Lifeline and Link Up Reform and Modernization, Advancing Broadband Availability Through Digital Literacy Training, 12952-12980 [2012-4978]
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12952
Federal Register / Vol. 77, No. 42 / Friday, March 2, 2012 / Rules and Regulations
FEDERAL COMMUNICATIONS
COMMISSION
Business/2012/db0207/FCC-1211A1.doc.
47 CFR Part 54
I. Introduction
1. In this Order, the Commission
comprehensively reforms and begins to
modernize the Universal Service Fund’s
Lifeline program (Lifeline or the
program). Building on recommendations
from the Federal-State Joint Board on
Universal Service (Joint Board),
proposals in the National Broadband
Plan, input from the Government
Accountability Office (GAO), and
comments received in response to the
Commission’s March Notice of Proposed
Rulemaking, the reforms adopted in this
Order substantially strengthen
protections against waste, fraud, and
abuse; improve program administration
and accountability; improve enrollment
and consumer disclosures; initiate
modernization of the program for
broadband; and constrain the growth of
the program in order to reduce the
burden on all who contribute to the
Universal Service Fund (USF or the
Fund). We take these significant actions,
while ensuring that eligible low-income
consumers who do not have the means
to pay for telephone service can
maintain their current voice service
through the Lifeline program and those
who are not currently connected to the
networks will have the opportunity to
benefit from this program and the
numerous opportunities and security
that telephone service affords.
2. This Order is another step in the
Commission’s ongoing efforts to
overhaul all USF programs to promote
the availability of modern networks and
the capability of all American
consumers to access and use those
networks. Consistent with previous
efforts, we act here to eliminate waste
and inefficiency, increase
accountability, and transition the Fund
from supporting standalone telephone
service to broadband. In June 2011, the
Commission adopted the Duplicative
Program Payments Order, 76 FR 38040,
June 29, 2011, which made clear that an
eligible consumer may only receive one
Lifeline-supported service, established
procedures to detect and de-enroll
subscribers receiving duplicative
Lifeline-supported services, and
directed the Universal Service
Administrative Company (USAC) to
implement a process to detect and
eliminate duplicative Lifeline support—
a process now completed in 12 states
and expanding to other states in the
near future. Building on those efforts,
the unprecedented reforms adopted in
today’s Order could save the Fund up to
an estimated $2 billion over the next
three years, keeping money in the
[WC Docket Nos. 11–42, 03–109, 12–23 and
CC Docket No. 96–45; FCC 12–11]
Lifeline and Link Up Reform and
Modernization, Advancing Broadband
Availability Through Digital Literacy
Training
Federal Communications
Commission.
ACTION: Final rule.
AGENCY:
In this document, the Federal
Communications Commission
comprehensively reforms and begins to
modernize the Universal Service Fund’s
Lifeline program. The reforms adopted
in this document substantially
strengthen protections against waste,
fraud, and abuse; improve program
administration and accountability;
improve enrollment and consumer
disclosures; initiate modernization of
the program for broadband; and
constrain the growth of the program in
order to reduce the burden on all who
contribute to the Universal Service
Fund.
SUMMARY:
Effective April 2, 2012, except
for the amendments to §§ 54.202(a),
54.401(c), 54.403, 54.407, 54.410,
54.416, 54.417, 54.420, 54.222 which
contain information collection
requirements that are not effective until
approved by the Office of Management
and Budget. The Federal
Communications Commission will
publish a document in the Federal
Register announcing the effective date
for those sections, and except for the
amendments contained herein to 47
CFR 54.411, 54.412, 54.413 and 54.414
which shall become effective April 1,
2012; and 47 CFR 54.409 which shall
become effective June 1, 2012.
FOR FURTHER INFORMATION CONTACT:
Kimberly Scardino, Wireline
Competition Bureau, (202) 418–7400 or
TTY: (202) 418–0484.
SUPPLEMENTARY INFORMATION: This is a
summary of the Commission’s Report
and Order (R&O) in WC Docket Nos. 11–
42, 03–109, 12–23 and CC Docket No.
96–45; FCC 12–11, adopted on January
31, 2012 and released on February 6,
2012. There was also a companion
document released with this item. The
full text of this document is available for
public inspection during regular
business hours in the FCC Reference
Center, Room CY–A257, 445 12th Street
SW., Washington, DC 20554. Or at the
following Internet address: https://
transition.fcc.gov/Daily_Releases/Daily_
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pockets of American consumers that
otherwise would have been wasted on
duplicative benefits, subsidies for
ineligible consumers, or fraudulent
misuse of Lifeline funds.
3. These savings will reduce growth
in the Fund, while providing telephone
service to consumers who remain
disconnected from the voice networks of
the twentieth century. Moreover, by
using a fraction of the savings from
eliminating waste and abuse in the
program to create a broadband pilot
program, we explore how Lifeline can
best be used to help low-income
consumers access the networks of the
twenty-first century by closing the
broadband adoption gap. This
complements the recent USF/ICC
Transformation Order, 76 FR 76623,
December 8, 2011, which reoriented
intercarrier compensation and the highcost fund toward increasing the
availability of broadband networks, as
well as the recently launched ‘‘Connect
to Compete’’ private-sector initiative to
increase access to affordable broadband
service for low-income consumers.
4. To make the program more
accountable, the Order establishes clear
goals and measures and establishes
national eligibility criteria to allow lowincome consumers to qualify for Lifeline
based on either income or participation
in certain government benefit programs.
The Order adopts rules for Lifeline
enrollment, including enhanced initial
and annual certification requirements,
and confirms the program’s one-perhousehold requirement. The Order
simplifies Lifeline reimbursement and
makes it more transparent. The
Commission adopts a number of reforms
to eliminate waste, fraud and abuse in
the program, including creating a
National Lifeline Accountability
Database to prevent multiple carriers
from receiving support for the same
subscribers; phasing out toll limitation
service support; eliminating Link Up
support except for recipients on Tribal
lands that are served by eligible
telecommunications carriers (ETCs) that
participate in both Lifeline and the
high-cost program; reducing the number
of ineligible subscribers in the program;
and imposing independent audit
requirements on carriers receiving more
than $5 million in annual support.
These reforms are estimated to save the
Fund up to $2 billion over the next
three years. As part of these reforms we
establish a savings target of $200 million
in 2012 versus the program’s status quo
path in the absence of reform, create a
mechanism for ensuring that target is
met, and put the Commission in a
position to determine the appropriate
budget for Lifeline in early 2013 after
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monitoring the impact of today’s
fundamental overhaul of the program
and addressing key issues in the Further
Notice of Proposed Rulemaking
(FNPRM), including the appropriate
monthly support amount for the
program. Using savings from the
reforms, the Order establishes a
Broadband Adoption Pilot Program to
test and determine how Lifeline can best
be used to increase broadband adoption
among Lifeline-eligible consumers. We
also establish an interim base of uniform
support amount of $9.25 per month for
non-Tribal subscribers to simplify
program administration.
II. Performance Goals & Measures
5. The Order adopts three
performance goals for the program: (1)
Ensure the availability of voice service
for low-income Americans; (2) ensure
the availability of broadband service for
low-income Americans; and (3)
minimize the contribution burden on
consumers and businesses. The Order
adopts measurements for each of the
goals, while delegating to the Bureau
authority to resolve implementation
aspects of such measurements (for
example, determining how to define
‘‘low-income’’ and ‘‘next higher’’ for the
purpose of the measurement).
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III. Voice Services Eligible for Discount
6. Consistent with the actions taken in
the CAF Order and Sua Sponte Order on
Reconsideration, the Order amends the
definition of ‘‘Lifeline’’ to provide
support for ‘‘voice telephony service.’’
The Order amends the rules to eliminate
the ‘‘basic local service qualifier’’ that is
currently part of the definition of
Lifeline service, but explains that the
Commission continues to expect
Lifeline providers to provide service
that enables consumers to communicate
with others that live nearby, while
acknowledging that service plans
increasingly allow all distance
communication. The Order declines to
specify minimum service standards for
Lifeline service, but states the
Commission will monitor service levels
to see if it should adopt standards in the
future.
IV. Support Amounts for Voice Services
7. Today, ETCs are reimbursed for
Lifeline based on a rather complicated
tiers structure that is, among other
things tied to the ILEC Subscriber Line
Charge. To simplify administration of
the program and revise the rules to
reflect the current marketplace in which
more than half of the support is
provided to wireless providers that do
not charge a SLC, the Order adopts an
interim rate of $9.25 to replace the
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current Tiers 1, 2, and 3, effective April
1, 2012. The interim support amount
represents the nationwide average rate
of reimbursement as of September 2011.
Tier 4, which provides enhanced
Lifeline support to residents of Tribal
lands, remains unchanged. We seek
further comment on setting appropriate
permanent support amounts in a
Further Notice of Proposed Rulemaking.
V. Consumer Eligibility and Enrollment
A. Uniform Eligibility Criteria
8. The Order establishes a uniform
floor of eligibility for Lifeline based on
the current federal rules, while allowing
states to include more permissive
eligibility criteria. Additionally, the
Order keeps the current federal income
standard of 135% or below of the
federal poverty guidelines. This
uniformity will simplify program
administration for USAC and for ETCs
as well as provide a baseline level of
program accessibility nationwide.
B. One-per-Household
9. The order adopts a one-perhousehold requirement. ‘‘Household’’ is
defined consistent with the Low-Income
Home Energy Assistance Program as
‘‘any individual or group of individuals
who are living together at the same
address as one economic unit,’’ with an
‘‘economic unit’’ defined as ‘‘all adult
individuals contributing to and sharing
in the income and expenses of a
household.’’ The Order permits Lifeline
support to individuals living in group
living facilities. The Order adopts
procedures to enable Lifeline applicants
to demonstrate when initially enrolling
in the program that any other Lifeline
recipients residing at their residential
address are part of a separate household
and directs USAC, within 30 days of the
effective date of the Order, to develop a
worksheet that will allow low-income
households sharing an address to
indicate they are part of a separate
household. The Order also directs
USAC, within 30 days of the effective
date of the Order, to develop print and
web materials to be posted on USAC’s
Web site that both USAC and ETCs can
use to educate consumers about the oneper-household rule (i.e., how to
determine what persons comprise a
household).
C. Determining Consumer Eligibility (At
Enrollment and Annually Thereafter)
10. The Order requires all Lifeline
subscribers to provide certain
certifications when enrolling in Lifeline
and annually thereafter. These
requirements are as follows:
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1. Initial Certification Requirements
11. The Order requires ETCs (or the
state administrator, where applicable) to
check the program-based eligibility of
new Lifeline subscribers at enrollment
by accessing available state or federal
eligibility databases. Where underlying
program eligibility data cannot be
accessed, the Order requires new
Lifeline subscribers to provide
documentation of program-based
eligibility, which the entity enrolling
the subscriber should review (but not
retain). Similarly, the Order extends the
current requirement in federal default
states that new Lifeline subscribers must
present documentation to qualify for
Lifeline based on income level to all
states. The Order adopts additional
certification requirements to protect the
program from waste, fraud, and abuse,
including requiring consumers to certify
upon enrollment and annually
thereafter that they are receiving
support for only one line per household
(as described above), and requires
consumers to sign a certification form
prior to enrolling in the Lifeline
program.
2. Annual Re-Certification Requirements
12. The Order replaces the existing
annual verification process with a rule
that requires each Lifeline subscriber
(both existing subscribers and new
subscribers) to provide annual selfcertifications attesting to their
continued eligibility for the program.
The Order requires all ETCs, to recertify by the end of 2012, all of their
subscribers claimed on their June FCC
Form 497 and report the results of this
annual re-certification process to the
Commission, USAC and the relevant
state commission (where the state has
jurisdiction over the ETC) annually by
January 31, 2013. Beginning in 2013,
where ETCs cannot re-certify their
subscriber by accessing a database, they
must re-certify them on an annual basis
or elect to have USAC re-certify them.
The results of the re-certification
process must be filed by January 31st
each year. Where ETCs can access
underlying state or federal program data
to confirm a consumer’s ongoing
eligibility for Lifeline, the Order allows
them to do so in place of the annual recertification process. The Order adopts
a rule that consumers that do not
respond to annual re-certifications must
be de-enrolled from the program. The
Order also adopts a rule requiring
consumers to notify their ETC within 30
days if the consumer no longer qualifies
for Lifeline.
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3. ETC Certifications
13. The Order requires ETCs to make
certain certifications annually and when
submitting for reimbursement from the
program.
D. Tribal Lifeline Eligibility
14. The Order clarifies that residents
of Tribal lands are eligible for Lifeline
(and Link Up support if served by a high
cost recipient) based on (1) Income
level; (2) participation in any Tribalspecific federal assistance program
identified in the Commission’s rules; or
(3) participation in any other program
identified in the Commission’s rules.
The Order adopts the NPRM proposal to
add the Food Distribution Program on
Indian Reservations (FDPIR) to the list
of programs that confer eligibility. The
Order establishes a waiver and
designation process for those Tribal
communities that are located outside of
reservations, but can show ties to
defined Tribal communities, and
removes the term ‘‘near reservation’’
from the Commission’s definition of
Tribal lands. The Order requires
residents on Tribal lands to follow the
same requirements for documentation of
income and program based eligibility as
other Lifeline recipients, but clarifies
that we will continue to allow selfcertification of residence on Tribal
lands.
E. Electronic Signature
15. The Order allows ETCs and state
agencies to capture a subscriber’s
signature electronically at sign-up,
including through the use of interactive
voice response systems in compliance
with the requirements of the E-Sign Act
and the Government Paperwork
Elimination Act. The E-Sign Act allows
the use of electronic records to satisfy
Commission regulations requiring that
such information be provided in
writing, if the consumer has
affirmatively consented to such use and
has not withdrawn such consent.
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F. Automatic and Coordinated
Enrollment
16. The Order encourages states to
facilitate coordinated enrollment, but
makes clear that automatic enrollment
whereby consumers receiving eligible
benefits are automatically enrolled in a
particular carrier’s Lifeline program
without their express consent is not
permitted because it may increase the
incidence of duplicative support.
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VI. Reforms To Eliminate Waste, Fraud
and Abuse
A. National Lifeline Accountability
Database
17. The Order adopts a national
duplicates database to detect and
eliminate duplicative Lifeline and Link
Up support. The Order directs WCB to
work with USAC and OMD to establish
and implement the database and
associated processes. ETCs will be
required to query the database to
determine whether a prospective
subscriber is already receiving Lifeline
support from another ETC. The order
directs ETCs to (1) populate the
database with the necessary information
to implement these processes and (2)
query the database for each new
subscriber prior to receiving
reimbursement from the fund for that
subscriber. We seek further comment in
an FNRPM on how to implement a
database to check for eligibility.
B. TLS
18. The Order clarifies that it does not
consider a subscriber who has a Lifeline
calling plan that includes a set number
of calling minutes available for either
local or domestic long distance calls to
have voluntarily elected to receive TLS.
Therefore, TLS support will not be
provided to ETCs providing such plans
effective April 1, 2012. To the extent an
ETC offers service plans that still charge
a fee for toll calls that is in addition to
the per month or per billing cycle price
for the Lifeline service plan, it must
provide at no additional cost to the
consumer the ability to limit or block
calls that would result in additional
charge, but the program will no longer
provide additional support for this
functionality. Support for TLS will be
eliminated over two years to mitigate
the impact of this change. The Order
establishes a limit on TLS support of
$3.00 per month per subscriber that will
be implemented with April 2012
support payments through the
remainder of 2012, beginning with April
2012 disbursements. TLS support will
be reduced to $2.00 per month per
subscriber in 2013, and eliminated at
the beginning of 2014.
C. Link Up
19. The Order eliminates Link Up
support to all ETCs on non-Tribal lands,
effective April 1, 2012, and limits Link
Up on Tribal lands to high cost
recipients deploying infrastructure.
Marketplace trends indicate that
Lifeline consumers increasingly have
service options from ETCs that neither
draw on Link Up support nor charge the
consumer a service initiation fee. In
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balancing a number of universal service
goals with finite resources, we conclude
that dollars currently spent for Link Up
can be more effectively spent to improve
and modernize the Lifeline program.
D. Subscriber Usage of Customer
Supported Service
20. The Order establishes a rule that
pre-paid ETCs offering service to
subscribers for free may not seek
reimbursement for subscribers until the
subscriber initiates service in the first
instance. Moreover, subscribers who fail
to ‘‘use’’ the service (as that term is
defined in the Order/Rules) within 60
consecutive days must be de-enrolled by
the carrier and the duplicates database
must be updated within one business
day. Furthermore, pre-paid ETCs must
inform their subscribers that Lifeline
services are not transferable, that there
is a usage requirement to retain the
benefit, and that subscribers will be
automatically de-enrolled for non-use.
E. Minimum Consumer Charge
21. The Order does not adopt a
minimum consumer charge in light of
other W/F/A protections that will be
implemented to ensure that consumers
do not abuse the program, but notes that
this issue could be revisited if the
measures adopted fail to address the
issues that currently exist. Further, the
Order eliminates the current rule that
imposes a $1 minimum local charge on
Tribal subscribers.
F. Outreach and Marketing
22. Within six months from the
Order’s effective date, ETCs must
include in plain, easy-to-understand
language in all of their Lifeline
marketing materials (including print,
internet, audio and video), that the
offering is a Lifeline-supported service;
Lifeline is a government assistance
program; only eligible consumers may
enroll in the program; what
documentation is necessary for
enrollment; the program is limited to
one benefit per household, consisting of
either wireline or wireless service; and
consumers who willfully make false
statements in order to obtain program
benefits can be punished with a fine or
imprisonment or barred from the
program. Additionally, the Order
requires ETCs to disclose the company
name under which it does business and
the details of its Lifeline service
offerings in its Lifeline-related
marketing and advertising. The Order
does not adopt mandatory outreach
requirements but directs the Wireline
Competition and Consumer and
Governmental Affairs Bureau to conduct
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an outreach campaign regarding the new
program rules.
G. Audits and Enforcement
23. The order requires USAC to revise
its existing oversight program (the
Beneficiary Compliance Audit and
Payment Quality Assurance programs)
in light of the new rules. It also adopts
a new first-year audit requirement for
newly designated ETCs whereby they
would be audited by USAC within their
first year of providing service. The order
also adopts a rule that ETCs drawing
more than $5 million, at the holding
company level, from the low-income
program must conduct biennial
independent audits and submit the
audit reports to the Commission, USAC,
and appropriate state commission. The
Order requires ETCs to report to USAC
their ownership information, including
affiliates and holding companies, which
is necessary to implement this new
audit requirement. ETCs are put on
notice that findings concerning
improper payment of funds may result
in recapture of those payments under
the Improper Payments Elimination and
Recovery Act (IPERA) and related Office
of Management and Budget
implementation guidelines and/or
revocation of ETC designation.
VII. Payment of Low-Income Support
24. The order adopts a three-month
transition for low-income support to be
disbursed based on actual support in
place of the current administrative
process of paying low-income support
based on projected service. The Order
accelerates USAC’s payment of lowincome support for carriers filing the
FCC Form 497 electronically by a
monthly deadline. The window by
which carriers must file revisions or
original FCC Form 497s is reduced from
fifteen months from the end of a
calendar year, to a rolling twelve-month
window.
VIII. Modernizing the Program
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A. Bundled Services
25. The Order adopts a rule
permitting ETCs in all states to allow
qualifying low-income consumers to
apply Lifeline discounts to all
residential service plans that provide
voice telephony service, including
bundled service packages combining
voice and broadband, or packages
containing optional calling features.
ETCs will be required to apply partial
subscriber payments to the cost of the
Lifeline voice component of a package
before paying down any additional
services, and must notify Lifeline
consumers of this rule in writing. In a
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Further Notice, described below, we
seek further comment on whether to
adopt a rule mandating that ETCs offer
Lifeline discounts on all bundled
service packages and packages with
optional calling features.
B. Broadband Pilot
26. The Order establishes a broadband
pilot program aimed at generating
statistically significant data that will
allow the Commission, ETCs, and the
public to analyze the effectiveness of
different approaches to using Lifeline
funds to making broadband more
affordable for low-income Americans
while providing support that is
sufficient but not excessive. The
broadband pilot program will be funded
with some of the savings from the
duplicate resolution process.
C. Managing the Size of the Low Income
Fund
27. The Order sets a savings target of
$200 million for 2012. The Bureau shall
provide to each Commissioner an
interim report no later than six months
from the adoption of the Order
analyzing the reforms’ progress in
meeting the savings target. Not later
than one year after the adoption of the
Order, the Bureau shall provide to each
Commissioner a report as to whether the
reforms have succeeded in meeting the
savings target; and, if they have not,
analyzing the causes, providing options
for realizing those savings, and making
specific recommendations for corrective
action to realize those savings. Both
reports shall be made available for
public input on the Commission’s Web
site.
IX. Eligible Telecommunications
Carrier Requirements
A. Facilities-Based Requirements for
Lifeline-Only ETCs
28. The Commission forbears from
applying the Act’s facilities requirement
of section 214(e)(1)(A) to all
telecommunications carriers that seek
limited ETC designation to participate
in the Lifeline program, subject to
certain conditions. Specifically, each
carrier must (i) comply with certain 911
requirements; and (ii) file, subject to
Bureau approval, a compliance plan
providing specific information regarding
the carrier’s service offerings and
outlining the measures the carrier will
take to implement the obligations
contained in this Order. To avoid
disruption to subscribers served by
existing Lifeline-only ETCs that
previously received forbearance in those
states where they were designated prior
to December 29, 2011, those ETCs can
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continue to receive reimbursement in
those states pending approval of their
compliance plan, provided they submit
their plan to the Bureau by July 1, 2012.
Non-facilities-based carriers designated
after December 29, 2011 will not receive
reimbursement from the Fund until the
Bureau approves their compliance
plans.
B. Impact of New Rules on Prior
Forbearance Conditions
29. To the extent that any of the
conditions in the prior forbearance
orders and compliance plans are
inconsistent with the rules adopted in
the Order, the newly adopted rules shall
prevail. However, any carrier whose
grant of forbearance was conditioned on
more stringent compliance plans must
comply with those additional
obligations as well as the rules adopted
in the Order.
C. Additional Rule Amendments
30. The Order makes several changes
to the rules regarding Lifeline providers
to eliminate waste and inefficiency, and
to increase accountability in the
program. The Order amends section
54.202 to clarify that Lifeline-only ETCs
are not required to submit a five-year
improvement plan as part of its
application for designation. Carriers
seeking to be designated as a Lifelineonly ETC must demonstrate their
technical and financial capacity to
provide the supported services. All
ETCs receiving Lifeline must annually
report the names and identifiers used by
the ETC, its holding company, operating
companies and affiliates. Additonally,
the Order requires every ETC receiving
low-income support to annually provide
to the Commission and USAC general
information regarding their Lifeline
plans for voice telephony service offered
specifically for low-income consumers.
X. APCC Petition
31. The Order denies a petition for
rulemaking and a petition for interim
relief by the American Public
Communications Council to subsidize
the payphone industry through Lifeline.
XI. Procedural Matters
A. Paperwork Reduction Act Analysis
32. This Report and Order contains
new information collection
requirements subject to the Paperwork
Reduction Act of 1995 (PRA), Public
Law 104–13. The new requirements will
be submitted to the Office of
Management and Budget (OMB) for
review under section 3507(d) of the
PRA. OMB, the general public, and
other Federal agencies are invited to
comment on the new or modified
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information collection requirements
contained in this proceeding. In
addition, we note that pursuant to the
Small Business Paperwork Relief Act of
2002, Public Law 107–198, see 44 U.S.C.
3506(c)(4), we previously sought
specific comment on how the
Commission might further reduce the
information collection burden for small
business concerns with fewer than 25
employees. We describe the impacts
that might affect small businesses,
which include most businesses with
fewer than 25 employees, in the Final
Rregulatory Flexibility Analysis below.
B. Congressional Review Act
33. The Commission will send a copy
of this Report and Order to Congress
and the Government Accountability
Office pursuant to the Congressional
Review Act, see 5 U.S.C. 801(a)(1)(A).
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C. Final Regulatory Flexibility Analysis
34. The Regulatory Flexibility Act
(RFA) requires that an agency prepare a
regulatory flexibility analysis for notice
and comment rulemakings, unless the
agency certifies that ‘‘the rule will not,
if promulgated, have a significant
economic impact on a substantial
number of small entities.’’ Accordingly,
we have prepared a Final Regulatory
Flexibility Analysis concerning the
possible impact of the rule changes
contained in this Report and Order on
small entities.
35. As required by the Regulatory
Flexibility Act of 1980, as amended
(RFA), an Initial Regulatory Flexibility
Analysis (IRFA) was incorporated in the
Lifeline and Link Up Reform and
Modernization Notice of Proposed
Rulemaking (Lifeline and Link Up
NPRM), 76 FR 16482, March 23, 2011.
The Commission sought written public
comments on the proposals in the
Lifeline and Link Up NPRM, including
comment on the IRFA. This present
Final Regulatory Flexibility Analysis
(FRFA) conforms to the RFA.
D. Need for, and Objectives of, the Order
36. The Commission is required by
section 254 of the Act to promulgate
rules to implement the universal service
provisions of section 254. On May 8,
1997, the Commission adopted rules
that reformed its system of universal
service support mechanisms so that
universal service is preserved and
advanced as markets move toward
competition. Among other programs, the
Commission adopted a program to
provide discounts that make basic, local
telephone service affordable for lowincome consumers.
37. In this Order, we comprehensively
reform and begin to modernize the
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Universal Service Fund’s Lifeline
program (Lifeline or the program).
Building on recommendations from the
Federal-State Joint Board on Universal
Service (‘‘Joint Board’’), proposals in the
National Broadband Plan, input from
the Government Accountability Office
(GAO), and comments received in
response to the Commission’s March
Notice of Proposed Rulemaking the
reforms adopted in this Order
substantially strengthen protections
against waste, fraud, and abuse; improve
program administration and
accountability; improve enrollment and
consumer disclosures; initiate
modernization of the program for
broadband; and constrain the growth of
the program in order to reduce the
burden on all who contribute to the
Universal Service Fund (USF or the
Fund). We take these significant actions,
while ensuring that eligible low-income
consumers who do not have the means
to pay for telephone service can
maintain their current voice service
through the Lifeline program and those
who are not currently connected to the
networks will have the opportunity to
benefit from this program and the
numerous opportunities and security
that telephone service affords.
38. This Order is another step in the
Commission’s ongoing efforts to
overhaul all Universal Service Fund
programs to fulfill the goals Congress
gave us to promote the availability of
modern networks and the capability of
all American consumers to access and
use those networks. Consistent with
previous efforts, we act here to
eliminate waste and inefficiency,
increase accountability, and transition
the Fund from supporting standalone
telephone service to broadband. In June
2011, the Commission adopted the
Duplicative Program Payments Order,
which made clear that an eligible
consumer may only receive one
Lifeline-supported service, established
procedures to detect and de-enroll
subscribers receiving duplicative
Lifeline-supported services, and
directed USAC to implement a process
to detect and eliminate duplicative
Lifeline support—a process now
completed in 12 states and expanding to
other states in the near future. Building
on those efforts, we estimate that the
unprecedented reforms adopted in
today’s Order could save the Fund up to
an estimated $2 billion over the next
three years, keeping money in the
pockets of American consumers that
otherwise would have been wasted on
duplicative benefits, subsidies for
ineligible consumers, or fraudulent
misuse of Lifeline funds.
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39. These savings will reduce growth
in the Fund but at the same time
provide telephone service to consumers
who remain disconnected from the
voice networks of the Twentieth
Century. Moreover, by using a fraction
of the savings from eliminating waste
and abuse in the program to create a
broadband pilot program, we explore
how Lifeline can best be used to help
low-income consumers access the
networks of the Twenty-First Century by
closing the broadband adoption gap.
This complements the recent USF/ICC
Transformation Order and FNPRM,
which reoriented intercarrier
compensation and the high-cost fund
toward increasing the availability of
broadband networks, as well as the
recently launched ‘‘Connect to
Compete’’ private-sector initiative to
increase access to affordable broadband
service for low-income consumers.
40. To make the program more
accountable, the Order establishes clear
goals and measures and establishes
national eligibility criteria to allow lowincome consumers to qualify for Lifeline
based on either income or participation
in certain government benefit programs.
The Order adopts rules for Lifeline
enrollment, including enhanced initial
and annual certification requirements,
and confirms the program’s one-perhousehold requirement. The Order
simplifies Lifeline reimbursement and
makes it more transparent. The
Commission adopts a number of reforms
to eliminate waste, fraud and abuse in
the program, including creating a
National Lifeline Accountability
Database to prevent multiple carriers
from receiving support for the same
subscribers; phasing out toll limitation
service support; eliminating Link Up
support except for recipients on Tribal
lands that are served by eligible
telecommunications carriers (‘‘ETCs’’)
that participate in both Lifeline and the
high-cost program; reducing the number
of ineligible subscribers in the program;
and imposing independent audit
requirements on carriers receiving more
than $5 million in annual support.
These reforms are expected to save the
Fund approximately $2 billion over the
next three years. Using savings from the
reforms, the Order establishes a
Broadband Adoption Pilot Program to
test and determine how Lifeline can best
be used to increase broadband adoption
among Lifeline-eligible consumers. We
also establish an interim base of uniform
support amount of $9.25 per month for
non-Tribal subscribers to simplify
program administration.
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E. Summary of Significant Issues Raised
by Public Comments in Response to the
IRFA
41. No comments were filed in
response to the IRFA attached to the
Lifeline and Link Up NPRM.
Notwithstanding the foregoing, general
comments discussing the impact of the
proposed rules on small business were
submitted in response to the Lifeline
and Link Up NPRM. With respect to the
proposal to provide household
identifying information as a measure to
prevent duplicate enrollment, one
commenter expressed concern that the
imposition of a data transmission
requirement would result in new
training, programming, and
administrative expenses which would
be burdensome on small entities. One
commenter opposed any limitations
placed on Link Up support arguing that
such limitations would inhibit small
ETCs’ ability to participate in the low
income program. Commenters expressed
concern that the proposed audit
requirements in the NPRM would be
expensive and difficult for small
companies to comply with. One
commenter opposed the proposed
verification proposals in the NPRM
asserting that such new requirements
would be unnecessarily expensive and
disproportionately burden small
businesses. Commenters opposed the
proposed sampling methodology to
confirm eligibility as it would have the
result of requiring small entities to
sample most if not all of their Lifeline
subscribers. Commenters asserted that
outreach efforts may be unreasonably
burdensome for small ETCs. In making
the determinations reflected in the
Order, we have considered the impact of
our actions on small entities.
F. Description and Estimate of the
Number of Small Entities to Which the
Proposed Rules Will Apply
42. The RFA directs agencies to
provide a description of and, where
feasible, an estimate of the number of
small entities that may be affected by
the proposed rules, if adopted. The RFA
generally defines the term ‘‘small
entity’’ as having the same meaning as
the terms ‘‘small business,’’ ‘‘small
organization,’’ and ‘‘small governmental
jurisdiction.’’ In addition, the term
‘‘small business’’ has the same meaning
as the term ‘‘small business concern’’
under the Small Business Act. A small
business concern is one that: (1) Is
independently owned and operated; (2)
is not dominant in its field of operation;
and (3) satisfies any additional criteria
established by the Small Business
Administration (SBA). Nationwide,
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there are a total of approximately 29.6
million small businesses, according to
the SBA. A ‘‘small organization’’ is
generally ‘‘any not-for-profit enterprise
which is independently owned and
operated and is not dominant in its
field.’’ Nationwide, as of 2002, there
were approximately 1.6 million small
organizations. The term ‘‘small
governmental jurisdiction’’ is defined
generally as ‘‘governments of cities,
towns, townships, villages, school
districts, or special districts, with a
population of less than fifty thousand.’’
Census Bureau data for 2002 indicate
that there were 87,525 local
governmental jurisdictions in the
United States. We estimate that, of this
total, 84,377 entities were ‘‘small
governmental jurisdictions.’’ Thus, we
estimate that most governmental
jurisdictions are small.
1. Wireline Providers
43. Incumbent Local Exchange
Carriers (Incumbent LECs). Neither the
Commission nor the SBA has developed
a small business size standard
specifically for incumbent local
exchange services. The appropriate size
standard under SBA rules is for the
category Wired Telecommunications
Carriers. Under that size standard, such
a business is small if it has 1,500 or
fewer employees. Census Bureau data
for 2007, which now supersede data
from the 2002 Census, show that there
were 3,188 firms in this category that
operated for the entire year. Of this
total, 3,144 had employment of 999 or
fewer and 44 firms had had employment
of 1000 or more. According to
Commission data, 1,307 carriers
reported that they were incumbent local
exchange service providers. Of these
1,307 carriers, an estimated 1,006 have
1,500 or fewer employees and 301 have
more than 1,500 employees.
Consequently, the Commission
estimates that most providers of local
exchange service are small entities that
may be affected by the rules and
policies proposed in the Notice. Thus
under this category and the associated
small business size standard, the
majority of these incumbent local
exchange service providers can be
considered small providers.
44. Competitive Local Exchange
Carriers (Competitive LECs),
Competitive Access Providers (CAPs),
Shared-Tenant Service Providers, and
Other Local Service Providers. Neither
the Commission nor the SBA has
developed a small business size
standard specifically for these service
providers. The appropriate size standard
under SBA rules is for the category
Wired Telecommunications Carriers.
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Under that size standard, such a
business is small if it has 1,500 or fewer
employees. Census Bureau data for
2007, which now supersede data from
the 2002 Census, show that there were
3,188 firms in this category that
operated for the entire year. Of this
total, 3,144 had employment of 999 or
fewer and 44 firms had had employment
of 1,000 employees or more. Thus under
this category and the associated small
business size standard, the majority of
these Competitive LECs, CAPs, SharedTenant Service Providers, and Other
Local Service Providers can be
considered small entities. According to
Commission data, 1,442 carriers
reported that they were engaged in the
provision of either competitive local
exchange services or competitive access
provider services. Of these 1,442
carriers, an estimated 1,256 have 1,500
or fewer employees and 186 have more
than 1,500 employees. In addition, 17
carriers have reported that they are
Shared-Tenant Service Providers, and
all 17 are estimated to have 1,500 or
fewer employees. In addition, 72
carriers have reported that they are
Other Local Service Providers. Seventy
of which have 1,500 or fewer employees
and two have more than 1,500
employees. Consequently, the
Commission estimates that most
providers of competitive local exchange
service, competitive access providers,
Shared-Tenant Service Providers, and
Other Local Service Providers are small
entities that may be affected by rules
adopted pursuant to the Notice.
45. Interexchange Carriers. Neither
the Commission nor the SBA has
developed a small business size
standard specifically for providers of
interexchange services. The appropriate
size standard under SBA rules is for the
category Wired Telecommunications
Carriers. Under that size standard, such
a business is small if it has 1,500 or
fewer employees. Census Bureau data
for 2007, which now supersede data
from the 2002 Census, show that there
were 3,188 firms in this category that
operated for the entire year. Of this
total, 3,144 had employment of 999 or
fewer, and 44 firms had had
employment of 1,000 employees or
more. Thus under this category and the
associated small business size standard,
the majority of these Interexchange
carriers can be considered small
entities. According to Commission data,
359 companies reported that their
primary telecommunications service
activity was the provision of
interexchange services. Of these 359
companies, an estimated 317 have 1,500
or fewer employees and 42 have more
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than 1,500 employees. Consequently,
the Commission estimates that the
majority of interexchange service
providers are small entities that may be
affected by rules adopted pursuant to
the Notice.
46. Operator Service Providers (OSPs).
Neither the Commission nor the SBA
has developed a small business size
standard specifically for operator
service providers. The appropriate size
standard under SBA rules is the
category Wired Telecommunications
Carriers. Under that size standard, such
a business is small if it has 1,500 or
fewer employees. Under that size
standard, such a business is small if it
has 1,500 or fewer employees. Census
Bureau data for 2007, which now
supersede 2002 Census data, show that
there were 3,188 firms in this category
that operated for the entire year. Of the
total, 3,144 had employment of 999 or
fewer, and 44 firms had had
employment of 1,000 employees or
more. Thus under this category and the
associated small business size standard,
the majority of these interexchange
carriers can be considered small
entities. According to Commission data,
33 carriers have reported that they are
engaged in the provision of operator
services. Of these, an estimated 31 have
1,500 or fewer employees and 2 have
more than 1,500 employees.
Consequently, the Commission
estimates that the majority of OSPs are
small entities that may be affected by
our proposed action.
47. Local Resellers. The SBA has
developed a small business size
standard for the category of
Telecommunications Resellers. Under
that size standard, such a business is
small if it has 1,500 or fewer employees.
Census data for 2007 show that 1,523
firms provided resale services during
that year. Of that number, 1,522
operated with fewer than 1000
employees and one operated with more
than 1,000. Thus under this category
and the associated small business size
standard, the majority of these local
resellers can be considered small
entities. According to Commission data,
213 carriers have reported that they are
engaged in the provision of local resale
services. Of these, an estimated 211
have 1,500 or fewer employees and two
have more than 1,500 employees.
Consequently, the Commission
estimates that the majority of local
resellers are small entities that may be
affected by rules adopted pursuant to
the Notice.
48. Toll Resellers. The SBA has
developed a small business size
standard for the category of
Telecommunications Resellers. Under
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that size standard, such a business is
small if it has 1,500 or fewer employees.
Census data for 2007 show that 1,523
firms provided resale services during
that year. Of that number, 1,522
operated with fewer than 1000
employees and one operated with more
than 1,000. Thus under this category
and the associated small business size
standard, the majority of these resellers
can be considered small entities.
According to Commission data, 881
carriers have reported that they are
engaged in the provision of toll resale
services. Of these, an estimated 857
have 1,500 or fewer employees and 24
have more than 1,500 employees.
Consequently, the Commission
estimates that the majority of toll
resellers are small entities that may be
affected by our action.
49. Pre-paid Calling Card Providers.
Neither the Commission nor the SBA
has developed a small business size
standard specifically for pre-paid calling
card providers. The appropriate size
standard under SBA rules is for the
category Telecommunications Resellers.
Under that size standard, such a
business is small if it has 1,500 or fewer
employees. Census data for 2007 show
that 1,523 firms provided resale services
during that year. Of that number, 1,522
operated with fewer than 1000
employees and one operated with more
than 1,000. Thus under this category
and the associated small business size
standard, the majority of these pre-paid
calling card providers can be considered
small entities. According to Commission
data, 193 carriers have reported that
they are engaged in the provision of prepaid calling cards. Of these, an
estimated all 193 have 1,500 or fewer
employees and none have more than
1,500 employees. Consequently, the
Commission estimates that the majority
of pre-paid calling card providers are
small entities that may be affected by
rules adopted pursuant to the Notice.
50. 800 and 800-Like Service
Subscribers. Neither the Commission
nor the SBA has developed a small
business size standard specifically for
800 and 800-like service (‘‘toll free’’)
subscribers. The appropriate size
standard under SBA rules is for the
category Telecommunications Resellers.
Under that size standard, such a
business is small if it has 1,500 or fewer
employees. Census data for 2007 show
that 1,523 firms provided resale services
during that year. Of that number, 1,522
operated with fewer than 1,000
employees and one operated with more
than 1,000. Thus under this category
and the associated small business size
standard, the majority of resellers in this
classification can be considered small
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entities. To focus specifically on the
number of subscribers than on those
firms which make subscription service
available, the most reliable source of
information regarding the number of
these service subscribers appears to be
data the Commission collects on the
800, 888, 877, and 866 numbers in use.
