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DA 11-1346
Release Date: August 5, 2011
FURTI-IER INQUIRY INTO FOUR ISSUES IN THE UNIVERSAL SERVICE LIFELINE / LINK
UP REFORM AND MODERNIZATION PROCEEDING
WC Docket Nos. 11-42, 03-109;
CC Docket No. 96-45
Comment Date: August 26, 2011
Reply Comment Date: September 2, 2011
To comprehensively reform and modernize the universal service Lifeline and Link Up programs
in light of recent technological, market, and regulatory changes, on March 4, 2011 the Commission
released the 2011 Lfeline and Link Up Notice of Proposed Rulemaking NPRM or 2011 Lifeline and Link
Up NPRM.' The NPRM sought public comment on proposed reforms that would significantly bolster
protections against waste, fraud, and abuse; control the size of the program; strengthen program
administration and accountability; improve enrollment and outreach efforts; and support pilot programs
that would assist the Commission in assessing strategies to increase broadband adoption, without
increasing overall program size. Based on the current record in this proceeding, four issues in particular
merit further inquiry: designing and implementing a Lifeline/Link Up broadband pilot program to
evaluate whether and how Lifeline/Link Up can effectively support broadband adoption by low-income
households;2 limiting the availability of Lifeline support to one discount per residential address;3 revising
the definition of Link Up service, as well as the possible reduction of the $30 reimbursement amount for
Link Up support;4 and improving methods for verifying continued eligibility for the program.5 We
believe that the Commission's analysis would benefit from further development of these issues in the
record, and therefore seek further comment focused on these areas.
'L(feline and Link Up Reform and Modernization; Federal-State Joint Board on Universal Service; Lifeline and
Link Up, WC Docket Nos. 11-42, 03-109, CC Docket No. 96-45, Notice of Proposed Rulemaking, 26 FCC Rcd
2770 (2011) (2011 Lifeline and Link Up NPRM).
2 See id. at 2856-62, paras. 279-302.
See id. at 2805-10, paras. 106-25.
See id. at 2795-97, paras. 73-74, 78-79.
See id. at 2825-29, paras. 179-90.
Broadband Pilot Program.
a. Scope of Permissible Funding. Some commenters support using universal service dollars
to fund equipment and training for the proposed broadband pilot program, yet they do not
cite to any legal authority to do so.6 We seek comment on the Commission's statutory
authority to permit universal service funds to be used for such purposes, directly or
indirectly, and what other legal considerations must be addressed before the Commission
proceeds with a broadband pilot program.
b. Consumer Eligibility for Pilot Program. In the NPRM, the Commission sought comment
on whether to allow some pilot projects to deviate from the federal default rules with
regards to consumer eligibility.7 Benton commented that more permissive eligibility
standards would be more useful for a broadband pilot program.8 Specifically, Benton
suggested that (1) the threshold income for eligibility should be raised to 150 percent
above Federal Poverty Guidelines (FPG), and (2) residents of group homes should be
eligible.9 Smith Bagley, however, stated that the pilot should use the same or similar
eligibility criteria as the current low-income program.'° USTelecom concurred.1' Main
Street Broadband commented that variations in eligibility should be tested, but did not
specify how.'2 We seek additional focused comment specifically on whether to maintain
the current eligibility requirements for consumers participating in the pilot program that
are currently used in the low-income program, or whether to adopt stricter or more
permissive eligibility requirements for those consumers.'3 How might adjusting the
eligibility criteria affect our ability to maximize broadband adoption while providing
support that is sufficient, but not excessive? How would it affect the reliability and
statistical significance of the results of the pilot program? How would it help the pilot
programs yield better data on how to accomplish our goals of maximizing adoption in
low-income communities?
c. Barriers to Consumer Participation in Pilots. The National Association of Regulatory
Utility Commissioners supports a Lifeline/Link Up broadband pilot program and urges
the Commission not to require Lifeline/Link Up broadband service pilot program
participants to change local telephone service providers, purchase bundled broadband and
voice services, or otherwise be penalized when they purchase Lifeline and Link Up
e.g., Box Top Lifeline/Link Up NPRM Comments at 1, 3; NCTA Lifeline/Link Up NPRM Comments at 4-5;
USTelecom Lifeline/Link Up NPRM Comments at 25.
