323. Consequently, we
can easily conclude that the record provides a rational basis for the PSC’s decision. The
fact that Union’s WUSF contribution will be reduced as a result of the PSC’s 2021 decision
does not render that decision arbitrary and capricious.
[¶50] Union further asserts Methodology 323 is arbitrary and capricious in a handful of
other, more narrow arguments. We address each of Union’s arguments in turn.
[¶51] Union first argues that Methodology 323 does not take into account that Union
receives A-CAM support based on all of the locations the company serves including those
outside of Wyoming. This assertion is patently incorrect, as the record demonstrates that
Methodology 323 was specifically designed to remove funding associated with companies’
15
locations outside of Wyoming for each company in exactly the same manner. In fact, the
PSC rationally based its decision, in part, on that particular aspect of Methodology 323.
[¶52] Second, Union contends that this methodology fails to acknowledge that costs vary
among different A-CAM funded locations. Here again, the record does not support
Union’s contention. Mr. Hendrick’s testimony explained how Methodology 323 accounts
for those differences:
I fully acknowledge that costs per location in ACAM differ.
As previously discussed, very low-cost locations are excluded
from ACAM eligibility and very high cost locations receive
capped support. In between are the fully funded locations that
have variations in ACAM-calculated costs per location
between $52.50 and $252.50 in non-tribal areas. The costs to
serve these locations in the real world will also vary between
the locations, as well as between what ACAM estimates and
what the costs will actually be to serve these locations. Carriers
knew this when they chose ACAM. However, the FCC
provided flexibility for companies to choose which locations
to serve within the eligible areas and flexibility on the
technology to meet the buildout requirements. So, even if the
[PSC] were to have access to the confidential ACAM cost-per-
location calculations (which it does not), that doesn’t mean
those are the costs that companies will actually incur to serve
the locations. In addition, the [PSC] has no way to know what
locations a carrier will choose to serve. The best we can do is
use the aggregate support amounts calculated for fully funded
eligible locations to determine what the FCC has chosen to pay
companies to meet their buildout requirements. That is exactly
what the Rural Companies have done in our proposed
[Methodology 323].
[¶53] Union next claims that Methodology 323 treats the different types of A-CAM
support the same, even though some A-CAM II recipients received earlier funding for the
same locations A-CAM II now supports and this methodology essentially allows those
companies to double dip into federal funds for the same locations. Several of the Rural
Companies’ representatives testified that this was not true. Mr. Hendricks testified that
[o]nce the Range Companies elected ACAM II in 2019, they
began receiving ACAM support and the funding they initially
received in 2019 under those old historic programs was “trued-
up” to zero through offsets to the ACAM II receipts. Thus,
there was not and is not double recovery of Range’s previous
16
investments through ACAM. The same process occurred for
all companies who elected ACAM II in Wyoming.
Mr. Walkenhorst and Ms. Motzkus each explained that Methodology 323 treated any
locations that previously received funding for broadband buildout as already fully funded
and therefore ineligible for WUSF support. When directly asked about Union’s accusation
that A-CAM II recipients were engaging in double dipping, Ms. Motzkus stated “[a]s to
Silver Star, I would rate those statements as false” and Mr. Walkenhorst referred to the
argument as “a red herring,” noting that “[f]rom All West’s experience it is not anywhere
close to accurate.” See Watkins v. State ex rel. Wyoming Medical Comm’n, 2011 WY 49,
¶ 23, 250 P.3d 1082, 1090 (Wyo. 2011) (explaining that we generally defer to the fact
finder’s witness credibility determinations (citation omitted)).
[¶54] Union also argues that Methodology 323 utilizes arbitrary allocation tiers. Mr.
Hendricks’ testimony clarifies that Methodology 323 uses different allocation tiers in its
calculations based on “each company’s ratio of Wyoming ACAM fully funded locations.”
The point of these tiers is to “mitigat[e] any underestimation of costs that may have
occurred in the ACAM cost estimate.” He explains why the allocation tiers are not
arbitrary:
I disagree that the tiers are not rational. Unlike the across-the-
board equal ACAM allocation percentages that were examined
and considered by the Fund Manager, the allocation tiers
proposed by the Rural Companies are not arbitrary but instead
directly relate to and reflect verifiable and supportable actual
ACAM data. They reflect genuine real differences in the
individual companies’ fully funded locations, and hence the
need or lack thereof for WUSF support. They are also
equitable in application between carriers and produce
reasonable benchmark and assessment rates.
The PSC could rationally rely on this explanation when adopting Methodology 323.
