Federal Communications Commission FCC 17-155
Before the
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON, D.C. 20554
In the Matter of
Bridging the Digital Divide for Low-Income 
Consumers
Lifeline and Link Up Reform and Modernization
Telecommunications Carriers Eligible for Universal 
Service Support
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WC Docket No. 17-287
WC Docket No. 11-42
WC Docket No. 09-197
FOURTH REPORT AND ORDER, ORDER ON RECONSIDERATION, MEMORANDUM 
OPINION AND ORDER, NOTICE OF PROPOSED RULEMAKING, AND NOTICE OF 
INQUIRY
Adopted:  November 16, 2017 Released: December 1, 2017
Comment Date: January 24, 2018
Reply Comment Date: February 23, 2018
By the Commission: Chairman Pai and Commissioners O’Rielly and Carr issuing separate statements; 
Commissioners Clyburn and Rosenworcel dissenting and issuing separate statements.
TABLE OF CONTENTS
Heading Paragraph #
I. INTRODUCTION.................................................................................................................................. 1
II. FOURTH REPORT AND ORDER........................................................................................................ 2
A. Targeting Enhanced Support on Tribal Lands to Rural Areas......................................................... 3
B. Mapping Resources for Enhanced Rural Tribal Lands Support .................................................... 10
C. Independent Verification of Residency on Rural Tribal Lands ..................................................... 17
D. Targeting Enhanced Lifeline Tribal Support to Facilities-Based Providers .................................. 21
E. Effective Dates for Changes to Enhanced Tribal Support ............................................................. 31
III. ORDER ON RECONSIDERATION ................................................................................................... 32
A. Increasing Lifeline Benefit Portability........................................................................................... 33
B. Application of Lifeline Support ..................................................................................................... 41
C. Minimizing Unnecessary Document Retention Burdens for Providers......................................... 44
IV. MEMORANDUM OPINION AND ORDER ...................................................................................... 47
V. NOTICE OF PROPOSED RULEMAKING........................................................................................ 53
A. Respecting the States’ Role in Program Administration ............................................................... 54
1. Reauthorizing State Commissions to Designate Lifeline ETCs.............................................. 55
2. Partnering with States for the Successful Implementation of the National Verifier ............... 59
B. Improving Lifeline’s Effectiveness for Consumers ....................................................................... 62
1. Focusing Lifeline Support to Encourage Investment in Broadband-Capable Networks......... 63
2. Enabling Consumer Choice..................................................................................................... 80
3. Removing Unnecessary Regulation ........................................................................................ 82
C. Steps to Address Waste, Fraud, and Abuse ................................................................................... 83
1. Improving Program Audits...................................................................................................... 84
Federal Communications Commission FCC 17-155
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2. Improving Program Integrity in Eligibility Verification ......................................................... 90
3. Transparency and State Partnerships..................................................................................... 102
D. Adopting a Self-Enforcing Budget .............................................................................................. 104
E. Improving Provider Incentives for Lifeline Service .................................................................... 111
F. Regulatory Impact Analysis......................................................................................................... 118
VI. NOTICE OF INQUIRY ..................................................................................................................... 119
A. Lifeline Support that Targets the Digital Divide ......................................................................... 121
B. Benefit Limits .............................................................................................................................. 130
C. Program Goals and Metrics ......................................................................................................... 132
VII. PROCEDURAL MATTERS ............................................................................................................ 133
A. Final Regulatory Flexibility Analysis .......................................................................................... 133
B. Paperwork Reduction Act Analysis ............................................................................................. 134
C. Congressional Review Act........................................................................................................... 135
D. Initial Regulatory Flexibility Analysis......................................................................................... 136
E. Initial Paperwork Reduction Act Analysis................................................................................... 137
F. Ex Parte Rules – Permit-But-Disclose......................................................................................... 138
G. Comment Filing Procedures ........................................................................................................ 139
VIII. ORDERING CLAUSES .............................................................................................................. 142
APPENDIX A – Final Rules
APPENDIX B – Proposed Rules
APPENDIX C – Final Regulatory Flexibility Analysis
APPENDIX D – Initial Regulatory Flexibility Analysis
APPENDIX E – Enhanced Lifeline Support on Rural Tribal Lands Map
I. INTRODUCTION
1. Today, the Commission takes a fresh look at how the Universal Service Fund’s (USF or 
Fund) Lifeline program can effectively and efficiently help close the digital divide for low-income 
consumers.  Our efforts are three-pronged.  First, we seek to direct Lifeline funds to the areas in which 
they are most needed, to encourage investment in networks that enable 21
st
Century connectivity for all 
Americans.  Second, we seek to ensure that the program operates consistent with the authority granted to 
us by Congress in the Communications Act and to clarify and streamline our rules to provide greater 
certainty to providers and consumers alike.  These reforms will improve the overall administration of the 
program, lessen the burdens on providers by removing unnecessary regulations, reduce the demands on 
ratepayers, and enhance consumer choice.  Third, we look to address ongoing waste, fraud, and abuse that 
undermines the integrity of the program and limits its effectiveness.  By curbing these abuses, we extend 
the reach of the program and are better able to help low-income families access the Internet so they may 
take full advantage of the educational, employment, civic, social, and other benefits broadband offers.  