7See 2011 Lfeline and Link Up NPRAI, 26 FCC Red at 2859-60, para. 292.
8 Benton Foundation Lifeline/Link Up NPRM Comments at 10.
91d.
'° SBI Lifeline/Link Up NPRM Comments at 7.
' USTelecom Lifeline/Link Up NPRM Comments at 22.
12 MSB Lifeline/Link Up NPRM Reply Comments at 5-6.
" 47 C.F.R. § 54.4 10.
broadband services and enabling access devices.14 Commenters should address whether
and how the Commission could implement those recommendations. Commenters are
encouraged to provide a legal analysis to support their positions.
d. Pilot Evaluation. We invite further comment on the structure of the pilot projects, how to
evaluate the results of pilot projects, and what reporting requirements should be adopted
for pilot participants.'5
i. Should the Commission structure the pilot program so that each individual
participant tests multiple design elements (e.g,, price of the service, length of the
offer, service type, kind of device connected to the broadband, etc.), or should
each participant test a single variable for comparison against pilots operated by
other participants?
ii. The NPRM recognized that the cost of equipment is a major barrier to broadband
adoption, and proposed to require at least some participants to provide the
necessary hardware.16 It also proposed to test the impact of variations in
equipment discounts.'7 Should we also test the impact on adoption and
broadband retention when equipment is leased, as opposed to purchased?
iii. What quantitative metrics could the Commission use to evaluate whether
approaches tested during the pilot program further the proposed goals of
supporting broadband adoption for low-income households and making
broadband affordable while providing support that is sufficient, but not
excessive? For instance, should we assess the total number of new adopters; new
adopters as a percentage of eligible program participants; cost of support for each
new adopter; average percentage of participants' discretionary income spent on
discounted broadband service through the pilot relative to the national average
percentage of household discretionary income spent on broadband; andlor some
other metric(s)?
iv. How could we evaluate the relative impact of the service discount compared to
other potential factors that could be part of a comprehensive strategy to increase
broadband adoption, such as the provision of training or equipment? The
Commission proposed to develop information about the cost per participant and
cost per new adopter through the pilot program.'8 This information could assist
the Commission in assessing the costs and benefits of particular approaches to
whether broadband should be supported, and if so, how. We seek further
comment on this proposal and whether there are other types of data that the
Commission should review to evaluate whether a given approach would provide
support that is sufficient but not excessive.
2. One-Per-Residence Limitation. In the 2011 Lifeline and Link Up NPRM, the Commission
' See Policy Resolutions Passed by the Board of Directors of the National Association of Regulatory Utility
Commissioners, Resolution Supporting a Low-Income Broadband Service Adoption Program (July 20, 2011),
http://summer.narucmeetings.org/2011 SummerFinalResolutions.df
' See 2011 Lifeline and Link Up NPRM, 26 FCC Red at 2861, para. 297.
16 See id. at 2857-58, para. 283.
'71d.
18 Seeid. at 28601, para. 297.
proposed to codify a rule that would allow eligible low-income consumers to receive only one
Lifeline and Link Up discount per residential address,19 and sought comment on related issues.2°
a. Defining "Household" or "Residence". We seek focused comment on whether a one-per-
household or one-per-family rule would provide an administratively feasible approach to
providing Lifeline/Link Up support, and how the Commission could implement such a
rule.21
i. Commenters recommend that the Commission adopt a defmition of "household"
that mirrors the definitions used to establish eligibility for other federal benefit
programs22 or used by other federal agencies.23 We seek comment on whether
any of these definitions, such as the definition of "household" used to establish
eligibility for the Low Income Home Energy Assistance Program (LIHEAP)24 or
the definition used by the U.S. Census Bureau for surveying purposes,25 would
.....
'91d. at 2805, para. 106. The Commission noted that codifying a one-per-residential-address requirement would be
consistent with the existing single-line-per-residence requirement, and that it would ensure that eligible
telecommunications carriers (ETCs) comply with that existing requirement. Id. at 2805, para. 107.
at 2805-10, paras. 109-25.