[¶55] Lastly, Union claims that the PSC did not make adequate findings of fact to support
its decision to adopt Methodology 323. We require only that an order “contain the basic
findings of fact upon which the hearing examiner based his ultimate conclusions[.]” Birch
v. State ex rel. Wyo. Workers’ Safety and Comp. Div., 2014 WY 31, ¶ 13, 319 P.3d 901,
907 (Wyo. 2014) (quoting Leavitt v. State ex rel. Wyo. Workers’ Safety and Comp. Div.,
2013 WY 77, ¶ 29, 307 P.3d 835, 842 (Wyo. 2013)). We have held that an agency’s
“findings must be sufficient to permit us to determine whether the agency decision was
supported by substantial evidence and was otherwise reasonable.” Id. (quoting Leavitt,
¶ 29, 307 P.3d at 842).
17
[¶56] The PSC’s findings are adequate in this case. Its written order set forth several
comprehensive paragraphs detailing the analyses presented, and the parties’ evidence and
arguments. Then, it found that “[t]he uncontested testimony of Mr. Hendricks [was], by
itself, sufficient to support [the] conclusion that the Rural Companies’ [Methodology 323]
provides the appropriate methodology for accounting for A-CAM funds in determining
WUSF contributions and disbursements.” The PSC explained that, based on the evidence,
Methodology 323 was “the most appropriate methodology” because it was “A-CAM and
Wyoming centric” and it met “statutory policy goals of being equitable, predictable, and
transparent.” Union has failed to demonstrate that the PSC’s order adopting Methodology
323 is arbitrary and capricious.
C. The order is in accordance with law.
[¶57] Union makes an additional argument we must review, de novo, under Wyo. Stat.
Ann. § 16-3-114(c)(ii)(A). See In re Hartmann, 2015 WY 1, ¶ 19, 342 P.3d 377, 382
(Wyo. 2015) (“Questions of law raised in an administrative context are reviewed by this
Court de novo.” (citation omitted)). Union contends that the PSC’s adoption of a
methodology that results in a lower WUSF payment to Union impermissibly burdens the
A-CAM programs because it “forc[es] Union to use ACAM proceeds for an under-funded
state program.” For this reason, Union asserts the PSC’s action is contrary to and
preempted by federal law.
[¶58] Union fails to explain, with cogent argument and citation to pertinent authority, how
the PSC’s order forces Union to misuse its federal funding. We find nothing in the PSC’s
order, or the rest of the record that clearly supports this assertion. Conversely, the PSC’s
order explains that WUSF support is designed simply to “supplement federal support” and
to ensure that companies did not receive state funding for locations that were considered
fully-funded by the FCC. And furthermore, the record demonstrates that Union certified
to the PSC its 2019 A-CAM funds would be expended only to support its A-CAM
obligations. 12
[¶59] Federal preemption can occur in either of two ways:
If Congress evidences an intent to occupy a given field, any
state law falling within that field is preempted. If Congress has
not entirely displaced state regulation over the matter in
question, state law is still preempted to the extent it actually
conflicts with federal law, that is, when it is impossible to
12
We understand that Union made long-term business decisions based on the amount of WUSF funding it
received in 2018-2019, and it is dissatisfied with its decreased WUSF support for the 2020-2021 fiscal year.
However, Union retains the opportunity to bring a rate case pursuant to Wyo. Stat. Ann. § 37-15-203 to
demonstrate that its rates need to be adjusted to adequately cover its costs.
18
comply with both state and federal law, or where the state law
stands as an obstacle to the accomplishment of the full
purposes and objectives of Congress.
Matter of Adoption of MAJB, 2020 WY 157, ¶ 17 n.8, 478 P.3d 196, 202 n.8 (Wyo. 2020)
(emphasis omitted) (quoting Hermes Consol., Inc. v. People, 849 P.2d 1302, 1306 (Wyo.
1993)). 47 U.S.C. § 254(f) expressly provides that “[a] State may adopt regulations not
inconsistent with the [FCC’s] rules to preserve and advance universal service.” Congress
therefore did not intend to occupy the field.
[¶60] Moreover, cases that have addressed federal preemption of state universal service
programs generally involve state assessments on federal support. See, e.g., Keen, 447 F.