The actions and proposals in this item aim to facilitate the Lifeline program’s goal of supporting 
affordable voice telephony and high-speed broadband for low-income households.  
II. FOURTH REPORT AND ORDER
2. In this Report and Order, we adopt several reforms to our Tribal Lifeline policies to 
increase the availability and affordability of high-quality communications services on Tribal lands.
1
  
                                                     
1
In the 2016 Lifeline Order, the Commission noted that many of the issues related to Lifeline support on Tribal 
lands on which the Commission had sought comment remained open for consideration in a future proceeding.  
Lifeline and Link Up Reform and Modernization et al., Third Report and Order, Further Report and Order, and 
Order on Reconsideration, 31 FCC Rcd 3962, 4038, para. 211 (2016) (2016 Lifeline Order) (citing Lifeline and Link 
Up Reform and Modernization et al., Second Further Notice of Proposed Rulemaking, Order on Reconsideration, 
Second Report and Order, and Memorandum Opinion and Order, 30 FCC Rcd 7818, 7827-91, paras. 14-223 (2015) 
(2015 Lifeline FNPRM or 2015 Lifeline Order). 
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A. Targeting Enhanced Support on Tribal Lands to Rural Areas
3. We first target enhanced Lifeline support on Tribal lands to residents of rural areas on 
Tribal lands.  Since 2000, the Lifeline and Link Up programs have provided an enhanced subsidy of up to 
an additional $25 per month for service provided to qualified residents of Tribal lands, and a Link Up 
reduction of up to $100 for the cost to initiate supported service for qualifying residents of Tribal lands.
2
  
This targeted support is in recognition of not only the low income levels but also the particularly poor 
connectivity on many Tribal lands.
3
  When it adopted the enhanced Lifeline Tribal subsidy, the 
Commission noted that the “unavailability or unaffordability of telecommunications service on Tribal 
lands is at odds with our statutory goal of ensuring access to such services to ‘[c]onsumers in all regions 
of the Nation, including low-income consumers,’”
4
and explained that the added Lifeline and Link Up 
support would help lead to the deployment of more robust networks.
5
  While the Commission provided 
the enhanced support as a discount on services, that support was focused to most efficiently encourage 
“investment and deployment” in facilities, especially since all Lifeline providers in the program at the 
time were facilities-based.
6
  Because of an overly-broad definition of the geographic areas eligible for the 
enhanced subsidy, however, many areas where this enhanced subsidy is currently available are not
lacking in either voice or broadband networks.  To remedy this, we refine our approach to target enhanced 
Lifeline support to residents of rural areas on Tribal lands.  Focusing the enhanced subsidy for Tribal 
lands on rural areas is consistent with the enhanced subsidy’s purpose and will ensure that the Fund is 
better directed toward the residents of Tribal lands who typically have the least choice for 
communications services.  