21 Cf GCI Reply Comments at 10 (arguing that "[b]ecause a one-per-residence rule would undermine public policy
in the wireless era ... the FCC should adopt a one-per-eligible-adult rule instead ); AT&T Comments at 19
(suggesting that the Commission should adopt a "one-per-qualifying-individual" rule rather than a "one-per-
residence" rule); COMPTEL Comments at 15 ("[A] single line per qualifying eligible adult rule would better
promote the goal of providing affordable access to telecommunications services to the low income community.");
Smith Bagley Comments at 8 ("Many low-income households require more than one connection to the
telecommunications network.").
22 See, e.g., Consumer Groups Lifeline/Link Up NPRM Comments at 19-20; AT&T Lifeline/Link Up NPRM
Comments at 19; Benton Foundation Lifeline/Link Up NPRM Comments at 4; LCCHR Lifeline/Link Up NPRM
Comments at 8. Some examples of federal benefit programs that define "household" or "family" for the purpose of
establishing eligibility include the Low Income Home Energy Assistance Program (LIHEAP), Supplemental
Nutrition Assistance Program (SNAP), National School Lunch Program (NLSP), Food Distribution Program on
Indian Reservations (FDPIR), and Section 8 Public Housing Assistance.
23 See, e.g., SBI Lifeline/Link Up NPRM Comments at 10-12 (noting that it would be consistent with the definition
of "household" employed by the U.S. Census Bureau to treat subdivided hogans as separate residences); Sprint
Lifeline/Link Up NPRIVI Comments at 12 (recommending that Lifeline/Link Up discounts be linked to a family unit
that shares a residential address where the family unit corresponds to IRS filing status); GCI Lifeline/Link Up
NPRM Reply Comments at 12 (agreeing with Sprint's proposed "one-per-family" limitation).
24 See 42 U.S.C. § 8622(5) (defming "household" as "any individual or group of individuals who are living together
as one economic unit for whom residential energy is customarily purchased in common or who make undesignated
payments for energy in the form of rent").
25 See U.S. Census Bureau, State & County QuickFacts, Households, Persons Per Household, and Households with
Individuals Under 18 Years, http://guickfacts.census.gov/qfd/meta/long HSD410209.htm (last visited Aug. 5, 2011)
("A household includes all the persons who occupy a housing unit as their usual place of residence. A housing unit
is a house, an apartment, a mobile home, a group of rooms, or a single room that is occupied (or if vacant, is
intended for occupancy) as separate living quarters. Separate living quarters are those in which the occupants live
and eat separately from any other persons in the building and which have direct access from outside the building or
through a common hall. The occupants may be a single family, one person living alone, two or more families living
together, or any other group of related or unrelated persons who share living arrangements. (People not living in
households are classified as living in group quarters).").
4
provide an administratively feasible option for the Commission to employ to
define who is eligible for Lifeline/Link Up support.
ii. On June 1, 2011, TracFone Wireless (TracFone) filed an ex parte letter that
detailed its procedures used to comply with a one-per-household limitation.26
Pursuant to this process, applicants residing in group living facilities may receive
Lifeline service after the facility notifies TracFone of its status as a group living
facility, provides the number of rooms or beds at the facility, and certifies that the
applicant resides at the facility.27 In other cases where multiple households
reside at an address, TracFone permits applicants to provide an explanation and
documentation to show that unrelated persons residing at that address are part of
separate households.28 Finally, TracFone directs applicants residing in multiple
dwelling units without separate unit numbers to contact the U.S. Postal Service to
register that address as containing multiple residential units.29 Once that occurs,
the applicant may complete its application for Lifeline service with TracFone.3°
We seek comment on whether, if the Commission ultimately adopts a one-per-
household rule (or a one-per-residential-address nile), requiring all ETCs to
utilize similar procedures when signing up applicants in unique living situations
would be an effective means of ensuring compliance with such a rule.
iii. MFY Legal Services recommends that the Commission use room numbers and, if
applicable, bed numbers to serve as potentially unique address identifiers for
residents of group living facilities.3' We seek comment on this recommendation.