Supp. 3d at 1076, 1092–93 (invalidating an administrative order that required carriers to
pay state assessments on funds received from a FUSF program, in part because it violated
47 U.S.C. § 254(e)’s requirement that FUSF funds be used for the services “for which the
support is intended”); AT&T Corp. v. Pub. Util. Comm’n of Texas, 252 F. Supp. 2d 347,
352 (W.D. Tex. 2003) (found that a regulation that required carriers to pay tax on
telecommunication revenue to the Texas Universal Service Fund impermissibly burdened
a FUSF mechanism because it disincentivized carriers to provide interstate services by
double taxing those services). The PSC’s order does not require Union to pay an
assessment on its FUSF support to the WUSF, and Union has failed to explain exactly how
the order has otherwise caused it to misuse its federal support. Because we find nothing in
47 U.S.C. § 254 that preempts the mere consideration of federal support when calculating
state distributions, and nothing in the record demonstrates an actual conflict with the A-
CAM programs, making it impossible for Union to comply with both state and federal law
or creating any obstacle to the accomplishment of the FUSF’s purposes and objectives, we
cannot conclude that the PSC’s order violates federal law.
III. The PSC did not abuse its discretion when it admitted the Rural Companies’
exhibits and witness testimony.
[¶61] Union contends the PSC abused its discretion when it admitted certain of the Rural
Companies’ exhibits and witness testimony over Union’s objections.
[¶62] An agency has discretion to rule on the admissibility of evidence and we will not
disrupt its evidentiary rulings unless it abused its discretion. Johnson v. State ex rel. Wyo.
Workers’ Safety and Comp. Div., 2014 WY 33, ¶ 14, 321 P.3d 318, 322 (Wyo. 2014) (citing
Greene v. State ex rel. Bd. of Chiropractic Exam’rs, 2009 WY 42, ¶ 9, 204 P.3d 285, 290
(Wyo. 2009)). An abuse of discretion occurs “when the decision shocks the conscience of
19
the court and appears to be so unfair and inequitable that a reasonable person could not
abide it.” Id. (citation omitted). 13
A. Exhibits 301 through 314
[¶63] Union argues on appeal, as it did before the PSC, that the Rural Companies’ Exhibits
301 through 314, which consisted of “reports [Union] had provided to the [PSC] and others
pursuant to statutory authority[,]” were “irrelevant, immaterial, or unduly repetitious” and
should have thus been excluded under Wyo. Stat. Ann. § 16-3-108(a). Union contends the
exhibits contained “sensitive financial” information that “had nothing to do with the issue
before the [PSC]” and that “the approximately 350 pages” of exhibits were unduly
repetitious and burdened the docket.
[¶64] Wyo. Stat. Ann. § 16-3-108(a) “requires the exclusion of evidence only if it is
irrelevant, immaterial, or unduly repetitious.” Zowada v. Mullinax Concrete Serv. Co.,
Inc., 2014 WY 121, ¶ 26, 335 P.3d 455, 461 (Wyo. 2014) (citing Wyo. Stat. Ann. § 16-3-
108(a)). The Wyoming Rules of Evidence generally do not apply to administrative
proceedings, but “the definition of relevance contained in them is instructive.” Id. ¶ 27,
335 P.3d at 461. Evidence is relevant if it has “any tendency to make the existence of any
fact that is of consequence to the determination of the action more probable or less probable
than it would be without the evidence.” W.R.E. 401.
[¶65] The PSC’s written order explained that the exhibits were relevant to Mr. Jackson’s
testimony. Mr. Jackson’s testimony offered concerns about one of the suggested
methodologies before the PSC during the contested case hearing—Analysis 8—and he
relied on Union’s past reports, Exhibits 301 through 314, to demonstrate his concerns with
that option. Because the purpose of these proceedings was for the PSC to determine the
best calculation methodology for the fiscal year, and the exhibits in question supported
testimony regarding concerns about one of the proposed methodologies, the PSC did not
abuse its discretion in ruling that the exhibits were relevant. Additionally, the PSC
reasonably concluded during the exhibit conference that the exhibits were not unduly
repetitious as they consisted of reports covering “different years” and “different states” and
therefore contained varying information.
13
Union’s evidentiary challenges were not included in its petition for review filed with the district court.
W.R.A.P. 12.09(a) provides that our review is limited “to the issues set forth in the petition and raised
before the agency.” (Emphasis added.) Thus, where a party fails to raise an issue both during the agency
proceedings, and in its petition for review to the district court we may decline to address it on appeal. See
Anderson v. Bd. of Cty. Comm’rs of Teton Cty., 2009 WY 122, ¶ 19, 217 P.3d 401, 406 (Wyo. 2009)
(explaining that the “better practice, obviously, is to clearly state all appellate issues in the petition for
review”). Under the circumstances presented here, where the issues on appeal were raised with the PSC,
and no party argues that Union has waived its right to challenge the PSC’s evidentiary rulings, we will
review the record and consider the arguments. See id.