According to our data, as of September
2009, the number of 800 numbers
assigned was 7,860,000; the number of
888 numbers assigned was 5,888,687;
the number of 877 numbers assigned
was 4,721,866; and the number of 866
numbers assigned was 7,867,736. The
Commission does not have data
specifying the number of these
subscribers that are not independently
owned and operated or have more than
1,500 employees, and thus are unable at
this time to estimate with greater
precision the number of toll free
subscribers that would qualify as small
businesses under the SBA size standard.
Consequently, the Commission
estimates that there are 7,860,000 or
fewer small entity 800 subscribers;
5,888,687 or fewer small entity 888
subscribers; 4,721,866 or fewer small
entity 877 subscribers; and 7,867,736 or
fewer small entity 866 subscribers. We
do not believe 800 and 800-Like Service
Subscribers will be effected by our
proposed rules, however we choose to
include this category and seek comment
on whether there will be an effect on
small entities within this category.
2. Wireless Carriers and Service
Providers
51. Below, for those services subject
to auctions, the Commission notes that,
as a general matter, the number of
winning bidders that qualify as small
businesses at the close of an auction
does not necessarily represent the
number of small businesses currently in
service. Also, the Commission does not
generally track subsequent business size
unless, in the context of assignments or
transfers, unjust enrichment issues are
implicated.
52. Wireless Telecommunications
Carriers (except Satellite). Since 2007,
the Census Bureau has placed wireless
firms within this new, broad, economic
census category. Prior to that time, such
firms were within the now-superseded
categories of ‘‘Paging’’ and ‘‘Cellular and
Other Wireless Telecommunications.’’
Under the present and prior categories,
the SBA has deemed a wireless business
to be small if it has 1,500 or fewer
employees. For the category of Wireless
Telecommunications Carriers (except
Satellite), Census data for 2007, which
supersede data contained in the 2002
Census, show that there were 1,383
firms that operated that year. Of those
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1,383, 1,368 had fewer than 100
employees, and 15 firms had more than
100 employees. Thus under this
category and the associated small
business size standard, the majority of
firms can be considered small.
Similarly, according to Commission
data, 413 carriers reported that they
were engaged in the provision of
wireless telephony, including cellular
service, Personal Communications
Service (PCS), and Specialized Mobile
Radio (SMR) Telephony services. Of
these, an estimated 261 have 1,500 or
fewer employees and 152 have more
than 1,500 employees. Consequently,
the Commission estimates that
approximately half or more of these
firms can be considered small. Thus,
using available data, we estimate that
the majority of wireless firms can be
considered small.
53. Wireless Communications
Services. This service can be used for
fixed, mobile, radiolocation, and digital
audio broadcasting satellite uses. The
Commission defined ‘‘small business’’
for the wireless communications
services (WCS) auction as an entity with
average gross revenues of $40 million
for each of the three preceding years,
and a ‘‘very small business’’ as an entity
with average gross revenues of $15
million for each of the three preceding
years. The SBA has approved these
definitions. The Commission auctioned
geographic area licenses in the WCS
service. In the auction, which
commenced on April 15, 1997 and
closed on April 25, 1997, seven bidders
won 31 licenses that qualified as very
small business entities, and one bidder
won one license that qualified as a small
business entity.
54. Satellite Telecommunications
Providers. Two economic census
categories address the satellite industry.
The first category has a small business
size standard of $15 million or less in
average annual receipts, under SBA
rules. The second has a size standard of
$25 million or less in annual receipts.
55. The category of Satellite
Telecommunications ‘‘comprises
establishments primarily engaged in
providing telecommunications services
to other establishments in the
telecommunications and broadcasting
industries by forwarding and receiving
communications signals via a system of
satellites or reselling satellite
telecommunications.’’ Census Bureau
data for 2007 show that 512 Satellite
Telecommunications firms that operated
for that entire year. Of this total, 464
firms had annual receipts of under $10
million, and 18 firms had receipts of
$10 million to $24,999,999.
Consequently, the Commission
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estimates that the majority of Satellite
Telecommunications firms are small
entities that might be affected by our
action.
56. The second category, i.e. ‘‘All
Other Telecommunications’’ comprises
‘‘establishments primarily engaged in
providing specialized
telecommunications services, such as
satellite tracking, communications
telemetry, and radar station operation.
This industry also includes
establishments primarily engaged in
providing satellite terminal stations and
associated facilities connected with one
or more terrestrial systems and capable
of transmitting telecommunications to,
and receiving telecommunications from,
satellite systems. Establishments
providing Internet services or voice over
Internet protocol (VoIP) services via
client-supplied telecommunications
connections are also included in this
industry.’’ For this category, Census
Bureau data for 2007 show that there
were a total of 2,383 firms that operated
for the entire year. Of this total, 2,347
firms had annual receipts of under $25
million and 12 firms had annual
receipts of $25 million to $49,999,999.
Consequently, the Commission
estimates that the majority of All Other
Telecommunications firms are small
entities that might be affected by our
action.
57. Common Carrier Paging. The SBA
considers paging to be a wireless
telecommunications service and
classifies it under the industry
classification Wireless
Telecommunications Carriers (except
satellite). Under that classification, the
applicable size standard is that a
business is small if it has 1,500 or fewer
employees. For the general category of
Wireless Telecommunications Carriers
(except Satellite), Census data for 2007,
which supersede data contained in the
2002 Census, show that there were
1,383 firms that operated that year. Of
those 1,383, 1,368 had fewer than 100
employees, and 15 firms had more than
100 employees. Thus under this
category and the associated small
business size standard, the majority of
firms can be considered small. The 2007
census also contains data for the
specific category of ‘‘Paging’’ ‘‘that is
classified under the seven-number
North American Industry Classification
System (NAICS) code 5172101.
According to Commission data, 291
carriers have reported that they are
engaged in Paging or Messaging Service.
Of these, an estimated 289 have 1,500 or
fewer employees, and 2 have more than
1,500 employees. Consequently, the
Commission estimates that the majority
of paging providers are small entities
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that may be affected by our action. In
addition, in the Paging Third Report and
Order, the Commission developed a
small business size standard for ‘‘small
businesses’’ and ‘‘very small
businesses’’ for purposes of determining
their eligibility for special provisions
such as bidding credits and installment
payments. A ‘‘small business’’ is an
entity that, together with its affiliates
and controlling principals, has average
gross revenues not exceeding $15
million for the preceding three years.
Additionally, a ‘‘very small business’’ is
an entity that, together with its affiliates
and controlling principals, has average
gross revenues that are not more than $3
million for the preceding three years.
The SBA has approved these small
business size standards. An auction of
Metropolitan Economic Area licenses
commenced on February 24, 2000, and
closed on March 2, 2000. Of the 985
licenses auctioned, 440 were sold. Fiftyseven companies claiming small
business status won.
58. Wireless Telephony. Wireless
telephony includes cellular, personal
communications services, and
specialized mobile radio telephony
carriers. As noted, the SBA has
developed a small business size
standard for Wireless
Telecommunications Carriers (except
Satellite). Under the SBA small business
size standard, a business is small if it
has 1,500 or fewer employees.
According to the 2008 Trends Report,
434 carriers reported that they were
engaged in wireless telephony. Of these,
an estimated 222 have 1,500 or fewer
employees and 212 have more than
1,500 employees. We have estimated
that 222 of these are small under the
SBA small business size standard.
3. Internet Service Providers
59. The 2007 Economic Census places
these firms, whose services might
include voice over Internet protocol
(VoIP), in either of two categories,
depending on whether the service is
provided over the provider’s own
telecommunications facilities (e.g., cable
and DSL ISPs), or over client-supplied
telecommunications connections (e.g.,
dial-up ISPs). The former are within the
category of Wired Telecommunications
Carriers, which has an SBA small
business size standard of 1,500 or fewer
employees. The latter are within the
category of All Other
Telecommunications, which has a size
standard of annual receipts of $25
million or less. The most current Census
Bureau data for all such firms, however,
are the 2002 data for the previous
census category called Internet Service
Providers. That category had a small
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business size standard of $21 million or
less in annual receipts, which was
revised in late 2005 to $23 million. The
2002 data show that there were 2,529
such firms that operated for the entire
year. Of those, 2,437 firms had annual
receipts of under $10 million, and an
additional 47 firms had receipts of
between $10 million and $24,999,999.
Consequently, we estimate that the
majority of ISP firms are small entities.
60. The RFA requires an agency to
describe any significant alternatives that
it has considered in developing its
approach, which may include the
following four alternatives (among
others): ‘‘(1) The establishment of
differing compliance or reporting
requirements or timetables that take into
account the resources available to small
entities; (2) the clarification,
consolidation, or simplification of
compliance or reporting requirements
under the rule for such small entities;
(3) the use of performance rather than
design standards; and (4) an exemption
from coverage of the rule, or any part
thereof, for small entities.’’
G. Description of Projected Reporting,
Recordkeeping, and Other Compliance
Requirements
61. Support Amounts for Voice
Service. In the Order, we adopt an
interim rate of reimbursement for
Lifeline in lieu of the prior tiered
system. The tiered system was tied to
the subscriber line charge (SLC), which
we find to be an imprecise basis for
Lifeline support given the myriad
changes in the telecommunications
marketplace. This interim monthly rate
is set at $9.25 per subscriber. This
interim support amount was determined
by calculating the average level of
support from the most recent
disbursement data available. Because
the interim support amount is an
average, some ETCs will receive more
monthly support while others receive
less—regardless of size. While there
may be a slightly negative economic
impact on some small entities, such an
impact will be felt by all entities
currently receiving more than $9.25 per
month per subscriber in Lifeline
support, not just small entities.
However, as with our adoption of
uniform consumer eligibility rules, this
uniform interim support amount will
simplify program administration by
ETCs operating across different SLCs.
62. Uniform Eligibility Criteria. As
part of the Commission’s effort to
streamline the program, the Commission
adopts a uniform set of consumer
eligibility requirements throughout the
nation. This rule alleviates some of the
administrative burdens on ETCs
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operating in multiple states caused by
varying consumer eligibility
requirements. We anticipate that this
new rule will significantly simplify
program administration by ETCs,
resulting in greater program efficiencies.
Given that we permit states to adopt
more permissive Lifeline eligibility
criteria on top of the base of federal
Lifeline eligibility criteria, no ETCs will
face a smaller Lifeline subscriber base
because of the change in eligibility
criteria. We expect no economic impact
on entities through the adoption of the
federal eligibility criteria across all
states.
63. One-per-Household. First, the
Order adopts a one-per-household
requirement. ‘‘Household’’ is defined
consistent with the Low-Income Home
Energy Assistance Program as ‘‘any
individual or group of individuals who
are living together at the same address
as one economic unit,’’ with an
‘‘economic unit’’ defined as ‘‘all
individuals contributing to and sharing
in the income and expenses of a
household’’ (which would include
persons with no income who benefit
from another person’s financial
support). Second, the Order adopts
procedures to enable Lifeline applicants
to demonstrate when initially enrolling
in the program that any other Lifeline
recipients residing at their residential
address are part of a separate household
and directs USAC, within 30 days of the
effective date of the Order, to develop a
form that will allow low-income
households sharing an address to
indicate they are part of a separate
household. Third, the Order also directs
USAC, within 30 days of the effective
date of the Order, to develop print and
web materials to be posted on USAC’s
Web site that both USAC and ETCs can
use to educate consumers about the oneper-household rule (i.e., how to
determine what persons comprise a
household). USAC will prepare
materials that the ETCs can rely on to
educate their subscribers about the
one-per-household requirement.
64. We estimate that these rules will
have a minimal economic impact. While
the rules will require eligible
telecommunications carriers to obtain
information from a limited number of
consumers about their household
arrangements, it will only impact those
low-income consumers who reside in
group living facilities or at addresses
shared by multiple households. This
information will be collected using a
worksheet to be designed and provided
to the ETCs by USAC. This information
is necessary to assist qualifying
consumers relying on addresses shared
by multiple households to obtain
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Lifeline service and to document their
compliance with the one-per-household
rule. Additionally, USAC will develop
print and web materials that ETCs can
use to educate consumers about the oneper-household rule. We do not expect
these requirements to have a
disproportionate impact on carriers,
including those that are small entities.
65. Certification of Consumer
Eligibility. First, the Order amends
§ 54.410 of the Commission’s rules to
require all Lifeline subscribers to
provide certain certifications pertaining
to their eligibility for Lifeline upon
initial program enrollment and annually
thereafter. Depending on the state,
certifications should be collected from
consumers by carriers or the state
Lifeline administrator or a state agency.
66. Carriers and states (where
applicable) may need to update their
existing certification forms to comply
with the requirements of § 54.410, as
amended. Carriers already collect
several similar certifications from
Lifeline subscribers at enrollment; thus,
we expect that the costs of compliance
with the amended rule will be
marginally larger. Therefore, we
anticipate that the effect of this rule will
have minimal economic impact. Carriers
and states (where applicable) may
choose to use their existing certification
forms so long as those forms are
updated to comply with the new
certification rules. We also provide in
the Order that the new certification
rules will not go into effect until June
1, 2012, which will give carriers (both
large and small) time to make any
needed system updates. We also expect
to recover cost savings to the program
based on the reduction of ineligible
consumers stemming from the updated
certification requirements. We do not
expect that this rule will
disproportionately impact small
entities.
67. Second, the Order requires ETCs
(or the state administrator, where
applicable) to check the eligibility of
new Lifeline subscribers at enrollment
by accessing available state or federal
eligibility databases. Where underlying
eligibility data cannot be accessed
through a database, the Order requires
new Lifeline subscribers to provide
documentation of program-based
eligibility or income-based eligibility,
which the entity enrolling the
subscriber should review (but not
retain). We acknowledge that
compliance with the rule we adopt here
will involve some administrative costs
for ETCs, for example, modifying their
internal processes and systems to
comply with the new documentation
requirement. However, we do not expect
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these costs to have a significant
economic impact especially since we
limit this requirement to new customers
rather than requiring ETCs to re-verify
all of their subscribers by obtaining
documentary proof of eligibility. We do
not expect these costs to be
disproportionately large for small
carriers. We also conclude that those
costs are outweighed by the significant
benefits gained by protecting the Fund
from waste, fraud, and abuse. We
estimate in the Order that up to 15
percent of current Lifeline subscribers
may be ineligible for the program,
potentially representing as much as
$375 million of support per year. We
expect that a rule requiring ETCs to
obtain documentation of program
participation from new Lifeline
applicants, in conjunction with our
efforts to implement a Lifeline database,
will enable the Commission to recapture
those funds and prevent unbridled
future growth in the Fund. The resulting
cost savings will in turn benefit those
consumers who contribute to the
Universal Service Fund, new qualifying
low-income consumers, and our goal to
modernize the program for a broadband
future. Further, while we will require
consumers to provide documentation of
program- and income-eligibility to ETCs
at enrollment, consumers will no longer
be required to provide such
documentation as part of the annual
verification process in federal default
states. Moreover, consumers will not
need to demonstrate eligibility at
enrollment (or annually) once that
function is addressed through a
database. Lastly, we give ETCs until
June 1, 2012, to implement processes to
document consumer eligibility for
Lifeline. We expect that these changes
will reduce the burdens on both
consumers and ETCs.
68. Third, the Order requires ETCs to
make certain certifications annually and
when submitting for reimbursement
from the program. The Commission
currently directs ETCs to make certain
certifications relating to the Lifeline
program. Section 54.410 of the
Commission’s rules, as modified, does
not substantially change those
requirements; rather, the Commission
adds additional certifications that the
ETC must make annually and when
seeking reimbursement from the Fund.
USAC and the Commission have jointly
developed the certification language and
the forms. Thus, carriers need only
make the necessary internal inquiries
(e.g., ensure that they have received a
signed certification form from each
Lifeline subscriber) and sign the forms
as provided to them by USAC. We do
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not expect that this requirement will
have an adverse financial impact on
small entities.
69. Fourth, we replace the existing
process used by ETCs and states to
verify ongoing consumer eligibility for
Lifeline with a uniform rule requiring
all ETCs (or states, where applicable) to
re-certify the eligibility of their
complete Lifeline subscriber base as of
June 1, 2012. By the end of 2012, all
ETCs (or states, where applicable) must
obtain from each Lifeline subscriber a
re-certification form that contains each
of the required certifications listed in
§ 54.410, as amended, and report those
results to USAC, the Commission, states
(where the state has jurisdiction over
the carrier), and Tribal governments
(where applicable). Alternatively, in
states where a state agency or a third
party has implemented a database that
carriers may query to re-certify the
consumer’s continued eligibility, the
carrier (or state agency or third-party,
where applicable) must instead query
the database by the end of 2012 and
maintain a record of what specific data
was used to re-certify eligibility and the
date of re-certification.
70. We have taken steps in
implementing this rule to minimize the
impact on carriers and states performing
the re-certification function. This recertification may be done on a rolling
basis throughout the year, at the ETC’s
election. ETCs (or states, where
applicable) may re-certify the continued
eligibility of an ETC’s Lifeline
subscribers by contacting them—which
can be done in any of a number of ways,
including in person, in writing, by
phone, by text message, by email, or
otherwise through the Internet—to
confirm their continued eligibility for
Lifeline. As noted above, where
available, ETCs and states will access
electronic eligibility data rather than
contact each subscriber to obtain an
individual re-certification. Lastly, after
2012, ETCs may elect to have USAC
administer the self-certification process
on their behalf. We do not expect the
costs of re-certification to
disproportionately burden small
entities, who will have a lesser number
of subscribers to contact and may opt to
use less costly means (such as text
message or email) to contact their
subscribers for re-certification.
71. Tribal Lifeline Eligibility. First, the
Order clarifies that residents of Tribal
lands are eligible for Lifeline (and Link
Up support if served by a high cost
recipient) based on (1) income level; (2)
participation in any Tribal-specific
federal assistance program identified in
the Commission’s rules; or (3)
participation in any other program
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identified in the Commission’s rules.
We do not expect that this clarification
will have any financial impact,
including on small businesses, as it does
not change existing program rules, but
rather removes any ambiguity in the
interpretation of those rules by carriers
and consumers.
72. Second, the Order adopts the
NPRM proposal to add the Food
Distribution Program on Indian
Reservations (FDPIR) to the list of
programs that confer eligibility. We
expect this rule change to have only
minimal financial impact. For example,
carriers serving eligible residents of
Tribal lands will need to update their
certification/enrollment forms to add
FDPIR to their list of qualifying
programs. However, the benefit that will
accrue to eligible residents of Tribal
lands participating in FDPIR will
outweigh the burdens to carriers. We do
not expect this rule to have a
disproportionate impact on small
entities, for whom the cost of
compliance would be the same as for
other carriers.
73. Third, the Order establishes a
waiver and designation process for
those Tribal communities that are
located outside of reservations, but can
show ties to defined Tribal
communities, and removes the term
‘‘near reservation’’ from the
Commission’s definition of Tribal lands.
We do not expect this rule to have any
financial impact, including on small
entities, as carriers will not have any
role in the designation process.
74. Fourth, the Order clarifies that we
will continue to allow self-certification
of residence on Tribal lands. We do not
expect this rule to have any economic
impact on any entities, as it clarifies,
rather than changes, existing program
rules.
75. Electronic Signatures and
Interactive Voice Response Systems. In
the Order, the Commission clarifies that
ETCs may use electronic signatures and
interactive voice response systems to
obtain Lifeline subscriber certifications,
provided the electronic signatures are
obtained in accordance with the
requirements of the E–SIGN Act. We
expect no negative economic impact
from this clarification because this
clarification makes obtaining subscriber
signatures easier for all ETCs.
76. National Accountability Database.
The Order established a national
accountability database to reduce the
likelihood that a consumer or household
will receive more than one subsidized
service through the low-income
program. The Order directs the Bureau
to work with USAC and OMB to
establish and implement the database
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and associated processes. The Order
directs ETCs to (1) populate the
database with the necessary subscriber
information to implement these
processes and (2) query the database for
each new subscriber prior to receiving
reimbursement from the fund for that
subscriber. ETCs may have to collect
customer information which is not
currently in their possession to populate
the database.
77. While the database imposes an
economic impact on carriers to populate
the database, and potentially interface
with the database, the entire system will
be designed to minimize burdens on
small entities. There are a number of
ways in which the database has been
designed to limit the burden on small
entities. First, the Commission does not
impose any real-time obligations on
ETCs to update the database. The ETCs
must update the database prior to
seeking reimbursement. Second, to the
extent that ETCs have not collected the
necessary data from existing customers
to send to the duplicates database, ETCs
will have a significant period of time
before the database is operational to
collect such information because the
Commission projects that the database
could take up to a year to build and
ETCs are given an additional 60 days to
populate the database. The Commission
has directed USAC to provide support
to ETCs regarding how they should
populate the database, and this
assistance should further reduce the
burden on ETCs, particularly those
smaller entities with fewer back-office
resources and less sophisticated
systems. For similar reasons, the burden
on small entities will be limited because
the database will be designed to accept
the subscriber information in many
different formats, not just via a machine
to machine connection. The database
will include an ID verification function,
which had heretofore been undertaken
by some ETCs at their own expense. The
database includes an exception
management and dispute resolution
process so that the burden on ETCs to
handle disputes if a subscriber is
classified as a duplicate by the database
will be limited.
78. Toll Limitation Service Support. In
the Order, the Commission begins the
process of eliminating toll limitation
service (TLS) support and modifies its
rules for which ETCs must offer TLS.
The Commission finds that TLS is less
relevant in a marketplace where many
ETCs do not separately charge for ‘‘toll’’
or ‘‘long distance’’ calls. To the extent
an ETC still distinguishes between local
and long distance calling in its Lifeline
service, it must provide at no additional
cost to the consumer the ability to limit
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or block calls that would result in
additional charge. Support for TLS will
be eliminated over three years to
mitigate the impact of this change. In
the first year of limited TLS support,
support will be capped at $3 per month
per consumer. In the second year,
support will be limited to $2 per month
per consumer. In the third year, support
will be eliminated. ETCs seeking TLS
reimbursement will need to adjust their
TLS provisioning methods as there will
no longer be a separate TLS
reimbursement outside of the standard
Lifeline support amount. This rule will
have an economic impact only on ETCs
unable to provide TLS at an incremental
cost above the limits set in the rule.
79. Link Up. The Order will eliminate
Link Up support to all ETCs on nonTribal lands and limit Link Up on Tribal
lands to high cost recipients deploying
infrastructure. Marketplace trends
indicate that Lifeline consumers
increasingly have service options from
ETCs that neither draw on Link Up
support nor charge the consumer a
service initiation fee. In balancing a
number of universal service goals with
finite resources, we conclude that
dollars currently spent for Link Up can
be more effectively spent to improve
and modernize the Lifeline program.
Some ETCs who had previously been
receiving support from the Fund will no
longer receive such support, however,
the rule will not disproportionately
impact small entities because the
support is being eliminated for all ETCs
serving non-Tribal areas—not just small
entitites.
80. Subscriber Usage of Customer
Supported Service. The Order
establishes a rule that pre-paid ETCs
who do not charge a fee for the service
(pre-paid ETCs) may not seek Lifeline
reimbursement until a subscriber
initiates service. Moreover, the rules
require pre-paid ETCs to de-enroll
subscribers who fail to use the service
within a consecutive 60-day period and
correspondingly update the duplicates
database within one business day of any
such de-enrollment. These new rules
require pre-paid ETCs to monitor usage
prior to seeking reimbursement from the
low-income fund. In an effort to make
compliance easier, the rules identify
what actions on the part of consumers
constitute usage. Given that carriers
already have systems in place whereby
usage is monitored so as to prevent
consumers from using more than their
allocated minutes, the burden of deenrolling those consumers who do not
use the service within a 60-day period
is likely minimal. Moreover, while there
may be some administrative expense
related to updating the database, we
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anticipate such expense to be nominal.
The new rules also require pre-paid
ETCs to inform subscribers at service
initiation of the usage and deenrollment policies. This new
requirement only applies to those ETCs
choosing to provide Lifeline service at
no charge to subscribers.
81. Minimum Consumer Charge. The
Order does not adopt a minimum
consumer charge for Lifeline services
and eliminates the current rule
imposing a minimum local charge on
Tribal subscribers. The requirements do
not impose any obligations on carriers,
large or small, therefore there is no
associated cost of compliance.
82. Marketing & Outreach. The Order
requires ETCs to include plain, easy-tounderstand language in all of their
Lifeline marketing materials that the
offering is a Lifeline-supported service;
that Lifeline is a government assistance
program; that only eligible consumers
may enroll in the program; what
documentation is necessary for
enrollment; and that the program is
limited to one benefit per household,
consisting of either wireline or wireless
service. Additionally, we require ETCs
to disclose the company name under
which it does business and the details
of its Lifeline service offerings in its
Lifeline-related marketing and
advertising. We do not anticipate this
rule to have a significant economic
impact on any entities because the costs
of including basic program information
in all marketing materials should be
minimal.
83. Audits and Enforcement. The
Order adopts a new audit requirement
whereby newly designated ETCs will be
audited by USAC within the first 18
months of seeking Lifeline support in
any single state. This requirement is the
same regardless of the size of the ETC.
Moreover, because all ETCs are required
to maintain records for a period of three
years, submit annual recertification
documentation, and be subjected to
discretionary USAC audits, this first
year audit requirement does not pose
any burden or hardship on new ETCs or
a disproportionate burden on small
ETCs.The Order also requires those
ETCs drawing more than $5 million in
low-income support from the fund, at
the holding company level, to perform
a biennial independent audit. This
requirement only pertains to large
entities therefore there is no impact, let
alone a disproportionate one, on small
ETCs.
84. In the Order, the Commission
requires the submission of certain
ownership information to USAC in
order to implement our new biennial
audit rule. ETCs are required to report
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ownership information, including
affiliates, holding companies, and any
branding, to USAC, along with relevant
universal service identifiers so that we
may determine at the holding company
level which ETCs meet the $5 million
threshold. In addition, the Order
requires newly designated ETCs to
describe service offerings and type of
service being provided. These reporting
requirements apply to all ETCs equally
and do not have a disproportionate
impact on small providers. This
reporting will help the Commission
increase accountability in our universal
service programs by simplifying the
process of determining the total amount
of public support received by each
recipient, regardless of corporate
structure. This new requirement will
impose a burden on all ETCs, though
not one that has a significant economic
impact. While there will be some
administrative costs associated with this
requirement, the overall burden should
be minimal and will be greater for large
ETCs operating with complex corporate
structures across multiple study areas.
85. Payment of Low-Income Support.
The Order adopts a three month
transition for low-income support to be
disbursed based on actual support in
place of the current administrative
process of paying low-income support
based on projected service. The Order
accelerates USAC’s payment of lowincome support for carriers filing the
FCC Form 497 electronically by a
monthly deadline. The window by
which carriers must file revisions or
original FCC Form 497s is reduced from
fifteen months from the end of a
calendar year, to a rolling twelve month
window. In order to accomplish this
transition, the Commission sets forth a
procedure whereby entities determine
which study area codes to transition in
each of the transition months, thereby
allowing carriers to proportionately
distribute any potential financial burden
resulting from the transition to
payments based on actual support. The
Commission sets the transition to
payments based on actual support to
begin in July 2012, giving small entities,
and all ETCs alike, ample time to
prepare for the transition to payments
based on actual support. Any economic
impact of this revision would be equal
to all entities.
86. In addition, the Commission
expedites payment of low-income funds
for carriers that file the FCC Form 497
electronically by the monthly deadline,
thereby allowing ETCs to receive
payments in a timely manner for timely
electronic filings, and helping small
entities reduce the negative financial
impact of delayed payment. The
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Commission narrowed the revision
window for FCC Form 497s from fifteen
months to a rolling twelve month
window. While carriers, large or small,
may experience a minor burden by
narrowing this revision window, the
burden is minimized by the transition to
payments on actual support. Carriers
should not require as much time to
scrutinize payments received because
the calculations of projections and trueups is being eliminated, and payments
will be based on actual support
provided by the ETC. A twelve month
rolling window should be sufficient
time for carriers to reconcile their books
and file any required revisions, without
imposing an unfair burden.
87. Bundled Services. In the Order, we
amend §§ 54.401 and 54.403 of the
Commission’s rules to adopt a federal
policy providing all ETCs (whether
designated by a state or this
Commission) the flexibility to permit
Lifeline subscribers to apply their
Lifeline discount to bundled service
packages or packages containing
optional calling features available to
Lifeline consumers. We do not expect
this rule change to have a substantial
financial impact, as carriers can elect
not to offer bundled service packages or
packages containing optional calling
features to Lifeline consumers. We are
not mandating that they do so at this
time and will continue to weigh the
effects of the flexible policy adopted in
the Order. We believe that the benefits
to consumers that could result from this
rule outweigh the potential costs of
compliance for carriers who choose to
make such plans available to Lifeline
consumers.
88. Support for Broadband: Pilot
Program. The Order will establish a
broadband pilot program aimed at
generating statistically significant data
that will allow the Commission, ETCs,
and the public to analyze the
effectiveness of different approaches to
using Lifeline funds to making
broadband more affordable for lowincome Americans while providing
support that is sufficient but not
excessive. The Commission directs the
Bureau to solicit applications from ETCs
to participate in the Pilot Program and
to select a relatively small number of
projects to test the impact on broadband
adoption with variations in the monthly
discount for broadband services,
including variations on the discount
amount, the duration of the discount
(phased down over time or constant)
over a 12-month period. The Bureau
will also give preference to ETCs that
partner with third parties that have
already developed approaches to
overcoming broadband adoption
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barriers, including digital literacy,
equipment costs, and relevance.
89. We do not expect these
requirements to have a significant
economic impact on ETCs because
entities have a choice of participating.
We also do not expect small entities to
be disproportionately impacted. The
Bureau will consider whether the
projects proposed will promote
entrepreneurs and other small
businesses in the provision and
ownership of telecommunications
services and information services,
consistent with section 257 of the
Communications Act, including those
that may be socially and economically
disadvantaged businesses. All ETCs that
choose to participate will be required to
collect and submit data throughout the
pilot to USAC. The collection of
information is required to study the
length and amount of subsidy that is
necessary for low-income consumers to
adopt broadband. The benefits of
collecting information outweigh any
costs.
90. Facilities-Based Requirements. In
the Order, the Commission forbears
from applying the Act’s facilities
requirement of section 214(e)(1)(A) to
all telecommunications carriers that
seek limited ETC designation to
participate in the Lifeline program,
subject to certain conditions.
Specifically, each carrier must (i)
comply with certain 911 requirements;
and (ii) file, subject to Bureau approval,
a compliance plan providing specific
information regarding the carrier’s
service offerings and outlining the
measures the carrier will take to
implement the obligations contained in
this Order. To avoid disruption to
subscribers served by existing Lifelineonly ETCs designated prior to December
29, 2011, those ETCs can continue to
receive reimbursement pending
approval of their compliance plan,
provided they submit their plan to the
Bureau by July 1, 2012. Carriers
designated after December 29, 2011 will
not receive reimbursement from the
Fund until the Bureau approves their
compliance plans.
91. We do not expect these changes to
have a disproportionate impact on
entities, including those that are small
entities, because the Commission will
no longer require carriers to seek
forbearance from the facilities
requirement of section 214(e)(1)(a). The
Commission, however, will continue to
require carriers seeking to forbear from
the facilities requirement of section 214
to comply with certain 911
requirements and to file and obtain
approval from the Bureau of a
compliance plan describing the ETC’s
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adherence to certain protections
designed to protect consumers and the
Fund. The Commission has historically
imposed these requirements on carriers
seeking to forbear from the facilities
requirement so this will not unduly
burden to all impacted entities.
H. Steps Taken To Minimize Significant
Economic Impact on Small Entities, and
Significant Alternatives Considered
92. The RFA requires an agency to
describe any significant alternatives that
it has considered in developing its
approach, which may include the
following four alternatives (among
others): ‘‘(1) The establishment of
differing compliance or reporting
requirements or timetables that take into
account the resources available to small
entities; (2) the clarification,
consolidation, or simplification of
compliance or reporting requirements
under the rule for such small entities;
(3) the use of performance rather than
design standards; and (4) an exemption
from coverage of the rule, or any part
thereof, for small entities.’’
93. Support Amounts for Voice
Service. The Commission considered
the establishment of a separate rate of
reimbursement for different types of
providers. The Commission determined
that such a system of reimbursement
would create administrative difficulties
for USAC and for ETCs. A tiered system,
be it the prior structure or the one
contemplated for the benefit of small
entities, does not treat all subscribers
equally and makes comparison of
Lifeline plans difficult for consumers.
Therefore, we determined that the
benefits of such a structure do not
outweigh the costs.
94. One Per Household. We
considered alternatives to a one-perhousehold rule, including a rule
permitting one Lifeline-supported
service per adult and one Lifelinesupported service per residential
address. We did not, however, adopt
these approaches—the former because it
would increase the size of the universal
service fund, inconsistent with our
program goals, and the latter because it
could potentially exclude eligible
consumers from the Lifeline program.
Thus, we found that the benefits of a
one-per-household rule and the
associated processes we adopt today
outweigh the potential costs.
95. Certification of Consumer
Eligibility. We considered alternatives
that would require ETCs to verify only
a portion of their Lifeline subscriber
base, including allowing small ETCs
within a state to perform sampling in
the aggregate rather than on an
individual basis, requiring ETCs with a
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minimal number of Lifeline subscribers
to sample fewer subscribers than larger
ETCs, and allowing all ETCs to sample
a lesser percentage of their Lifeline
subscriber base. The approach we adopt
in the Order strikes an appropriate
balance between these interests by
helping to identify and de-enroll
ineligible subscribers, while imposing
fewer burdens on consumers and ETCs
than a full census survey (i.e., requiring
consumers to annually produce
documentation to verify continued
eligibility).
96. National Accountability Database.
The Commission considered whether
ETCs would be obligated to update the
database with customer information in
real-time. The Commission found that it
would be overly burdensome for ETCs,
particularly ETCs which are also small
entities, to implement real-time
connections between the database and
carriers given the limited benefits that
real-time updates would provide. We
therefore did not adopt a rule that the
database would have to be updated in
real-time. Furthermore, except for
information regarding customer deenrollment, ETCs would have ten
business days to update the database
once it has become aware that
information regarding a subscriber has
changed. The Commission adopted a
rule that the first ETC to populate the
database with a particular customer’s
information would be able to receive
reimbursement for that customer. The
Commission acknowledged that this
rule would provide an advantage to
those ETCs with real-time updating
capability, but the Commission found
that this approach would reduce the
amount of duplicative support and
encourage the prompt transmission of
data without imposing burdens that a
real-time updating requirement might
impose on small entities.
97. Toll Limitation Service Support.
The new TLS support rule, as discussed
above, may have an economic impact on
entities, including an impact on small
entities because they are used to getting
TLS support. This rule will have an
economic impact only on ETCs unable
to provide TLS at an incremental cost
above limits set in the rule. In the Order,
we note that ILECs typically seek TLS
support at a much lower rate than
competitive LECs. Small entities that
purchase TLS will no longer be able to
seek reimbursement for the incremental
costs of doing so after 2013. Therefore,
small competitive LECs may still be
required to offer TLS to Lifeline
subscribers but unable to receive
sufficient support for the incremental
costs of doing so. However, we adopt
this TLS support rule to encourage
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efficiencies in the provisioning of TLS.
In light of the concerns expressed by
competitive LECs, we considered
several other approaches to reforming
TLS support, including a shorter
timeframe for reduction of TLS support
as well as an immediate elimination of
support. We chose the approach
adopted in the Order because it is the
least burdensome method to reform TLS
support.
98. Link Up. While we considered
some carriers’ proposal to decrease the
Link Up support amount, and others to
define more narrowly appropriate and
inappropriate uses of Link Up, on
balance, the Commission concluded that
the dollars spent on Link Up in its
current form can be better spent on
other uses, such as modernizing the
program and constraining the overall
size of the fund. We acknowledge that
some ETCs will receive less support as
a result of the elimination of Link Up
funds but the Commission has
concluded that Link Up support has
been abused by some carriers and that
USF dollars are better spent supporting
other aspects of the program.
99. Subscriber Usage of Customer
Supported Services. We extend the
consumer usage condition (whereby
subscribers will be de-enrolled if they
fail to use the service within a
consecutive 60-day period) only to free
pre-paid services, which are those
services for which subscribers do not
receive monthly bills and do not have
any regular billing relationship with the
ETC, and decline at this time to impose
this condition on other types of Lifeline
supported services. We are sensitive to
the administrative burden that a 60-day
usage requirement may have on postpaid services, and at this time do not
extend the usage requirements to postpaid services, whether wireline or
wireless.
100. Audits and Enforcement. We
adopt a requirement that every ETC
providing Lifeline service and drawing
$5 million or more in the aggregate on
an annual basis from the low-income
program hire an independent audit firm
to assess the ETC’s overall compliance
with the program’s requirements every
two years. We considered imposing the
biennial independent audit requirement
on all ETCs but rejected that as too
burdensome on small entities. We
concluded it was appropriate to focus
the mandatory independent audit
requirement on the largest recipients
who post the biggest risk to the program
if they lack effective internal controls to
ensure compliance with Commission
requirements.
101. Payment of Low-Income Support.
The Commission sought comment on a
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one month transition, as proposed by
USAC, however the Commission found
that the financial impact of the one
month proposed transition could have
been overly burdensome on the
financial well-being of small entities
participating in the Lifeline program.
The Commission considered a two
month transition as suggested by
commenters, and went one step further
to extend the transition to three months,
thus allowing all carriers, especially
small entities, to minimize any potential
negative financial impact by spreading
the transition out over the three months.
102. Bundled Services. We considered
adopting a rule mandating that all ETCs
allow Lifeline discounts to be applied to
any package containing a voice
component; however, we determined
that we did not have sufficient
information in the record to evaluate the
impact of a rule at this time. We also
adopt a rule that ETCs must explicitly
notify Lifeline subscribers purchasing
bundled packages or packages
containing optional calling features that
partial payments will first be applied to
pay down the allocated price of the
Lifeline voice services, and require
ETCs to provide clear language to this
effect on the subscriber’s bill. We do not
expect that this rule will
disproportionately impact small
businesses, which, as above, may opt
not to offer such plans to Lifeline
subscribers. Additionally, we expect
that some carriers may already have
processes in place to apply partial
payments to maintain the voice portion
of a Lifeline calling plan. Moreover, this
rule will help to prevent Lifeline
subscribers from being disconnected
from voice service for non-payment,
thereby reducing potential burdens that
may result to ETCs from having to reenroll disconnected subscribers.
103. Report to Congress: The
Commission will send a copy of the
Order, including this FRFA, in a report
to be sent to Congress pursuant to the
Congressional Review Act. In addition,
the Commission will send a copy of the
Order, including this FRFA, to the Chief
Counsel for Advocacy of the SVA. A
copy of the Order and FRFA (or
summaries thereof) will also be
published in the Federal Register.
XII. Ordering Clauses
104. Accordingly, it is ordered, that
pursuant to the authority contained in
sections 1, 2, 4(i), 10, 201–206, 214,
218–220, 251, 252, 254, 256, 303(r), 332,
and 403 of the Communications Act of
1934, as amended, and section 706 of
the Telecommunications Act of 1996, 47
U.S.C. 151, 152, 154(i), 160, 201–206,
214, 218–220, 251, 252, 254, 256, 303(r),
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332, 403, 1302, and §§ 1.1 and 1.427 of
the Commission’s rules, 47 CFR 1.1,
1.427, this Report and Order is Adopted.