If implemented, what types of information could constitute unique address
identifiers? Who should be responsible for providing such information to the
ETC - the consumer or the group living facility? Are there group living
situations where a unique identifier would not be available, for example a shelter
that houses all of its residents in a single room?
b. Exceptions or Waivers from the "One-Per-Household" or "One-Per-Residential-Address"
Rule. On May 25, 2011, MFY Legal Services filed an ex parte presentation that included
a copy of the National Telecommunications and Information Administration's (NTIA)
rule providing a limited waiver of the household-based eligibility process for the Digital-
to-Analog Converter Box Coupon Program to allow applications from individuals
residing in nursing homes, intermediate care facilities, and assisted living facilities.32 The
26 See Letter from Mitchell F. Brecher, Greenberg Traurig, to Marlene H. Dortch, Secretary, Federal
Communications Commission, WC Docket Nos. 03-109, 11-42, CC Docket No. 96-45 (filed June 1, 2011)
(TracFone June 1, 2011 Ex Parte Letter).
27Id at2.
28 Id.
29 Id.
30Id.
' MFY Legal Services Lifeline/Link Up NPRM Reply Comments at 2; see also CenturyLink Lifeline/Link Up
NPRM Comments at 13 (noting that "service addresses should be as specific as necessary to properly distinguish
living addresses that may otherwise appear to be the same residence").
32 See Letter from Shelly R. Weizman, Staff Attorney, MFY Legal Services, to Federal Communications
Commission, WC Docket No. 11-42 (May 24, 2011) (attaching copy of Household Eligibility and Application
5
NTIA rule waived the one-per-residence requirement for individuals residing in nursing
homes, intermediate care facilities, and assisted living facilities licensed by a state,33 as
well as individuals using post office boxes for mail receipt.34 Third party designees, such
as facility administrators and family members, were also allowed to apply on behalf of
residents.35 We seek comment on whether that rule could serve as a model for how to
address such situations in the context of the low-income program. If the Commission
were to adopt a similar rule, what information should applicants be required to provide to
demonstrate they reside in such a facility?
One-per-person for Tribal Residents. Smith Bagley provides further calculations in its
comments as to the costs associated with providing enhanced Lifeline service to one
additional adult per household on Tribal lands.36 Smith Bagley projected that, assuming a
100% take rate, the cost of providing this additional funding would be $77.7 million per
year, or just under one percent of the current size of the overall universal service fund.37
We seek comment on the analysis provided by Smith Bagley.
3. Link Up. The NPRM addressed a number of issues regarding Link Up reimbursement for voice
services.
a. Sprint states that the costs associated with initiating phone service have fallen, noting that
"the ever-increasing level of automation has reduced the cost of initiating service,"38 and
proposes that Link Up support be limited or eliminated.39 We seek comment on this
proposal.
b. Similarly, multiple commenters suggest that only costs actually incurred for initiating
service should be reimbursable.4° Noting that several wireless providers (TracFone,
Process of the Coupon Program for Nursing Homes, Intermediate Care Facilities, Assisted Living Facilities, and
Households that Utilize Post Office Boxes, 73 Fed. Reg. 54325 (Sept. 19, 2008) (NTIA Rule) (attachment filed with
FCC May 25, 2011)).
u NTIA modeled its rules on United States Housing and Urban Development (HUD) mortgage insurance rules for
its definitions of each living situation. See NTIA Rule, 73 Fed. Reg. at 54326 n. 18, 54327 (referencing the
definitions of each living situation codified in HTJD's mortgage insurance rules at 12 U.S.C. § 1715).
Individuals who use post office boxes to receive mail were required to submit with their application a physical
address location, but not proof of address. Id. at 54330.
351d. at 24327-28.
36 See SBI Lifeline/Link Up NPRM Comments at 8-9.
371d. at9.
38 Sprint Lifeline/Link Up NPRM Comments at 9.
Sprint Lifeline/Link Up NPRM Comments at 9-10; Sprint Lifeline/Link Up NPRM Reply Comments at 7.