20
[¶66] Union has not otherwise demonstrated that this ruling “shocks the conscience” or is
“so unfair and inequitable” as to be unreasonable. Johnson, ¶ 14, 321 P.3d at 322. For
these reasons, we find no abuse of discretion.
B. Witness Testimony
[¶67] Union also objected to Mr. Jackson’s oral testimony and argued it should not have
been allowed because it went beyond the scope of his pre-filed testimony. According to
Union, Mr. Jackson’s testimony was “unfair” and “a surprise” because it “introduced
concepts and issues that were not in his pre-filed testimony.” Union claims its due process
rights were violated because the new testimony “prevented Union [] from conducting an
appropriate cross-examination.” Lastly, Union asserts that allowing this testimony
amounted to reversible error. We disagree with each of Union’s contentions.
[¶68] The PSC allowed the parties to submit written testimony in accordance with Wyo.
Stat. Ann. § 16-3-108. The Rural Companies filed Mr. Jackson’s testimony as Exhibit 300.
Then, in its scheduling orders, the PSC requested that “[f]or each witness who will testify
to matters not included in pre-filed testimony,” the parties shall file “a brief summary of
the witness’s proposed testimony which specifies the issue(s) to which the testimony will
be directed together with an estimation of the length of time it will take to present the
party’s case.”
[¶69] The Rural Companies pre-hearing report offered a summary of Mr. Jackson’s oral
testimony:
[I]n addition to the matters set forth in his pre-filed testimony,
Mr. Jackson may testify as to any of the factual or opinion
assertions set forth in this document pertaining or related to the
history of local exchange service prices, the history of legacy
FUSF, the history of WUSF, HCL; HCL comparison to
ACAM; Union’s numbers and allocations historic and current
as it relates to Analysis 8; Analysis 8 issues and problems;
similar HCL proxy Analysis proposals issues and problems;
attributes of the Rural Companies[’] proposals which address
allocation problems; as well as to address testimony set forth
in Mr. Meredith’s rebuttal testimony.
Union does not identify which “concepts and issues” came out during Mr. Jackson’s oral
testimony that it felt were new, and it is not evident from our review of the record what
exactly Union considered to be “far outside of the scope of his pre-filed testimony.”
[¶70] Union seemingly objected to Mr. Jackson’s testimony regarding Exhibits 301
through 314. In response, the hearing examiner ruled that the testimony was proper
21
because it was based on the filed exhibits which were in the record. When Union pushed
the issue, the hearing examiner conferred with PSC counsel and explained to the parties
that “the [PSC’s] expectation is that summary of the witnesses’ pre[-]filed testimony will
be closely related,” but that “perfect adherence is not required.” Thus, even if Mr.
Jackson’s oral testimony strayed somewhat beyond his pre-filed testimony, the PSC
reasonably deemed it to be closely related. Because Union has not convinced us that this
ruling was an abuse of discretion, 14 and we have found nothing in the Wyoming
Administrative Procedure Act, the PSC’s rules, or its orders that specifically limited oral
testimony to what was pre-filed, we affirm the ruling.
[¶71] Union’s due process argument also must fail. Though Union is correct “that a party
to a civil proceeding generally has a due process right to cross-examine witnesses,” Jontra
Holdings Pty Ltd. v. Gas Sensing Tech. Corp., 2021 WY 17, ¶ 83, 479 P.3d 1222, 1245
(Wyo. 2021), Union does not explain how Mr. Jackson’s oral testimony “prevented” it
from cross-examining Mr. Jackson. The record shows that Union was given an opportunity
to cross-examine Mr. Jackson but declined to do so. We find no due process violation.
CONCLUSION
[¶72] We conclude that collateral estoppel did not bar the PSC from adopting a WUSF
calculation methodology that considered A-CAM funds to be FUSF contributions, and the
PSC’s 2021 order was lawful, in all respects, under the Wyoming Administrative
Procedure Act § 16-3-114(c). Furthermore, the PSC did not abuse its discretion when it
admitted the Rural Companies’ Exhibits 301 through 314 and Mr. Jackson’s testimony
during the contested case hearing. For these reasons, we affirm the PSC’s ruling.
14
In regard to Union’s reversible error assertion, the PSC’s written order specifically found that even if it
had excluded Mr. Jackson’s testimony, the rest of the evidence of record was sufficient to support its
adoption of Methodology 323. The record supports that finding. See supra ¶¶ 42–47 (substantial evidence
discussion). Therefore, even if the PSC had erred in admitting Mr. Jackson’s testimony, the error would
have been harmless.
22