105. It is further ordered that, Part 54
of the Commission’s rules, 47 CFR part
54, is Amended as set forth in this rule,
and such rule amendments shall be
effective April 2, 2012, except for those
rules and requirements that involve
Paperwork Reduction Act burdens,
which shall become effective
immediately upon announcement in the
Federal Register of OMB approval and
of effective dates of such rules, and
except for the amendments contained
herein to 47 CFR 54.411, 54.412, 54.413
and 54.414 which shall become effective
April 1, 2012; and 47 CFR 54.409 which
shall become effective June 1, 2012.
106. It is further ordered that,
pursuant to the authority contained in
sections 4(i), 4(j), 10, 214, and 254 of the
Communications Act of 1934, as
amended, 47 U.S.C. 154(i), 154(j), 160,
214, 254, the petition for forbearance
filed by AMERICAN BROADBAND &
TELECOMMUNICATIONS is granted to
the extent discussed herein and
conditioned on fulfillment of the
obligations set forth in this order.
107. It is further ordered that,
pursuant to the authority contained in
sections 4(i), 4(j), 10, 214, and 254 of the
Communications Act of 1934, as
amended, 47 U.S.C. 154(i), 154(j), 160,
214, 254, the petition for forbearance
filed by MILLENNIUM 2000, INC. is
granted to the extent discussed herein
and conditioned on fulfillment of the
obligations set forth in this order.
108. It Is Further Ordered that,
pursuant to the authority contained in
sections 4(i), 4(j), 10, 214, and 254 of the
Communications Act of 1934, as
amended, 47 U.S.C. 154(i), 154(j), 160,
214, 254, the petition for forbearance
filed by NORTH AMERICAN LOCAL,
LLC is granted to the extent discussed
herein and conditioned on fulfillment of
the obligations set forth in this order.
109. It is further ordered that,
pursuant to the authority contained in
sections 4(i), 4(j), 10, 214, and 254 of the
Communications Act of 1934, as
amended, 47 U.S.C. 154(i), 154(j), 160,
214, 254, the petition for forbearance
filed by TOTAL CALL MOBILE, INC. is
granted to the extent discussed herein
and conditioned on fulfillment of the
obligations set forth in this order.
110. It is further ordered that,
pursuant to the authority contained in
sections 4(i), 4(j), 10, 214, and 254 of the
Communications Act of 1934, as
amended, 47 U.S.C. 154(i), 154(j), 160,
214, 254, the petition for forbearance
filed by AIRVOICE WIRELESS, LLC Is
granted to the extent discussed herein
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12965
and conditioned on fulfillment of the
obligations set forth in this order.
111. It is further ordered that,
pursuant to the authority contained in
sections 4(i), 4(j), 10, 214, and 254 of the
Communications Act of 1934, as
amended, 47 U.S.C. 154(i), 154(j), 160,
214, 254, we forbear from applying
section 214(e)(1)(A) of the
Communications Act, 47 U.S.C.
214(e)(1)(A), and § 54.201(d)(1) and (i)
of the Commission’s rules, 47 CFR
54.201(d)(1), (i), to American Broadband
& Telecommunications, Millennium
2000, Inc., North American Local, LLC,
Total Call Mobile, Inc. and Airvoice
Wireless, LLC to the extent discussed
herein and conditioned on fulfillment of
the obligations set forth in this order.
112. It is further ordered that the
Petition of Qwest, Inc. regarding selfcertification of subscribers on Tribal
lands, filed April 25, 2008, is granted.
113. It is further ordered that the
Petition of AMERICAN PUBLIC
COMMUNICATIONS COUNCIL seeking
a rulemaking regarding payphone
service eligibility for Lifeline support,
filed December 6, 2010, is denied.
114. It is further ordered that the
Petition of AMERICAN PUBLIC
COMMUNICATIONS COUNCIL for
interim relief seeking to allow ETCs to
receive Lifeline support for services
provided to payphones, filed December
6, 2010, is denied.
115. It is further ordered that the
Commission shall send a copy of this
Report and Order to Congress and to the
Government Accountability Office
pursuant to the Congressional Review
Act, see 5 U.S.C. 801(a)(1)(A).
116. It is further ordered that the
Commission’s Consumer and
Governmental Affairs Bureau, Reference
Information Center, shall send a copy of
this Report and Order, including the
Final Regulatory Flexibility Analysis, to
the Chief Counsel for Advocacy of the
Small Business Administration.
List of Subjects in 47 CFR Part 54
Communications common carriers,
Reporting and record keeping
requirements, Telecommunications,
Telephone.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
Final Rules
For the reasons discussed in the
preamble, the Federal Communications
Commission amends 47 CFR part 54 as
follows:
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PART 54—UNIVERSAL SERVICE
1. The authority citation for part 54
continues to read as follows:
■
Authority: 47 U.S.C. 151, 154(i), 201, 205,
214, 219, 220, 254, 303(r), 403, and 1302
unless otherwise noted.
Subpart A—General Information
2. Amend § 54.5 by revising the
definition of ‘‘eligible
telecommunications carrier’’ to read as
follows:
■
§ 54.5
Terms and definitions.
*
*
*
*
*
Eligible telecommunications carrier.
‘‘Eligible telecommunications carrier’’
means a carrier designated as such
under subpart C of this part.
*
*
*
*
*
Subpart B—Services Designated for
Support
3. Amend § 54.101 by revising
paragraph (a) to read as follows:
■
§ 54.101 Supported services for rural,
insular and high cost areas.
(a) Services designated for support.
Voice Telephony services shall be
supported by federal universal service
support mechanisms. Eligible voice
telephony services must provide voice
grade access to the public switched
network or its functional equivalent;
minutes of use for local service
provided at no additional charge to end
users; access to the emergency services
provided by local government or other
public safety organizations, such as 911
and enhanced 911, to the extent the
local government in an eligible carrier’s
service area has implemented 911 or
enhanced 911 systems; and toll
limitation services to qualifying lowincome consumers as provided in
subpart E of this part.
*
*
*
*
*
Subpart C—Carriers Eligible for
Universal Service Support
4. Amend § 54.201 by revising
paragraphs (a)(1) and (h) to read as
follows:
■
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§ 54.201 Definition of eligible
telecommunications carriers generally.
(a) * * *
(1) Only eligible telecommunications
carriers designated under this subpart
shall receive universal service support
distributed pursuant to part 36 of this
chapter, and subparts D and E of this
part.
*
*
*
*
*
(h) A state commission shall not
designate a common carrier as an
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eligible telecommunications carrier for
purposes of receiving support only
under subpart E of this part unless the
carrier seeking such designation has
demonstrated that it is financially and
technically capable of providing the
supported Lifeline service in
compliance with subpart E of this part.
*
*
*
*
*
■ 5. Revise § 54.202 to read as follows:
§ 54.202 Additional requirements for
Commission designation of eligible
telecommunications carriers.
(a) In order to be designated an
eligible telecommunications carrier
under section 214(e)(6), any common
carrier in its application must:
(1)(i) Certify that it will comply with
the service requirements applicable to
the support that it receives.
(ii) Submit a five-year plan that
describes with specificity proposed
improvements or upgrades to the
applicant’s network throughout its
proposed service area. Each applicant
shall estimate the area and population
that will be served as a result of the
improvements. Except, a common
carrier seeking designation as an eligible
telecommunications carrier in order to
provide supported services only under
subpart E of this part does not need to
submit such a five-year plan.
(2) Demonstrate its ability to remain
functional in emergency situations,
including a demonstration that it has a
reasonable amount of back-up power to
ensure functionality without an external
power source, is able to reroute traffic
around damaged facilities, and is
capable of managing traffic spikes
resulting from emergency situations.
(3) Demonstrate that it will satisfy
applicable consumer protection and
service quality standards. A
commitment by wireless applicants to
comply with the Cellular
Telecommunications and Internet
Association’s Consumer Code for
Wireless Service will satisfy this
requirement. Other commitments will
be considered on a case-by-case basis.
(4) For common carriers seeking
designation as an eligible
telecommunications carrier for purposes
of receiving support only under subpart
E of this part, demonstrate that it is
financially and technically capable of
providing the Lifeline service in
compliance with subpart E of this part.
(5) For common carriers seeking
designation as an eligible
telecommunications carrier for purposes
of receiving support only under subpart
E of this part, submit information
describing the terms and conditions of
any voice telephony service plans
offered to Lifeline subscribers, including
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details on the number of minutes
provided as part of the plan, additional
charges, if any, for toll calls, and rates
for each such plan. To the extent the
eligible telecommunications carrier
offers plans to Lifeline subscribers that
are generally available to the public, it
may provide summary information
regarding such plans, such as a link to
a public Web site outlining the terms
and conditions of such plans.
(b) Public interest standard. Prior to
designating an eligible
telecommunications carrier pursuant to
section 214(e)(6), the Commission
determines that such designation is in
the public interest.
(c) A common carrier seeking
designation as an eligible
telecommunications carrier under
section 214(e)(6) for any part of Tribal
lands shall provide a copy of its petition
to the affected tribal government and
tribal regulatory authority, as
applicable, at the time it files its petition
with the Federal Communications
Commission. In addition, the
Commission shall send any public
notice seeking comment on any petition
for designation as an eligible
telecommunications carrier on Tribal
lands, at the time it is released, to the
affected tribal government and tribal
regulatory authority, as applicable, by
the most expeditious means available.
§ 54.209
■
[Removed]
6. Section 54.209 is removed.
Subpart E—Universal Service Support
for Low-Income Consumers
■
7. Revise § 54.400 to read as follows:
54.400
Terms and definitions.
As used in this subpart, the following
terms shall be defined as follows:
(a) Qualifying low-income consumer.
A ‘‘qualifying low-income consumer’’ is
a consumer who meets the
qualifications for Lifeline, as specified
in § 54.409.
(b) Toll blocking service. ‘‘Toll
blocking service’’ is a service provided
by an eligible telecommunications
carrier that lets subscribers elect not to
allow the completion of outgoing toll
calls from their telecommunications
channel.
(c) Toll control service. ‘‘Toll control
service’’ is a service provided by an
eligible telecommunications carrier that
allows subscribers to specify a certain
amount of toll usage that may be
incurred on their telecommunications
channel per month or per billing cycle.
(d) Toll limitation service. ‘‘Toll
limitation service’’ denotes either toll
blocking service or toll control service
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Federal Register / Vol. 77, No. 42 / Friday, March 2, 2012 / Rules and Regulations
for eligible telecommunications carriers
that are incapable of providing both
services. For eligible
telecommunications carriers that are
capable of providing both services, ‘‘toll
limitation service’’ denotes both toll
blocking service and toll control service.
(e) Eligible resident of Tribal lands.
An ‘‘eligible resident of Tribal lands’’ is
a ‘‘qualifying low-income consumer,’’ as
defined in paragraph (a) of this section,
living on Tribal lands. For purposes of
this subpart, ‘‘Tribal lands’’ include any
federally recognized Indian tribe’s
reservation, pueblo, or colony,
including former reservations in
Oklahoma; Alaska Native regions
established pursuant to the Alaska
Native Claims Settlement Act (85 Stat.
688); Indian allotments; Hawaiian Home
Lands—areas held in trust for Native
Hawaiians by the state of Hawaii,
pursuant to the Hawaiian Homes
Commission Act, 1920 July 9, 1921, 42
Stat. 108, et. seq., as amended; and any
land designated as such by the
Commission for purposes of this subpart
pursuant to the designation process in
§ 54.412.
(f) Income. ‘‘Income’’ is all income
actually received by all members of a
household. This includes salary before
deductions for taxes, public assistance
benefits, social security payments,
pensions, unemployment compensation,
veteran’s benefits, inheritances,
alimony, child support payments,
worker’s compensation benefits, gifts,
lottery winnings, and the like. The only
exceptions are student financial aid,
military housing and cost-of-living
allowances, irregular income from
occasional small jobs such as babysitting or lawn mowing, and the like.
(g) Duplicative support. ‘‘Duplicative
support’’ exists when a Lifeline
subscriber is receiving two or more
Lifeline services concurrently or two or
more subscribers in a household are
receiving Lifeline services or Tribal Link
Up support concurrently.
(h) Household. A ‘‘household’’ is any
individual or group of individuals who
are living together at the same address
as one economic unit. A household may
include related and unrelated persons.
An ‘‘economic unit’’ consists of all adult
individuals contributing to and sharing
in the income and expenses of a
household. An adult is any person
eighteen years or older. If an adult has
no or minimal income, and lives with
someone who provides financial
support to him/her, both people shall be
considered part of the same household.
Children under the age of eighteen
living with their parents or guardians
are considered to be part of the same
household as their parents or guardians.
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(i) National Lifeline Accountability
Database or Database. The ‘‘National
Lifeline Accountability Database’’ or
‘‘Database’’ is an electronic system, with
associated functions, processes, policies
and procedures, to facilitate the
detection and elimination of duplicative
support, as directed by the Commission.
(j) Qualifying assistance program. A
‘‘qualifying assistance program’’ means
any of the federal, state, or Tribal
assistance programs participation in
which, pursuant to § 54.409(a) or (b),
qualifies a consumer for Lifeline service,
including Medicaid; Supplemental
Nutrition Assistance Program;
Supplemental Security Income; Federal
Public Housing Assistance (Section 8);
Low-Income Home Energy Assistance
Program; National School Lunch
Program’s free lunch program;
Temporary Assistance for Needy
Families; Bureau of Indian Affairs
general assistance; Tribally
administered Temporary Assistance for
Needy Families (Tribal TANF); Head
Start (only those households meeting its
income qualifying standard); or the
Food Distribution Program on Indian
Reservations (FDPIR), and with respect
to the residents of any particular state,
any other program so designated by that
state pursuant to § 54.409(a).
■ 8. Revise § 54.401 to read as follows:
§ 54.401
Lifeline defined.
(a) As used in this subpart, Lifeline
means a non-transferable retail service
offering:
(1) For which qualifying low-income
consumers pay reduced charges as a
result of application of the Lifeline
support amount described in § 54.403;
and
(2) That provides qualifying lowincome consumers with voice telephony
service as specified in § 54.101(a). Toll
limitation service does not need to be
offered for any Lifeline service that does
not distinguish between toll and nontoll calls in the pricing of the service. If
an eligible telecommunications carrier
charges Lifeline subscribers a fee for toll
calls that is in addition to the per month
or per billing cycle price of the
subscribers’ Lifeline service, the carrier
must offer toll limitation service at no
charge to its subscribers as part of its
Lifeline service offering.
(b) Eligible telecommunications
carriers may allow qualifying lowincome consumers to apply Lifeline
discounts to any residential service plan
that includes voice telephony service,
including bundled packages of voice
and data services; and plans that
include optional calling features such
as, but not limited to, caller
identification, call waiting, voicemail,
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and three-way calling. Eligible
telecommunications carriers may also
permit qualifying low-income
consumers to apply their Lifeline
discount to family shared calling plans.
(c) Eligible telecommunications
carriers may not collect a service
deposit in order to initiate Lifeline
service for plans that:
(1) Do not charge subscribers
additional fees for toll calls; or
(2) That charge additional fees for toll
calls, but the subscriber voluntarily
elects toll limitation service.
(d) When an eligible
telecommunications carrier is
designated by a state commission, the
state commission shall file or require
the eligible telecommunications carrier
to file information with the
Administrator demonstrating that the
carrier’s Lifeline plan meets the criteria
set forth in this subpart and describing
the terms and conditions of any voice
telephony service plans offered to
Lifeline subscribers, including details
on the number of minutes provided as
part of the plan, additional charges, if
any, for toll calls, and rates for each
such plan. To the extent the eligible
telecommunications carrier offers plans
to Lifeline subscribers that are generally
available to the public, it may provide
summary information regarding such
plans, such as a link to a public Web
site outlining the terms and conditions
of such plans. Lifeline assistance shall
be made available to qualifying lowincome consumers as soon as the
Administrator certifies that the carrier’s
Lifeline plan satisfies the criteria set out
in this subpart.
(e) Consistent with § 52.33(a)(1)(i)(C)
of this chapter, eligible
telecommunications carriers may not
charge Lifeline customers a monthly
number-portability charge.
■ 9. Revise § 54.403 to read as follows:
§ 54.403
Lifeline support amount.
(a) The federal Lifeline support
amount for all eligible
telecommunications carriers shall equal:
(1) Basic support amount. Federal
Lifeline support in the amount of $9.25
per month will be made available to an
eligible telecommunications carrier
providing Lifeline service to a
qualifying low-income consumer, if that
carrier certifies to the Administrator that
it will pass through the full amount of
support to the qualifying low-income
consumer and that it has received any
non-federal regulatory approvals
necessary to implement the rate
reduction.
(2) Tribal lands support amount.
Additional federal Lifeline support of
up to $25 per month will be made
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available to an eligible
telecommunications carrier providing
Lifeline service to an eligible resident of
Tribal lands, as defined in § 54.400 (e),
to the extent that the eligible
telecommunications carrier certifies to
the Administrator that it will pass
through the full Tribal lands support
amount to the qualifying eligible
resident of Tribal lands and that it has
received any non-federal regulatory
approvals necessary to implement the
required rate reduction.
(b) Application of Lifeline discount
amount.
(1) Eligible telecommunications
carriers that charge federal End User
Common Line charges or equivalent
federal charges must apply federal
Lifeline support to waive the federal
End User Common Line charges for
Lifeline subscribers. Such carriers must
apply any additional federal support
amount to a qualifying low-income
consumer’s intrastate rate, if the carrier
has received the non-federal regulatory
approvals necessary to implement the
required rate reduction. Other eligible
telecommunications carriers must apply
the federal Lifeline support amount,
plus any additional support amount, to
reduce the cost of any generally
available residential service plan or
package offered by such carriers that
provides voice telephony service as
described in § 54.101, and charge
Lifeline subscribers the resulting
amount.
(2) Where a subscriber makes only a
partial payment to an eligible
telecommunications carrier for a
bundled service package, the eligible
telecommunications carrier must apply
the partial payment first to the allocated
price of the voice telephony service
component of the package and then to
the cost of any additional services
included in the bundled package.
(c) Toll limitation service. An eligible
telecommunications carrier providing
toll limitation service voluntarily
elected by Lifeline subscribers whose
Lifeline plans would otherwise include
a fee for placing a toll call that would
be in addition to the per month or per
billing cycle price of the subscriber’s
Lifeline service, shall, for April 2012
Lifeline disbursements through
December 2013 Lifeline disbursements,
receive support in an amount equal to
the lesser of:
(1) The eligible telecommunications
carrier’s incremental cost of providing
either toll blocking services or toll
control services to each Lifeline
subscriber who has selected such
service; or
(2) The following amounts for each
Lifeline subscriber who has selected toll
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blocking services or toll control
services:
(i) $3.00 per month per subscriber
during 2012; and
(ii) $2.00 per month per subscriber
during 2013.
■ 10. Add § 54.404 to Subpart E to read
as follows
§ 54.404 The National Lifeline
Accountability Database.
(a) State certification. An eligible
telecommunications carrier operating in
a state that provides an approved valid
certification to the Commission in
accordance with this section is not
required to comply with the
requirements set forth in paragraphs (b)
and (c) of this section with respect to
the eligible telecommunications
carriers’ subscribers in that state. A
valid certification must include a
statement that the state has a
comprehensive system in place to
prevent duplicative federal Lifeline
support that is at least as robust as the
system adopted by the Commission and
that incorporates information from all
eligible telecommunications carriers
receiving low-income support in the
state and their subscribers. A valid
certification must also describe in detail
how the state system functions and for
each requirement adopted by the
Commission to prevent duplicative
support, how the state system performs
the equivalent functions. The
certification must be submitted to the
Commission no later than six months
from the effective date of this section of
the Commission’s rules to be valid.
Such certification will be considered
approved unless the Wireline
Competition Bureau rejects the
certification within 90 days of filing.
(b) The National Lifeline
Accountability Database. In order to
receive Lifeline support, eligible
telecommunications carriers operating
in states that have not provided the
Commission with approved valid
certification pursuant to paragraph (a) of
this section must comply with the
following requirements:
(1) All eligible telecommunications
carriers must query the National Lifeline
Accountability Database to determine
whether a prospective subscriber who
has executed a certification pursuant to
§ 54.410(d) is currently receiving a
Lifeline service from another eligible
telecommunications carrier; and
whether anyone else living at the
prospective subscriber’s residential
address is currently receiving a Lifeline
service.
(2) If the Database indicates that a
prospective subscriber, who is not
seeking to port his or her telephone
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number, is currently receiving a Lifeline
service, the eligible telecommunications
carrier must not provide and shall not
seek or receive Lifeline reimbursement
for that subscriber.
(3) If the Database indicates that
another individual at the prospective
subscriber’s residential address is
currently receiving a Lifeline service,
the eligible telecommunications carrier
must not seek and will not receive
Lifeline reimbursement for providing
service to that prospective subscriber,
unless the prospective subscriber has
certified, pursuant to § 54.410(d) that to
the best of his or her knowledge, no one
in his or her household is already
receiving a Lifeline service.
(4) An eligible telecommunications
carrier is not required to comply with
paragraphs (b)(1) through (3) of this
section if it receives notice from a state
Lifeline administrator or other state
agency that the administrator or other
agency has queried the Database about
a prospective subscriber and that
providing the prospective subscriber
with a Lifeline benefit would not result
in duplicative support.
(5) Eligible telecommunications
carriers may query the Database only for
the purposes provided in paragraphs
(b)(1) through (b)(3) of this section, and
to determine whether information with
respect to its subscribers already in the
Database is correct and complete.
(6) Eligible telecommunications
carriers must transmit to the Database in
a format prescribed by the
Administrator each new and existing
Lifeline subscriber’s full name; full
residential address; date of birth and the
last four digits of the subscriber’s Social
Security number or Tribal Identification
number, if the subscriber is a member of
a Tribal nation and does not have a
Social Security number; the telephone
number associated with the Lifeline
service; the date on which the Lifeline
service was initiated; the date on which
the Lifeline service was terminated, if it
has been terminated; the amount of
support being sought for that subscriber;
and the means through which the
subscriber qualified for Lifeline.
(7) In the event that two or more
eligible telecommunications carriers
transmit the information required by
this paragraph to the Database for the
same subscriber, only the eligible
telecommunications carrier whose
information was received and processed
by the Database first, as determined by
the Administrator, will be entitled to
reimbursement from the Fund for that
subscriber.
(8) All eligible telecommunications
carriers must update an existing Lifeline
subscriber’s information in the Database
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within ten business days of receiving
any change to that information, except
as described in paragraph (b)(10) of this
section.
(9) All eligible telecommunications
carriers must obtain, from each new and
existing subscriber, consent to transmit
the subscriber’s information. Prior to
obtaining consent, the eligible
telecommunications carrier must
describe to the subscriber, using clear,
easily understood language, the specific
information being transmitted, that the
information is being transmitted to the
Administrator to ensure the proper
administration of the Lifeline program,
and that failure to provide consent will
result in subscriber being denied the
Lifeline service.
(10) When an eligible
telecommunications carrier de-enrolls a
subscriber, it must transmit to the
Database the date of Lifeline service deenrollment within one business day of
de-enrollment.
(c) Tribal Link Up and the National
Lifeline Accountability Database. In
order to receive universal service
support reimbursement for Tribal Link
Up, eligible telecommunications carriers
operating in states that have not
provided the Commission with a valid
certification pursuant to paragraph (a) of
this section, must comply with the
following requirements:
(1) Such eligible telecommunications
carriers must query the Database to
determine whether a prospective Link
Up recipient who has executed a
certification pursuant to § 54.410(d) has
previously received a Link Up benefit at
the residential address provided by the
prospective subscriber.
(2) If the Database indicates that a
prospective subscriber has received a
Link Up benefit at the residential
address provided by the subscriber, the
eligible telecommunications provider
must not seek Link Up reimbursement
for that subscriber.
(3) An eligible telecommunications
carrier is not required to comply with
paragraphs (c)(1) through (c)(2) of this
section, if it receives notice from a state
Lifeline administrator or other state
agency that the administrator or other
agency has queried the Database about
a prospective subscriber and that
providing the prospective subscriber
with a Link Up benefit would not result
in duplicative support or support to a
subscriber who had already received
Link Up support at that residential
address.
(4) All eligible telecommunications
carriers must transmit to the Database in
a format prescribed by the
Administrator each new and existing
Link Up recipient’s full name;
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residential address; date of birth; and
the last four digits of the subscriber’s
Social Security number, or Tribal
identification number if the subscriber
is a member of a Tribal nation and does
not have a Social Security number; the
telephone number associated with the
Link Up support; and the date of service
activation. Where two or more eligible
telecommunications carriers transmit
the information required by this
paragraph to the Database for the same
subscriber, only the eligible
telecommunications carrier whose
information was received and processed
by the Database first, as determined by
the Administrator, will be entitled to
reimbursement from the Fund for that
subscriber.
(5) All eligible telecommunications
carriers must obtain, from each new and
existing subscriber, consent to transmit
the information required in paragraph
(c) of this section. Prior to obtaining
consent, the eligible
telecommunications carrier must
describe to the subscriber, using clear,
easily understood language, the specific
information being transmitted, that the
information is being transmitted to the
Administrator to ensure the proper
administration of the Link Up program,
and that failure to provide consent will
result in the subscriber being denied the
Link Up benefit.
■ 11. Revise § 54.405 to read as follows:
§ 54.405
Carrier obligation to offer Lifeline.
All eligible telecommunications
carriers must:
(a) Make available Lifeline service, as
defined in § 54.401, to qualifying lowincome consumers.
(b) Publicize the availability of
Lifeline service in a manner reasonably
designed to reach those likely to qualify
for the service.
(c) Indicate on all materials describing
the service, using easily understood
language, that it is a Lifeline service,
that Lifeline is a government assistance
program, the service is non-transferable,
only eligible consumers may enroll in
the program, and the program is limited
to one discount per household. For the
purposes of this section, the term
‘‘materials describing the service’’
includes all print, audio, video, and web
materials used to describe or enroll in
the Lifeline service offering, including
application and certification forms.
(d) Disclose the name of the eligible
telecommunications carrier on all
materials describing the service.
(e) De-enrollment—(1) De-enrollment
generally. If an eligible
telecommunications carrier has a
reasonable basis to believe that a
Lifeline subscriber no longer meets the
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criteria to be considered a qualifying
low-income consumer under § 54.409,
the carrier must notify the subscriber of
impending termination of his or her
Lifeline service. Notification of
impending termination must be sent in
writing separate from the subscriber’s
monthly bill, if one is provided, and
must be written in clear, easily
understood language. A carrier
providing Lifeline service in a state that
has dispute resolution procedures
applicable to Lifeline termination, that
requires, at a minimum, written
notification of impending termination,
must comply with the applicable state
requirements. The carrier must allow a
subscriber 30-days following the date of
the impending termination letter
required to demonstrate continued
eligibility. A subscriber making such a
demonstration must present proof of
continued eligibility to the carrier
consistent with applicable annual recertification requirements, as described
in § 54.410(f). An eligible
telecommunications carrier must
terminate any subscriber who fails to
demonstrate continued eligibility within
the 30-day time period. A carrier
providing Lifeline service in a state that
has dispute resolution procedures
applicable to Lifeline termination must
comply with the applicable state
requirements.
(2) De-enrollment for duplicative
support. Notwithstanding paragraph
(e)(1) of this section, upon notification
by the Administrator to any eligible
telecommunications carrier that a
subscriber is receiving Lifeline service
from another eligible
telecommunications carrier or that more
than one member of a subscriber’s
household is receiving Lifeline service
and therefore that the subscriber should
be de-enrolled from participation in that
carrier’s Lifeline program, the eligible
telecommunications carrier must deenroll the subscriber from participation
in that carrier’s Lifeline program within
five business days. An eligible
telecommunications carrier shall not be
eligible for Lifeline reimbursement for
any de-enrolled subscriber following the
date of that subscriber’s de-enrollment.
(3) De-enrollment for non-usage.
Notwithstanding paragraph (e)(1) of this
section, if a Lifeline subscriber fails to
use, as ‘‘usage’’ is defined in
§ 54.407(c)(2), for 60 consecutive days a
Lifeline service that does not require the
eligible telecommunications carrier to
assess or collect a monthly fee from its
subscribers, an eligible
telecommunications carrier must
provide the subscriber 30 days’ notice,
using clear, easily understood language,
that the subscriber’s failure to use the
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Lifeline service within the 30-day notice
period will result in service termination
for non-usage under this paragraph. If
the subscriber uses the Lifeline service
within 30 days of the carrier providing
such notice, the eligible
telecommunications carrier shall not
terminate the subscriber’s Lifeline
service. Eligible telecommunications
carriers shall report to the Commission
annually the number of subscribers deenrolled for non-usage under this
paragraph. This de-enrollment
information must be reported by month
and must be submitted to the
Commission at the time an eligible
telecommunications carrier submits its
annual certification report pursuant to
§ 54.416.
(4) De-enrollment for failure to recertify. Notwithstanding paragraph
(e)(1) of this section, an eligible
telecommunications carrier must deenroll a Lifeline subscriber who does
not respond to the carrier’s attempts to
obtain re-certification of the subscriber’s
continued eligibility as required by
§ 54.410(f); who fails to provide the
annual one-per-household recertifications as required by § 54.410(f);
or who relies on a temporary address
and fails to respond to the carrier’s
address re-certification attempts
pursuant to § 54.410(g). Prior to deenrolling a subscriber under this
paragraph, the eligible
telecommunications carrier must notify
the subscriber in writing separate from
the subscriber’s monthly bill, if one is
provided using clear, easily understood
language, that failure to respond to the
re-certification request within 30 days of
the date of the request will trigger deenrollment. If a subscriber does not
respond to the carrier’s notice of
impending de-enrollment, the carrier
must de-enroll the subscriber from
Lifeline within five business days after
the expiration of the subscriber’s time to
respond to the re-certification efforts.
■ 12. Revise § 54.407 to read as follows:
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§ 54.407
Lifeline.
Reimbursement for offering
(a) Universal service support for
providing Lifeline shall be provided
directly to an eligible
telecommunications carrier, based on
the number of actual qualifying lowincome consumers it serves.
(b) An eligible telecommunications
carrier may receive universal service
support reimbursement for each
qualifying low-income consumer
served. For each qualifying low-income
consumer receiving Lifeline service, the
reimbursement amount shall equal the
federal support amount, including the
support amounts described in
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§ 54.403(a) and (c). The eligible
telecommunications carrier’s universal
service support reimbursement shall not
exceed the carrier’s rate for that offering,
or similar offerings, subscribed to by
consumers who do not qualify for
Lifeline.
(c) An eligible telecommunications
carrier offering a Lifeline service that
does not require the eligible
telecommunications carrier to assess or
collect a monthly fee from its
subscribers:
(1) Shall not receive universal service
support for a subscriber to such Lifeline
service until the subscriber activates the
service by whatever means specified by
the carrier, such as completing an
outbound call; and
(2) After service activation, an eligible
telecommunications carrier shall only
continue to receive universal service
support reimbursement for such Lifeline
service provided to subscribers who
have used the service within the last 60
days, or who have cured their non-usage
as provided for in § 54.405(e)(3). Any of
these activities, if undertaken by the
subscriber will establish ‘‘usage’’ of the
Lifeline service:
(i) Completion of an outbound call;
(ii) Purchase of minutes from the
eligible telecommunications carrier to
add to the subscriber’s service plan;
(iii) Answering an incoming call from
a party other than the eligible
telecommunications carrier or the
eligible telecommunications carrier’s
agent or representative; or
(iv) Responding to direct contact from
the eligible communications carrier and
confirming that he or she wants to
continue receiving the Lifeline service.
(d) In order to receive universal
service support reimbursement, an
eligible telecommunications carrier
must certify, as part of each request for
reimbursement, that it is in compliance
with all of the rules in this subpart, and,
to the extent required under this
subpart, has obtained valid certification
and re-certification forms from each of
the subscribers for whom it is seeking
reimbursement.
(e) In order to receive universal
service support reimbursement, an
eligible telecommunications carrier
must keep accurate records of the
revenues it forgoes in providing Lifeline
services. Such records shall be kept in
the form directed by the Administrator
and provided to the Administrator at
intervals as directed by the
Administrator or as provided in this
subpart.
■
13. Revise § 54.409 to read as follows:
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§ 54.409
Lifeline.
Consumer qualification for
(a) To constitute a qualifying lowincome consumer:
(1) A consumer’s household income
as defined in § 54.400(f) must be at or
below 135% of the Federal Poverty
Guidelines for a household of that size;
or
(2) The consumer, one or more of the
consumer’s dependents, or the
consumer’s household must receive
benefits from one of the following
federal assistance programs: Medicaid;
Supplemental Nutrition Assistance
Program; Supplemental Security
Income; Federal Public Housing
Assistance (Section 8); Low-Income
Home Energy Assistance Program;
National School Lunch Program’s free
lunch program; or Temporary
Assistance for Needy Families; or
(3) The consumer must meet
eligibility criteria established by a state
for its residents, provided that such
state-specific criteria are based solely on
income or factors directly related to
income.
(b) A consumer who lives on Tribal
lands is eligible for Lifeline service as a
‘‘qualifying low-income consumer’’ as
defined by § 54.400(a) and as an
‘‘eligible resident of Tribal lands’’ as
defined by § 54.400(e) if that consumer
meets the qualifications for Lifeline
specified in paragraph (a) of this section
or if the consumer, one or more of the
consumer’s dependents, or the
consumer’s household participates in
one of the following Tribal-specific
federal assistance programs: Bureau of
Indian Affairs general assistance;
Tribally administered Temporary
Assistance for Needy Families; Head
Start (only those households meeting its
income qualifying standard); or the
Food Distribution Program on Indian
Reservations.
(c) In addition to meeting the
qualifications provided in paragraph (a)
or (b) of this section, in order to
constitute a qualifying low-income
consumer, a consumer must not already
be receiving a Lifeline service, and there
must not be anyone else in the
subscriber’s household subscribed to a
Lifeline service.
■ 14. Revise § 54.410 to read as follows:
§ 54.410 Subscriber eligibility
determination and certification.
(a) All eligible telecommunications
carriers must implement policies and
procedures for ensuring that their
Lifeline subscribers are eligible to
receive Lifeline services.
(b) Initial income-based eligibility
determination.
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(1) Except where a state Lifeline
administrator or other state agency is
responsible for the initial determination
of a subscriber’s eligibility, when a
prospective subscriber seeks to qualify
for Lifeline or using the income-based
eligibility criteria provided for in
§ 54.409(a)(1) or (a)(3) an eligible
telecommunications carrier:
(i) Must not seek reimbursement for
providing Lifeline to a subscriber,
unless the carrier has received a
certification of eligibility from the
prospective subscriber that complies
with the requirements set forth in
paragraph (d) of this section and has
confirmed the subscriber’s incomebased eligibility using the following
procedures:
(A) If an eligible telecommunications
carrier can determine a prospective
subscriber’s income-based eligibility by
accessing one or more databases
containing information regarding the
subscriber’s income (‘‘income
databases’’), the eligible
telecommunications carrier must access
such income databases and determine
whether the prospective subscriber
qualifies for Lifeline.
(B) If an eligible telecommunications
carrier cannot determine a prospective
subscriber’s income-based eligibility by
accessing income databases, the eligible
telecommunications carrier must review
documentation that establishes that the
prospective subscriber meets the
income-eligibility criteria set forth in
§ 54.409(a)(1) or (a)(3). Acceptable
documentation of income eligibility
includes the prior year’s state, federal,
or Tribal tax return; current income
statement from an employer or
paycheck stub; a Social Security
statement of benefits; a Veterans
Administration statement of benefits; a
retirement/pension statement of
benefits; an Unemployment/Workers’
Compensation statement of benefit;
federal or Tribal notice letter of
participation in General Assistance; or a
divorce decree, child support award, or
other official document containing
income information. If the prospective
subscriber presents documentation of
income that does not cover a full year,
such as current pay stubs, the
prospective subscriber must present the
same type of documentation covering
three consecutive months within the
previous twelve months.
(ii) Must not retain copies of the
documentation of a prospective
subscriber’s income-based eligibility for
Lifeline.
(iii) Must, consistent with § 54.417,
keep and maintain accurate records
detailing the data source a carrier used
to determine a subscriber’s eligibility or
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the documentation a subscriber
provided to demonstrate his or her
eligibility for Lifeline.
(2) Where a state Lifeline
administrator or other state agency is
responsible for the initial determination
of a subscriber’s eligibility, an eligible
telecommunications carrier must not
seek reimbursement for providing
Lifeline service to a subscriber, based on
that subscriber’s income eligibility,
unless the carrier has received from the
state Lifeline administrator or other
state agency:
(i) Notice that the prospective
subscriber meets the income-eligibility
criteria set forth in § 54.409(a)(1) or
(a)(3); and
(ii) A copy of the subscriber’s
certification that complies with the
requirements set forth in paragraph (d)
of this section.
(c) Initial program-based eligibility
determination.
(1) Except in states where a state
Lifeline administrator or other state
agency is responsible for the initial
determination of a subscriber’s programbased eligibility, when a prospective
subscriber seeks to qualify for Lifeline
service using the program-based criteria
set forth in § 54.409(a)(2), (a)(3) or (b),
an eligible telecommunications carrier:
(i) Must not seek reimbursement for
providing Lifeline to a subscriber unless
the carrier has received a certification of
eligibility from the subscriber that
complies with the requirements set forth
in paragraph (d) of this section and has
confirmed the subscriber’s programbased eligibility using the following
procedures:
(A) If the eligible telecommunications
carrier can determine a prospective
subscriber’s program-based eligibility
for Lifeline by accessing one or more
databases containing information
regarding enrollment in qualifying
assistance programs (‘‘eligibility
databases’’), the eligible
telecommunications carrier must access
such eligibility databases to determine
whether the prospective subscriber
qualifies for Lifeline based on
participation in a qualifying assistance
program; or
(B) If an eligible telecommunications
carrier cannot determine a prospective
subscriber’s program-based eligibility
for Lifeline by accessing eligibility
databases, the eligible
telecommunications carrier must review
documentation demonstrating that a
prospective subscriber qualifies for
Lifeline under the program-based
eligibility requirements. Acceptable
documentation of program eligibility
includes the current or prior year’s
statement of benefits from a qualifying
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assistance program, a notice or letter of
participation in a qualifying assistance
program, program participation
documents, or another official
document demonstrating that the
prospective subscriber, one or more of
the prospective subscriber’s dependents
or the prospective subscriber’s
household receives benefits from a
qualifying assistance program.
(ii) Must not retain copies of the
documentation of a subscriber’s
program-based eligibility for Lifeline
services.
(iii) Must, consistent with § 54.517,
keep and maintain accurate records
detailing the data source a carrier used
to determine a subscriber’s programbased eligibility or the documentation a
subscriber provided to demonstrate his
or her eligibility for Lifeline.
(2) Where a state Lifeline
administrator or other state agency is
responsible for the initial determination
of a subscriber’s eligibility, when a
prospective subscriber seeks to qualify
for Lifeline service using the programbased eligibility criteria provided in
§ 54.409, an eligible
telecommunications carrier must not
seek reimbursement for providing
Lifeline to a subscriber unless the
carrier has received from the state
Lifeline administrator or other state
agency:
(i) Notice that the subscriber meets
the program-based eligibility criteria set
forth in §§ 54.409(a)(2), (a)(3) or (b); and
(ii) a copy of the subscriber’s
certification that complies with the
requirements set forth in paragraph (d)
of this section.