40 See, e.g., AT&T Lifeline/Link Up NPRM Comments at 29; GCI Lifeline/Link Up NPRM Comments at 30; Keep
USF Fair Lifeline/Link Up NPRM Reply Comments 2 at 2; NASUCA Lifeline/Link Up NPRM Comments at 13;
MI PSC Lifeline/Link Up NPRIvI Comments at 4; Sprint Lifeline/Link Up NPRM Comments at 9-10. In response
to a December 2010 petition for declaratory ruling filed by TracFone, the Public Utilities of Ohio (PUCO)
previously had argued that "commencing service' means an actual physical connection of facilities and does not
include 'activation," and that therefore "Link Up support should only be provided for 'connections' tied to carrier
facilities." Citing section 54.411(a) of our rules, PUCO observed that "[i]f. . . the rule [governing Link Up] was
6
Virgin Mobile, i-wireless) do not charge activation fees, and that even wireline service
initiations sometimes do not require new installations or service visits, the Indiana Utility
Regulatory Commission suggests that the Commission "eliminate the Link Up subsidy
for wireless providers and for wireline providers alike, unless greenfield (new)
installation of equipment and/or facilities is required."4' We seek further focused
comment on whether the Commission should provide reimbursement for Link Up only
for service initiations that involve the physical installation of facilities by the provider at
the consumer's residence.
4. Verification of Consumer Eligibility for Lifeline - Sampling Methodology. In the 2011
Lifeline and Link Up NPRJvI, the Commission proposed to amend section 54.4 10 of its rules to
establish a uniform methodology for conducting verification sampling that would apply to all
ETCs in all states.42 The NPRM also asked commenters to consider two proposals for modifying
the existing sampling methodology to more effectively balance the need for an administratively
feasible sampling methodology with the Commission's obligation to ensure that ineligible
consumers do not receive Lifeline/Link Up benefits.43 We invite additional comment on this
issue.
a. Commenters such as Montana Independent Telecommunications Systems, NTCA, and
TCA state that the Commission's sample-and-census proposal would be overly
burdensome to carriers with a small number of Lifeline sub scribers.44 With respect to the
Commission's sample-and-census proposal, could the Commission implement it in a way
that would be more easily administrable for ETCs, particularly ETCs with a small
number of Lifeline subscribers?
b. TCA proposes that, if the Commission adopts a sample-and-census rule, carriers with a
small number of Lifeline subscribers should be required to sample fewer consumers than
ETCs with a larger number of Lifeline subscribers.45 We seek comment on this proposal.
Should the Commission consider a smaller sample size for ETCs with a small number of
Lifeline customers in a given state? What number of respondents could ETCs with a
smaller number of Lifeline customers feasibly sample in a given year, keeping in mind
that reducing the required number of respondents could result in larger margins of
intended to contemplate something other than a physical connection to the carrier's facilities, then it would not
include the phrase 'at a consumer's principal place of residence' to further clarif' the rule's apparent intent to
require a joining of carrier and subscriber facilities." See TracFone Wireless, Pet ition for Declaratory Ruling; WC
Docket Nos. 09-197, 03-109; Ohio PUC Comments, at 3 (filed Dec. 23, 2010).
41 See IRUC Lifeline/Link Up NPRM Comments at 5.
42 2011 L(feline and Link Up NPRJVI, 26 FCC Rcd at 2825, para. 177.
43Seeid. at 2827, para. 182.
" See, e.g., MITS Lifeline/Link Up NPRM Reply Comments at 5; NTCA Lifeline/Link Up NPRM Comments at 6;
TCA Lifeline/Link Up NPRM Comments at 3-4. But see Letter from Commissioner Anne Boyle, Nebraska Public
Service Commission, to Julius Genachowski, Chairman, Federal Communications Commission, WC Docket Nos.
03-109, 11-42, CC Docket No. 96-45 (July 21, 2011) (stating that consumers who fail to respond to verification
inquiries should not continue receiving Lifeline service, as the verification process is not burdensome to consumers,
and it is a mandatory requirement for those who receive government benefits).
TCA Lifeline/Link Up NPRM Comments at 3-4.
7
error?46
c. Alternatively, should carriers with a small number of Lifeline subscribers be required to
sample only a specified percentage of their customer base?47 What would be a
reasonable percentage in such cases?
Pursuantto sections 1.415 and 1.419 of the Commission's rules, 47 CFR § 1.415, 1.419,
interested parties may file comments and reply comments on or before the dates indicated on the first
page of this document. All comments are to reference WC Docket Nos. 11-42, 03-109, and CC Docket
No. 96-45 and may be filed using: (1) the Commission's Electronic Comment Filing System (ECFS)
or (2) by filing paper copies. See Electronic Filing ofDocuments in Rulemaking Proceedings, 63 FR
24121 (1998).
• Electronic Filers: Comments may be filed electronically using the Internet by accessing the
ECFS: http://fi allfoss.fcc.gov/ecfs2/.
• Paper Filers: Parties who choose to file by paper must file an original and one copy of each
filing. If more than one docket or rulemaking number appears in the caption of this proceeding,
filers must submit two additional copies for each additional docket or rulemaking number.
Filings can be sent by hand or messenger delivery, by commercial overnight courier, or by first-
class or overnight U.S. Postal Service mail. All filings must be addressed to the Commission's Secretary,
Office of the Secretary, Federal Communications Commission.
All hand-delivered or messenger-delivered paper filings for the Commission's Secretary must be
delivered to FCC Headquarters at 445 12tl St., SW, Room TW-A325, Washington, DC 20554.
The filing hours are 8:00 a.m. to 7:00 p.m. All hand deliveries must be held together with rubber
bands or fasteners. Any envelopes must be disposed of before entering the building.
• Commercial overnight mail (other than U.S. Postal Service Express Mail and Priority Mail) must
be sent to 9300 East Hampton Drive, Capitol Heights, MD 20743.
U.S. Postal Service first-class, Express, and Priority mail must be addressed to 445 12th Street,
SW, Washington DC 20554.
People with Disabilities: To request materials in accessible formats for people with disabilities (Braille,
large print, electronic files, audio format), send an e-mail to fcc504(fcc.gov or call the Consumer &
Govermnental Affairs Bureau at 202-418-0530 (voice), 202-418-0432 (tty).
In addition, one copy of each pleading must be sent to each of the following:
(1) The Commission's duplicating contractor, Best Copy and Printing, Inc., 445 12th Street, S.W., Room
CY-B402, Washington, D.C. 20554, www.bcpiweb.com; phone: (202) 488-5300 fax: (202) 488-
5563;
(2) Jamie Susskind, Telecommunications Access Policy Division, Wireline Competition Bureau, 445
12th Street, S.W., Room 5-B4l8, Washington, D.C. 20554; e-mail: Jamie.Susskind(fcc.gov; and
(3) Charles Tyler, Telecommunications Access Policy Division, Wireline Competition Bureau, 445 12th
Street, S.W., Room 5-A452, Washington, D.C. 20554; e-mail: Charles.Tyler@fcc.gy.
462011 Lifeline and Link Up NPRM, 26 FCC Rcd at 2827, para. 184.
' See, e.g., NTCA Lifeline/Link Up NPRM Comments at 6 (recommending that the Commission require carriers of
all sizes to sample only a reasonable percentage of their subscribers).
Filings and comments are also available for public inspection and copying during regular
business hours at the FCC Reference Information Center, Portals II, 445 12th Street, S.W., Room CY-
A257, Washington, D.C. 20554. They may also be purchased from the Commission's duplicating
contractor, Best Copy and Printing, Inc., Portals II, 445 12th Street, S.W., Room CY-B402, Washington,
D.C. 20554, telephone: (202) 488-5300, fax: (202) 488-5563, or via e-mail www.bcpiweb.com.
This matter shall be treated as a "permit-but-disclose" proceeding in accordance with the
Commission's exparte rules.48 Persons making oral exparte presentations are reminded that memoranda
summarizing the presentations must contain summaries of the substance of the presentation and not
merely a listing of the subjects discussed. More than a one or two sentence description of the views and
arguments presented generally is required.49 Other rules pertaining to oral and written exparte
presentations in permit-but-disclose proceedings are set forth in section 1.1206(b) of the Commission's
rules.5°
For further information, please contact Jamie Susskind, Telecommunications Access Policy
Division, Wireline Competition Bureau at (202) 418-7400 or TTY (202) 418-0484.
-FCC-
4847 C.F.R. § 1.1200 etseq.
See 47 C.F.R. § l.1206(b)(2).
5047 C.F.R. § 1.1206(b).
9