(d) Eligibility certifications. Eligible
telecommunications carriers and state
Lifeline administrators or other state
agencies that are responsible for the
initial determination of a subscriber’s
eligibility for Lifeline must provide
prospective subscribers Lifeline
certification forms that in clear, easily
understood language:
(1) Provide the following information:
(i) Lifeline is a federal benefit and that
willfully making false statements to
obtain the benefit can result in fines,
imprisonment, de-enrollment or being
barred from the program;
(ii) Only one Lifeline service is
available per household;
(iii) A household is defined, for
purposes of the Lifeline program, as any
individual or group of individuals who
live together at the same address and
share income and expenses;
(iv) A household is not permitted to
receive Lifeline benefits from multiple
providers;
(v) Violation of the one-per-household
limitation constitutes a violation of the
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Commission’s rules and will result in
the subscriber’s de-enrollment from the
program; and
(vi) Lifeline is a non-transferable
benefit and the subscriber may not
transfer his or her benefit to any other
person.
(2) Require each prospective
subscriber to provide the following
information:
(i) The subscriber’s full name;
(ii) The subscriber’s full residential
address;
(iii) Whether the subscriber’s
residential address is permanent or
temporary;
(iv) The subscriber’s billing address, if
different from the subscriber’s
residential address;
(v) The subscriber’s date of birth;
(vi) The last four digits of the
subscriber’s social security number, or
the subscriber’s Tribal identification
number, if the subscriber is a member of
a Tribal nation and does not have a
social security number;
(vii) If the subscriber is seeking to
qualify for Lifeline under the programbased criteria, as set forth in § 54.409,
the name of the qualifying assistance
program from which the subscriber, his
or her dependents, or his or her
household receives benefits; and
(viii) If the subscriber is seeking to
qualify for Lifeline under the incomebased criterion, as set forth in § 54.409,
the number of individuals in his or her
household.
(3) Require each prospective
subscriber to certify, under penalty of
perjury, that:
(i) The subscriber meets the incomebased or program-based eligibility
criteria for receiving Lifeline, provided
in § 54.409;
(ii) The subscriber will notify the
carrier within 30 days if for any reason
he or she no longer satisfies the criteria
for receiving Lifeline including, as
relevant, if the subscriber no longer
meets the income-based or programbased criteria for receiving Lifeline
support, the subscriber is receiving
more than one Lifeline benefit, or
another member of the subscriber’s
household is receiving a Lifeline
benefit.
(ii) If the subscriber is seeking to
qualify for Lifeline as an eligible
resident of Tribal lands, he or she lives
on Tribal lands, as defined in 54.400(e);
(iii) If the subscriber moves to a new
address, he or she will provide that new
address to the eligible
telecommunications carrier within 30
days;
(iv) If the subscriber provided a
temporary residential address to the
eligible telecommunications carrier, he
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or she will be required to verify his or
her temporary residential address every
90 days;
(v) The subscriber’s household will
receive only one Lifeline service and, to
the best of his or her knowledge, the
subscriber’s household is not already
receiving a Lifeline service;
(vi) The information contained in the
subscriber’s certification form is true
and correct to the best of his or her
knowledge,
(vii) The subscriber acknowledges
that providing false or fraudulent
information to receive Lifeline benefits
is punishable by law; and
(viii) The subscriber acknowledges
that the subscriber may be required to
re-certify his or her continued eligibility
for Lifeline at any time, and the
subscriber’s failure to re-certify as to his
or her continued eligibility will result in
de-enrollment and the termination of
the subscriber’s Lifeline benefits
pursuant to § 54.405(e)(4).
(e) State Lifeline administrators or
other state agencies that are responsible
for the initial determination of a
subscriber’s eligibility for Lifeline must
provide each eligible
telecommunications carrier with a copy
of each of the certification forms
collected by the state Lifeline
administrator or other state agency from
that carrier’s subscribers.
(f) Annual eligibility re-certification
process.
(1) All eligible telecommunications
carriers must annually re-certify all
subscribers except for subscribers in
states where a state Lifeline
administrator or other state agency is
responsible for re-certification of
subscribers’ Lifeline eligibility.
(2) In order to re-certify a subscriber’s
eligibility, an eligible
telecommunications carrier must
confirm a subscriber’s current eligibility
to receive Lifeline by:
(i) Querying the appropriate eligibility
databases, confirming that the
subscriber still meets the program-based
eligibility requirements for Lifeline, and
documenting the results of that review;
or
(ii) Querying the appropriate income
databases, confirming that the
subscriber continues to meet the
income-based eligibility requirements
for Lifeline, and documenting the
results of that review; or
(iii) Obtaining a signed certification
from the subscriber that meets the
certification requirements in paragraph
(d) of this section.
(3) Where a state Lifeline
administrator or other state agency is
responsible for re-certification of a
subscriber’s Lifeline eligibility, the state
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Lifeline administrator or other state
agency must confirm a subscriber’s
current eligibility to receive a Lifeline
service by:
(i) Querying the appropriate eligibility
databases, confirming that the
subscriber still meets the program-based
eligibility requirements for Lifeline, and
documenting the results of that review;
or
(ii) Querying the appropriate income
databases, confirming that the
subscriber continues to meet the
income-based eligibility requirements
for Lifeline, and documenting the
results of that review; or
(iii) Obtaining a signed certification
from the subscriber that meets the
certification requirements in paragraph
(d) of this section.
(4) Where a state Lifeline
administrator or other state agency is
responsible for re-certification of
subscribers’ Lifeline eligibility, the state
Lifeline administrator or other state
agency must provide to each eligible
telecommunications carrier the results
of its annual re-certification efforts with
respect to that eligible
telecommunications carrier’s
subscribers.
(5) If an eligible telecommunications
carrier is unable to re-certify a
subscriber or has been notified of a state
Lifeline administrator’s or other state
agency’s inability to re-certify a
subscriber, the eligible
telecommunications carrier must
comply with the de-enrollment
requirements provided for in
§ 54.405(e)(4).
(g) Re-certification of temporary
address. An eligible
telecommunications carrier must recertify, every 90 days, the residential
address of each of its subscribers who
have provided a temporary address as
part of the subscriber’s initial
certification or re-certification of
eligibility, pursuant to paragraphs (d),
(e), or (f) of this section.
§ 54.411
[Removed]
15. Section 54.411 is removed.
■ 16. Add § 54.412 to Subpart E to read
as follows:
■
§ 54.412 Off reservation Tribal lands
designation process.
(a) The Commission’s Wireline
Competition Bureau and the Office of
Native Affairs and Policy may, upon
receipt of a request made in accordance
with the requirements of this section,
designate as Tribal lands, for the
purposes of the Lifeline and Tribal Link
Up program, areas or communities that
fall outside the boundaries of existing
Tribal lands but which maintain the
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same characteristics as lands identified
as Tribal lands defined as in § 54.400(c).
(b) A request for designation must be
made to the Commission by a duly
authorized official of a federally
recognized American Indian Tribe or
Alaska Native Village.
(c) A request for designation must
clearly describe a defined geographical
area for which the requesting party
seeks designation as Tribal lands.
(d) A request for designation must
demonstrate the Tribal character of the
area or community.
(e) A request for designation must
provide sufficient evidence of a nexus
between the area or community and the
Tribe, and describe in detail how
program support to the area or
community would aid the Tribe in
serving the needs and interests of its
citizens and further the Commission’s
goal of increasing telecommunications
access on Tribal lands.
(f) Upon designation by the Wireline
Competition Bureau and the Office of
Native Affairs and Policy, the area or
community described in the designation
shall be considered Tribal lands for the
purposes of this subpart.
■ 17. Revise § 54.413 to read as follows:
mstockstill on DSK4VPTVN1PROD with RULES3
§ 54.413
Link Up for Tribal lands.
(a) Definition. For purposes of this
subpart, the term ‘‘Tribal Link Up’’
means an assistance program for eligible
residents of Tribal lands seeking
telecommunications service from a
telecommunications carrier that is
receiving high-cost support on Tribal
lands, pursuant to subpart D of this part,
that provides:
(1) A 100 percent reduction, up to
$100, of the customary charge for
commencing telecommunications
service for a single telecommunications
connection at a subscriber’s principal
place of residence imposed by an
eligible telecommunications carrier that
is also receiving high-cost support on
Tribal lands, pursuant to subpart D of
this part. For purposes of this subpart,
a ‘‘customary charge for commencing
telecommunications service’’ is the
ordinary charge an eligible
telecommunications carrier imposes and
collects from all subscribers to initiate
service with that eligible
telecommunications carrier. A charge
imposed only on qualifying low-income
consumers to initiate service is not a
customary charge for commencing
telecommunications service. Activation
charges routinely waived, reduced, or
eliminated with the purchase of
additional products, services, or
minutes are not customary charges
eligible for universal service support;
and
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(2) A deferred schedule of payments
of the customary charge for commencing
telecommunications service for a single
telecommunications connection at a
subscriber’s principal place of residence
imposed by an eligible
telecommunications carrier that is also
receiving high-cost support on Tribal
lands, pursuant to subpart D of this part,
for which the eligible resident of Tribal
lands does not pay interest. The interest
charges not assessed to the eligible
resident of tribal lands shall be for a
customary charge for connecting
telecommunications service of up to
$200 and such interest charges shall be
deferred for a period not to exceed one
year.
(b) An eligible resident of Tribal lands
may receive the benefit of the Tribal
Link Up program for a second or
subsequent time only for otherwise
qualifying commencement of
telecommunications service at a
principal place of residence with an
address different from the address for
which Tribal Link Up assistance was
provided previously.
■ 18. Add § 54.414 to Subpart E to read
as follows:
§ 54.414
Up.
Reimbursement for Tribal Link
(a) Eligible telecommunications
carriers that are receiving high-cost
support, pursuant to subpart D of this
part, may receive universal service
support reimbursement for the
reduction in their customary charge for
commencing telecommunications
service and for providing a deferred
schedule for payment of the customary
charge for commencing
telecommunications services for which
the subscriber does not pay interest, in
conformity with § 54.413.
(b) In order to receive universal
support reimbursement for providing
Tribal Link Up, eligible
telecommunications carriers must
follow the procedures set forth in
§ 54.410 to determine an eligible
resident of Tribal lands’ initial
eligibility for Tribal Link Up. Eligible
telecommunications carriers must
obtain a certification form from each
eligible resident of Tribal lands that
complies with § 54.410 prior to
enrolling him or her in Tribal Link Up.
(c) In order to receive universal
service support reimbursement for
providing Tribal Link Up, eligible
telecommunications carriers must keep
accurate records of the reductions in
their customary charge for commencing
telecommunications service and for
providing a deferred schedule for
payment of the charges assessed for
commencing service for which the
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12973
subscriber does not pay interest, in
conformity with § 54.413. Such records
shall be kept in the form directed by the
Administrator and provided to the
Administrator at intervals as directed by
the Administrator or as provided in this
subpart. The reductions in the
customary charge for which the eligible
telecommunications carrier may receive
reimbursement shall include only the
difference between the carrier’s
customary connection or interest
charges and the charges actually
assessed to the subscriber receiving
Lifeline services.
§ 54.415
■
■
[Removed]
19. Section 54.415 is removed.
20. Revise § 54.416 to read as follows:
§ 54.416 Annual certifications by eligible
telecommunications carriers.
(a) Eligible telecommunications
carrier certifications. Eligible
telecommunications carriers are
required to make and submit to the
Administrator the following annual
certifications, under penalty of perjury,
relating to the Lifeline program:
(1) An officer of each eligible
telecommunications carrier must certify
that the carrier has policies and
procedures in place to ensure that its
Lifeline subscribers are eligible to
receive Lifeline services. Each eligible
telecommunications carrier must make
this certification annually to the
Administrator as part of the carrier’s
submission of annual re-certification
data pursuant to this section. In
instances where an eligible
telecommunications carrier confirms
consumer eligibility by relying on
income or eligibility databases, as
defined in § 54.410(b)(1)(i)(A) or
(c)(1)(i)(A), the representative must
attest annually as to what specific data
sources the eligible telecommunications
carrier used to confirm eligibility.
(2) An officer of the eligible
telecommunications carrier must certify
that the carrier is in compliance with all
federal Lifeline certification procedures.
Eligible telecommunications carriers
must make this certification annually to
the Administrator as part of the carrier’s
submission of re-certification data
pursuant to this section.
(3) An officer of the eligible
telecommunications carrier must certify
annually that the carrier has obtained a
valid certification form for each
subscriber for whom the carrier seeks
Lifeline reimbursement.
(b) All eligible telecommunications
carriers must annually provide the
results of their re-certification efforts,
performed pursuant to § 54.410(f), to the
Commission and the Administrator.
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Eligible telecommunications carriers
designated as such by one or more states
pursuant to § 54.201 must also provide,
on an annual basis, the results of their
re-certification efforts to state
commissions for subscribers residing in
those states where the state designated
the eligible telecommunications carrier.
Eligible telecommunications carriers
must also provide their annual recertification results for subscribers
residing on Tribal lands to the relevant
Tribal governments.
(c) States that mandate Lifeline
support may impose additional
standards on eligible
telecommunications carriers operating
in their states to ensure compliance
with state Lifeline programs.
■ 21. Revise § 54.417 to read as follows:
mstockstill on DSK4VPTVN1PROD with RULES3
§ 54.417
Recordkeeping requirements.
(a) Eligible telecommunications
carriers must maintain records to
document compliance with all
Commission and state requirements
governing the Lifeline and Tribal Link
Up program for the three full preceding
calendar years and provide that
documentation to the Commission or
Administrator upon request.
Notwithstanding the preceding
sentence, eligible telecommunications
carriers must maintain the
documentation required in § 54.410(d)
and (f) for as long as the subscriber
receives Lifeline service from that
eligible telecommunications carrier.
(b) If an eligible telecommunications
carrier provides Lifeline discounted
wholesale services to a reseller, it must
obtain a certification from that reseller
that it is complying with all
Commission requirements governing the
Lifeline and Tribal Link Up program.
(c) Non-eligible-telecommunicationscarrier resellers that purchase Lifeline
discounted wholesale services to offer
discounted services to low-income
consumers must maintain records to
document compliance with all
Commission requirements governing the
Lifeline and Tribal Link Up program for
the three full preceding calendar years
and provide that documentation to the
Commission or Administrator upon
request. To the extent such a reseller
provides discounted services to lowincome consumers, it must fulfill the
obligations of an eligible
telecommunications carrier in
§§ 54.405(e), 54.405(f), and 54.410.
■ 22. Add § 54.419 to Subpart E to read
as follows:
§ 54.419
Validity of electronic signatures.
(a) For the purposes of this subpart,
an electronic signature, defined by the
Electronic Signatures in Global and
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National Commerce Act, as an
electronic sound, symbol, or process,
attached to or logically associated with
a contract or other record and executed
or adopted by a person with the intent
to sign the record, has the same legal
effect as a written signature.
(b) For the purposes of this subpart,
an electronic record, defined by the
Electronic Signatures in Global and
National Commerce Act as a contract or
other record created, generated, sent,
communicated, received, or stored by
electronic means, constitutes a record.
■ 23. Add § 54.420 to Subpart E to read
as follows:
§ 54.420
Low income program audits.
(a) Independent audit requirements
for eligible telecommunications carriers.
Companies that receive $5 million or
more annually in the aggregate, on a
holding company basis, in Lifeline
reimbursements must obtain a third
party biennial audit of their compliance
with the rules in this subpart. Such
engagements shall be agreed upon
performance attestations to assess the
company’s overall compliance with
rules and the company’s internal
controls regarding these regulatory
requirements.
(1) For purposes of the $5 million
threshold, a holding company consists
of operating companies and affiliates, as
that term is defined in section 3(2) of
the Communications Act of 1934, as
amended, that are eligible
telecommunications carriers.
(2) The initial audit must be
completed one year after the
Commission issues a standardized audit
plan outlining the scope of the
engagement and the extent of
compliance testing to be performed by
third-party auditors and shall be
conducted every two years thereafter,
unless directed otherwise by the
Commission. The following minimum
requirements shall apply:
(i) The audit must be conducted by a
licensed certified public accounting
firm that is independent of the carrier.
(ii) The engagement shall be
conducted consistent with government
accounting standards (GAGAS).
(3) The certified public accounting
firm shall submit to the Commission
any rule interpretations necessary to
complete the biennial audit, and the
Administrator shall notify all firms
subject to the biennial audit
requirement of such requests. The audit
issue will be noted, but not held as a
negative finding, in future audit reports
for all carriers subject to this
requirement unless and until guidance
has been provided by the Commission.
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(4) Within 60 days after completion of
the audit work, but prior to finalization
of the report, the third party auditor
shall submit a draft of the audit report
to the Commission and the
Administrator, who shall be deemed
authorized users of such reports.
Finalized audit reports must be
provided to the Commission, the
Administrator, and relevant states and
Tribal governments within 30 days of
the issuance of the final audit report.
The reports will not be considered or
deemed confidential.
(5) Delegated authority. The Wireline
Competition Bureau and the Office of
Managing Director have delegated
authority to perform the functions
specified in paragraphs (a)(2) and (a)(3)
of this section.
(b) Audit requirements for new
eligible telecommunications carriers.
After a company is designated for the
first time in any state or territory the
Administrator will audit that new
eligible telecommunications carrier to
assess its overall compliance with the
rules in this subpart and the company’s
internal controls regarding these
regulatory requirements. This audit
should be conducted within the carrier’s
first twelve months of seeking federal
low-income Universal Service Fund
support.
■ 24. Add § 54.422 to Subpart E to read
as follows:
§ 54.422 Annual reporting for eligible
telecommunications carriers that receive
low-income support.
(a) In order to receive support under
this subpart, an eligible
telecommunications carrier must
annually report the company name,
names of the company’s holding
company, operating companies and
affiliates, and any branding (a ‘‘dba,’’ or
‘‘doing-business-as company’’ or brand
designation) as well as relevant
universal service identifiers for each
such entity by Study Area Code. For
purposes of this paragraph, ‘‘affiliates’’
has the meaning set forth in section 3(2)
of the Communications Act of 1934, as
amended.
(b) In order to receive support under
this subpart, a common carrier
designated as an eligible
telecommunications carrier under
section 214(e)(6) of the Act must
annually provide:
(1) Detailed information on any
outage in the prior calendar year, as that
term is defined in 47 CFR 4.5, of at least
30 minutes in duration for each service
area in which the eligible
telecommunications carrier is
designated for any facilities it owns,
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operates, leases, or otherwise utilizes
that potentially affect:
(i) At least ten percent of the end
users served in a designated service
area; or
(ii) A 911 special facility, as defined
in 47 CFR 4.5(e).
(iii) Specifically, the eligible
telecommunications carrier’s annual
report must include information
detailing:
(A) The date and time of onset of the
outage;
(B) A brief description of the outage
and its resolution;
(C) The particular services affected;
(D) The geographic areas affected by
the outage;
(E) Steps taken to prevent a similar
situation in the future; and
(F) The number of customers affected.
(2) The number of complaints per
1,000 connections (fixed or mobile) in
the prior calendar year;
(3) Certification of compliance with
applicable service quality standards and
consumer protection rules;
(4) Certification that the carrier is able
to function in emergency situations as
set forth in § 54.202(a)(2);
(5) Information describing the terms
and conditions of any voice telephony
service plans offered to Lifeline
subscribers, including details on the
number of minutes provided as part of
the plan, additional charges, if any, for
toll calls, and rates for each such plan.
To the extent the eligible
telecommunications carrier offers plans
to Lifeline subscribers that are generally
available to the public, it may provide
summary information regarding such
plans, such as a link to a public Web
site outlining the terms and conditions
of such plans.
(c) All reports required by this section
must be filed with the Office of the
Secretary of the Commission, and with
the Administrator. Such reports must
also be filed with the relevant state
commissions and the relevant authority
in a U.S. territory or Tribal
governments, as appropriate.
Note: The following appendixes will not
appear in the Code of Federal Regulations.
mstockstill on DSK4VPTVN1PROD with RULES3
Appendix A
Certification Requirements for Lifeline
Subscribers
Pursuant to the Universal Service LowIncome Order, all ETCs (or the state Lifeline
program administrator, where applicable)
must provide the following information in
clear, easily understandable language on
their initial and annual Lifeline certification
forms:
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Household Information for Initial and
Annual Certification Forms
• Contact Information: All certification
forms must ask for the Lifeline subscriber’s
name and address information.
• Residential Address: Prior to providing
service to a consumer, ETCs must collect a
residential address from each subscriber,
which the subscriber must indicate is his/her
permanent address, and a billing address, if
different than the subscriber’s residential
address. ETCs should inform subscribers
that, if the subscriber moves, they must
provide their new address to the ETC within
30 days of moving.
• A consumer who lacks a permanent
residential address (e.g., address not
recognized by the Post Office, temporary
living situation) must provide a temporary
residential service address or other address
identifying information that could be used to
perform a check for duplicative support.
• Consumers using Post Office Box
Addresses: Lifeline subscribers may not use
a post office box as their residential address.
An ETC may accept a P.O. Box or General
Delivery address as a billing address, but not
a residential address.
• Consumers with Temporary Addresses:
ETCs must collect permanent addresses from
subscribers. If a subscriber does not have a
permanent address, ETCs must:
• Inform applicants that, if they use a
temporary address, the ETC will attempt to
verify every 90 days that the subscriber
continues to rely on that address, and (as
noted above) the subscriber must notify the
ETC within 30 days of their new address after
moving.
• Inform the subscriber that if he or she
does not respond to the ETC’s address
verification attempts within 30 days, the
subscriber may be de-enrolled from the ETC’s
Lifeline service.
• Multiple Households Sharing an
Address: Upon receiving an application for
Lifeline support, all ETCs must check the
duplicates database to determine whether an
individual at the applicant’s residential
address is currently receiving Lifelinesupported service. The ETC must also search
its own internal records to ensure that it does
not already provide Lifeline-supported
service to someone at that residential
address.
• If nobody at the residential address is
currently receiving Lifeline-supported
service, the ETC may initiate Lifeline service
after determining that the household is
otherwise eligible to receive Lifeline and
obtaining all required certifications from the
household.
• If the ETC determines that an individual
at the applicant’s residential address is
currently receiving Lifeline-supported
service, the ETC must collect from the
applicant upon initial enrollment and
annually thereafter a worksheet that: (1)
Explains the Commission’s one-perhousehold rule; (2) contains a check box that
an applicant can mark to indicate that he or
she lives at an address occupied by multiple
households; (3) provides a space for the
applicant to initial or certify that he or she
shares an address with other adults who do
not contribute income to the applicant’s
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12975
household and/or share in the household’s
expenses; and (4) notifies applicants of the
one-per-household certification requirement
adopted below and the penalty for a
consumer’s failure to make the required oneper-household certification (i.e., deenrollment).
• One-per-Household Certification: All
consumers must certify that they receive
Lifeline support for a single subscription per
household.
• All ETCs (or state agencies or thirdparties, where they are responsible for
Lifeline enrollment in a state) must obtain a
certification from the subscriber at sign up
and annually thereafter attesting under
penalty of perjury that the subscriber’s
household is receiving no more than one
Lifeline-supported service. In addition, the
certification form must include a place for
the subscriber to separately acknowledge
that, to the best of his or her knowledge, no
one at the consumer’s household is receiving
a Lifeline-supported service from any other
provider.
• The certification form must explain in
clear, easily understandable language that: (1)
Lifeline is a federal benefit; (2) Lifeline
service is available for only one line per
household; (3) a household is defined, for
purposes of the Lifeline program, as any
individual or group of individuals who live
together at the same address and share
income and expenses; and (4) households are
not permitted to receive benefits from
multiple providers.
• The certification form must also contain
clear, easily understandable language stating
that violation of the one-per-household
requirement would constitute a violation of
the Commission’s rules and would result in
the consumer’s de-enrollment from the
program, and potentially, prosecution by the
United States government.
Eligibility Information for Initial and Annual
Certification Forms
• Identity Information: All certification
forms must ask for the Lifeline subscriber’s
date of birth and the last 4 digits of the
subscriber’s social security number.
• Establishing eligibility for Lifeline:
• The certification form should be written
in clear, easily understandable language and
should include a place for the customer to
sign under penalty of perjury attesting to his/
her eligibility for Lifeline. All ETCs (or the
state Lifeline program administrator, where
applicable) should obtain the consumer’s
signature certifying under penalty of perjury
that:
• The consumer either participates in a
qualifying federal program or meets the
income qualifications to establish eligibility
for Lifeline;
• The consumer has provided
documentation of eligibility, if required to do
so;
• The consumer attests that the
information contained in his or her
application is true and correct to the best of
his or her knowledge and acknowledging that
providing false or fraudulent information to
receive Lifeline benefits is punishable by
law. The certification form should explain
that Lifeline is a government benefit program
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and consumers who willfully make false
statements in order to obtain the benefit can
be punished by fine or imprisonment or can
be barred from the program.
• The certification form must include
space for consumers qualifying for Lifeline
under an income-based criterion to certify
the number of individuals in their
household.
• ETCs (or the state administrator, where
applicable) should also obtain the
consumer’s initials or signature on the
certification form acknowledging that the
consumer may be required to re-certify his or
her continued eligibility for Lifeline at any
time, and that failure to do so will result in
the termination of the consumer’s Lifeline
benefits.
• Consumer no longer eligible for Lifeline:
The certification form must notify the
consumer using clear, easily understandable
language that he or she must inform the ETC
within 30 days if (1) The consumer ceases to
participate in a federal qualifying program or
programs or the consumer’s annual
household income exceeds 135% of the
Federal Poverty Guidelines; (2) the consumer
is receiving more than one Lifeline-supported
service; or (3) the consumer, for any other
reason, no longer satisfies the criteria for
receiving Lifeline support. Additionally,
prior to enrolling in Lifeline, consumers must
certify attest under penalty of perjury that
they understand the notification requirement,
and that they may be subject to penalties if
they fail to follow this requirement.
• Tribal eligibility: Consumers seeking
Tribal lands Lifeline support must certify
that they reside on Federally-recognized
Tribal lands.
• Non-transferability of Lifeline benefit:
The certification form should inform
consumers that Lifeline service is a nontransferable benefit, and that a Lifeline
subscriber may not transfer his or her service
to any other individual, including another
eligible low-income consumer.
Annual Re-Certification of Consumer
Eligibility for Lifeline
• By the end of 2012, each Lifeline
subscriber enrolled in the program as of June
1, 2012 must provide a signed re-certification
form to the ETC (or the state Lifeline
administrator, where applicable) attesting to
their continued eligibility for Lifeline. This
signed certification should collect all of the
subscriber information noted above,
including an updated address. Consumers
may provide the re-certification in writing,
by phone, by text message, by email, or
otherwise through the Internet.
• Alternatively, where a database
containing consumer eligibility data is
available, the carrier (or state Lifeline
administrator, where applicable) must query
the database by the end of 2012 and maintain
a record of what specific data was used to recertify the consumer’s eligibility and the date
that the consumer was re-certified.
• The ETC or the state administrator,
where applicable, must report the results of
their re-certification efforts to USAC, the
Commission, and the relevant state
commission (where the state has jurisdiction
over the carrier) by January 31, 2013. ETCs
or the state administrator, where applicable,
should also provide their re-certification
results to the relevant Tribal government, for
subscribers residing on reservations or Tribal
lands.
• ETCs must remind consumers about the
annual re-certification requirement on the
ETC’s certification form that is completed
upon program enrollment and annually
thereafter.
Database
• Consent to provide information to the
database: An ETC must obtain
acknowledgement and consent from each of
its subscribers that is written in clear, easily
understandable language that the subscriber’s
name, telephone number, and address will be
divulged to the Universal Service
Administrative Company (USAC) (the
administrator of the program) and/or its
agents for the purpose of verifying that the
subscriber does not receive more than one
Lifeline benefit. In the event that USAC
identifies a consumer as receiving more than
one Lifeline subsidy per household, all
carriers involved may be notified so that the
consumer may select one service and be deenrolled from the other.
Appendix B
Lifeline Verification Survey Results for 2011
and 2007
TABLE 1—LIFELINE VERIFICATION RESULTS FOR 2011
Subscribers
surveyed
State/territory
Found
ineligible
No response
to survey
Percentage
deemed
ineligible
Percentage
nonresponders
Federal Default States
American Samoa .................................................................
Delaware ..............................................................................
Hawaii ..................................................................................
Indiana .................................................................................
Iowa ......................................................................................
Louisiana ..............................................................................
New Hampshire ...................................................................
North Dakota ........................................................................
Northern Mariana Islands ....................................................
South Dakota .......................................................................
62
534
499
2,066
12,015
3,656
629
2,240
1,857
2,411
0
56
61
340
711
331
115
419
0
243
16
217
116
647
4,936
926
156
706
0
802
0
10
12
16
6
9
18
19
0
10
26
41
23
31
41
25
25
32
0
33
6
6
4
11
28
16
19
9
9
18
9
26
34
16
30
27
Non-Federal-Default States Mandating That ETCs Follow Federal Verification Procedures
Arkansas ..............................................................................
New York .............................................................................
North Carolina ......................................................................
6,114
6,276
4,288
384
401
171
653
1,755
689
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Non-Federal-Default States Requiring ETCs To Submit Verification Results to USAC
Alabama ...............................................................................
Arizona .................................................................................
Pennsylvania ........................................................................
West Virginia ........................................................................
Average ................................................................................
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1,982
2,519
1,123
52,865
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180
226
198
4,694
1,193
674
395
338
14,219
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12977
Federal Register / Vol. 77, No. 42 / Friday, March 2, 2012 / Rules and Regulations
TABLE 2—LIFELINE VERIFICATION RESULTS FOR 2007
Subscribers
surveyed
State/territory
Found
ineligible
No response
to survey
Percentage
deemed
ineligible
Percentage
nonresponders
Federal Default States
American Samoa .................................................................
Delaware ..............................................................................
Hawaii ..................................................................................
Iowa ......................................................................................
Indiana .................................................................................
Louisiana ..............................................................................
New Hampshire ...................................................................
North Dakota ........................................................................
Northern Mariana Islands ....................................................
South Dakota .......................................................................
154
250
296
9,492
2,669
2,141
483
2,795
947
1,823
3
4
54
1,646
991
673
108
342
0
472
0
162
11
1,219
1,065
175
212
574
0
447
2
2
18
17
37
31
22
12
0
26
0
65
4
13
40
8
44
21
0
25
28
15
9
5
14
6
30
47
11
8
75
32
13
12
10
40
16
7
0
18
84
10
Non-Federal-Default States Mandating That ETCs Follow Federal Verification Procedures
Arkansas ..............................................................................
New York .............................................................................
North Carolina ......................................................................
5,650
4,208
10,534
1,608
624
940
296
585
600
Non-Federal-Default States Requiring ETCs To Submit Verification Results to USAC
Alabama ...............................................................................
Arizona .................................................................................
Kentucky ..............................................................................
Pennsylvania ........................................................................
Puerto Rico ..........................................................................
Tennessee ...........................................................................
West Virginia ........................................................................
Average ................................................................................
4,618
1,313
11,482
138,453
4
4,907
838
203,057
1,393
619
1,253
10,956
3
1,562
109
23,360
454
525
1,788
9,866
0
891
702
19,572
Appendix C
INITIAL COMMENTERS
Commenter
Abbreviation
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AARP ..............................................................................................................................................................................
Advocates for Basic Legal Equality, Inc., Community Counseling Bristol County, Community Voice Mail, Crossroads Urban Center, Disability Right Advocates, Legal Services Advocacy Project, Low Income Utility Advocacy
Project, National Center for Medical-Legal Partnership, National Consumer Law Center, On Behalf of Our, LowIncome Clients, New Jersey Shares, Ohio Poverty Law Center, Open Access Connections, Pennsylvania Utility
Law Project, Pro Seniors, Inc., Salt Lake Community Action Program, Texas Legal Services Center, Virginia Citizens Consumer Council.
Alaska Telephone Association .......................................................................................................................................
American Library Association .........................................................................................................................................
American Public Communications Council, Inc. .............................................................................................................
Amvensys Telecom Holdings, LLC ................................................................................................................................
Area Agency on Aging of West Central Arkansas .........................................................................................................
Arkansas Advocates for Nursing Home Residents ........................................................................................................
Association of Programs for Rural Independent Living ..................................................................................................
AT&T ...............................................................................................................................................................................
Benton Foundation and Center for Rural Strategies Public Knowledge and United Church of Christ, OC Inc. ...........
Box Top Solutions, Inc. ..................................................................................................................................................
Budget Prepay, Inc., GreatCall, Inc. and PR Wireless Inc. d/b/a Open Mobile ............................................................
CenturyLink .....................................................................................................................................................................
CGM, LLC .......................................................................................................................................................................
Cincinnati Bell Inc. ..........................................................................................................................................................
City Councilor Sean Paulhus (ME)
City of New York .............................................................................................................................................................
City of North Las Vegas .................................................................................................................................................
Comcast Corporation ......................................................................................................................................................
Commissioner Brenda Howerton (NC)
Commissioner Joe Bowser (NC)
Commissioner Lawrence Weekly (NV)
Commissioner Michael Page (NC)
Ogden-Weber Community Action Partnership ...............................................................................................................
COMPTEL .......................................................................................................................................................................
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AARP
Consumer Groups
ATA
ALA
APCC
Amvensys
Area Agency on Aging
WCA
AANHR
APRIL
AT&T
Benton/PK/UCC
Box Top
Budget/GreatCall/PR
CenturyLink
CGM
Cincinnati Bell
City of NY
North Las Vegas
Comcast
OWCAP
COMPTEL
12978
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INITIAL COMMENTERS—Continued
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Commenter
Abbreviation
Conexions LLC d/b/a Conexion Wireless .......................................................................................................................
Consumer Cellular, Inc. ..................................................................................................................................................
Connecticut Department of Public Utility Control ...........................................................................................................
Councilman Christopher A. Hilbert (VA)
Councilman Howard Clement (NC)
Councilman Jamie Benoit (MD)
Councilman Kelvin E. Washington, Sr. (SC)
Councilman Ricki Y. Barlow (NV)
Councilwoman Cora Cole-McFadden (NC)
Cox Communication Inc. ................................................................................................................................................
CTIA–The Wireless Association .....................................................................................................................................
Daniel Reyes, III
Delegate Benjamin S. Barnes
Delegate Eileen Filler-Corn
Delegate Joe Morrissey (VA)
Delegate Paula J. Miller (VA)
Public Service Commission of the District of Columbia .................................................................................................
Educational Services Network, Corp. .............................................................................................................................
Executive Councilor Daniel St. Hilaire (NH)
Florida Public Service Commission ................................................................................................................................
General Communication, Inc. .........................................................................................................................................
Gila River Telecommunications, Inc. ..............................................................................................................................
House Democratic Caucus (GA)
Indiana Family and Social Services Administration .......................................................................................................
Indiana Utility Regulatory Commission ...........................................................................................................................
Institute for Health, Law & Ethics ...................................................................................................................................
Iridium Satellite LLC .......................................................................................................................................................
Keep USF Fair Coalition .................................................................................................................................................
Kevan Lee Deckelmann
Las Vegas Urban League ...............................................................................................................................................
The Leadership Conference on Civil and Human Rights ..............................................................................................
Leap Wireless International, Inc. and Cricket Communications, Inc. ............................................................................
Massachusetts Department of Telecommunications and Cable ....................................................................................
Mayor Jim Bouley (NH)
Media Action Grassroots Network ..................................................................................................................................
Michigan Public Service Commission ............................................................................................................................
Minority Media and Telecommunications Council ..........................................................................................................
Mississippi Public Service Commission .........................................................................................................................
Public Service Commission of the State of Missouri .....................................................................................................
National ALEC Association/Prepaid Communications Association ................................................................................
National Association for the Advancement of Colored People Reno/Sparks Branch #1112 ........................................
National Association of State Utility Consumer Advocates ............................................................................................
National Association of Telecommunications Officers and Advisors .............................................................................
National Cable & Telecommunications Association .......................................................................................................
National Consumer Law Center .....................................................................................................................................
National Telecommunications Cooperative Association ................................................................................................
Nebraska Public Service Commission ...........................................................................................................................
New America Foundation ...............................................................................................................................................
New Hampshire Coalition of Aging Services .................................................................................................................
New Hampshire Coalition Against Domestic and Sexual Violence ...............................................................................
New Jersey Division of Rate Counsel ............................................................................................................................
New York State Public Service Commission .................................................................................................................
Nexus Communications, Inc. ..........................................................................................................................................
Ohio Association of Second Harvest Food Banks .........................................................................................................
Open Access Connections (formerly Twin Cities Community Voice Mail), Energy Cents Coalition, Main Street
Project, Minnesota Center for Neighborhood, Organizing Voices for Change.
One Economy Corp. .......................................................................................................................................................
Partnership for a Connected Illinois ...............................................................................................................................
Public Utilities Commission of Ohio ...............................................................................................................................
Public Utilities Commission of Oregon ...........................................................................................................................
Rainbow PUSH Coalition ................................................................................................................................................
Reunion Communications, Inc. .......................................................................................................................................
San Juan Cable LLC d/b/a OneLink Communications ..................................................................................................
Several Members of the Texas House Democratic Caucus
Smith Bagley, Inc. ...........................................................................................................................................................
Solix, Inc. ........................................................................................................................................................................
Southern Nevada Children First .....................................................................................................................................
Sprint Nextel Corp. .........................................................................................................................................................
State Representative Barbara B. Boyd, Ed. D. (OH)
State Representative Bob Turner (WI)
State Representative Christopher J. England (AL)
State Representative Cory Mason (WI)
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Conexions
CCI
CT DPUC
Cox
CTIA
DC PSC
EDNet
FL PSC
GCI
GRTI
Indiana FSSA
IN URC
IHLE
Iridium
Keep USF Fair
Las Vegas Urban League
LCCHR
Cricket
MA DTC
MAG-Net
MI PSC
MMTC
MS PSC
MO PSC
NALA/PCA
NAACP Reno Sparks
NASUCA
NATOA
NCTA
NCLC
NTCA
NE PSC
NAF
NH Coalition of Aging
NHCADSV
NJ DRC
NY PSC
Nexus
OASHF
Open Access
One Economy
PCI
OH PUC
OR PUC
Rainbow PUSH
Reunion
OneLink
SBI
Solix
SNCF
Sprint
Federal Register / Vol. 77, No. 42 / Friday, March 2, 2012 / Rules and Regulations
12979
INITIAL COMMENTERS—Continued
Commenter
Abbreviation
State Representative Demetrius C. Newton (AL)
State Representative Denise Driehaus (OH)
State Representative Denise Harlow (ME)
State Representative Diane Russell (ME)
State Representative Dennis Murray (OH)
State Representative J.M. Lozano (TX)
State Representative John F. Knight (AL)
State Representative John Robinson (AL)
State Representative John W. Rogers (AL)
State Representative Leslie Milam Post (AR)
State Representative Mark Eves (ME)
State Representative Peter Stuckey (ME)
State Representative Ralph Howard (AL)
State Representative Richard Laird (AL)
State Representative Sheila Lampkin (AR)
State Representative Stacy Adams (GA)
State Representative Tony Payton (PA)
State Senator Jason Wilson (OH)
State Senator John C. Astle (MD)
State Senator Thomas Mac Middleton (MD)
Suzanne Burke
TCA .................................................................................................................................................................................
TracFone Wireless, Inc. ..................................................................................................................................................
United States Telecom Association ................................................................................................................................
Verizon and Verizon Wireless ........................................................................................................................................
ViaSat, Inc. .....................................................................................................................................................................
Virginia Interfaith Center for Public Policy ......................................................................................................................
YourTel America, Inc. .....................................................................................................................................................
TCA
TracFone
USTelecom
Verizon
ViaSat
Virginia Interfaith Center
YourTel
Appendix D
REPLY COMMENTERS
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Commenter
Abbreviation
Advocates for Basic Legal Equality, Inc., Community Voice Mail National, Disability Rights Advocates, Low Income
Utility Advocacy Project, The National Consumer Law Center, on Behalf of our Low-Income Clients, Ohio Poverty Law Center, Open Access Connections, Pennsylvania Utility Law Project, Pro Seniors, Inc., Texas Legal
Services Center, Virginia Citizens Consumer Council.
American Public Communications Council, Inc ..............................................................................................................
Amvensys Telecom Holdings, LLC ................................................................................................................................
AT&T ...............................................................................................................................................................................
California Public Utilities Commission ............................................................................................................................
COMPTEL .......................................................................................................................................................................
CTIA—The Wireless Association ...................................................................................................................................
Emerios ...........................................................................................................................................................................
Fletcher School (Tufts University) ..................................................................................................................................
General Communication, Inc ..........................................................................................................................................
Leap Wireless International, Inc. and Cricket Communications, Inc .............................................................................
Media Action Grassroots Network ..................................................................................................................................
MFY Legal Services, Inc ................................................................................................................................................
Michigan Public Service Commission ............................................................................................................................
Montana Independent Telecommunications Systems, LLC ...........................................................................................
National ALEC Association/Prepaid Communications Association ................................................................................
National Association of State Utility Consumer Advocates ............................................................................................
National Hispanic Media Coalition ..................................................................................................................................
New Jersey Division of Rate Counsel ............................................................................................................................
Nexus Communications, Inc ...........................................................................................................................................
One Economy Corp., League of United Latin America Citizens, Minority Media and Telecommunications Council ...
Open Access Connections .............................................................................................................................................
PR Wireless, Inc. d/b/a Open Mobile .............................................................................................................................
Regulatory Commission of Alaska .................................................................................................................................
Reunion Communications, Inc ........................................................................................................................................
Sprint Nextel Corporation ...............................................................................................................................................
State of Alaska ...............................................................................................................................................................
Texas Statewide Telephone Cooperative, Inc ...............................................................................................................
TracFone Wireless, Inc ...................................................................................................................................................
Verizon and Verizon Wireless ........................................................................................................................................
YourTel America, Inc.
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Consumer Groups
APCC
Amvensys
AT&T
CA PUC
COMPTEL
CTIA
Emerios
Fletcher School
GCI
Cricket
MAG–Net
MFY Legal Services
MI PSC
MITS
NALA/PCA
NASUCA
NHMC
NJ DRC
Nexus
One Economy
Open Access Connections
PR Wireless
Alaska Commission
Reunion
Sprint
Alaska
TX Telephone Cooperative
TracFone
Verizon
12980
Federal Register / Vol. 77, No. 42 / Friday, March 2, 2012 / Rules and Regulations
Appendix E
USAC DISBURSEMENT PUBLIC NOTICE COMMENTERS
Commenter
Abbreviation
Alexicon Telecommunications Consulting ......................................................................................................................
CenturyLink .....................................................................................................................................................................
COMPTEL .......................................................................................................................................................................
Michigan Public Service Commission ............................................................................................................................
PR Wireless, Inc. d/b/a Open Mobile .............................................................................................................................
Smith Bagley, Inc ............................................................................................................................................................
South Carolina Office of Regulatory Staff ......................................................................................................................
Alexicon
CenturyLink
Comptel
MI PSC
PR Wireless
Smith Bagley
South Carolina Office of
Regulatory Staff
Sprint
USTelecom
Verizon and Verizon Wireless
Sprint Nextel Corporation ...............................................................................................................................................
United States Telecom Association ................................................................................................................................
Verizon and Verizon Wireless ........................................................................................................................................
Reply Commenter
Massachusetts Department of Telecommunications and Cable ....................................................................................
National Tribal Telecommunications Association ...........................................................................................................
Nexus Communications, Inc ...........................................................................................................................................
[FR Doc. 2012–4978 Filed 3–1–12; 8:45 am]
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BILLING CODE 6712–01–P
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NTTA
Nexus
Agencies
[Federal Register Volume 77, Number 42 (Friday, March 2, 2012)]
[Rules and Regulations]
[Pages 12952-12980]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-4978]
[[Page 12951]]
Vol. 77
Friday,
No. 42
March 2, 2012
Part III
Federal Communications Commission
-----------------------------------------------------------------------
47 CFR Chapter 54
Lifeline and Link Up Reform and Modernization, Advancing Broadband
Availability Through Digital Literacy Training; Final Rule
Federal Register / Vol. 77, No. 42 / Friday, March 2, 2012 / Rules
and Regulations
[[Page 12952]]
-----------------------------------------------------------------------
FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 54
[WC Docket Nos. 11-42, 03-109, 12-23 and CC Docket No. 96-45; FCC 12-
11]
Lifeline and Link Up Reform and Modernization, Advancing
Broadband Availability Through Digital Literacy Training
AGENCY: Federal Communications Commission.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: In this document, the Federal Communications Commission
comprehensively reforms and begins to modernize the Universal Service
Fund's Lifeline program. The reforms adopted in this document
substantially strengthen protections against waste, fraud, and abuse;
improve program administration and accountability; improve enrollment
and consumer disclosures; initiate modernization of the program for
broadband; and constrain the growth of the program in order to reduce
the burden on all who contribute to the Universal Service Fund.
DATES: Effective April 2, 2012, except for the amendments to Sec. Sec.
54.202(a), 54.401(c), 54.403, 54.407, 54.410, 54.416, 54.417, 54.420,
54.222 which contain information collection requirements that are not
effective until approved by the Office of Management and Budget. The
Federal Communications Commission will publish a document in the
Federal Register announcing the effective date for those sections, and
except for the amendments contained herein to 47 CFR 54.411, 54.412,
54.413 and 54.414 which shall become effective April 1, 2012; and 47
CFR 54.409 which shall become effective June 1, 2012.
FOR FURTHER INFORMATION CONTACT: Kimberly Scardino, Wireline
Competition Bureau, (202) 418-7400 or TTY: (202) 418-0484.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report
and Order (R&O) in WC Docket Nos. 11-42, 03-109, 12-23 and CC Docket
No. 96-45; FCC 12-11, adopted on January 31, 2012 and released on
February 6, 2012. There was also a companion document released with
this item. The full text of this document is available for public
inspection during regular business hours in the FCC Reference Center,
Room CY-A257, 445 12th Street SW., Washington, DC 20554. Or at the
following Internet address: https://transition.fcc.gov/Daily_Releases/Daily_Business/2012/db0207/FCC-12-11A1.doc.
I. Introduction
1. In this Order, the Commission comprehensively reforms and begins
to modernize the Universal Service Fund's Lifeline program (Lifeline or
the program). Building on recommendations from the Federal-State Joint
Board on Universal Service (Joint Board), proposals in the National
Broadband Plan, input from the Government Accountability Office (GAO),
and comments received in response to the Commission's March Notice of
Proposed Rulemaking, the reforms adopted in this Order substantially
strengthen protections against waste, fraud, and abuse; improve program
administration and accountability; improve enrollment and consumer
disclosures; initiate modernization of the program for broadband; and
constrain the growth of the program in order to reduce the burden on
all who contribute to the Universal Service Fund (USF or the Fund). We
take these significant actions, while ensuring that eligible low-income
consumers who do not have the means to pay for telephone service can
maintain their current voice service through the Lifeline program and
those who are not currently connected to the networks will have the
opportunity to benefit from this program and the numerous opportunities
and security that telephone service affords.
2. This Order is another step in the Commission's ongoing efforts
to overhaul all USF programs to promote the availability of modern
networks and the capability of all American consumers to access and use
those networks. Consistent with previous efforts, we act here to
eliminate waste and inefficiency, increase accountability, and
transition the Fund from supporting standalone telephone service to
broadband. In June 2011, the Commission adopted the Duplicative Program
Payments Order, 76 FR 38040, June 29, 2011, which made clear that an
eligible consumer may only receive one Lifeline-supported service,
established procedures to detect and de-enroll subscribers receiving
duplicative Lifeline-supported services, and directed the Universal
Service Administrative Company (USAC) to implement a process to detect
and eliminate duplicative Lifeline support--a process now completed in
12 states and expanding to other states in the near future. Building on
those efforts, the unprecedented reforms adopted in today's Order could
save the Fund up to an estimated $2 billion over the next three years,
keeping money in the pockets of American consumers that otherwise would
have been wasted on duplicative benefits, subsidies for ineligible
consumers, or fraudulent misuse of Lifeline funds.
3. These savings will reduce growth in the Fund, while providing
telephone service to consumers who remain disconnected from the voice
networks of the twentieth century. Moreover, by using a fraction of the
savings from eliminating waste and abuse in the program to create a
broadband pilot program, we explore how Lifeline can best be used to
help low-income consumers access the networks of the twenty-first
century by closing the broadband adoption gap. This complements the
recent USF/ICC Transformation Order, 76 FR 76623, December 8, 2011,
which reoriented intercarrier compensation and the high-cost fund
toward increasing the availability of broadband networks, as well as
the recently launched ``Connect to Compete'' private-sector initiative
to increase access to affordable broadband service for low-income
consumers.
4. To make the program more accountable, the Order establishes
clear goals and measures and establishes national eligibility criteria
to allow low-income consumers to qualify for Lifeline based on either
income or participation in certain government benefit programs. The
Order adopts rules for Lifeline enrollment, including enhanced initial
and annual certification requirements, and confirms the program's one-
per-household requirement. The Order simplifies Lifeline reimbursement
and makes it more transparent. The Commission adopts a number of
reforms to eliminate waste, fraud and abuse in the program, including
creating a National Lifeline Accountability Database to prevent
multiple carriers from receiving support for the same subscribers;
phasing out toll limitation service support; eliminating Link Up
support except for recipients on Tribal lands that are served by
eligible telecommunications carriers (ETCs) that participate in both
Lifeline and the high-cost program; reducing the number of ineligible
subscribers in the program; and imposing independent audit requirements
on carriers receiving more than $5 million in annual support. These
reforms are estimated to save the Fund up to $2 billion over the next
three years. As part of these reforms we establish a savings target of
$200 million in 2012 versus the program's status quo path in the
absence of reform, create a mechanism for ensuring that target is met,
and put the Commission in a position to determine the appropriate
budget for Lifeline in early 2013 after
[[Page 12953]]
monitoring the impact of today's fundamental overhaul of the program
and addressing key issues in the Further Notice of Proposed Rulemaking
(FNPRM), including the appropriate monthly support amount for the
program. Using savings from the reforms, the Order establishes a
Broadband Adoption Pilot Program to test and determine how Lifeline can
best be used to increase broadband adoption among Lifeline-eligible
consumers. We also establish an interim base of uniform support amount
of $9.25 per month for non-Tribal subscribers to simplify program
administration.
II. Performance Goals & Measures
5. The Order adopts three performance goals for the program: (1)
Ensure the availability of voice service for low-income Americans; (2)
ensure the availability of broadband service for low-income Americans;
and (3) minimize the contribution burden on consumers and businesses.
The Order adopts measurements for each of the goals, while delegating
to the Bureau authority to resolve implementation aspects of such
measurements (for example, determining how to define ``low-income'' and
``next higher'' for the purpose of the measurement).
III. Voice Services Eligible for Discount
6. Consistent with the actions taken in the CAF Order and Sua
Sponte Order on Reconsideration, the Order amends the definition of
``Lifeline'' to provide support for ``voice telephony service.'' The
Order amends the rules to eliminate the ``basic local service
qualifier'' that is currently part of the definition of Lifeline
service, but explains that the Commission continues to expect Lifeline
providers to provide service that enables consumers to communicate with
others that live nearby, while acknowledging that service plans
increasingly allow all distance communication. The Order declines to
specify minimum service standards for Lifeline service, but states the
Commission will monitor service levels to see if it should adopt
standards in the future.
IV. Support Amounts for Voice Services
7. Today, ETCs are reimbursed for Lifeline based on a rather
complicated tiers structure that is, among other things tied to the
ILEC Subscriber Line Charge. To simplify administration of the program
and revise the rules to reflect the current marketplace in which more
than half of the support is provided to wireless providers that do not
charge a SLC, the Order adopts an interim rate of $9.25 to replace the
current Tiers 1, 2, and 3, effective April 1, 2012. The interim support
amount represents the nationwide average rate of reimbursement as of
September 2011. Tier 4, which provides enhanced Lifeline support to
residents of Tribal lands, remains unchanged. We seek further comment
on setting appropriate permanent support amounts in a Further Notice of
Proposed Rulemaking.
V. Consumer Eligibility and Enrollment
A. Uniform Eligibility Criteria
8. The Order establishes a uniform floor of eligibility for
Lifeline based on the current federal rules, while allowing states to
include more permissive eligibility criteria. Additionally, the Order
keeps the current federal income standard of 135% or below of the
federal poverty guidelines. This uniformity will simplify program
administration for USAC and for ETCs as well as provide a baseline
level of program accessibility nationwide.
B. One-per-Household
9. The order adopts a one-per-household requirement. ``Household''
is defined consistent with the Low-Income Home Energy Assistance
Program as ``any individual or group of individuals who are living
together at the same address as one economic unit,'' with an ``economic
unit'' defined as ``all adult individuals contributing to and sharing
in the income and expenses of a household.'' The Order permits Lifeline
support to individuals living in group living facilities. The Order
adopts procedures to enable Lifeline applicants to demonstrate when
initially enrolling in the program that any other Lifeline recipients
residing at their residential address are part of a separate household
and directs USAC, within 30 days of the effective date of the Order, to
develop a worksheet that will allow low-income households sharing an
address to indicate they are part of a separate household. The Order
also directs USAC, within 30 days of the effective date of the Order,
to develop print and web materials to be posted on USAC's Web site that
both USAC and ETCs can use to educate consumers about the one-per-
household rule (i.e., how to determine what persons comprise a
household).
C. Determining Consumer Eligibility (At Enrollment and Annually
Thereafter)
10. The Order requires all Lifeline subscribers to provide certain
certifications when enrolling in Lifeline and annually thereafter.
These requirements are as follows:
1. Initial Certification Requirements
11. The Order requires ETCs (or the state administrator, where
applicable) to check the program-based eligibility of new Lifeline
subscribers at enrollment by accessing available state or federal
eligibility databases. Where underlying program eligibility data cannot
be accessed, the Order requires new Lifeline subscribers to provide
documentation of program-based eligibility, which the entity enrolling
the subscriber should review (but not retain). Similarly, the Order
extends the current requirement in federal default states that new
Lifeline subscribers must present documentation to qualify for Lifeline
based on income level to all states. The Order adopts additional
certification requirements to protect the program from waste, fraud,
and abuse, including requiring consumers to certify upon enrollment and
annually thereafter that they are receiving support for only one line
per household (as described above), and requires consumers to sign a
certification form prior to enrolling in the Lifeline program.
2. Annual Re-Certification Requirements
12. The Order replaces the existing annual verification process
with a rule that requires each Lifeline subscriber (both existing
subscribers and new subscribers) to provide annual self-certifications
attesting to their continued eligibility for the program. The Order
requires all ETCs, to re-certify by the end of 2012, all of their
subscribers claimed on their June FCC Form 497 and report the results
of this annual re-certification process to the Commission, USAC and the
relevant state commission (where the state has jurisdiction over the
ETC) annually by January 31, 2013. Beginning in 2013, where ETCs cannot
re-certify their subscriber by accessing a database, they must re-
certify them on an annual basis or elect to have USAC re-certify them.
The results of the re-certification process must be filed by January
31st each year. Where ETCs can access underlying state or federal
program data to confirm a consumer's ongoing eligibility for Lifeline,
the Order allows them to do so in place of the annual re-certification
process. The Order adopts a rule that consumers that do not respond to
annual re-certifications must be de-enrolled from the program. The
Order also adopts a rule requiring consumers to notify their ETC within
30 days if the consumer no longer qualifies for Lifeline.
[[Page 12954]]
3. ETC Certifications
13. The Order requires ETCs to make certain certifications annually
and when submitting for reimbursement from the program.
D. Tribal Lifeline Eligibility
14. The Order clarifies that residents of Tribal lands are eligible
for Lifeline (and Link Up support if served by a high cost recipient)
based on (1) Income level; (2) participation in any Tribal-specific
federal assistance program identified in the Commission's rules; or (3)
participation in any other program identified in the Commission's
rules. The Order adopts the NPRM proposal to add the Food Distribution
Program on Indian Reservations (FDPIR) to the list of programs that
confer eligibility. The Order establishes a waiver and designation
process for those Tribal communities that are located outside of
reservations, but can show ties to defined Tribal communities, and
removes the term ``near reservation'' from the Commission's definition
of Tribal lands. The Order requires residents on Tribal lands to follow
the same requirements for documentation of income and program based
eligibility as other Lifeline recipients, but clarifies that we will
continue to allow self-certification of residence on Tribal lands.
E. Electronic Signature
15. The Order allows ETCs and state agencies to capture a
subscriber's signature electronically at sign-up, including through the
use of interactive voice response systems in compliance with the
requirements of the E-Sign Act and the Government Paperwork Elimination
Act. The E-Sign Act allows the use of electronic records to satisfy
Commission regulations requiring that such information be provided in
writing, if the consumer has affirmatively consented to such use and
has not withdrawn such consent.
F. Automatic and Coordinated Enrollment
16. The Order encourages states to facilitate coordinated
enrollment, but makes clear that automatic enrollment whereby consumers
receiving eligible benefits are automatically enrolled in a particular
carrier's Lifeline program without their express consent is not
permitted because it may increase the incidence of duplicative support.
VI. Reforms To Eliminate Waste, Fraud and Abuse
A. National Lifeline Accountability Database
17. The Order adopts a national duplicates database to detect and
eliminate duplicative Lifeline and Link Up support. The Order directs
WCB to work with USAC and OMD to establish and implement the database
and associated processes. ETCs will be required to query the database
to determine whether a prospective subscriber is already receiving
Lifeline support from another ETC. The order directs ETCs to (1)
populate the database with the necessary information to implement these
processes and (2) query the database for each new subscriber prior to
receiving reimbursement from the fund for that subscriber. We seek
further comment in an FNRPM on how to implement a database to check for
eligibility.
B. TLS
18. The Order clarifies that it does not consider a subscriber who
has a Lifeline calling plan that includes a set number of calling
minutes available for either local or domestic long distance calls to
have voluntarily elected to receive TLS. Therefore, TLS support will
not be provided to ETCs providing such plans effective April 1, 2012.
To the extent an ETC offers service plans that still charge a fee for
toll calls that is in addition to the per month or per billing cycle
price for the Lifeline service plan, it must provide at no additional
cost to the consumer the ability to limit or block calls that would
result in additional charge, but the program will no longer provide
additional support for this functionality. Support for TLS will be
eliminated over two years to mitigate the impact of this change. The
Order establishes a limit on TLS support of $3.00 per month per
subscriber that will be implemented with April 2012 support payments
through the remainder of 2012, beginning with April 2012 disbursements.
TLS support will be reduced to $2.00 per month per subscriber in 2013,
and eliminated at the beginning of 2014.
C. Link Up
19. The Order eliminates Link Up support to all ETCs on non-Tribal
lands, effective April 1, 2012, and limits Link Up on Tribal lands to
high cost recipients deploying infrastructure. Marketplace trends
indicate that Lifeline consumers increasingly have service options from
ETCs that neither draw on Link Up support nor charge the consumer a
service initiation fee. In balancing a number of universal service
goals with finite resources, we conclude that dollars currently spent
for Link Up can be more effectively spent to improve and modernize the
Lifeline program.
D. Subscriber Usage of Customer Supported Service
20. The Order establishes a rule that pre-paid ETCs offering
service to subscribers for free may not seek reimbursement for
subscribers until the subscriber initiates service in the first
instance. Moreover, subscribers who fail to ``use'' the service (as
that term is defined in the Order/Rules) within 60 consecutive days
must be de-enrolled by the carrier and the duplicates database must be
updated within one business day. Furthermore, pre-paid ETCs must inform
their subscribers that Lifeline services are not transferable, that
there is a usage requirement to retain the benefit, and that
subscribers will be automatically de-enrolled for non-use.
E. Minimum Consumer Charge
21. The Order does not adopt a minimum consumer charge in light of
other W/F/A protections that will be implemented to ensure that
consumers do not abuse the program, but notes that this issue could be
revisited if the measures adopted fail to address the issues that
currently exist. Further, the Order eliminates the current rule that
imposes a $1 minimum local charge on Tribal subscribers.
F. Outreach and Marketing
22. Within six months from the Order's effective date, ETCs must
include in plain, easy-to-understand language in all of their Lifeline
marketing materials (including print, internet, audio and video), that
the offering is a Lifeline-supported service; Lifeline is a government
assistance program; only eligible consumers may enroll in the program;
what documentation is necessary for enrollment; the program is limited
to one benefit per household, consisting of either wireline or wireless
service; and consumers who willfully make false statements in order to
obtain program benefits can be punished with a fine or imprisonment or
barred from the program. Additionally, the Order requires ETCs to
disclose the company name under which it does business and the details
of its Lifeline service offerings in its Lifeline-related marketing and
advertising. The Order does not adopt mandatory outreach requirements
but directs the Wireline Competition and Consumer and Governmental
Affairs Bureau to conduct
[[Page 12955]]
an outreach campaign regarding the new program rules.
G. Audits and Enforcement
23. The order requires USAC to revise its existing oversight
program (the Beneficiary Compliance Audit and Payment Quality Assurance
programs) in light of the new rules. It also adopts a new first-year
audit requirement for newly designated ETCs whereby they would be
audited by USAC within their first year of providing service. The order
also adopts a rule that ETCs drawing more than $5 million, at the
holding company level, from the low-income program must conduct
biennial independent audits and submit the audit reports to the
Commission, USAC, and appropriate state commission. The Order requires
ETCs to report to USAC their ownership information, including
affiliates and holding companies, which is necessary to implement this
new audit requirement. ETCs are put on notice that findings concerning
improper payment of funds may result in recapture of those payments
under the Improper Payments Elimination and Recovery Act (IPERA) and
related Office of Management and Budget implementation guidelines and/
or revocation of ETC designation.
VII. Payment of Low-Income Support
24. The order adopts a three-month transition for low-income
support to be disbursed based on actual support in place of the current
administrative process of paying low-income support based on projected
service. The Order accelerates USAC's payment of low-income support for
carriers filing the FCC Form 497 electronically by a monthly deadline.
The window by which carriers must file revisions or original FCC Form
497s is reduced from fifteen months from the end of a calendar year, to
a rolling twelve-month window.
VIII. Modernizing the Program
A. Bundled Services
25. The Order adopts a rule permitting ETCs in all states to allow
qualifying low-income consumers to apply Lifeline discounts to all
residential service plans that provide voice telephony service,
including bundled service packages combining voice and broadband, or
packages containing optional calling features. ETCs will be required to
apply partial subscriber payments to the cost of the Lifeline voice
component of a package before paying down any additional services, and
must notify Lifeline consumers of this rule in writing. In a Further
Notice, described below, we seek further comment on whether to adopt a
rule mandating that ETCs offer Lifeline discounts on all bundled
service packages and packages with optional calling features.
B. Broadband Pilot
26. The Order establishes a broadband pilot program aimed at
generating statistically significant data that will allow the
Commission, ETCs, and the public to analyze the effectiveness of
different approaches to using Lifeline funds to making broadband more
affordable for low-income Americans while providing support that is
sufficient but not excessive. The broadband pilot program will be
funded with some of the savings from the duplicate resolution process.
C. Managing the Size of the Low Income Fund
27. The Order sets a savings target of $200 million for 2012. The
Bureau shall provide to each Commissioner an interim report no later
than six months from the adoption of the Order analyzing the reforms'
progress in meeting the savings target. Not later than one year after
the adoption of the Order, the Bureau shall provide to each
Commissioner a report as to whether the reforms have succeeded in
meeting the savings target; and, if they have not, analyzing the
causes, providing options for realizing those savings, and making
specific recommendations for corrective action to realize those
savings. Both reports shall be made available for public input on the
Commission's Web site.
IX. Eligible Telecommunications Carrier Requirements
A. Facilities-Based Requirements for Lifeline-Only ETCs
28. The Commission forbears from applying the Act's facilities
requirement of section 214(e)(1)(A) to all telecommunications carriers
that seek limited ETC designation to participate in the Lifeline
program, subject to certain conditions. Specifically, each carrier must
(i) comply with certain 911 requirements; and (ii) file, subject to
Bureau approval, a compliance plan providing specific information
regarding the carrier's service offerings and outlining the measures
the carrier will take to implement the obligations contained in this
Order. To avoid disruption to subscribers served by existing Lifeline-
only ETCs that previously received forbearance in those states where
they were designated prior to December 29, 2011, those ETCs can
continue to receive reimbursement in those states pending approval of
their compliance plan, provided they submit their plan to the Bureau by
July 1, 2012. Non-facilities-based carriers designated after December
29, 2011 will not receive reimbursement from the Fund until the Bureau
approves their compliance plans.
B. Impact of New Rules on Prior Forbearance Conditions
29. To the extent that any of the conditions in the prior
forbearance orders and compliance plans are inconsistent with the rules
adopted in the Order, the newly adopted rules shall prevail. However,
any carrier whose grant of forbearance was conditioned on more
stringent compliance plans must comply with those additional
obligations as well as the rules adopted in the Order.
C. Additional Rule Amendments
30. The Order makes several changes to the rules regarding Lifeline
providers to eliminate waste and inefficiency, and to increase
accountability in the program. The Order amends section 54.202 to
clarify that Lifeline-only ETCs are not required to submit a five-year
improvement plan as part of its application for designation. Carriers
seeking to be designated as a Lifeline-only ETC must demonstrate their
technical and financial capacity to provide the supported services. All
ETCs receiving Lifeline must annually report the names and identifiers
used by the ETC, its holding company, operating companies and
affiliates. Additonally, the Order requires every ETC receiving low-
income support to annually provide to the Commission and USAC general
information regarding their Lifeline plans for voice telephony service
offered specifically for low-income consumers.
X. APCC Petition
31. The Order denies a petition for rulemaking and a petition for
interim relief by the American Public Communications Council to
subsidize the payphone industry through Lifeline.
XI. Procedural Matters
A. Paperwork Reduction Act Analysis
32. This Report and Order contains new information collection
requirements subject to the Paperwork Reduction Act of 1995 (PRA),
Public Law 104-13. The new requirements will be submitted to the Office
of Management and Budget (OMB) for review under section 3507(d) of the
PRA. OMB, the general public, and other Federal agencies are invited to
comment on the new or modified
[[Page 12956]]
information collection requirements contained in this proceeding. In
addition, we note that pursuant to the Small Business Paperwork Relief
Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), we
previously sought specific comment on how the Commission might further
reduce the information collection burden for small business concerns
with fewer than 25 employees. We describe the impacts that might affect
small businesses, which include most businesses with fewer than 25
employees, in the Final Rregulatory Flexibility Analysis below.
B. Congressional Review Act
33. The Commission will send a copy of this Report and Order to
Congress and the Government Accountability Office pursuant to the
Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).
C. Final Regulatory Flexibility Analysis
34. The Regulatory Flexibility Act (RFA) requires that an agency
prepare a regulatory flexibility analysis for notice and comment
rulemakings, unless the agency certifies that ``the rule will not, if
promulgated, have a significant economic impact on a substantial number
of small entities.'' Accordingly, we have prepared a Final Regulatory
Flexibility Analysis concerning the possible impact of the rule changes
contained in this Report and Order on small entities.
35. As required by the Regulatory Flexibility Act of 1980, as
amended (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was
incorporated in the Lifeline and Link Up Reform and Modernization
Notice of Proposed Rulemaking (Lifeline and Link Up NPRM), 76 FR 16482,
March 23, 2011. The Commission sought written public comments on the
proposals in the Lifeline and Link Up NPRM, including comment on the
IRFA. This present Final Regulatory Flexibility Analysis (FRFA)
conforms to the RFA.
D. Need for, and Objectives of, the Order
36. The Commission is required by section 254 of the Act to
promulgate rules to implement the universal service provisions of
section 254. On May 8, 1997, the Commission adopted rules that reformed
its system of universal service support mechanisms so that universal
service is preserved and advanced as markets move toward competition.
Among other programs, the Commission adopted a program to provide
discounts that make basic, local telephone service affordable for low-
income consumers.
37. In this Order, we comprehensively reform and begin to modernize
the Universal Service Fund's Lifeline program (Lifeline or the
program). Building on recommendations from the Federal-State Joint
Board on Universal Service (``Joint Board''), proposals in the National
Broadband Plan, input from the Government Accountability Office (GAO),
and comments received in response to the Commission's March Notice of
Proposed Rulemaking the reforms adopted in this Order substantially
strengthen protections against waste, fraud, and abuse; improve program
administration and accountability; improve enrollment and consumer
disclosures; initiate modernization of the program for broadband; and
constrain the growth of the program in order to reduce the burden on
all who contribute to the Universal Service Fund (USF or the Fund). We
take these significant actions, while ensuring that eligible low-income
consumers who do not have the means to pay for telephone service can
maintain their current voice service through the Lifeline program and
those who are not currently connected to the networks will have the
opportunity to benefit from this program and the numerous opportunities
and security that telephone service affords.
38. This Order is another step in the Commission's ongoing efforts
to overhaul all Universal Service Fund programs to fulfill the goals
Congress gave us to promote the availability of modern networks and the
capability of all American consumers to access and use those networks.
Consistent with previous efforts, we act here to eliminate waste and
inefficiency, increase accountability, and transition the Fund from
supporting standalone telephone service to broadband. In June 2011, the
Commission adopted the Duplicative Program Payments Order, which made
clear that an eligible consumer may only receive one Lifeline-supported
service, established procedures to detect and de-enroll subscribers
receiving duplicative Lifeline-supported services, and directed USAC to
implement a process to detect and eliminate duplicative Lifeline
support--a process now completed in 12 states and expanding to other
states in the near future. Building on those efforts, we estimate that
the unprecedented reforms adopted in today's Order could save the Fund
up to an estimated $2 billion over the next three years, keeping money
in the pockets of American consumers that otherwise would have been
wasted on duplicative benefits, subsidies for ineligible consumers, or
fraudulent misuse of Lifeline funds.
39. These savings will reduce growth in the Fund but at the same
time provide telephone service to consumers who remain disconnected
from the voice networks of the Twentieth Century. Moreover, by using a
fraction of the savings from eliminating waste and abuse in the program
to create a broadband pilot program, we explore how Lifeline can best
be used to help low-income consumers access the networks of the Twenty-
First Century by closing the broadband adoption gap. This complements
the recent USF/ICC Transformation Order and FNPRM, which reoriented
intercarrier compensation and the high-cost fund toward increasing the
availability of broadband networks, as well as the recently launched
``Connect to Compete'' private-sector initiative to increase access to
affordable broadband service for low-income consumers.
40. To make the program more accountable, the Order establishes
clear goals and measures and establishes national eligibility criteria
to allow low-income consumers to qualify for Lifeline based on either
income or participation in certain government benefit programs. The
Order adopts rules for Lifeline enrollment, including enhanced initial
and annual certification requirements, and confirms the program's one-
per-household requirement. The Order simplifies Lifeline reimbursement
and makes it more transparent. The Commission adopts a number of
reforms to eliminate waste, fraud and abuse in the program, including
creating a National Lifeline Accountability Database to prevent
multiple carriers from receiving support for the same subscribers;
phasing out toll limitation service support; eliminating Link Up
support except for recipients on Tribal lands that are served by
eligible telecommunications carriers (``ETCs'') that participate in
both Lifeline and the high-cost program; reducing the number of
ineligible subscribers in the program; and imposing independent audit
requirements on carriers receiving more than $5 million in annual
support. These reforms are expected to save the Fund approximately $2
billion over the next three years. Using savings from the reforms, the
Order establishes a Broadband Adoption Pilot Program to test and
determine how Lifeline can best be used to increase broadband adoption
among Lifeline-eligible consumers. We also establish an interim base of
uniform support amount of $9.25 per month for non-Tribal subscribers to
simplify program administration.
[[Page 12957]]
E. Summary of Significant Issues Raised by Public Comments in Response
to the IRFA
41. No comments were filed in response to the IRFA attached to the
Lifeline and Link Up NPRM. Notwithstanding the foregoing, general
comments discussing the impact of the proposed rules on small business
were submitted in response to the Lifeline and Link Up NPRM. With
respect to the proposal to provide household identifying information as
a measure to prevent duplicate enrollment, one commenter expressed
concern that the imposition of a data transmission requirement would
result in new training, programming, and administrative expenses which
would be burdensome on small entities. One commenter opposed any
limitations placed on Link Up support arguing that such limitations
would inhibit small ETCs' ability to participate in the low income
program. Commenters expressed concern that the proposed audit
requirements in the NPRM would be expensive and difficult for small
companies to comply with. One commenter opposed the proposed
verification proposals in the NPRM asserting that such new requirements
would be unnecessarily expensive and disproportionately burden small
businesses. Commenters opposed the proposed sampling methodology to
confirm eligibility as it would have the result of requiring small
entities to sample most if not all of their Lifeline subscribers.
Commenters asserted that outreach efforts may be unreasonably
burdensome for small ETCs. In making the determinations reflected in
the Order, we have considered the impact of our actions on small
entities.
F. Description and Estimate of the Number of Small Entities to Which
the Proposed Rules Will Apply
42. The RFA directs agencies to provide a description of and, where
feasible, an estimate of the number of small entities that may be
affected by the proposed rules, if adopted. The RFA generally defines
the term ``small entity'' as having the same meaning as the terms
``small business,'' ``small organization,'' and ``small governmental
jurisdiction.'' In addition, the term ``small business'' has the same
meaning as the term ``small business concern'' under the Small Business
Act. A small business concern is one that: (1) Is independently owned
and operated; (2) is not dominant in its field of operation; and (3)
satisfies any additional criteria established by the Small Business
Administration (SBA). Nationwide, there are a total of approximately
29.6 million small businesses, according to the SBA. A ``small
organization'' is generally ``any not-for-profit enterprise which is
independently owned and operated and is not dominant in its field.''
Nationwide, as of 2002, there were approximately 1.6 million small
organizations. The term ``small governmental jurisdiction'' is defined
generally as ``governments of cities, towns, townships, villages,
school districts, or special districts, with a population of less than
fifty thousand.'' Census Bureau data for 2002 indicate that there were
87,525 local governmental jurisdictions in the United States. We
estimate that, of this total, 84,377 entities were ``small governmental
jurisdictions.'' Thus, we estimate that most governmental jurisdictions
are small.
1. Wireline Providers
43. Incumbent Local Exchange Carriers (Incumbent LECs). Neither the
Commission nor the SBA has developed a small business size standard
specifically for incumbent local exchange services. The appropriate
size standard under SBA rules is for the category Wired
Telecommunications Carriers. Under that size standard, such a business
is small if it has 1,500 or fewer employees. Census Bureau data for
2007, which now supersede data from the 2002 Census, show that there
were 3,188 firms in this category that operated for the entire year. Of
this total, 3,144 had employment of 999 or fewer and 44 firms had had
employment of 1000 or more. According to Commission data, 1,307
carriers reported that they were incumbent local exchange service
providers. Of these 1,307 carriers, an estimated 1,006 have 1,500 or
fewer employees and 301 have more than 1,500 employees. Consequently,
the Commission estimates that most providers of local exchange service
are small entities that may be affected by the rules and policies
proposed in the Notice. Thus under this category and the associated
small business size standard, the majority of these incumbent local
exchange service providers can be considered small providers.
44. Competitive Local Exchange Carriers (Competitive LECs),
Competitive Access Providers (CAPs), Shared-Tenant Service Providers,
and Other Local Service Providers. Neither the Commission nor the SBA
has developed a small business size standard specifically for these
service providers. The appropriate size standard under SBA rules is for
the category Wired Telecommunications Carriers. Under that size
standard, such a business is small if it has 1,500 or fewer employees.
Census Bureau data for 2007, which now supersede data from the 2002
Census, show that there were 3,188 firms in this category that operated
for the entire year. Of this total, 3,144 had employment of 999 or
fewer and 44 firms had had employment of 1,000 employees or more. Thus
under this category and the associated small business size standard,
the majority of these Competitive LECs, CAPs, Shared-Tenant Service
Providers, and Other Local Service Providers can be considered small
entities. According to Commission data, 1,442 carriers reported that
they were engaged in the provision of either competitive local exchange
services or competitive access provider services. Of these 1,442
carriers, an estimated 1,256 have 1,500 or fewer employees and 186 have
more than 1,500 employees. In addition, 17 carriers have reported that
they are Shared-Tenant Service Providers, and all 17 are estimated to
have 1,500 or fewer employees. In addition, 72 carriers have reported
that they are Other Local Service Providers. Seventy of which have
1,500 or fewer employees and two have more than 1,500 employees.
Consequently, the Commission estimates that most providers of
competitive local exchange service, competitive access providers,
Shared-Tenant Service Providers, and Other Local Service Providers are
small entities that may be affected by rules adopted pursuant to the
Notice.
45. Interexchange Carriers. Neither the Commission nor the SBA has
developed a small business size standard specifically for providers of
interexchange services. The appropriate size standard under SBA rules
is for the category Wired Telecommunications Carriers. Under that size
standard, such a business is small if it has 1,500 or fewer employees.
Census Bureau data for 2007, which now supersede data from the 2002
Census, show that there were 3,188 firms in this category that operated
for the entire year. Of this total, 3,144 had employment of 999 or
fewer, and 44 firms had had employment of 1,000 employees or more. Thus
under this category and the associated small business size standard,
the majority of these Interexchange carriers can be considered small
entities. According to Commission data, 359 companies reported that
their primary telecommunications service activity was the provision of
interexchange services. Of these 359 companies, an estimated 317 have
1,500 or fewer employees and 42 have more
[[Page 12958]]
than 1,500 employees. Consequently, the Commission estimates that the
majority of interexchange service providers are small entities that may
be affected by rules adopted pursuant to the Notice.
46. Operator Service Providers (OSPs). Neither the Commission nor
the SBA has developed a small business size standard specifically for
operator service providers. The appropriate size standard under SBA
rules is the category Wired Telecommunications Carriers. Under that
size standard, such a business is small if it has 1,500 or fewer
employees. Under that size standard, such a business is small if it has
1,500 or fewer employees. Census Bureau data for 2007, which now
supersede 2002 Census data, show that there were 3,188 firms in this
category that operated for the entire year. Of the total, 3,144 had
employment of 999 or fewer, and 44 firms had had employment of 1,000
employees or more. Thus under this category and the associated small
business size standard, the majority of these interexchange carriers
can be considered small entities. According to Commission data, 33
carriers have reported that they are engaged in the provision of
operator services. Of these, an estimated 31 have 1,500 or fewer
employees and 2 have more than 1,500 employees. Consequently, the
Commission estimates that the majority of OSPs are small entities that
may be affected by our proposed action.
47. Local Resellers. The SBA has developed a small business size
standard for the category of Telecommunications Resellers. Under that
size standard, such a business is small if it has 1,500 or fewer
employees. Census data for 2007 show that 1,523 firms provided resale
services during that year. Of that number, 1,522 operated with fewer
than 1000 employees and one operated with more than 1,000. Thus under
this category and the associated small business size standard, the
majority of these local resellers can be considered small entities.
According to Commission data, 213 carriers have reported that they are
engaged in the provision of local resale services. Of these, an
estimated 211 have 1,500 or fewer employees and two have more than
1,500 employees. Consequently, the Commission estimates that the
majority of local resellers are small entities that may be affected by
rules adopted pursuant to the Notice.
48. Toll Resellers. The SBA has developed a small business size
standard for the category of Telecommunications Resellers. Under that
size standard, such a business is small if it has 1,500 or fewer
employees. Census data for 2007 show that 1,523 firms provided resale
services during that year. Of that number, 1,522 operated with fewer
than 1000 employees and one operated with more than 1,000. Thus under
this category and the associated small business size standard, the
majority of these resellers can be considered small entities. According
to Commission data, 881 carriers have reported that they are engaged in
the provision of toll resale services. Of these, an estimated 857 have
1,500 or fewer employees and 24 have more than 1,500 employees.
Consequently, the Commission estimates that the majority of toll
resellers are small entities that may be affected by our action.
49. Pre-paid Calling Card Providers. Neither the Commission nor the
SBA has developed a small business size standard specifically for pre-
paid calling card providers. The appropriate size standard under SBA
rules is for the category Telecommunications Resellers. Under that size
standard, such a business is small if it has 1,500 or fewer employees.
Census data for 2007 show that 1,523 firms provided resale services
during that year. Of that number, 1,522 operated with fewer than 1000
employees and one operated with more than 1,000. Thus under this
category and the associated small business size standard, the majority
of these pre-paid calling card providers can be considered small
entities. According to Commission data, 193 carriers have reported that
they are engaged in the provision of pre-paid calling cards. Of these,
an estimated all 193 have 1,500 or fewer employees and none have more
than 1,500 employees. Consequently, the Commission estimates that the
majority of pre-paid calling card providers are small entities that may
be affected by rules adopted pursuant to the Notice.
50. 800 and 800-Like Service Subscribers. Neither the Commission
nor the SBA has developed a small business size standard specifically
for 800 and 800-like service (``toll free'') subscribers. The
appropriate size standard under SBA rules is for the category
Telecommunications Resellers. Under that size standard, such a business
is small if it has 1,500 or fewer employees. Census data for 2007 show
that 1,523 firms provided resale services during that year. Of that
number, 1,522 operated with fewer than 1,000 employees and one operated
with more than 1,000. Thus under this category and the associated small
business size standard, the majority of resellers in this
classification can be considered small entities. To focus specifically
on the number of subscribers than on those firms which make
subscription service available, the most reliable source of information
regarding the number of these service subscribers appears to be data
the Commission collects on the 800, 888, 877, and 866 numbers in use.
According to our data, as of September 2009, the number of 800 numbers
assigned was 7,860,000; the number of 888 numbers assigned was
5,888,687; the number of 877 numbers assigned was 4,721,866; and the
number of 866 numbers assigned was 7,867,736. The Commission does not
have data specifying the number of these subscribers that are not
independently owned and operated or have more than 1,500 employees, and
thus are unable at this time to estimate with greater precision the
number of toll free subscribers that would qualify as small businesses
under the SBA size standard. Consequently, the Commission estimates
that there are 7,860,000 or fewer small entity 800 subscribers;
5,888,687 or fewer small entity 888 subscribers; 4,721,866 or fewer
small entity 877 subscribers; and 7,867,736 or fewer small entity 866
subscribers. We do not believe 800 and 800-Like Service Subscribers
will be effected by our proposed rules, however we choose to include
this category and seek comment on whether there will be an effect on
small entities within this category.
2. Wireless Carriers and Service Providers
51. Below, for those services subject to auctions, the Commission
notes that, as a general matter, the number of winning bidders that
qualify as small businesses at the close of an auction does not
necessarily represent the number of small businesses currently in
service. Also, the Commission does not generally track subsequent
business size unless, in the context of assignments or transfers,
unjust enrichment issues are implicated.
52. Wireless Telecommunications Carriers (except Satellite). Since
2007, the Census Bureau has placed wireless firms within this new,
broad, economic census category. Prior to that time, such firms were
within the now-superseded categories of ``Paging'' and ``Cellular and
Other Wireless Telecommunications.'' Under the present and prior
categories, the SBA has deemed a wireless business to be small if it
has 1,500 or fewer employees. For the category of Wireless
Telecommunications Carriers (except Satellite), Census data for 2007,
which supersede data contained in the 2002 Census, show that there were
1,383 firms that operated that year. Of those
[[Page 12959]]
1,383, 1,368 had fewer than 100 employees, and 15 firms had more than
100 employees. Thus under this category and the associated small
business size standard, the majority of firms can be considered small.
Similarly, according to Commission data, 413 carriers reported that
they were engaged in the provision of wireless telephony, including
cellular service, Personal Communications Service (PCS), and
Specialized Mobile Radio (SMR) Telephony services. Of these, an
estimated 261 have 1,500 or fewer employees and 152 have more than
1,500 employees. Consequently, the Commission estimates that
approximately half or more of these firms can be considered small.
Thus, using available data, we estimate that the majority of wireless
firms can be considered small.
53. Wireless Communications Services. This service can be used for
fixed, mobile, radiolocation, and digital audio broadcasting satellite
uses. The Commission defined ``small business'' for the wireless
communications services (WCS) auction as an entity with average gross
revenues of $40 million for each of the three preceding years, and a
``very small business'' as an entity with average gross revenues of $15
million for each of the three preceding years. The SBA has approved
these definitions. The Commission auctioned geographic area licenses in
the WCS service. In the auction, which commenced on April 15, 1997 and
closed on April 25, 1997, seven bidders won 31 licenses that qualified
as very small business entities, and one bidder won one license that
qualified as a small business entity.
54. Satellite Telecommunications Providers. Two economic census
categories address the satellite industry. The first category has a
small business size standard of $15 million or less in average annual
receipts, under SBA rules. The second has a size standard of $25
million or less in annual receipts.
55. The category of Satellite Telecommunications ``comprises
establishments primarily engaged in providing telecommunications
services to other establishments in the telecommunications and
broadcasting industries by forwarding and receiving communications
signals via a system of satellites or reselling satellite
telecommunications.'' Census Bureau data for 2007 show that 512
Satellite Telecommunications firms that operated for that entire year.
Of this total, 464 firms had annual receipts of under $10 million, and
18 firms had receipts of $10 million to $24,999,999. Consequently, the
Commission estimates that the majority of Satellite Telecommunications
firms are small entities that might be affected by our action.
56. The second category, i.e. ``All Other Telecommunications''
comprises ``establishments primarily engaged in providing specialized
telecommunications services, such as satellite tracking, communications
telemetry, and radar station operation. This industry also includes
establishments primarily engaged in providing satellite terminal
stations and associated facilities connected with one or more
terrestrial systems and capable of transmitting telecommunications to,
and receiving telecommunications from, satellite systems.
Establishments providing Internet services or voice over Internet
protocol (VoIP) services via client-supplied telecommunications
connections are also included in this industry.'' For this category,
Census Bureau data for 2007 show that there were a total of 2,383 firms
that operated for the entire year. Of this total, 2,347 firms had
annual receipts of under $25 million and 12 firms had annual receipts
of $25 million to $49,999,999. Consequently, the Commission estimates
that the majority of All Other Telecommunications firms are small
entities that might be affected by our action.
57. Common Carrier Paging. The SBA considers paging to be a
wireless telecommunications service and classifies it under the
industry classification Wireless Telecommunications Carriers (except
satellite). Under that classification, the applicable size standard is
that a business is small if it has 1,500 or fewer employees. For the
general category of Wireless Telecommunications Carriers (except
Satellite), Census data for 2007, which supersede data contained in the
2002 Census, show that there were 1,383 firms that operated that year.
Of those 1,383, 1,368 had fewer than 100 employees, and 15 firms had
more than 100 employees. Thus under this category and the associated
small business size standard, the majority of firms can be considered
small. The 2007 census also contains data for the specific category of
``Paging'' ``that is classified under the seven-number North American
Industry Classification System (NAICS) code 5172101. According to
Commission data, 291 carriers have reported that they are engaged in
Paging or Messaging Service. Of these, an estimated 289 have 1,500 or
fewer employees, and 2 have more than 1,500 employees. Consequently,
the Commission estimates that the majority of paging providers are
small entities that may be affected by our action. In addition, in the
Paging Third Report and Order, the Commission developed a small
business size standard for ``small businesses'' and ``very small
businesses'' for purposes of determining their eligibility for special
provisions such as bidding credits and installment payments. A ``small
business'' is an entity that, together with its affiliates and
controlling principals, has average gross revenues not exceeding $15
million for the preceding three years. Additionally, a ``very small
business'' is an entity that, together with its affiliates and
controlling principals, has average gross revenues that are not more
than $3 million for the preceding three years. The SBA has approved
these small business size standards. An auction of Metropolitan
Economic Area licenses commenced on February 24, 2000, and closed on
March 2, 2000. Of the 985 licenses auctioned, 440 were sold. Fifty-
seven companies claiming small business status won.
58. Wireless Telephony. Wireless telephony includes cellular,
personal communications services, and specialized mobile radio
telephony carriers. As noted, the SBA has developed a small business
size standard for Wireless Telecommunications Carriers (except
Satellite). Under the SBA small business size standard, a business is
small if it has 1,500 or fewer employees. According to the 2008 Trends
Report, 434 carriers reported that they were engaged in wireless
telephony. Of these, an estimated 222 have 1,500 or fewer employees and
212 have more than 1,500 employees. We have estimated that 222 of these
are small under the SBA small business size standard.
3. Internet Service Providers
59. The 2007 Economic Census places these firms, whose services
might include voice over Internet protocol (VoIP), in either of two
categories, depending on whether the service is provided over the
provider's own telecommunications facilities (e.g., cable and DSL
ISPs), or over client-supplied telecommunications connections (e.g.,
dial-up ISPs). The former are within the category of Wired
Telecommunications Carriers, which has an SBA small business size
standard of 1,500 or fewer employees. The latter are within the
category of All Other Telecommunications, which has a size standard of
annual receipts of $25 million or less. The most current Census Bureau
data for all such firms, however, are the 2002 data for the previous
census category called Internet Service Providers. That category had a
small
[[Page 12960]]
business size standard of $21 million or less in annual receipts, which
was revised in late 2005 to $23 million. The 2002 data show that there
were 2,529 such firms that operated for the entire year. Of those,
2,437 firms had annual receipts of under $10 million, and an additional
47 firms had receipts of between $10 million and $24,999,999.
Consequently, we estimate that the majority of ISP firms are small
entities.
60. The RFA requires an agency to describe any significant
alternatives that it has considered in developing its approach, which
may include the following four alternatives (among others): ``(1) The
establishment of differing compliance or reporting requirements or
timetables that take into account the resources available to small
entities; (2) the clarification, consolidation, or simplification of
compliance or reporting requirements under the rule for such small
entities; (3) the use of performance rather than design standards; and
(4) an exemption from coverage of the rule, or any part thereof, for
small entities.''
G. Description of Projected Reporting, Recordkeeping, and Other
Compliance Requirements
61. Support Amounts for Voice Service. In the Order, we adopt an
interim rate of reimbursement for Lifeline in lieu of the prior tiered
system. The tiered system was tied to the subscriber line charge (SLC),
which we find to be an imprecise basis for Lifeline support given the
myriad changes in the telecommunications marketplace. This interim
monthly rate is set at $9.25 per subscriber. This interim support
amount was determined by calculating the average level of support from
the most recent disbursement data available. Because the interim
support amount is an average, some ETCs will receive more monthly
support while others receive less--regardless of size. While there may
be a slightly negative economic impact on some small entities, such an
impact will be felt by all entities currently receiving more than $9.25
per month per subscriber in Lifeline support, not just small entities.
However, as with our adoption of uniform consumer eligibility rules,
this uniform interim support amount will simplify program
administration by ETCs operating across different SLCs.
62. Uniform Eligibility Criteria. As part of the Commission's
effort to streamline the program, the Commission adopts a uniform set
of consumer eligibility requirements throughout the nation. This rule
alleviates some of the administrative burdens on ETCs operating in
multiple states caused by varying consumer eligibility requirements. We
anticipate that this new rule will significantly simplify program
administration by ETCs, resulting in greater program efficiencies.
Given that we permit states to adopt more permissive Lifeline
eligibility criteria on top of the base of federal Lifeline eligibility
criteria, no ETCs will face a smaller Lifeline subscriber base because
of the change in eligibility criteria. We expect no economic impact on
entities through the adoption of the federal eligibility criteria
across all states.
63. One-per-Household. First, the Order adopts a one-per-household
requirement. ``Household'' is defined consistent with the Low-Income
Home Energy Assistance Program as ``any individual or group of
individuals who are living together at the same address as one economic
unit,'' with an ``economic unit'' defined as ``all individuals
contributing to and sharing in the income and expenses of a household''
(which would include persons with no income who benefit from another
person's financial support). Second, the Order adopts procedures to
enable Lifeline applicants to demonstrate when initially enrolling in
the program that any other Lifeline recipients residing at their
residential address are part of a separate household and directs USAC,
within 30 days of the effective date of the Order, to develop a form
that will allow low-income households sharing an address to indicate
they are part of a separate household. Third, the Order also directs
USAC, within 30 days of the effective date of the Order, to develop
print and web materials to be posted on USAC's Web site that both USAC
and ETCs can use to educate consumers about the one-per-household rule
(i.e., how to determine what persons comprise a household). USAC will
prepare materials that the ETCs can rely on to educate their
subscribers about the one-per-household requirement.
64. We estimate that these rules will have a minimal economic
impact. While the rules will require eligible telecommunications
carriers to obtain information from a limited number of consumers about
their household arrangements, it will only impact those low-income
consumers who reside in group living facilities or at addresses shared
by multiple households. This information will be collected using a
worksheet to be designed and provided to the ETCs by USAC. This
information is necessary to assist qualifying consumers relying on
addresses shared by multiple households to obtain Lifeline service and
to document their compliance with the one-per-household rule.
Additionally, USAC will develop print and web materials that ETCs can
use to educate consumers about the one-per-household rule. We do not
expect these requirements to have a disproportionate impact on
carriers, including those that are small entities.
65. Certification of Consumer Eligibility. First, the Order amends
Sec. 54.410 of the Commission's rules to require all Lifeline
subscribers to provide certain certifications pertaining to their
eligibility for Lifeline upon initial program enrollment and annually
thereafter. Depending on the state, certifications should be collected
from consumers by carriers or the state Lifeline administrator or a
state agency.
66. Carriers and states (where applicable) may need to update their
existing certification forms to comply with the requirements of Sec.
54.410, as amended. Carriers already collect several similar
certifications from Lifeline subscribers at enrollment; thus, we expect
that the costs of compliance with the amended rule will be marginally
larger. Therefore, we anticipate that the effect of this rule will have
minimal economic impact. Carriers and states (where applicable) may
choose to use their existing certification forms so long as those forms
are updated to comply with the new certification rules. We also provide
in the Order that the new certification rules will not go into effect
until June 1, 2012, which will give carriers (both large and small)
time to make any needed system updates. We also expect to recover cost
savings to the program based on the reduction of ineligible consumers
stemming from the updated certification requirements. We do not expect
that this rule will disproportionately impact small entities.
67. Second, the Order requires ETCs (or the state administrator,
where applicable) to check the eligibility of new Lifeline subscribers
at enrollment by accessing available state or federal eligibility
databases. Where underlying eligibility data cannot be accessed through
a database, the Order requires new Lifeline subscribers to provide
documentation of program-based eligibility or income-based eligibility,
which the entity enrolling the subscriber should review (but not
retain). We acknowledge that compliance with the rule we adopt here
will involve some administrative costs for ETCs, for example, modifying
their internal processes and systems to comply with the new
documentation requirement. However, we do not expect
[[Page 12961]]
these costs to have a significant economic impact especially since we
limit this requirement to new customers rather than requiring ETCs to
re-verify all of their subscribers by obtaining documentary proof of
eligibility. We do not expect these costs to be disproportionately
large for small carriers. We also conclude that those costs are
outweighed by the significant benefits gained by protecting the Fund
from waste, fraud, and abuse. We estimate in the Order that up to 15
percent of current Lifeline subscribers may be ineligible for the
program, potentially representing as much as $375 million of support
per year. We expect that a rule requiring ETCs to obtain documentation
of program participation from new Lifeline applicants, in conjunction
with our efforts to implement a Lifeline database, will enable the
Commission to recapture those funds and prevent unbridled future growth
in the Fund. The resulting cost savings will in turn benefit those
consumers who contribute to the Universal Service Fund, new qualifying
low-income consumers, and our goal to modernize the program for a
broadband future. Further, while we will require consumers to provide
documentation of program- and income-eligibility to ETCs at enrollment,
consumers will no longer be required to provide such documentation as
part of the annual verification process in federal default states.
Moreover, consumers will not need to demonstrate eligibility at
enrollment (or annually) once that function is addressed through a
database. Lastly, we give ETCs until June 1, 2012, to implement
processes to document consumer eligibility for Lifeline. We expect that
these changes will reduce the burdens on both consumers and ETCs.
68. Third, the Order requires ETCs to make certain certifications
annually and when submitting for reimbursement from the program. The
Commission currently directs ETCs to make certain certifications
relating to the Lifeline program. Section 54.410 of the Commission's
rules, as modified, does not substantially change those requirements;
rather, the Commission adds additional certifications that the ETC must
make annually and when seeking reimbursement from the Fund. USAC and
the Commission have jointly developed the certification language and
the forms. Thus, carriers need only make the necessary internal
inquiries (e.g., ensure that they have received a signed certification
form from each Lifeline subscriber) and sign the forms as provided to
them by USAC. We do not expect that this requirement will have an
adverse financial impact on small entities.
69. Fourth, we replace the existing process used by ETCs and states
to verify ongoing consumer eligibility for Lifeline with a uniform rule
requiring all ETCs (or states, where applicable) to re-certify the
eligibility of their complete Lifeline subscriber base as of June 1,
2012. By the end of 2012, all ETCs (or states, where applicable) must
obtain from each Lifeline subscriber a re-certification form that
contains each of the required certifications listed in Sec. 54.410, as
amended, and report those results to USAC, the Commission, states
(where the state has jurisdiction over the carrier), and Tribal
governments (where applicable). Alternatively, in states where a state
agency or a third party has implemented a database that carriers may
query to re-certify the consumer's continued eligibility, the carrier
(or state agency or third-party, where applicable) must instead query
the database by the end of 2012 and maintain a record of what specific
data was used to re-certify eligibility and the date of re-
certification.
70. We have taken steps in implementing this rule to minimize the
impact on carriers and states performing the re-certification function.
This re-certification may be done on a rolling basis throughout the
year, at the ETC's election. ETCs (or states, where applicable) may re-
certify the continued eligibility of an ETC's Lifeline subscribers by
contacting them--which can be done in any of a number of ways,
including in person, in writing, by phone, by text message, by email,
or otherwise through the Internet--to confirm their continued
eligibility for Lifeline. As noted above, where available, ETCs and
states will access electronic eligibility data rather than contact each
subscriber to obtain an individual re-certification. Lastly, after
2012, ETCs may elect to have USAC administer the self-certification
process on their behalf. We do not expect the costs of re-certification
to disproportionately burden small entities, who will have a lesser
number of subscribers to contact and may opt to use less costly means
(such as text message or email) to contact their subscribers for re-
certification.
71. Tribal Lifeline Eligibility. First, the Order clarifies that
residents of Tribal lands are eligible for Lifeline (and Link Up
support if served by a high cost recipient) based on (1) income level;
(2) participation in any Tribal-specific federal assistance program
identified in the Commission's rules; or (3) participation in any other
program identified in the Commission's rules. We do not expect that
this clarification will have any financial impact, including on small
businesses, as it does not change existing program rules, but rather
removes any ambiguity in the interpretation of those rules by carriers
and consumers.
72. Second, the Order adopts the NPRM proposal to add the Food
Distribution Program on Indian Reservations (FDPIR) to the list of
programs that confer eligibility. We expect this rule change to have
only minimal financial impact. For example, carriers serving eligible
residents of Tribal lands will need to update their certification/
enrollment forms to add FDPIR to their list of qualifying programs.
However, the benefit that will accrue to eligible residents of Tribal
lands participating in FDPIR will outweigh the burdens to carriers. We
do not expect this rule to have a disproportionate impact on small
entities, for whom the cost of compliance would be the same as for
other carriers.
73. Third, the Order establishes a waiver and designation process
for those Tribal communities that are located outside of reservations,
but can show ties to defined Tribal communities, and removes the term
``near reservation'' from the Commission's definition of Tribal lands.
We do not expect this rule to have any financial impact, including on
small entities, as carriers will not have any role in the designation
process.
74. Fourth, the Order clarifies that we will continue to allow
self-certification of residence on Tribal lands. We do not expect this
rule to have any economic impact on any entities, as it clarifies,
rather than changes, existing program rules.
75. Electronic Signatures and Interactive Voice Response Systems.
In the Order, the Commission clarifies that ETCs may use electronic
signatures and interactive voice response systems to obtain Lifeline
subscriber certifications, provided the electronic signatures are
obtained in accordance with the requirements of the E-SIGN Act. We
expect no negative economic impact from this clarification because this
clarification makes obtaining subscriber signatures easier for all
ETCs.
76. National Accountability Database. The Order established a
national accountability database to reduce the likelihood that a
consumer or household will receive more than one subsidized service
through the low-income program. The Order directs the Bureau to work
with USAC and OMB to establish and implement the database
[[Page 12962]]
and associated processes. The Order directs ETCs to (1) populate the
database with the necessary subscriber information to implement these
processes and (2) query the database for each new subscriber prior to
receiving reimbursement from the fund for that subscriber. ETCs may
have to collect customer information which is not currently in their
possession to populate the database.
77. While the database imposes an economic impact on carriers to
populate the database, and potentially interface with the database, the
entire system will be designed to minimize burdens on small entities.
There are a number of ways in which the database has been designed to
limit the burden on small entities. First, the Commission does not
impose any real-time obligations on ETCs to update the database. The
ETCs must update the database prior to seeking reimbursement. Second,
to the extent that ETCs have not collected the necessary data from
existing customers to send to the duplicates database, ETCs will have a
significant period of time before the database is operational to
collect such information because the Commission projects that the
database could take up to a year to build and ETCs are given an
additional 60 days to populate the database. The Commission has
directed USAC to provide support to ETCs regarding how they should
populate the database, and this assistance should further reduce the
burden on ETCs, particularly those smaller entities with fewer back-
office resources and less sophisticated systems. For similar reasons,
the burden on small entities will be limited because the database will
be designed to accept the subscriber information in many different
formats, not just via a machine to machine connection. The database
will include an ID verification function, which had heretofore been
undertaken by some ETCs at their own expense. The database includes an
exception management and dispute resolution process so that the burden
on ETCs to handle disputes if a subscriber is classified as a duplicate
by the database will be limited.
78. Toll Limitation Service Support. In the Order, the Commission
begins the process of eliminating toll limitation service (TLS) support
and modifies its rules for which ETCs must offer TLS. The Commission
finds that TLS is less relevant in a marketplace where many ETCs do not
separately charge for ``toll'' or ``long distance'' calls. To the
extent an ETC still distinguishes between local and long distance
calling in its Lifeline service, it must provide at no additional cost
to the consumer the ability to limit or block calls that would result
in additional charge. Support for TLS will be eliminated over three
years to mitigate the impact of this change. In the first year of
limited TLS support, support will be capped at $3 per month per
consumer. In the second year, support will be limited to $2 per month
per consumer. In the third year, support will be eliminated. ETCs
seeking TLS reimbursement will need to adjust their TLS provisioning
methods as there will no longer be a separate TLS reimbursement outside
of the standard Lifeline support amount. This rule will have an
economic impact only on ETCs unable to provide TLS at an incremental
cost above the limits set in the rule.
79. Link Up. The Order will eliminate Link Up support to all ETCs
on non-Tribal lands and limit Link Up on Tribal lands to high cost
recipients deploying infrastructure. Marketplace trends indicate that
Lifeline consumers increasingly have service options from ETCs that
neither draw on Link Up support nor charge the consumer a service
initiation fee. In balancing a number of universal service goals with
finite resources, we conclude that dollars currently spent for Link Up
can be more effectively spent to improve and modernize the Lifeline
program. Some ETCs who had previously been receiving support from the
Fund will no longer receive such support, however, the rule will not
disproportionately impact small entities because the support is being
eliminated for all ETCs serving non-Tribal areas--not just small
entitites.
80. Subscriber Usage of Customer Supported Service. The Order
establishes a rule that pre-paid ETCs who do not charge a fee for the
service (pre-paid ETCs) may not seek Lifeline reimbursement until a
subscriber initiates service. Moreover, the rules require pre-paid ETCs
to de-enroll subscribers who fail to use the service within a
consecutive 60-day period and correspondingly update the duplicates
database within one business day of any such de-enrollment. These new
rules require pre-paid ETCs to monitor usage prior to seeking
reimbursement from the low-income fund. In an effort to make compliance
easier, the rules identify what actions on the part of consumers
constitute usage. Given that carriers already have systems in place
whereby usage is monitored so as to prevent consumers from using more
than their allocated minutes, the burden of de-enrolling those
consumers who do not use the service within a 60-day period is likely
minimal. Moreover, while there may be some administrative expense
related to updating the database, we anticipate such expense to be
nominal. The new rules also require pre-paid ETCs to inform subscribers
at service initiation of the usage and de-enrollment policies. This new
requirement only applies to those ETCs choosing to provide Lifeline
service at no charge to subscribers.
81. Minimum Consumer Charge. The Order does not adopt a minimum
consumer charge for Lifeline services and eliminates the current rule
imposing a minimum local charge on Tribal subscribers. The requirements
do not impose any obligations on carriers, large or small, therefore
there is no associated cost of compliance.
82. Marketing & Outreach. The Order requires ETCs to include plain,
easy-to-understand language in all of their Lifeline marketing
materials that the offering is a Lifeline-supported service; that
Lifeline is a government assistance program; that only eligible
consumers may enroll in the program; what documentation is necessary
for enrollment; and that the program is limited to one benefit per
household, consisting of either wireline or wireless service.
Additionally, we require ETCs to disclose the company name under which
it does business and the details of its Lifeline service offerings in
its Lifeline-related marketing and advertising. We do not anticipate
this rule to have a significant economic impact on any entities because
the costs of including basic program information in all marketing
materials should be minimal.
83. Audits and Enforcement. The Order adopts a new audit
requirement whereby newly designated ETCs will be audited by USAC
within the first 18 months of seeking Lifeline support in any single
state. This requirement is the same regardless of the size of the ETC.
Moreover, because all ETCs are required to maintain records for a
period of three years, submit annual recertification documentation, and
be subjected to discretionary USAC audits, this first year audit
requirement does not pose any burden or hardship on new ETCs or a
disproportionate burden on small ETCs.The Order also requires those
ETCs drawing more than $5 million in low-income support from the fund,
at the holding company level, to perform a biennial independent audit.
This requirement only pertains to large entities therefore there is no
impact, let alone a disproportionate one, on small ETCs.
84. In the Order, the Commission requires the submission of certain
ownership information to USAC in order to implement our new biennial
audit rule. ETCs are required to report
[[Page 12963]]
ownership information, including affiliates, holding companies, and any
branding, to USAC, along with relevant universal service identifiers so
that we may determine at the holding company level which ETCs meet the
$5 million threshold. In addition, the Order requires newly designated
ETCs to describe service offerings and type of service being provided.
These reporting requirements apply to all ETCs equally and do not have
a disproportionate impact on small providers. This reporting will help
the Commission increase accountability in our universal service
programs by simplifying the process of determining the total amount of
public support received by each recipient, regardless of corporate
structure. This new requirement will impose a burden on all ETCs,
though not one that has a significant economic impact. While there will
be some administrative costs associated with this requirement, the
overall burden should be minimal and will be greater for large ETCs
operating with complex corporate structures across multiple study
areas.
85. Payment of Low-Income Support. The Order adopts a three month
transition for low-income support to be disbursed based on actual
support in place of the current administrative process of paying low-
income support based on projected service. The Order accelerates USAC's
payment of low-income support for carriers filing the FCC Form 497
electronically by a monthly deadline. The window by which carriers must
file revisions or original FCC Form 497s is reduced from fifteen months
from the end of a calendar year, to a rolling twelve month window. In
order to accomplish this transition, the Commission sets forth a
procedure whereby entities determine which study area codes to
transition in each of the transition months, thereby allowing carriers
to proportionately distribute any potential financial burden resulting
from the transition to payments based on actual support. The Commission
sets the transition to payments based on actual support to begin in
July 2012, giving small entities, and all ETCs alike, ample time to
prepare for the transition to payments based on actual support. Any
economic impact of this revision would be equal to all entities.
86. In addition, the Commission expedites payment of low-income
funds for carriers that file the FCC Form 497 electronically by the
monthly deadline, thereby allowing ETCs to receive payments in a timely
manner for timely electronic filings, and helping small entities reduce
the negative financial impact of delayed payment. The Commission
narrowed the revision window for FCC Form 497s from fifteen months to a
rolling twelve month window. While carriers, large or small, may
experience a minor burden by narrowing this revision window, the burden
is minimized by the transition to payments on actual support. Carriers
should not require as much time to scrutinize payments received because
the calculations of projections and true-ups is being eliminated, and
payments will be based on actual support provided by the ETC. A twelve
month rolling window should be sufficient time for carriers to
reconcile their books and file any required revisions, without imposing
an unfair burden.
87. Bundled Services. In the Order, we amend Sec. Sec. 54.401 and
54.403 of the Commission's rules to adopt a federal policy providing
all ETCs (whether designated by a state or this Commission) the
flexibility to permit Lifeline subscribers to apply their Lifeline
discount to bundled service packages or packages containing optional
calling features available to Lifeline consumers. We do not expect this
rule change to have a substantial financial impact, as carriers can
elect not to offer bundled service packages or packages containing
optional calling features to Lifeline consumers. We are not mandating
that they do so at this time and will continue to weigh the effects of
the flexible policy adopted in the Order. We believe that the benefits
to consumers that could result from this rule outweigh the potential
costs of compliance for carriers who choose to make such plans
available to Lifeline consumers.
88. Support for Broadband: Pilot Program. The Order will establish
a broadband pilot program aimed at generating statistically significant
data that will allow the Commission, ETCs, and the public to analyze
the effectiveness of different approaches to using Lifeline funds to
making broadband more affordable for low-income Americans while
providing support that is sufficient but not excessive. The Commission
directs the Bureau to solicit applications from ETCs to participate in
the Pilot Program and to select a relatively small number of projects
to test the impact on broadband adoption with variations in the monthly
discount for broadband services, including variations on the discount
amount, the duration of the discount (phased down over time or
constant) over a 12-month period. The Bureau will also give preference
to ETCs that partner with third parties that have already developed
approaches to overcoming broadband adoption barriers, including digital
literacy, equipment costs, and relevance.
89. We do not expect these requirements to have a significant
economic impact on ETCs because entities have a choice of
participating. We also do not expect small entities to be
disproportionately impacted. The Bureau will consider whether the
projects proposed will promote entrepreneurs and other small businesses
in the provision and ownership of telecommunications services and
information services, consistent with section 257 of the Communications
Act, including those that may be socially and economically
disadvantaged businesses. All ETCs that choose to participate will be
required to collect and submit data throughout the pilot to USAC. The
collection of information is required to study the length and amount of
subsidy that is necessary for low-income consumers to adopt broadband.
The benefits of collecting information outweigh any costs.
90. Facilities-Based Requirements. In the Order, the Commission
forbears from applying the Act's facilities requirement of section
214(e)(1)(A) to all telecommunications carriers that seek limited ETC
designation to participate in the Lifeline program, subject to certain
conditions. Specifically, each carrier must (i) comply with certain 911
requirements; and (ii) file, subject to Bureau approval, a compliance
plan providing specific information regarding the carrier's service
offerings and outlining the measures the carrier will take to implement
the obligations contained in this Order. To avoid disruption to
subscribers served by existing Lifeline-only ETCs designated prior to
December 29, 2011, those ETCs can continue to receive reimbursement
pending approval of their compliance plan, provided they submit their
plan to the Bureau by July 1, 2012. Carriers designated after December
29, 2011 will not receive reimbursement from the Fund until the Bureau
approves their compliance plans.
91. We do not expect these changes to have a disproportionate
impact on entities, including those that are small entities, because
the Commission will no longer require carriers to seek forbearance from
the facilities requirement of section 214(e)(1)(a). The Commission,
however, will continue to require carriers seeking to forbear from the
facilities requirement of section 214 to comply with certain 911
requirements and to file and obtain approval from the Bureau of a
compliance plan describing the ETC's
[[Page 12964]]
adherence to certain protections designed to protect consumers and the
Fund. The Commission has historically imposed these requirements on
carriers seeking to forbear from the facilities requirement so this
will not unduly burden to all impacted entities.
H. Steps Taken To Minimize Significant Economic Impact on Small
Entities, and Significant Alternatives Considered
92. The RFA requires an agency to describe any significant
alternatives that it has considered in developing its approach, which
may include the following four alternatives (among others): ``(1) The
establishment of differing compliance or reporting requirements or
timetables that take into account the resources available to small
entities; (2) the clarification, consolidation, or simplification of
compliance or reporting requirements under the rule for such small
entities; (3) the use of performance rather than design standards; and
(4) an exemption from coverage of the rule, or any part thereof, for
small entities.''
93. Support Amounts for Voice Service. The Commission considered
the establishment of a separate rate of reimbursement for different
types of providers. The Commission determined that such a system of
reimbursement would create administrative difficulties for USAC and for
ETCs. A tiered system, be it the prior structure or the one
contemplated for the benefit of small entities, does not treat all
subscribers equally and makes comparison of Lifeline plans difficult
for consumers. Therefore, we determined that the benefits of such a
structure do not outweigh the costs.
94. One Per Household. We considered alternatives to a one-per-
household rule, including a rule permitting one Lifeline-supported
service per adult and one Lifeline-supported service per residential
address. We did not, however, adopt these approaches--the former
because it would increase the size of the universal service fund,
inconsistent with our program goals, and the latter because it could
potentially exclude eligible consumers from the Lifeline program. Thus,
we found that the benefits of a one-per-household rule and the
associated processes we adopt today outweigh the potential costs.
95. Certification of Consumer Eligibility. We considered
alternatives that would require ETCs to verify only a portion of their
Lifeline subscriber base, including allowing small ETCs within a state
to perform sampling in the aggregate rather than on an individual
basis, requiring ETCs with a minimal number of Lifeline subscribers to
sample fewer subscribers than larger ETCs, and allowing all ETCs to
sample a lesser percentage of their Lifeline subscriber base. The
approach we adopt in the Order strikes an appropriate balance between
these interests by helping to identify and de-enroll ineligible
subscribers, while imposing fewer burdens on consumers and ETCs than a
full census survey (i.e., requiring consumers to annually produce
documentation to verify continued eligibility).
96. National Accountability Database. The Commission considered
whether ETCs would be obligated to update the database with customer
information in real-time. The Commission found that it would be overly
burdensome for ETCs, particularly ETCs which are also small entities,
to implement real-time connections between the database and carriers
given the limited benefits that real-time updates would provide. We
therefore did not adopt a rule that the database would have to be
updated in real-time. Furthermore, except for information regarding
customer de-enrollment, ETCs would have ten business days to update the
database once it has become aware that information regarding a
subscriber has changed. The Commission adopted a rule that the first
ETC to populate the database with a particular customer's information
would be able to receive reimbursement for that customer. The
Commission acknowledged that this rule would provide an advantage to
those ETCs with real-time updating capability, but the Commission found
that this approach would reduce the amount of duplicative support and
encourage the prompt transmission of data without imposing burdens that
a real-time updating requirement might impose on small entities.
97. Toll Limitation Service Support. The new TLS support rule, as
discussed above, may have an economic impact on entities, including an
impact on small entities because they are used to getting TLS support.
This rule will have an economic impact only on ETCs unable to provide
TLS at an incremental cost above limits set in the rule. In the Order,
we note that ILECs typically seek TLS support at a much lower rate than
competitive LECs. Small entities that purchase TLS will no longer be
able to seek reimbursement for the incremental costs of doing so after
2013. Therefore, small competitive LECs may still be required to offer
TLS to Lifeline subscribers but unable to receive sufficient support
for the incremental costs of doing so. However, we adopt this TLS
support rule to encourage efficiencies in the provisioning of TLS. In
light of the concerns expressed by competitive LECs, we considered
several other approaches to reforming TLS support, including a shorter
timeframe for reduction of TLS support as well as an immediate
elimination of support. We chose the approach adopted in the Order
because it is the least burdensome method to reform TLS support.
98. Link Up. While we considered some carriers' proposal to
decrease the Link Up support amount, and others to define more narrowly
appropriate and inappropriate uses of Link Up, on balance, the
Commission concluded that the dollars spent on Link Up in its current
form can be better spent on other uses, such as modernizing the program
and constraining the overall size of the fund. We acknowledge that some
ETCs will receive less support as a result of the elimination of Link
Up funds but the Commission has concluded that Link Up support has been
abused by some carriers and that USF dollars are better spent
supporting other aspects of the program.
99. Subscriber Usage of Customer Supported Services. We extend the
consumer usage condition (whereby subscribers will be de-enrolled if
they fail to use the service within a consecutive 60-day period) only
to free pre-paid services, which are those services for which
subscribers do not receive monthly bills and do not have any regular
billing relationship with the ETC, and decline at this time to impose
this condition on other types of Lifeline supported services. We are
sensitive to the administrative burden that a 60-day usage requirement
may have on post-paid services, and at this time do not extend the
usage requirements to post-paid services, whether wireline or wireless.
100. Audits and Enforcement. We adopt a requirement that every ETC
providing Lifeline service and drawing $5 million or more in the
aggregate on an annual basis from the low-income program hire an
independent audit firm to assess the ETC's overall compliance with the
program's requirements every two years. We considered imposing the
biennial independent audit requirement on all ETCs but rejected that as
too burdensome on small entities. We concluded it was appropriate to
focus the mandatory independent audit requirement on the largest
recipients who post the biggest risk to the program if they lack
effective internal controls to ensure compliance with Commission
requirements.
101. Payment of Low-Income Support. The Commission sought comment
on a
[[Page 12965]]
one month transition, as proposed by USAC, however the Commission found
that the financial impact of the one month proposed transition could
have been overly burdensome on the financial well-being of small
entities participating in the Lifeline program. The Commission
considered a two month transition as suggested by commenters, and went
one step further to extend the transition to three months, thus
allowing all carriers, especially small entities, to minimize any
potential negative financial impact by spreading the transition out
over the three months.
102. Bundled Services. We considered adopting a rule mandating that
all ETCs allow Lifeline discounts to be applied to any package
containing a voice component; however, we determined that we did not
have sufficient information in the record to evaluate the impact of a
rule at this time. We also adopt a rule that ETCs must explicitly
notify Lifeline subscribers purchasing bundled packages or packages
containing optional calling features that partial payments will first
be applied to pay down the allocated price of the Lifeline voice
services, and require ETCs to provide clear language to this effect on
the subscriber's bill. We do not expect that this rule will
disproportionately impact small businesses, which, as above, may opt
not to offer such plans to Lifeline subscribers. Additionally, we
expect that some carriers may already have processes in place to apply
partial payments to maintain the voice portion of a Lifeline calling
plan. Moreover, this rule will help to prevent Lifeline subscribers
from being disconnected from voice service for non-payment, thereby
reducing potential burdens that may result to ETCs from having to re-
enroll disconnected subscribers.
103. Report to Congress: The Commission will send a copy of the
Order, including this FRFA, in a report to be sent to Congress pursuant
to the Congressional Review Act. In addition, the Commission will send
a copy of the Order, including this FRFA, to the Chief Counsel for
Advocacy of the SVA. A copy of the Order and FRFA (or summaries
thereof) will also be published in the Federal Register.
XII. Ordering Clauses
104. Accordingly, it is ordered, that pursuant to the authority
contained in sections 1, 2, 4(i), 10, 201-206, 214, 218-220, 251, 252,
254, 256, 303(r), 332, and 403 of the Communications Act of 1934, as
amended, and section 706 of the Telecommunications Act of 1996, 47
U.S.C. 151, 152, 154(i), 160, 201-206, 214, 218-220, 251, 252, 254,
256, 303(r), 332, 403, 1302, and Sec. Sec. 1.1 and 1.427 of the
Commission's rules, 47 CFR 1.1, 1.427, this Report and Order is
Adopted.
105. It is further ordered that, Part 54 of the Commission's rules,
47 CFR part 54, is Amended as set forth in this rule, and such rule
amendments shall be effective April 2, 2012, except for those rules and
requirements that involve Paperwork Reduction Act burdens, which shall
become effective immediately upon announcement in the Federal Register
of OMB approval and of effective dates of such rules, and except for
the amendments contained herein to 47 CFR 54.411, 54.412, 54.413 and
54.414 which shall become effective April 1, 2012; and 47 CFR 54.409
which shall become effective June 1, 2012.
106. It is further ordered that, pursuant to the authority
contained in sections 4(i), 4(j), 10, 214, and 254 of the
Communications Act of 1934, as amended, 47 U.S.C. 154(i), 154(j), 160,
214, 254, the petition for forbearance filed by AMERICAN BROADBAND &
TELECOMMUNICATIONS is granted to the extent discussed herein and
conditioned on fulfillment of the obligations set forth in this order.
107. It is further ordered that, pursuant to the authority
contained in sections 4(i), 4(j), 10, 214, and 254 of the
Communications Act of 1934, as amended, 47 U.S.C. 154(i), 154(j), 160,
214, 254, the petition for forbearance filed by MILLENNIUM 2000, INC.
is granted to the extent discussed herein and conditioned on
fulfillment of the obligations set forth in this order.
108. It Is Further Ordered that, pursuant to the authority
contained in sections 4(i), 4(j), 10, 214, and 254 of the
Communications Act of 1934, as amended, 47 U.S.C. 154(i), 154(j), 160,
214, 254, the petition for forbearance filed by NORTH AMERICAN LOCAL,
LLC is granted to the extent discussed herein and conditioned on
fulfillment of the obligations set forth in this order.
109. It is further ordered that, pursuant to the authority
contained in sections 4(i), 4(j), 10, 214, and 254 of the
Communications Act of 1934, as amended, 47 U.S.C. 154(i), 154(j), 160,
214, 254, the petition for forbearance filed by TOTAL CALL MOBILE, INC.
is granted to the extent discussed herein and conditioned on
fulfillment of the obligations set forth in this order.
110. It is further ordered that, pursuant to the authority
contained in sections 4(i), 4(j), 10, 214, and 254 of the
Communications Act of 1934, as amended, 47 U.S.C. 154(i), 154(j), 160,
214, 254, the petition for forbearance filed by AIRVOICE WIRELESS, LLC
Is granted to the extent discussed herein and conditioned on
fulfillment of the obligations set forth in this order.
111. It is further ordered that, pursuant to the authority
contained in sections 4(i), 4(j), 10, 214, and 254 of the
Communications Act of 1934, as amended, 47 U.S.C. 154(i), 154(j), 160,
214, 254, we forbear from applying section 214(e)(1)(A) of the
Communications Act, 47 U.S.C. 214(e)(1)(A), and Sec. 54.201(d)(1) and
(i) of the Commission's rules, 47 CFR 54.201(d)(1), (i), to American
Broadband & Telecommunications, Millennium 2000, Inc., North American
Local, LLC, Total Call Mobile, Inc. and Airvoice Wireless, LLC to the
extent discussed herein and conditioned on fulfillment of the
obligations set forth in this order.
112. It is further ordered that the Petition of Qwest, Inc.
regarding self-certification of subscribers on Tribal lands, filed
April 25, 2008, is granted.
113. It is further ordered that the Petition of AMERICAN PUBLIC
COMMUNICATIONS COUNCIL seeking a rulemaking regarding payphone service
eligibility for Lifeline support, filed December 6, 2010, is denied.
114. It is further ordered that the Petition of AMERICAN PUBLIC
COMMUNICATIONS COUNCIL for interim relief seeking to allow ETCs to
receive Lifeline support for services provided to payphones, filed
December 6, 2010, is denied.
115. It is further ordered that the Commission shall send a copy of
this Report and Order to Congress and to the Government Accountability
Office pursuant to the Congressional Review Act, see 5 U.S.C.
801(a)(1)(A).
116. It is further ordered that the Commission's Consumer and
Governmental Affairs Bureau, Reference Information Center, shall send a
copy of this Report and Order, including the Final Regulatory
Flexibility Analysis, to the Chief Counsel for Advocacy of the Small
Business Administration.
List of Subjects in 47 CFR Part 54
Communications common carriers, Reporting and record keeping
requirements, Telecommunications, Telephone.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
Final Rules
For the reasons discussed in the preamble, the Federal
Communications Commission amends 47 CFR part 54 as follows:
[[Page 12966]]
PART 54--UNIVERSAL SERVICE
0
1. The authority citation for part 54 continues to read as follows:
Authority: 47 U.S.C. 151, 154(i), 201, 205, 214, 219, 220, 254,
303(r), 403, and 1302 unless otherwise noted.
Subpart A--General Information
0
2. Amend Sec. 54.5 by revising the definition of ``eligible
telecommunications carrier'' to read as follows:
Sec. 54.5 Terms and definitions.
* * * * *
Eligible telecommunications carrier. ``Eligible telecommunications
carrier'' means a carrier designated as such under subpart C of this
part.
* * * * *
Subpart B--Services Designated for Support
0
3. Amend Sec. 54.101 by revising paragraph (a) to read as follows:
Sec. 54.101 Supported services for rural, insular and high cost
areas.
(a) Services designated for support. Voice Telephony services shall
be supported by federal universal service support mechanisms. Eligible
voice telephony services must provide voice grade access to the public
switched network or its functional equivalent; minutes of use for local
service provided at no additional charge to end users; access to the
emergency services provided by local government or other public safety
organizations, such as 911 and enhanced 911, to the extent the local
government in an eligible carrier's service area has implemented 911 or
enhanced 911 systems; and toll limitation services to qualifying low-
income consumers as provided in subpart E of this part.
* * * * *
Subpart C--Carriers Eligible for Universal Service Support
0
4. Amend Sec. 54.201 by revising paragraphs (a)(1) and (h) to read as
follows:
Sec. 54.201 Definition of eligible telecommunications carriers
generally.
(a) * * *
(1) Only eligible telecommunications carriers designated under this
subpart shall receive universal service support distributed pursuant to
part 36 of this chapter, and subparts D and E of this part.
* * * * *
(h) A state commission shall not designate a common carrier as an
eligible telecommunications carrier for purposes of receiving support
only under subpart E of this part unless the carrier seeking such
designation has demonstrated that it is financially and technically
capable of providing the supported Lifeline service in compliance with
subpart E of this part.
* * * * *
0
5. Revise Sec. 54.202 to read as follows:
Sec. 54.202 Additional requirements for Commission designation of
eligible telecommunications carriers.
(a) In order to be designated an eligible telecommunications
carrier under section 214(e)(6), any common carrier in its application
must:
(1)(i) Certify that it will comply with the service requirements
applicable to the support that it receives.
(ii) Submit a five-year plan that describes with specificity
proposed improvements or upgrades to the applicant's network throughout
its proposed service area. Each applicant shall estimate the area and
population that will be served as a result of the improvements. Except,
a common carrier seeking designation as an eligible telecommunications
carrier in order to provide supported services only under subpart E of
this part does not need to submit such a five-year plan.
(2) Demonstrate its ability to remain functional in emergency
situations, including a demonstration that it has a reasonable amount
of back-up power to ensure functionality without an external power
source, is able to reroute traffic around damaged facilities, and is
capable of managing traffic spikes resulting from emergency situations.
(3) Demonstrate that it will satisfy applicable consumer protection
and service quality standards. A commitment by wireless applicants to
comply with the Cellular Telecommunications and Internet Association's
Consumer Code for Wireless Service will satisfy this requirement. Other
commitments will be considered on a case-by-case basis.
(4) For common carriers seeking designation as an eligible
telecommunications carrier for purposes of receiving support only under
subpart E of this part, demonstrate that it is financially and
technically capable of providing the Lifeline service in compliance
with subpart E of this part.
(5) For common carriers seeking designation as an eligible
telecommunications carrier for purposes of receiving support only under
subpart E of this part, submit information describing the terms and
conditions of any voice telephony service plans offered to Lifeline
subscribers, including details on the number of minutes provided as
part of the plan, additional charges, if any, for toll calls, and rates
for each such plan. To the extent the eligible telecommunications
carrier offers plans to Lifeline subscribers that are generally
available to the public, it may provide summary information regarding
such plans, such as a link to a public Web site outlining the terms and
conditions of such plans.
(b) Public interest standard. Prior to designating an eligible
telecommunications carrier pursuant to section 214(e)(6), the
Commission determines that such designation is in the public interest.
(c) A common carrier seeking designation as an eligible
telecommunications carrier under section 214(e)(6) for any part of
Tribal lands shall provide a copy of its petition to the affected
tribal government and tribal regulatory authority, as applicable, at
the time it files its petition with the Federal Communications
Commission. In addition, the Commission shall send any public notice
seeking comment on any petition for designation as an eligible
telecommunications carrier on Tribal lands, at the time it is released,
to the affected tribal government and tribal regulatory authority, as
applicable, by the most expeditious means available.
Sec. 54.209 [Removed]
0
6. Section 54.209 is removed.
Subpart E--Universal Service Support for Low-Income Consumers
0
7. Revise Sec. 54.400 to read as follows:
54.400 Terms and definitions.
As used in this subpart, the following terms shall be defined as
follows:
(a) Qualifying low-income consumer. A ``qualifying low-income
consumer'' is a consumer who meets the qualifications for Lifeline, as
specified in Sec. 54.409.
(b) Toll blocking service. ``Toll blocking service'' is a service
provided by an eligible telecommunications carrier that lets
subscribers elect not to allow the completion of outgoing toll calls
from their telecommunications channel.
(c) Toll control service. ``Toll control service'' is a service
provided by an eligible telecommunications carrier that allows
subscribers to specify a certain amount of toll usage that may be
incurred on their telecommunications channel per month or per billing
cycle.
(d) Toll limitation service. ``Toll limitation service'' denotes
either toll blocking service or toll control service
[[Page 12967]]
for eligible telecommunications carriers that are incapable of
providing both services. For eligible telecommunications carriers that
are capable of providing both services, ``toll limitation service''
denotes both toll blocking service and toll control service.
(e) Eligible resident of Tribal lands. An ``eligible resident of
Tribal lands'' is a ``qualifying low-income consumer,'' as defined in
paragraph (a) of this section, living on Tribal lands. For purposes of
this subpart, ``Tribal lands'' include any federally recognized Indian
tribe's reservation, pueblo, or colony, including former reservations
in Oklahoma; Alaska Native regions established pursuant to the Alaska
Native Claims Settlement Act (85 Stat. 688); Indian allotments;
Hawaiian Home Lands--areas held in trust for Native Hawaiians by the
state of Hawaii, pursuant to the Hawaiian Homes Commission Act, 1920
July 9, 1921, 42 Stat. 108, et. seq., as amended; and any land
designated as such by the Commission for purposes of this subpart
pursuant to the designation process in Sec. 54.412.
(f) Income. ``Income'' is all income actually received by all
members of a household. This includes salary before deductions for
taxes, public assistance benefits, social security payments, pensions,
unemployment compensation, veteran's benefits, inheritances, alimony,
child support payments, worker's compensation benefits, gifts, lottery
winnings, and the like. The only exceptions are student financial aid,
military housing and cost-of-living allowances, irregular income from
occasional small jobs such as baby-sitting or lawn mowing, and the
like.
(g) Duplicative support. ``Duplicative support'' exists when a
Lifeline subscriber is receiving two or more Lifeline services
concurrently or two or more subscribers in a household are receiving
Lifeline services or Tribal Link Up support concurrently.
(h) Household. A ``household'' is any individual or group of
individuals who are living together at the same address as one economic
unit. A household may include related and unrelated persons. An
``economic unit'' consists of all adult individuals contributing to and
sharing in the income and expenses of a household. An adult is any
person eighteen years or older. If an adult has no or minimal income,
and lives with someone who provides financial support to him/her, both
people shall be considered part of the same household. Children under
the age of eighteen living with their parents or guardians are
considered to be part of the same household as their parents or
guardians.
(i) National Lifeline Accountability Database or Database. The
``National Lifeline Accountability Database'' or ``Database'' is an
electronic system, with associated functions, processes, policies and
procedures, to facilitate the detection and elimination of duplicative
support, as directed by the Commission.
(j) Qualifying assistance program. A ``qualifying assistance
program'' means any of the federal, state, or Tribal assistance
programs participation in which, pursuant to Sec. 54.409(a) or (b),
qualifies a consumer for Lifeline service, including Medicaid;
Supplemental Nutrition Assistance Program; Supplemental Security
Income; Federal Public Housing Assistance (Section 8); Low-Income Home
Energy Assistance Program; National School Lunch Program's free lunch
program; Temporary Assistance for Needy Families; Bureau of Indian
Affairs general assistance; Tribally administered Temporary Assistance
for Needy Families (Tribal TANF); Head Start (only those households
meeting its income qualifying standard); or the Food Distribution
Program on Indian Reservations (FDPIR), and with respect to the
residents of any particular state, any other program so designated by
that state pursuant to Sec. 54.409(a).
0
8. Revise Sec. 54.401 to read as follows:
Sec. 54.401 Lifeline defined.
(a) As used in this subpart, Lifeline means a non-transferable
retail service offering:
(1) For which qualifying low-income consumers pay reduced charges
as a result of application of the Lifeline support amount described in
Sec. 54.403; and
(2) That provides qualifying low-income consumers with voice
telephony service as specified in Sec. 54.101(a). Toll limitation
service does not need to be offered for any Lifeline service that does
not distinguish between toll and non-toll calls in the pricing of the
service. If an eligible telecommunications carrier charges Lifeline
subscribers a fee for toll calls that is in addition to the per month
or per billing cycle price of the subscribers' Lifeline service, the
carrier must offer toll limitation service at no charge to its
subscribers as part of its Lifeline service offering.
(b) Eligible telecommunications carriers may allow qualifying low-
income consumers to apply Lifeline discounts to any residential service
plan that includes voice telephony service, including bundled packages
of voice and data services; and plans that include optional calling
features such as, but not limited to, caller identification, call
waiting, voicemail, and three-way calling. Eligible telecommunications
carriers may also permit qualifying low-income consumers to apply their
Lifeline discount to family shared calling plans.
(c) Eligible telecommunications carriers may not collect a service
deposit in order to initiate Lifeline service for plans that:
(1) Do not charge subscribers additional fees for toll calls; or
(2) That charge additional fees for toll calls, but the subscriber
voluntarily elects toll limitation service.
(d) When an eligible telecommunications carrier is designated by a
state commission, the state commission shall file or require the
eligible telecommunications carrier to file information with the
Administrator demonstrating that the carrier's Lifeline plan meets the
criteria set forth in this subpart and describing the terms and
conditions of any voice telephony service plans offered to Lifeline
subscribers, including details on the number of minutes provided as
part of the plan, additional charges, if any, for toll calls, and rates
for each such plan. To the extent the eligible telecommunications
carrier offers plans to Lifeline subscribers that are generally
available to the public, it may provide summary information regarding
such plans, such as a link to a public Web site outlining the terms and
conditions of such plans. Lifeline assistance shall be made available
to qualifying low-income consumers as soon as the Administrator
certifies that the carrier's Lifeline plan satisfies the criteria set
out in this subpart.
(e) Consistent with Sec. 52.33(a)(1)(i)(C) of this chapter,
eligible telecommunications carriers may not charge Lifeline customers
a monthly number-portability charge.
0
9. Revise Sec. 54.403 to read as follows:
Sec. 54.403 Lifeline support amount.
(a) The federal Lifeline support amount for all eligible
telecommunications carriers shall equal:
(1) Basic support amount. Federal Lifeline support in the amount of
$9.25 per month will be made available to an eligible
telecommunications carrier providing Lifeline service to a qualifying
low-income consumer, if that carrier certifies to the Administrator
that it will pass through the full amount of support to the qualifying
low-income consumer and that it has received any non-federal regulatory
approvals necessary to implement the rate reduction.
(2) Tribal lands support amount. Additional federal Lifeline
support of up to $25 per month will be made
[[Page 12968]]
available to an eligible telecommunications carrier providing Lifeline
service to an eligible resident of Tribal lands, as defined in Sec.
54.400 (e), to the extent that the eligible telecommunications carrier
certifies to the Administrator that it will pass through the full
Tribal lands support amount to the qualifying eligible resident of
Tribal lands and that it has received any non-federal regulatory
approvals necessary to implement the required rate reduction.
(b) Application of Lifeline discount amount.
(1) Eligible telecommunications carriers that charge federal End
User Common Line charges or equivalent federal charges must apply
federal Lifeline support to waive the federal End User Common Line
charges for Lifeline subscribers. Such carriers must apply any
additional federal support amount to a qualifying low-income consumer's
intrastate rate, if the carrier has received the non-federal regulatory
approvals necessary to implement the required rate reduction. Other
eligible telecommunications carriers must apply the federal Lifeline
support amount, plus any additional support amount, to reduce the cost
of any generally available residential service plan or package offered
by such carriers that provides voice telephony service as described in
Sec. 54.101, and charge Lifeline subscribers the resulting amount.
(2) Where a subscriber makes only a partial payment to an eligible
telecommunications carrier for a bundled service package, the eligible
telecommunications carrier must apply the partial payment first to the
allocated price of the voice telephony service component of the package
and then to the cost of any additional services included in the bundled
package.
(c) Toll limitation service. An eligible telecommunications carrier
providing toll limitation service voluntarily elected by Lifeline
subscribers whose Lifeline plans would otherwise include a fee for
placing a toll call that would be in addition to the per month or per
billing cycle price of the subscriber's Lifeline service, shall, for
April 2012 Lifeline disbursements through December 2013 Lifeline
disbursements, receive support in an amount equal to the lesser of:
(1) The eligible telecommunications carrier's incremental cost of
providing either toll blocking services or toll control services to
each Lifeline subscriber who has selected such service; or
(2) The following amounts for each Lifeline subscriber who has
selected toll blocking services or toll control services:
(i) $3.00 per month per subscriber during 2012; and
(ii) $2.00 per month per subscriber during 2013.
0
10. Add Sec. 54.404 to Subpart E to read as follows
Sec. 54.404 The National Lifeline Accountability Database.
(a) State certification. An eligible telecommunications carrier
operating in a state that provides an approved valid certification to
the Commission in accordance with this section is not required to
comply with the requirements set forth in paragraphs (b) and (c) of
this section with respect to the eligible telecommunications carriers'
subscribers in that state. A valid certification must include a
statement that the state has a comprehensive system in place to prevent
duplicative federal Lifeline support that is at least as robust as the
system adopted by the Commission and that incorporates information from
all eligible telecommunications carriers receiving low-income support
in the state and their subscribers. A valid certification must also
describe in detail how the state system functions and for each
requirement adopted by the Commission to prevent duplicative support,
how the state system performs the equivalent functions. The
certification must be submitted to the Commission no later than six
months from the effective date of this section of the Commission's
rules to be valid. Such certification will be considered approved
unless the Wireline Competition Bureau rejects the certification within
90 days of filing.
(b) The National Lifeline Accountability Database. In order to
receive Lifeline support, eligible telecommunications carriers
operating in states that have not provided the Commission with approved
valid certification pursuant to paragraph (a) of this section must
comply with the following requirements:
(1) All eligible telecommunications carriers must query the
National Lifeline Accountability Database to determine whether a
prospective subscriber who has executed a certification pursuant to
Sec. 54.410(d) is currently receiving a Lifeline service from another
eligible telecommunications carrier; and whether anyone else living at
the prospective subscriber's residential address is currently receiving
a Lifeline service.
(2) If the Database indicates that a prospective subscriber, who is
not seeking to port his or her telephone number, is currently receiving
a Lifeline service, the eligible telecommunications carrier must not
provide and shall not seek or receive Lifeline reimbursement for that
subscriber.
(3) If the Database indicates that another individual at the
prospective subscriber's residential address is currently receiving a
Lifeline service, the eligible telecommunications carrier must not seek
and will not receive Lifeline reimbursement for providing service to
that prospective subscriber, unless the prospective subscriber has
certified, pursuant to Sec. 54.410(d) that to the best of his or her
knowledge, no one in his or her household is already receiving a
Lifeline service.
(4) An eligible telecommunications carrier is not required to
comply with paragraphs (b)(1) through (3) of this section if it
receives notice from a state Lifeline administrator or other state
agency that the administrator or other agency has queried the Database
about a prospective subscriber and that providing the prospective
subscriber with a Lifeline benefit would not result in duplicative
support.
(5) Eligible telecommunications carriers may query the Database
only for the purposes provided in paragraphs (b)(1) through (b)(3) of
this section, and to determine whether information with respect to its
subscribers already in the Database is correct and complete.
(6) Eligible telecommunications carriers must transmit to the
Database in a format prescribed by the Administrator each new and
existing Lifeline subscriber's full name; full residential address;
date of birth and the last four digits of the subscriber's Social
Security number or Tribal Identification number, if the subscriber is a
member of a Tribal nation and does not have a Social Security number;
the telephone number associated with the Lifeline service; the date on
which the Lifeline service was initiated; the date on which the
Lifeline service was terminated, if it has been terminated; the amount
of support being sought for that subscriber; and the means through
which the subscriber qualified for Lifeline.
(7) In the event that two or more eligible telecommunications
carriers transmit the information required by this paragraph to the
Database for the same subscriber, only the eligible telecommunications
carrier whose information was received and processed by the Database
first, as determined by the Administrator, will be entitled to
reimbursement from the Fund for that subscriber.
(8) All eligible telecommunications carriers must update an
existing Lifeline subscriber's information in the Database
[[Page 12969]]
within ten business days of receiving any change to that information,
except as described in paragraph (b)(10) of this section.
(9) All eligible telecommunications carriers must obtain, from each
new and existing subscriber, consent to transmit the subscriber's
information. Prior to obtaining consent, the eligible
telecommunications carrier must describe to the subscriber, using
clear, easily understood language, the specific information being
transmitted, that the information is being transmitted to the
Administrator to ensure the proper administration of the Lifeline
program, and that failure to provide consent will result in subscriber
being denied the Lifeline service.
(10) When an eligible telecommunications carrier de-enrolls a
subscriber, it must transmit to the Database the date of Lifeline
service de-enrollment within one business day of de-enrollment.
(c) Tribal Link Up and the National Lifeline Accountability
Database. In order to receive universal service support reimbursement
for Tribal Link Up, eligible telecommunications carriers operating in
states that have not provided the Commission with a valid certification
pursuant to paragraph (a) of this section, must comply with the
following requirements:
(1) Such eligible telecommunications carriers must query the
Database to determine whether a prospective Link Up recipient who has
executed a certification pursuant to Sec. 54.410(d) has previously
received a Link Up benefit at the residential address provided by the
prospective subscriber.
(2) If the Database indicates that a prospective subscriber has
received a Link Up benefit at the residential address provided by the
subscriber, the eligible telecommunications provider must not seek Link
Up reimbursement for that subscriber.
(3) An eligible telecommunications carrier is not required to
comply with paragraphs (c)(1) through (c)(2) of this section, if it
receives notice from a state Lifeline administrator or other state
agency that the administrator or other agency has queried the Database
about a prospective subscriber and that providing the prospective
subscriber with a Link Up benefit would not result in duplicative
support or support to a subscriber who had already received Link Up
support at that residential address.
(4) All eligible telecommunications carriers must transmit to the
Database in a format prescribed by the Administrator each new and
existing Link Up recipient's full name; residential address; date of
birth; and the last four digits of the subscriber's Social Security
number, or Tribal identification number if the subscriber is a member
of a Tribal nation and does not have a Social Security number; the
telephone number associated with the Link Up support; and the date of
service activation. Where two or more eligible telecommunications
carriers transmit the information required by this paragraph to the
Database for the same subscriber, only the eligible telecommunications
carrier whose information was received and processed by the Database
first, as determined by the Administrator, will be entitled to
reimbursement from the Fund for that subscriber.
(5) All eligible telecommunications carriers must obtain, from each
new and existing subscriber, consent to transmit the information
required in paragraph (c) of this section. Prior to obtaining consent,
the eligible telecommunications carrier must describe to the
subscriber, using clear, easily understood language, the specific
information being transmitted, that the information is being
transmitted to the Administrator to ensure the proper administration of
the Link Up program, and that failure to provide consent will result in
the subscriber being denied the Link Up benefit.
0
11. Revise Sec. 54.405 to read as follows:
Sec. 54.405 Carrier obligation to offer Lifeline.
All eligible telecommunications carriers must:
(a) Make available Lifeline service, as defined in Sec. 54.401, to
qualifying low-income consumers.
(b) Publicize the availability of Lifeline service in a manner
reasonably designed to reach those likely to qualify for the service.
(c) Indicate on all materials describing the service, using easily
understood language, that it is a Lifeline service, that Lifeline is a
government assistance program, the service is non-transferable, only
eligible consumers may enroll in the program, and the program is
limited to one discount per household. For the purposes of this
section, the term ``materials describing the service'' includes all
print, audio, video, and web materials used to describe or enroll in
the Lifeline service offering, including application and certification
forms.
(d) Disclose the name of the eligible telecommunications carrier on
all materials describing the service.
(e) De-enrollment--(1) De-enrollment generally. If an eligible
telecommunications carrier has a reasonable basis to believe that a
Lifeline subscriber no longer meets the criteria to be considered a
qualifying low-income consumer under Sec. 54.409, the carrier must
notify the subscriber of impending termination of his or her Lifeline
service. Notification of impending termination must be sent in writing
separate from the subscriber's monthly bill, if one is provided, and
must be written in clear, easily understood language. A carrier
providing Lifeline service in a state that has dispute resolution
procedures applicable to Lifeline termination, that requires, at a
minimum, written notification of impending termination, must comply
with the applicable state requirements. The carrier must allow a
subscriber 30-days following the date of the impending termination
letter required to demonstrate continued eligibility. A subscriber
making such a demonstration must present proof of continued eligibility
to the carrier consistent with applicable annual re-certification
requirements, as described in Sec. 54.410(f). An eligible
telecommunications carrier must terminate any subscriber who fails to
demonstrate continued eligibility within the 30-day time period. A
carrier providing Lifeline service in a state that has dispute
resolution procedures applicable to Lifeline termination must comply
with the applicable state requirements.
(2) De-enrollment for duplicative support. Notwithstanding
paragraph (e)(1) of this section, upon notification by the
Administrator to any eligible telecommunications carrier that a
subscriber is receiving Lifeline service from another eligible
telecommunications carrier or that more than one member of a
subscriber's household is receiving Lifeline service and therefore that
the subscriber should be de-enrolled from participation in that
carrier's Lifeline program, the eligible telecommunications carrier
must de-enroll the subscriber from participation in that carrier's
Lifeline program within five business days. An eligible
telecommunications carrier shall not be eligible for Lifeline
reimbursement for any de-enrolled subscriber following the date of that
subscriber's de-enrollment.
(3) De-enrollment for non-usage. Notwithstanding paragraph (e)(1)
of this section, if a Lifeline subscriber fails to use, as ``usage'' is
defined in Sec. 54.407(c)(2), for 60 consecutive days a Lifeline
service that does not require the eligible telecommunications carrier
to assess or collect a monthly fee from its subscribers, an eligible
telecommunications carrier must provide the subscriber 30 days' notice,
using clear, easily understood language, that the subscriber's failure
to use the
[[Page 12970]]
Lifeline service within the 30-day notice period will result in service
termination for non-usage under this paragraph. If the subscriber uses
the Lifeline service within 30 days of the carrier providing such
notice, the eligible telecommunications carrier shall not terminate the
subscriber's Lifeline service. Eligible telecommunications carriers
shall report to the Commission annually the number of subscribers de-
enrolled for non-usage under this paragraph. This de-enrollment
information must be reported by month and must be submitted to the
Commission at the time an eligible telecommunications carrier submits
its annual certification report pursuant to Sec. 54.416.
(4) De-enrollment for failure to re-certify. Notwithstanding
paragraph (e)(1) of this section, an eligible telecommunications
carrier must de-enroll a Lifeline subscriber who does not respond to
the carrier's attempts to obtain re-certification of the subscriber's
continued eligibility as required by Sec. 54.410(f); who fails to
provide the annual one-per-household re-certifications as required by
Sec. 54.410(f); or who relies on a temporary address and fails to
respond to the carrier's address re-certification attempts pursuant to
Sec. 54.410(g). Prior to de-enrolling a subscriber under this
paragraph, the eligible telecommunications carrier must notify the
subscriber in writing separate from the subscriber's monthly bill, if
one is provided using clear, easily understood language, that failure
to respond to the re-certification request within 30 days of the date
of the request will trigger de-enrollment. If a subscriber does not
respond to the carrier's notice of impending de-enrollment, the carrier
must de-enroll the subscriber from Lifeline within five business days
after the expiration of the subscriber's time to respond to the re-
certification efforts.
0
12. Revise Sec. 54.407 to read as follows:
Sec. 54.407 Reimbursement for offering Lifeline.
(a) Universal service support for providing Lifeline shall be
provided directly to an eligible telecommunications carrier, based on
the number of actual qualifying low-income consumers it serves.
(b) An eligible telecommunications carrier may receive universal
service support reimbursement for each qualifying low-income consumer
served. For each qualifying low-income consumer receiving Lifeline
service, the reimbursement amount shall equal the federal support
amount, including the support amounts described in Sec. 54.403(a) and
(c). The eligible telecommunications carrier's universal service
support reimbursement shall not exceed the carrier's rate for that
offering, or similar offerings, subscribed to by consumers who do not
qualify for Lifeline.
(c) An eligible telecommunications carrier offering a Lifeline
service that does not require the eligible telecommunications carrier
to assess or collect a monthly fee from its subscribers:
(1) Shall not receive universal service support for a subscriber to
such Lifeline service until the subscriber activates the service by
whatever means specified by the carrier, such as completing an outbound
call; and
(2) After service activation, an eligible telecommunications
carrier shall only continue to receive universal service support
reimbursement for such Lifeline service provided to subscribers who
have used the service within the last 60 days, or who have cured their
non-usage as provided for in Sec. 54.405(e)(3). Any of these
activities, if undertaken by the subscriber will establish ``usage'' of
the Lifeline service:
(i) Completion of an outbound call;
(ii) Purchase of minutes from the eligible telecommunications
carrier to add to the subscriber's service plan;
(iii) Answering an incoming call from a party other than the
eligible telecommunications carrier or the eligible telecommunications
carrier's agent or representative; or
(iv) Responding to direct contact from the eligible communications
carrier and confirming that he or she wants to continue receiving the
Lifeline service.
(d) In order to receive universal service support reimbursement, an
eligible telecommunications carrier must certify, as part of each
request for reimbursement, that it is in compliance with all of the
rules in this subpart, and, to the extent required under this subpart,
has obtained valid certification and re-certification forms from each
of the subscribers for whom it is seeking reimbursement.
(e) In order to receive universal service support reimbursement, an
eligible telecommunications carrier must keep accurate records of the
revenues it forgoes in providing Lifeline services. Such records shall
be kept in the form directed by the Administrator and provided to the
Administrator at intervals as directed by the Administrator or as
provided in this subpart.
0
13. Revise Sec. 54.409 to read as follows:
Sec. 54.409 Consumer qualification for Lifeline.
(a) To constitute a qualifying low-income consumer:
(1) A consumer's household income as defined in Sec. 54.400(f)
must be at or below 135% of the Federal Poverty Guidelines for a
household of that size; or
(2) The consumer, one or more of the consumer's dependents, or the
consumer's household must receive benefits from one of the following
federal assistance programs: Medicaid; Supplemental Nutrition
Assistance Program; Supplemental Security Income; Federal Public
Housing Assistance (Section 8); Low-Income Home Energy Assistance
Program; National School Lunch Program's free lunch program; or
Temporary Assistance for Needy Families; or
(3) The consumer must meet eligibility criteria established by a
state for its residents, provided that such state-specific criteria are
based solely on income or factors directly related to income.
(b) A consumer who lives on Tribal lands is eligible for Lifeline
service as a ``qualifying low-income consumer'' as defined by Sec.
54.400(a) and as an ``eligible resident of Tribal lands'' as defined by
Sec. 54.400(e) if that consumer meets the qualifications for Lifeline
specified in paragraph (a) of this section or if the consumer, one or
more of the consumer's dependents, or the consumer's household
participates in one of the following Tribal-specific federal assistance
programs: Bureau of Indian Affairs general assistance; Tribally
administered Temporary Assistance for Needy Families; Head Start (only
those households meeting its income qualifying standard); or the Food
Distribution Program on Indian Reservations.
(c) In addition to meeting the qualifications provided in paragraph
(a) or (b) of this section, in order to constitute a qualifying low-
income consumer, a consumer must not already be receiving a Lifeline
service, and there must not be anyone else in the subscriber's
household subscribed to a Lifeline service.
0
14. Revise Sec. 54.410 to read as follows:
Sec. 54.410 Subscriber eligibility determination and certification.
(a) All eligible telecommunications carriers must implement
policies and procedures for ensuring that their Lifeline subscribers
are eligible to receive Lifeline services.
(b) Initial income-based eligibility determination.
[[Page 12971]]
(1) Except where a state Lifeline administrator or other state
agency is responsible for the initial determination of a subscriber's
eligibility, when a prospective subscriber seeks to qualify for
Lifeline or using the income-based eligibility criteria provided for in
Sec. 54.409(a)(1) or (a)(3) an eligible telecommunications carrier:
(i) Must not seek reimbursement for providing Lifeline to a
subscriber, unless the carrier has received a certification of
eligibility from the prospective subscriber that complies with the
requirements set forth in paragraph (d) of this section and has
confirmed the subscriber's income-based eligibility using the following
procedures:
(A) If an eligible telecommunications carrier can determine a
prospective subscriber's income-based eligibility by accessing one or
more databases containing information regarding the subscriber's income
(``income databases''), the eligible telecommunications carrier must
access such income databases and determine whether the prospective
subscriber qualifies for Lifeline.
(B) If an eligible telecommunications carrier cannot determine a
prospective subscriber's income-based eligibility by accessing income
databases, the eligible telecommunications carrier must review
documentation that establishes that the prospective subscriber meets
the income-eligibility criteria set forth in Sec. 54.409(a)(1) or
(a)(3). Acceptable documentation of income eligibility includes the
prior year's state, federal, or Tribal tax return; current income
statement from an employer or paycheck stub; a Social Security
statement of benefits; a Veterans Administration statement of benefits;
a retirement/pension statement of benefits; an Unemployment/Workers'
Compensation statement of benefit; federal or Tribal notice letter of
participation in General Assistance; or a divorce decree, child support
award, or other official document containing income information. If the
prospective subscriber presents documentation of income that does not
cover a full year, such as current pay stubs, the prospective
subscriber must present the same type of documentation covering three
consecutive months within the previous twelve months.
(ii) Must not retain copies of the documentation of a prospective
subscriber's income-based eligibility for Lifeline.
(iii) Must, consistent with Sec. 54.417, keep and maintain
accurate records detailing the data source a carrier used to determine
a subscriber's eligibility or the documentation a subscriber provided
to demonstrate his or her eligibility for Lifeline.
(2) Where a state Lifeline administrator or other state agency is
responsible for the initial determination of a subscriber's
eligibility, an eligible telecommunications carrier must not seek
reimbursement for providing Lifeline service to a subscriber, based on
that subscriber's income eligibility, unless the carrier has received
from the state Lifeline administrator or other state agency:
(i) Notice that the prospective subscriber meets the income-
eligibility criteria set forth in Sec. 54.409(a)(1) or (a)(3); and
(ii) A copy of the subscriber's certification that complies with
the requirements set forth in paragraph (d) of this section.
(c) Initial program-based eligibility determination.
(1) Except in states where a state Lifeline administrator or other
state agency is responsible for the initial determination of a
subscriber's program-based eligibility, when a prospective subscriber
seeks to qualify for Lifeline service using the program-based criteria
set forth in Sec. 54.409(a)(2), (a)(3) or (b), an eligible
telecommunications carrier:
(i) Must not seek reimbursement for providing Lifeline to a
subscriber unless the carrier has received a certification of
eligibility from the subscriber that complies with the requirements set
forth in paragraph (d) of this section and has confirmed the
subscriber's program-based eligibility using the following procedures:
(A) If the eligible telecommunications carrier can determine a
prospective subscriber's program-based eligibility for Lifeline by
accessing one or more databases containing information regarding
enrollment in qualifying assistance programs (``eligibility
databases''), the eligible telecommunications carrier must access such
eligibility databases to determine whether the prospective subscriber
qualifies for Lifeline based on participation in a qualifying
assistance program; or
(B) If an eligible telecommunications carrier cannot determine a
prospective subscriber's program-based eligibility for Lifeline by
accessing eligibility databases, the eligible telecommunications
carrier must review documentation demonstrating that a prospective
subscriber qualifies for Lifeline under the program-based eligibility
requirements. Acceptable documentation of program eligibility includes
the current or prior year's statement of benefits from a qualifying
assistance program, a notice or letter of participation in a qualifying
assistance program, program participation documents, or another
official document demonstrating that the prospective subscriber, one or
more of the prospective subscriber's dependents or the prospective
subscriber's household receives benefits from a qualifying assistance
program.
(ii) Must not retain copies of the documentation of a subscriber's
program-based eligibility for Lifeline services.
(iii) Must, consistent with Sec. 54.517, keep and maintain
accurate records detailing the data source a carrier used to determine
a subscriber's program-based eligibility or the documentation a
subscriber provided to demonstrate his or her eligibility for Lifeline.
(2) Where a state Lifeline administrator or other state agency is
responsible for the initial determination of a subscriber's
eligibility, when a prospective subscriber seeks to qualify for
Lifeline service using the program-based eligibility criteria provided
in Sec. 54.409, an eligible telecommunications carrier must not seek
reimbursement for providing Lifeline to a subscriber unless the carrier
has received from the state Lifeline administrator or other state
agency:
(i) Notice that the subscriber meets the program-based eligibility
criteria set forth in Sec. Sec. 54.409(a)(2), (a)(3) or (b); and
(ii) a copy of the subscriber's certification that complies with
the requirements set forth in paragraph (d) of this section.
(d) Eligibility certifications. Eligible telecommunications
carriers and state Lifeline administrators or other state agencies that
are responsible for the initial determination of a subscriber's
eligibility for Lifeline must provide prospective subscribers Lifeline
certification forms that in clear, easily understood language:
(1) Provide the following information:
(i) Lifeline is a federal benefit and that willfully making false
statements to obtain the benefit can result in fines, imprisonment, de-
enrollment or being barred from the program;
(ii) Only one Lifeline service is available per household;
(iii) A household is defined, for purposes of the Lifeline program,
as any individual or group of individuals who live together at the same
address and share income and expenses;
(iv) A household is not permitted to receive Lifeline benefits from
multiple providers;
(v) Violation of the one-per-household limitation constitutes a
violation of the
[[Page 12972]]
Commission's rules and will result in the subscriber's de-enrollment
from the program; and
(vi) Lifeline is a non-transferable benefit and the subscriber may
not transfer his or her benefit to any other person.
(2) Require each prospective subscriber to provide the following
information:
(i) The subscriber's full name;
(ii) The subscriber's full residential address;
(iii) Whether the subscriber's residential address is permanent or
temporary;
(iv) The subscriber's billing address, if different from the
subscriber's residential address;
(v) The subscriber's date of birth;
(vi) The last four digits of the subscriber's social security
number, or the subscriber's Tribal identification number, if the
subscriber is a member of a Tribal nation and does not have a social
security number;
(vii) If the subscriber is seeking to qualify for Lifeline under
the program-based criteria, as set forth in Sec. 54.409, the name of
the qualifying assistance program from which the subscriber, his or her
dependents, or his or her household receives benefits; and
(viii) If the subscriber is seeking to qualify for Lifeline under
the income-based criterion, as set forth in Sec. 54.409, the number of
individuals in his or her household.
(3) Require each prospective subscriber to certify, under penalty
of perjury, that:
(i) The subscriber meets the income-based or program-based
eligibility criteria for receiving Lifeline, provided in Sec. 54.409;
(ii) The subscriber will notify the carrier within 30 days if for
any reason he or she no longer satisfies the criteria for receiving
Lifeline including, as relevant, if the subscriber no longer meets the
income-based or program-based criteria for receiving Lifeline support,
the subscriber is receiving more than one Lifeline benefit, or another
member of the subscriber's household is receiving a Lifeline benefit.
(ii) If the subscriber is seeking to qualify for Lifeline as an
eligible resident of Tribal lands, he or she lives on Tribal lands, as
defined in 54.400(e);
(iii) If the subscriber moves to a new address, he or she will
provide that new address to the eligible telecommunications carrier
within 30 days;
(iv) If the subscriber provided a temporary residential address to
the eligible telecommunications carrier, he or she will be required to
verify his or her temporary residential address every 90 days;
(v) The subscriber's household will receive only one Lifeline
service and, to the best of his or her knowledge, the subscriber's
household is not already receiving a Lifeline service;
(vi) The information contained in the subscriber's certification
form is true and correct to the best of his or her knowledge,
(vii) The subscriber acknowledges that providing false or
fraudulent information to receive Lifeline benefits is punishable by
law; and
(viii) The subscriber acknowledges that the subscriber may be
required to re-certify his or her continued eligibility for Lifeline at
any time, and the subscriber's failure to re-certify as to his or her
continued eligibility will result in de-enrollment and the termination
of the subscriber's Lifeline benefits pursuant to Sec. 54.405(e)(4).
(e) State Lifeline administrators or other state agencies that are
responsible for the initial determination of a subscriber's eligibility
for Lifeline must provide each eligible telecommunications carrier with
a copy of each of the certification forms collected by the state
Lifeline administrator or other state agency from that carrier's
subscribers.
(f) Annual eligibility re-certification process.
(1) All eligible telecommunications carriers must annually re-
certify all subscribers except for subscribers in states where a state
Lifeline administrator or other state agency is responsible for re-
certification of subscribers' Lifeline eligibility.
(2) In order to re-certify a subscriber's eligibility, an eligible
telecommunications carrier must confirm a subscriber's current
eligibility to receive Lifeline by:
(i) Querying the appropriate eligibility databases, confirming that
the subscriber still meets the program-based eligibility requirements
for Lifeline, and documenting the results of that review; or
(ii) Querying the appropriate income databases, confirming that the
subscriber continues to meet the income-based eligibility requirements
for Lifeline, and documenting the results of that review; or
(iii) Obtaining a signed certification from the subscriber that
meets the certification requirements in paragraph (d) of this section.
(3) Where a state Lifeline administrator or other state agency is
responsible for re-certification of a subscriber's Lifeline
eligibility, the state Lifeline administrator or other state agency
must confirm a subscriber's current eligibility to receive a Lifeline
service by:
(i) Querying the appropriate eligibility databases, confirming that
the subscriber still meets the program-based eligibility requirements
for Lifeline, and documenting the results of that review; or
(ii) Querying the appropriate income databases, confirming that the
subscriber continues to meet the income-based eligibility requirements
for Lifeline, and documenting the results of that review; or
(iii) Obtaining a signed certification from the subscriber that
meets the certification requirements in paragraph (d) of this section.
(4) Where a state Lifeline administrator or other state agency is
responsible for re-certification of subscribers' Lifeline eligibility,
the state Lifeline administrator or other state agency must provide to
each eligible telecommunications carrier the results of its annual re-
certification efforts with respect to that eligible telecommunications
carrier's subscribers.
(5) If an eligible telecommunications carrier is unable to re-
certify a subscriber or has been notified of a state Lifeline
administrator's or other state agency's inability to re-certify a
subscriber, the eligible telecommunications carrier must comply with
the de-enrollment requirements provided for in Sec. 54.405(e)(4).
(g) Re-certification of temporary address. An eligible
telecommunications carrier must re-certify, every 90 days, the
residential address of each of its subscribers who have provided a
temporary address as part of the subscriber's initial certification or
re-certification of eligibility, pursuant to paragraphs (d), (e), or
(f) of this section.
Sec. 54.411 [Removed]
0
15. Section 54.411 is removed.
0
16. Add Sec. 54.412 to Subpart E to read as follows:
Sec. 54.412 Off reservation Tribal lands designation process.
(a) The Commission's Wireline Competition Bureau and the Office of
Native Affairs and Policy may, upon receipt of a request made in
accordance with the requirements of this section, designate as Tribal
lands, for the purposes of the Lifeline and Tribal Link Up program,
areas or communities that fall outside the boundaries of existing
Tribal lands but which maintain the
[[Page 12973]]
same characteristics as lands identified as Tribal lands defined as in
Sec. 54.400(c).
(b) A request for designation must be made to the Commission by a
duly authorized official of a federally recognized American Indian
Tribe or Alaska Native Village.
(c) A request for designation must clearly describe a defined
geographical area for which the requesting party seeks designation as
Tribal lands.
(d) A request for designation must demonstrate the Tribal character
of the area or community.
(e) A request for designation must provide sufficient evidence of a
nexus between the area or community and the Tribe, and describe in
detail how program support to the area or community would aid the Tribe
in serving the needs and interests of its citizens and further the
Commission's goal of increasing telecommunications access on Tribal
lands.
(f) Upon designation by the Wireline Competition Bureau and the
Office of Native Affairs and Policy, the area or community described in
the designation shall be considered Tribal lands for the purposes of
this subpart.
0
17. Revise Sec. 54.413 to read as follows:
Sec. 54.413 Link Up for Tribal lands.
(a) Definition. For purposes of this subpart, the term ``Tribal
Link Up'' means an assistance program for eligible residents of Tribal
lands seeking telecommunications service from a telecommunications
carrier that is receiving high-cost support on Tribal lands, pursuant
to subpart D of this part, that provides:
(1) A 100 percent reduction, up to $100, of the customary charge
for commencing telecommunications service for a single
telecommunications connection at a subscriber's principal place of
residence imposed by an eligible telecommunications carrier that is
also receiving high-cost support on Tribal lands, pursuant to subpart D
of this part. For purposes of this subpart, a ``customary charge for
commencing telecommunications service'' is the ordinary charge an
eligible telecommunications carrier imposes and collects from all
subscribers to initiate service with that eligible telecommunications
carrier. A charge imposed only on qualifying low-income consumers to
initiate service is not a customary charge for commencing
telecommunications service. Activation charges routinely waived,
reduced, or eliminated with the purchase of additional products,
services, or minutes are not customary charges eligible for universal
service support; and
(2) A deferred schedule of payments of the customary charge for
commencing telecommunications service for a single telecommunications
connection at a subscriber's principal place of residence imposed by an
eligible telecommunications carrier that is also receiving high-cost
support on Tribal lands, pursuant to subpart D of this part, for which
the eligible resident of Tribal lands does not pay interest. The
interest charges not assessed to the eligible resident of tribal lands
shall be for a customary charge for connecting telecommunications
service of up to $200 and such interest charges shall be deferred for a
period not to exceed one year.
(b) An eligible resident of Tribal lands may receive the benefit of
the Tribal Link Up program for a second or subsequent time only for
otherwise qualifying commencement of telecommunications service at a
principal place of residence with an address different from the address
for which Tribal Link Up assistance was provided previously.
0
18. Add Sec. 54.414 to Subpart E to read as follows:
Sec. 54.414 Reimbursement for Tribal Link Up.
(a) Eligible telecommunications carriers that are receiving high-
cost support, pursuant to subpart D of this part, may receive universal
service support reimbursement for the reduction in their customary
charge for commencing telecommunications service and for providing a
deferred schedule for payment of the customary charge for commencing
telecommunications services for which the subscriber does not pay
interest, in conformity with Sec. 54.413.
(b) In order to receive universal support reimbursement for
providing Tribal Link Up, eligible telecommunications carriers must
follow the procedures set forth in Sec. 54.410 to determine an
eligible resident of Tribal lands' initial eligibility for Tribal Link
Up. Eligible telecommunications carriers must obtain a certification
form from each eligible resident of Tribal lands that complies with
Sec. 54.410 prior to enrolling him or her in Tribal Link Up.
(c) In order to receive universal service support reimbursement for
providing Tribal Link Up, eligible telecommunications carriers must
keep accurate records of the reductions in their customary charge for
commencing telecommunications service and for providing a deferred
schedule for payment of the charges assessed for commencing service for
which the subscriber does not pay interest, in conformity with Sec.
54.413. Such records shall be kept in the form directed by the
Administrator and provided to the Administrator at intervals as
directed by the Administrator or as provided in this subpart. The
reductions in the customary charge for which the eligible
telecommunications carrier may receive reimbursement shall include only
the difference between the carrier's customary connection or interest
charges and the charges actually assessed to the subscriber receiving
Lifeline services.
Sec. 54.415 [Removed]
0
19. Section 54.415 is removed.
0
20. Revise Sec. 54.416 to read as follows:
Sec. 54.416 Annual certifications by eligible telecommunications
carriers.
(a) Eligible telecommunications carrier certifications. Eligible
telecommunications carriers are required to make and submit to the
Administrator the following annual certifications, under penalty of
perjury, relating to the Lifeline program:
(1) An officer of each eligible telecommunications carrier must
certify that the carrier has policies and procedures in place to ensure
that its Lifeline subscribers are eligible to receive Lifeline
services. Each eligible telecommunications carrier must make this
certification annually to the Administrator as part of the carrier's
submission of annual re-certification data pursuant to this section. In
instances where an eligible telecommunications carrier confirms
consumer eligibility by relying on income or eligibility databases, as
defined in Sec. 54.410(b)(1)(i)(A) or (c)(1)(i)(A), the representative
must attest annually as to what specific data sources the eligible
telecommunications carrier used to confirm eligibility.
(2) An officer of the eligible telecommunications carrier must
certify that the carrier is in compliance with all federal Lifeline
certification procedures. Eligible telecommunications carriers must
make this certification annually to the Administrator as part of the
carrier's submission of re-certification data pursuant to this section.
(3) An officer of the eligible telecommunications carrier must
certify annually that the carrier has obtained a valid certification
form for each subscriber for whom the carrier seeks Lifeline
reimbursement.
(b) All eligible telecommunications carriers must annually provide
the results of their re-certification efforts, performed pursuant to
Sec. 54.410(f), to the Commission and the Administrator.
[[Page 12974]]
Eligible telecommunications carriers designated as such by one or more
states pursuant to Sec. 54.201 must also provide, on an annual basis,
the results of their re-certification efforts to state commissions for
subscribers residing in those states where the state designated the
eligible telecommunications carrier. Eligible telecommunications
carriers must also provide their annual re-certification results for
subscribers residing on Tribal lands to the relevant Tribal
governments.
(c) States that mandate Lifeline support may impose additional
standards on eligible telecommunications carriers operating in their
states to ensure compliance with state Lifeline programs.
0
21. Revise Sec. 54.417 to read as follows:
Sec. 54.417 Recordkeeping requirements.
(a) Eligible telecommunications carriers must maintain records to
document compliance with all Commission and state requirements
governing the Lifeline and Tribal Link Up program for the three full
preceding calendar years and provide that documentation to the
Commission or Administrator upon request. Notwithstanding the preceding
sentence, eligible telecommunications carriers must maintain the
documentation required in Sec. 54.410(d) and (f) for as long as the
subscriber receives Lifeline service from that eligible
telecommunications carrier.
(b) If an eligible telecommunications carrier provides Lifeline
discounted wholesale services to a reseller, it must obtain a
certification from that reseller that it is complying with all
Commission requirements governing the Lifeline and Tribal Link Up
program.
(c) Non-eligible-telecommunications-carrier resellers that purchase
Lifeline discounted wholesale services to offer discounted services to
low-income consumers must maintain records to document compliance with
all Commission requirements governing the Lifeline and Tribal Link Up
program for the three full preceding calendar years and provide that
documentation to the Commission or Administrator upon request. To the
extent such a reseller provides discounted services to low-income
consumers, it must fulfill the obligations of an eligible
telecommunications carrier in Sec. Sec. 54.405(e), 54.405(f), and
54.410.
0
22. Add Sec. 54.419 to Subpart E to read as follows:
Sec. 54.419 Validity of electronic signatures.
(a) For the purposes of this subpart, an electronic signature,
defined by the Electronic Signatures in Global and National Commerce
Act, as an electronic sound, symbol, or process, attached to or
logically associated with a contract or other record and executed or
adopted by a person with the intent to sign the record, has the same
legal effect as a written signature.
(b) For the purposes of this subpart, an electronic record, defined
by the Electronic Signatures in Global and National Commerce Act as a
contract or other record created, generated, sent, communicated,
received, or stored by electronic means, constitutes a record.
0
23. Add Sec. 54.420 to Subpart E to read as follows:
Sec. 54.420 Low income program audits.
(a) Independent audit requirements for eligible telecommunications
carriers. Companies that receive $5 million or more annually in the
aggregate, on a holding company basis, in Lifeline reimbursements must
obtain a third party biennial audit of their compliance with the rules
in this subpart. Such engagements shall be agreed upon performance
attestations to assess the company's overall compliance with rules and
the company's internal controls regarding these regulatory
requirements.
(1) For purposes of the $5 million threshold, a holding company
consists of operating companies and affiliates, as that term is defined
in section 3(2) of the Communications Act of 1934, as amended, that are
eligible telecommunications carriers.
(2) The initial audit must be completed one year after the
Commission issues a standardized audit plan outlining the scope of the
engagement and the extent of compliance testing to be performed by
third-party auditors and shall be conducted every two years thereafter,
unless directed otherwise by the Commission. The following minimum
requirements shall apply:
(i) The audit must be conducted by a licensed certified public
accounting firm that is independent of the carrier.
(ii) The engagement shall be conducted consistent with government
accounting standards (GAGAS).
(3) The certified public accounting firm shall submit to the
Commission any rule interpretations necessary to complete the biennial
audit, and the Administrator shall notify all firms subject to the
biennial audit requirement of such requests. The audit issue will be
noted, but not held as a negative finding, in future audit reports for
all carriers subject to this requirement unless and until guidance has
been provided by the Commission.
(4) Within 60 days after completion of the audit work, but prior to
finalization of the report, the third party auditor shall submit a
draft of the audit report to the Commission and the Administrator, who
shall be deemed authorized users of such reports. Finalized audit
reports must be provided to the Commission, the Administrator, and
relevant states and Tribal governments within 30 days of the issuance
of the final audit report. The reports will not be considered or deemed
confidential.
(5) Delegated authority. The Wireline Competition Bureau and the
Office of Managing Director have delegated authority to perform the
functions specified in paragraphs (a)(2) and (a)(3) of this section.
(b) Audit requirements for new eligible telecommunications
carriers. After a company is designated for the first time in any state
or territory the Administrator will audit that new eligible
telecommunications carrier to assess its overall compliance with the
rules in this subpart and the company's internal controls regarding
these regulatory requirements. This audit should be conducted within
the carrier's first twelve months of seeking federal low-income
Universal Service Fund support.
0
24. Add Sec. 54.422 to Subpart E to read as follows:
Sec. 54.422 Annual reporting for eligible telecommunications carriers
that receive low-income support.
(a) In order to receive support under this subpart, an eligible
telecommunications carrier must annually report the company name, names
of the company's holding company, operating companies and affiliates,
and any branding (a ``dba,'' or ``doing-business-as company'' or brand
designation) as well as relevant universal service identifiers for each
such entity by Study Area Code. For purposes of this paragraph,
``affiliates'' has the meaning set forth in section 3(2) of the
Communications Act of 1934, as amended.
(b) In order to receive support under this subpart, a common
carrier designated as an eligible telecommunications carrier under
section 214(e)(6) of the Act must annually provide:
(1) Detailed information on any outage in the prior calendar year,
as that term is defined in 47 CFR 4.5, of at least 30 minutes in
duration for each service area in which the eligible telecommunications
carrier is designated for any facilities it owns,
[[Page 12975]]
operates, leases, or otherwise utilizes that potentially affect:
(i) At least ten percent of the end users served in a designated
service area; or
(ii) A 911 special facility, as defined in 47 CFR 4.5(e).
(iii) Specifically, the eligible telecommunications carrier's
annual report must include information detailing:
(A) The date and time of onset of the outage;
(B) A brief description of the outage and its resolution;
(C) The particular services affected;
(D) The geographic areas affected by the outage;
(E) Steps taken to prevent a similar situation in the future; and
(F) The number of customers affected.
(2) The number of complaints per 1,000 connections (fixed or
mobile) in the prior calendar year;
(3) Certification of compliance with applicable service quality
standards and consumer protection rules;
(4) Certification that the carrier is able to function in emergency
situations as set forth in Sec. 54.202(a)(2);
(5) Information describing the terms and conditions of any voice
telephony service plans offered to Lifeline subscribers, including
details on the number of minutes provided as part of the plan,
additional charges, if any, for toll calls, and rates for each such
plan. To the extent the eligible telecommunications carrier offers
plans to Lifeline subscribers that are generally available to the
public, it may provide summary information regarding such plans, such
as a link to a public Web site outlining the terms and conditions of
such plans.
(c) All reports required by this section must be filed with the
Office of the Secretary of the Commission, and with the Administrator.
Such reports must also be filed with the relevant state commissions and
the relevant authority in a U.S. territory or Tribal governments, as
appropriate.
Note: The following appendixes will not appear in the Code of
Federal Regulations.
Appendix A
Certification Requirements for Lifeline Subscribers
Pursuant to the Universal Service Low-Income Order, all ETCs (or
the state Lifeline program administrator, where applicable) must
provide the following information in clear, easily understandable
language on their initial and annual Lifeline certification forms:
Household Information for Initial and Annual Certification Forms
Contact Information: All certification forms must ask
for the Lifeline subscriber's name and address information.
Residential Address: Prior to providing service to a
consumer, ETCs must collect a residential address from each
subscriber, which the subscriber must indicate is his/her permanent
address, and a billing address, if different than the subscriber's
residential address. ETCs should inform subscribers that, if the
subscriber moves, they must provide their new address to the ETC
within 30 days of moving.
A consumer who lacks a permanent residential address
(e.g., address not recognized by the Post Office, temporary living
situation) must provide a temporary residential service address or
other address identifying information that could be used to perform
a check for duplicative support.
Consumers using Post Office Box Addresses: Lifeline
subscribers may not use a post office box as their residential
address. An ETC may accept a P.O. Box or General Delivery address as
a billing address, but not a residential address.
Consumers with Temporary Addresses: ETCs must collect
permanent addresses from subscribers. If a subscriber does not have
a permanent address, ETCs must:
Inform applicants that, if they use a temporary
address, the ETC will attempt to verify every 90 days that the
subscriber continues to rely on that address, and (as noted above)
the subscriber must notify the ETC within 30 days of their new
address after moving.
Inform the subscriber that if he or she does not
respond to the ETC's address verification attempts within 30 days,
the subscriber may be de-enrolled from the ETC's Lifeline service.
Multiple Households Sharing an Address: Upon receiving
an application for Lifeline support, all ETCs must check the
duplicates database to determine whether an individual at the
applicant's residential address is currently receiving Lifeline-
supported service. The ETC must also search its own internal records
to ensure that it does not already provide Lifeline-supported
service to someone at that residential address.
If nobody at the residential address is currently
receiving Lifeline-supported service, the ETC may initiate Lifeline
service after determining that the household is otherwise eligible
to receive Lifeline and obtaining all required certifications from
the household.
If the ETC determines that an individual at the
applicant's residential address is currently receiving Lifeline-
supported service, the ETC must collect from the applicant upon
initial enrollment and annually thereafter a worksheet that: (1)
Explains the Commission's one-per-household rule; (2) contains a
check box that an applicant can mark to indicate that he or she
lives at an address occupied by multiple households; (3) provides a
space for the applicant to initial or certify that he or she shares
an address with other adults who do not contribute income to the
applicant's household and/or share in the household's expenses; and
(4) notifies applicants of the one-per-household certification
requirement adopted below and the penalty for a consumer's failure
to make the required one-per-household certification (i.e., de-
enrollment).
One-per-Household Certification: All consumers must
certify that they receive Lifeline support for a single subscription
per household.
All ETCs (or state agencies or third-parties, where
they are responsible for Lifeline enrollment in a state) must obtain
a certification from the subscriber at sign up and annually
thereafter attesting under penalty of perjury that the subscriber's
household is receiving no more than one Lifeline-supported service.
In addition, the certification form must include a place for the
subscriber to separately acknowledge that, to the best of his or her
knowledge, no one at the consumer's household is receiving a
Lifeline-supported service from any other provider.
The certification form must explain in clear, easily
understandable language that: (1) Lifeline is a federal benefit; (2)
Lifeline service is available for only one line per household; (3) a
household is defined, for purposes of the Lifeline program, as any
individual or group of individuals who live together at the same
address and share income and expenses; and (4) households are not
permitted to receive benefits from multiple providers.
The certification form must also contain clear, easily
understandable language stating that violation of the one-per-
household requirement would constitute a violation of the
Commission's rules and would result in the consumer's de-enrollment
from the program, and potentially, prosecution by the United States
government.
Eligibility Information for Initial and Annual Certification Forms
Identity Information: All certification forms must ask
for the Lifeline subscriber's date of birth and the last 4 digits of
the subscriber's social security number.
Establishing eligibility for Lifeline:
The certification form should be written in clear,
easily understandable language and should include a place for the
customer to sign under penalty of perjury attesting to his/her
eligibility for Lifeline. All ETCs (or the state Lifeline program
administrator, where applicable) should obtain the consumer's
signature certifying under penalty of perjury that:
The consumer either participates in a qualifying
federal program or meets the income qualifications to establish
eligibility for Lifeline;
The consumer has provided documentation of eligibility,
if required to do so;
The consumer attests that the information contained in
his or her application is true and correct to the best of his or her
knowledge and acknowledging that providing false or fraudulent
information to receive Lifeline benefits is punishable by law. The
certification form should explain that Lifeline is a government
benefit program
[[Page 12976]]
and consumers who willfully make false statements in order to obtain
the benefit can be punished by fine or imprisonment or can be barred
from the program.
The certification form must include space for consumers
qualifying for Lifeline under an income-based criterion to certify
the number of individuals in their household.
ETCs (or the state administrator, where applicable)
should also obtain the consumer's initials or signature on the
certification form acknowledging that the consumer may be required
to re-certify his or her continued eligibility for Lifeline at any
time, and that failure to do so will result in the termination of
the consumer's Lifeline benefits.
Consumer no longer eligible for Lifeline: The
certification form must notify the consumer using clear, easily
understandable language that he or she must inform the ETC within 30
days if (1) The consumer ceases to participate in a federal
qualifying program or programs or the consumer's annual household
income exceeds 135% of the Federal Poverty Guidelines; (2) the
consumer is receiving more than one Lifeline-supported service; or
(3) the consumer, for any other reason, no longer satisfies the
criteria for receiving Lifeline support. Additionally, prior to
enrolling in Lifeline, consumers must certify attest under penalty
of perjury that they understand the notification requirement, and
that they may be subject to penalties if they fail to follow this
requirement.
Tribal eligibility: Consumers seeking Tribal lands
Lifeline support must certify that they reside on Federally-
recognized Tribal lands.
Non-transferability of Lifeline benefit: The
certification form should inform consumers that Lifeline service is
a non-transferable benefit, and that a Lifeline subscriber may not
transfer his or her service to any other individual, including
another eligible low-income consumer.
Annual Re-Certification of Consumer Eligibility for Lifeline
By the end of 2012, each Lifeline subscriber enrolled
in the program as of June 1, 2012 must provide a signed re-
certification form to the ETC (or the state Lifeline administrator,
where applicable) attesting to their continued eligibility for
Lifeline. This signed certification should collect all of the
subscriber information noted above, including an updated address.
Consumers may provide the re-certification in writing, by phone, by
text message, by email, or otherwise through the Internet.
Alternatively, where a database containing consumer
eligibility data is available, the carrier (or state Lifeline
administrator, where applicable) must query the database by the end
of 2012 and maintain a record of what specific data was used to re-
certify the consumer's eligibility and the date that the consumer
was re-certified.
The ETC or the state administrator, where applicable,
must report the results of their re-certification efforts to USAC,
the Commission, and the relevant state commission (where the state
has jurisdiction over the carrier) by January 31, 2013. ETCs or the
state administrator, where applicable, should also provide their re-
certification results to the relevant Tribal government, for
subscribers residing on reservations or Tribal lands.
ETCs must remind consumers about the annual re-
certification requirement on the ETC's certification form that is
completed upon program enrollment and annually thereafter.
Database
Consent to provide information to the database: An ETC
must obtain acknowledgement and consent from each of its subscribers
that is written in clear, easily understandable language that the
subscriber's name, telephone number, and address will be divulged to
the Universal Service Administrative Company (USAC) (the
administrator of the program) and/or its agents for the purpose of
verifying that the subscriber does not receive more than one
Lifeline benefit. In the event that USAC identifies a consumer as
receiving more than one Lifeline subsidy per household, all carriers
involved may be notified so that the consumer may select one service
and be de-enrolled from the other.
Appendix B
Lifeline Verification Survey Results for 2011 and 2007
Table 1--Lifeline Verification Results for 2011
----------------------------------------------------------------------------------------------------------------
Percentage
State/territory Subscribers Found No response to deemed Percentage non-
surveyed ineligible survey ineligible responders
----------------------------------------------------------------------------------------------------------------
Federal Default States
----------------------------------------------------------------------------------------------------------------
American Samoa.................. 62 0 16 0 26
Delaware........................ 534 56 217 10 41
Hawaii.......................... 499 61 116 12 23
Indiana......................... 2,066 340 647 16 31
Iowa............................ 12,015 711 4,936 6 41
Louisiana....................... 3,656 331 926 9 25
New Hampshire................... 629 115 156 18 25
North Dakota.................... 2,240 419 706 19 32
Northern Mariana Islands........ 1,857 0 0 0 0
South Dakota.................... 2,411 243 802 10 33
----------------------------------------------------------------------------------------------------------------
Non-Federal-Default States Mandating That ETCs Follow Federal Verification Procedures
----------------------------------------------------------------------------------------------------------------
Arkansas........................ 6,114 384 653 6 11
New York........................ 6,276 401 1,755 6 28
North Carolina.................. 4,288 171 689 4 16
----------------------------------------------------------------------------------------------------------------
Non-Federal-Default States Requiring ETCs To Submit Verification Results to USAC
----------------------------------------------------------------------------------------------------------------
Alabama......................... 4,594 858 1,193 19 26
Arizona......................... 1,982 180 674 9 34
Pennsylvania.................... 2,519 226 395 9 16
West Virginia................... 1,123 198 338 18 30
Average......................... 52,865 4,694 14,219 9 27
----------------------------------------------------------------------------------------------------------------
[[Page 12977]]
Table 2--Lifeline Verification Results for 2007
----------------------------------------------------------------------------------------------------------------
Percentage
State/territory Subscribers Found No response to deemed Percentage non-
surveyed ineligible survey ineligible responders
----------------------------------------------------------------------------------------------------------------
Federal Default States
----------------------------------------------------------------------------------------------------------------
American Samoa.................. 154 3 0 2 0
Delaware........................ 250 4 162 2 65
Hawaii.......................... 296 54 11 18 4
Iowa............................ 9,492 1,646 1,219 17 13
Indiana......................... 2,669 991 1,065 37 40
Louisiana....................... 2,141 673 175 31 8
New Hampshire................... 483 108 212 22 44
North Dakota.................... 2,795 342 574 12 21
Northern Mariana Islands........ 947 0 0 0 0
South Dakota.................... 1,823 472 447 26 25
----------------------------------------------------------------------------------------------------------------
Non-Federal-Default States Mandating That ETCs Follow Federal Verification Procedures
----------------------------------------------------------------------------------------------------------------
Arkansas........................ 5,650 1,608 296 28 5
New York........................ 4,208 624 585 15 14
North Carolina.................. 10,534 940 600 9 6
----------------------------------------------------------------------------------------------------------------
Non-Federal-Default States Requiring ETCs To Submit Verification Results to USAC
----------------------------------------------------------------------------------------------------------------
Alabama......................... 4,618 1,393 454 30 10
Arizona......................... 1,313 619 525 47 40
Kentucky........................ 11,482 1,253 1,788 11 16
Pennsylvania.................... 138,453 10,956 9,866 8 7
Puerto Rico..................... 4 3 0 75 0
Tennessee....................... 4,907 1,562 891 32 18
West Virginia................... 838 109 702 13 84
Average......................... 203,057 23,360 19,572 12 10
----------------------------------------------------------------------------------------------------------------
Appendix C
Initial Commenters
------------------------------------------------------------------------
Commenter Abbreviation
------------------------------------------------------------------------
AARP............................. AARP
Advocates for Basic Legal Consumer Groups
Equality, Inc., Community
Counseling Bristol County,
Community Voice Mail, Crossroads
Urban Center, Disability Right
Advocates, Legal Services
Advocacy Project, Low Income
Utility Advocacy Project,
National Center for Medical-
Legal Partnership, National
Consumer Law Center, On Behalf
of Our, Low-Income Clients, New
Jersey Shares, Ohio Poverty Law
Center, Open Access Connections,
Pennsylvania Utility Law
Project, Pro Seniors, Inc., Salt
Lake Community Action Program,
Texas Legal Services Center,
Virginia Citizens Consumer
Council.
Alaska Telephone Association..... ATA
American Library Association..... ALA
American Public Communications APCC
Council, Inc..
Amvensys Telecom Holdings, LLC... Amvensys
Area Agency on Aging of West Area Agency on Aging WCA
Central Arkansas.
Arkansas Advocates for Nursing AANHR
Home Residents.
Association of Programs for Rural APRIL
Independent Living.
AT&T............................. AT&T
Benton Foundation and Center for Benton/PK/UCC
Rural Strategies Public
Knowledge and United Church of
Christ, OC Inc..
Box Top Solutions, Inc........... Box Top
Budget Prepay, Inc., GreatCall, Budget/GreatCall/PR
Inc. and PR Wireless Inc. d/b/a
Open Mobile.
CenturyLink...................... CenturyLink
CGM, LLC......................... CGM
Cincinnati Bell Inc.............. Cincinnati Bell
City Councilor Sean Paulhus (ME)
City of New York................. City of NY
City of North Las Vegas.......... North Las Vegas
Comcast Corporation.............. Comcast
Commissioner Brenda Howerton (NC)
Commissioner Joe Bowser (NC)
Commissioner Lawrence Weekly (NV)
Commissioner Michael Page (NC)
Ogden-Weber Community Action OWCAP
Partnership.
COMPTEL.......................... COMPTEL
[[Page 12978]]
Conexions LLC d/b/a Conexion Conexions
Wireless.
Consumer Cellular, Inc........... CCI
Connecticut Department of Public CT DPUC
Utility Control.
Councilman Christopher A. Hilbert
(VA)
Councilman Howard Clement (NC)
Councilman Jamie Benoit (MD)
Councilman Kelvin E. Washington,
Sr. (SC)
Councilman Ricki Y. Barlow (NV)
Councilwoman Cora Cole-McFadden
(NC)
Cox Communication Inc............ Cox
CTIA-The Wireless Association.... CTIA
Daniel Reyes, III
Delegate Benjamin S. Barnes
Delegate Eileen Filler-Corn
Delegate Joe Morrissey (VA)
Delegate Paula J. Miller (VA)
Public Service Commission of the DC PSC
District of Columbia.
Educational Services Network, EDNet
Corp..
Executive Councilor Daniel St.
Hilaire (NH)
Florida Public Service Commission FL PSC
General Communication, Inc....... GCI
Gila River Telecommunications, GRTI
Inc..
House Democratic Caucus (GA)
Indiana Family and Social Indiana FSSA
Services Administration.
Indiana Utility Regulatory IN URC
Commission.
Institute for Health, Law & IHLE
Ethics.
Iridium Satellite LLC............ Iridium
Keep USF Fair Coalition.......... Keep USF Fair
Kevan Lee Deckelmann
Las Vegas Urban League........... Las Vegas Urban League
The Leadership Conference on LCCHR
Civil and Human Rights.
Leap Wireless International, Inc. Cricket
and Cricket Communications, Inc..
Massachusetts Department of MA DTC
Telecommunications and Cable.
Mayor Jim Bouley (NH)
Media Action Grassroots Network.. MAG-Net
Michigan Public Service MI PSC
Commission.
Minority Media and MMTC
Telecommunications Council.
Mississippi Public Service MS PSC
Commission.
Public Service Commission of the MO PSC
State of Missouri.
National ALEC Association/Prepaid NALA/PCA
Communications Association.
National Association for the NAACP Reno Sparks
Advancement of Colored People
Reno/Sparks Branch 1112.
National Association of State NASUCA
Utility Consumer Advocates.
National Association of NATOA
Telecommunications Officers and
Advisors.
National Cable & NCTA
Telecommunications Association.
National Consumer Law Center..... NCLC
National Telecommunications NTCA
Cooperative Association.
Nebraska Public Service NE PSC
Commission.
New America Foundation........... NAF
New Hampshire Coalition of Aging NH Coalition of Aging
Services.
New Hampshire Coalition Against NHCADSV
Domestic and Sexual Violence.
New Jersey Division of Rate NJ DRC
Counsel.
New York State Public Service NY PSC
Commission.
Nexus Communications, Inc........ Nexus
Ohio Association of Second OASHF
Harvest Food Banks.
Open Access Connections (formerly Open Access
Twin Cities Community Voice
Mail), Energy Cents Coalition,
Main Street Project, Minnesota
Center for Neighborhood,
Organizing Voices for Change.
One Economy Corp................. One Economy
Partnership for a Connected PCI
Illinois.
Public Utilities Commission of OH PUC
Ohio.
Public Utilities Commission of OR PUC
Oregon.
Rainbow PUSH Coalition........... Rainbow PUSH
Reunion Communications, Inc...... Reunion
San Juan Cable LLC d/b/a OneLink OneLink
Communications.
Several Members of the Texas
House Democratic Caucus
Smith Bagley, Inc................ SBI
Solix, Inc....................... Solix
Southern Nevada Children First... SNCF
Sprint Nextel Corp............... Sprint
State Representative Barbara B.
Boyd, Ed. D. (OH)
State Representative Bob Turner
(WI)
State Representative Christopher
J. England (AL)
State Representative Cory Mason
(WI)
[[Page 12979]]
State Representative Demetrius C.
Newton (AL)
State Representative Denise
Driehaus (OH)
State Representative Denise
Harlow (ME)
State Representative Diane
Russell (ME)
State Representative Dennis
Murray (OH)
State Representative J.M. Lozano
(TX)
State Representative John F.
Knight (AL)
State Representative John
Robinson (AL)
State Representative John W.
Rogers (AL)
State Representative Leslie Milam
Post (AR)
State Representative Mark Eves
(ME)
State Representative Peter
Stuckey (ME)
State Representative Ralph Howard
(AL)
State Representative Richard
Laird (AL)
State Representative Sheila
Lampkin (AR)
State Representative Stacy Adams
(GA)
State Representative Tony Payton
(PA)
State Senator Jason Wilson (OH)
State Senator John C. Astle (MD)
State Senator Thomas Mac
Middleton (MD)
Suzanne Burke
TCA.............................. TCA
TracFone Wireless, Inc........... TracFone
United States Telecom Association USTelecom
Verizon and Verizon Wireless..... Verizon
ViaSat, Inc...................... ViaSat
Virginia Interfaith Center for Virginia Interfaith Center
Public Policy.
YourTel America, Inc............. YourTel
------------------------------------------------------------------------
Appendix D
Reply Commenters
------------------------------------------------------------------------
Commenter Abbreviation
------------------------------------------------------------------------
Advocates for Basic Legal Consumer Groups
Equality, Inc., Community Voice
Mail National, Disability Rights
Advocates, Low Income Utility
Advocacy Project, The National
Consumer Law Center, on Behalf
of our Low-Income Clients, Ohio
Poverty Law Center, Open Access
Connections, Pennsylvania
Utility Law Project, Pro
Seniors, Inc., Texas Legal
Services Center, Virginia
Citizens Consumer Council.
American Public Communications APCC
Council, Inc.
Amvensys Telecom Holdings, LLC... Amvensys
AT&T............................. AT&T
California Public Utilities CA PUC
Commission.
COMPTEL.......................... COMPTEL
CTIA--The Wireless Association... CTIA
Emerios.......................... Emerios
Fletcher School (Tufts Fletcher School
University).
General Communication, Inc....... GCI
Leap Wireless International, Inc. Cricket
and Cricket Communications, Inc.
Media Action Grassroots Network.. MAG-Net
MFY Legal Services, Inc.......... MFY Legal Services
Michigan Public Service MI PSC
Commission.
Montana Independent MITS
Telecommunications Systems, LLC.
National ALEC Association/Prepaid NALA/PCA
Communications Association.
National Association of State NASUCA
Utility Consumer Advocates.
National Hispanic Media Coalition NHMC
New Jersey Division of Rate NJ DRC
Counsel.
Nexus Communications, Inc........ Nexus
One Economy Corp., League of One Economy
United Latin America Citizens,
Minority Media and
Telecommunications Council.
Open Access Connections.......... Open Access Connections
PR Wireless, Inc. d/b/a Open PR Wireless
Mobile.
Regulatory Commission of Alaska.. Alaska Commission
Reunion Communications, Inc...... Reunion
Sprint Nextel Corporation........ Sprint
State of Alaska.................. Alaska
Texas Statewide Telephone TX Telephone Cooperative
Cooperative, Inc.
TracFone Wireless, Inc........... TracFone
Verizon and Verizon Wireless..... Verizon
YourTel America, Inc.............
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[[Page 12980]]
Appendix E
USAC Disbursement Public Notice Commenters
------------------------------------------------------------------------
Commenter Abbreviation
------------------------------------------------------------------------
Alexicon Telecommunications Alexicon
Consulting.
CenturyLink...................... CenturyLink
COMPTEL.......................... Comptel
Michigan Public Service MI PSC
Commission.
PR Wireless, Inc. d/b/a Open PR Wireless
Mobile.
Smith Bagley, Inc................ Smith Bagley
South Carolina Office of South Carolina Office of Regulatory
Regulatory Staff. Staff
Sprint Nextel Corporation........ Sprint
United States Telecom Association USTelecom
Verizon and Verizon Wireless..... Verizon and Verizon Wireless
------------------------------------------------------------------------
Reply Commenter
------------------------------------------------------------------------
Massachusetts Department of MDTC
Telecommunications and Cable.
National Tribal NTTA
Telecommunications Association.
Nexus Communications, Inc........ Nexus
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[FR Doc. 2012-4978 Filed 3-1-12; 8:45 am]
BILLING CODE 6712-01-P