4. We believe that targeting enhanced support toward rural, facilities-based providers is 
consistent with the intent of the 2000 Tribal Order.  While the 2000 Tribal Order referenced reducing the 
costs of telecommunications services,
7
it specifically premised the support on the idea that enhanced 
support would incentivize providers to “deploy telecommunications facilities in areas that previously may 
have been regarded as high risk and unprofitable.”
8
  The Commission’s creation of an enhanced Lifeline 
benefit in the 2000 Tribal Order both reduced telecommunications costs and supported the deployment of 
                                                     
2
Federal-State Joint Board on Universal Service et al., Twelfth Report and Order, Memorandum Opinion and 
Order, and Further Notice of Proposed Rulemaking, 15 FCC Rcd 12208, 12223-24, 12230, paras. 26, 42 (2000) 
(2000 Tribal Order).  See also 47 CFR § 54.413(a), (a)(1)-(2), (b).
3
See 2000 Tribal Order, 15 FCC Rcd at 12230-31, paras. 42, 44.  See also Inquiry Concerning the Deployment of 
Advanced Telecommunications Capability to All Americans in a Reasonable and Timely Fashion, and Possible 
Steps to Accelerate Such Deployment Pursuant to Section 706 of the Telecommunications Act of 1996, as Amended 
by the Broadband Data Improvement Act, 2016 Broadband Progress Report, 31 FCC Rcd 699, 732, para. 79 & 
Table 1 (2016) (2016 Broadband Progress Report) (“[A]pproximately 41 percent of Americans living on Tribal 
lands . . . lack access to advanced telecommunications capability as compared to 10 percent of the U.S. population 
as a whole.”); 2016 Lifeline Order, 31 FCC Rcd at 4036-37, para. 206; 2015 Lifeline FNPRM, 30 FCC Rcd at 7873-
74, paras. 159-161; Improving Communications Services for Native Nations, Notice of Inquiry, 26 FCC Rcd 2672, 
2673-83, paras. 1-19 (2011); Connect America Fund et al., Report and Order and Further Notice of Proposed 
Rulemaking, 26 FCC Rcd 17663, 17868, para. 636 (2011) (USF/ICC Transformation Order).
4
See 2000 Tribal Order, 15 FCC Rcd at 12221, para. 21 (citing 47 U.S.C. § 254(b)(3)).
5
See id. at 12213, 12223-24, 12235-36, paras. 5, 26, 53.  
6
See id. at 12227, para. 30.
7
See id. at 12231, para. 44.
8
See id. at 12235-36, para. 53; 12221, para. 20 (noting the “inadequate telecommunications infrastructure and the 
cost of line extensions and facilities deployment in remote, sparsely populated areas”) (emphasis added); 12235, 
para. 52 (noting that enhanced support would lead ETCs to “construct telecommunications facilities”).
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networks because, at the time, all ETCs were facilities-based.
9
  While the Commission must consider and 
address appropriate distinctions between support for facilities-based and non-facilities-based providers, 
we do so in a way that continues to follow the principles identified in the 2000 Tribal Order and Sections 
214 and 254 of the Act.
10
5. To identify rural areas on Tribal lands, we adopt the definition of “rural” used in the E-
rate program rules, which define “urban” as “an urbanized area or urban cluster area with a population 
equal to or greater than 25,000.”  We define all other areas as “rural.”
11
In the 2015 Lifeline FNPRM, the 
Commission asked for comment on “what level of density” and at “what level of geographic granularity” 
we should define such rural areas.
12
  Shortly thereafter, the Commission began consultations with Tribal 
Nations regarding the Lifeline proposals that the Commission sought comment on in the 2015 Lifeline 
FNPRM.
13
  After consideration of the comments, including comments by numerous Tribal stakeholders, 
and evaluation of the practicality of implementation, we believe this definition will reasonably identify 
the Tribal areas the Commission intends to benefit from additional Lifeline funding.  Accordingly, we 
amend sections 54.403(a)(3), 54.413, and 54.414 of the Lifeline program rules and direct the Universal 
Service Administrative Company (USAC) to develop a tool that will allow Lifeline service providers to 
determine whether a subscriber residing on Tribal lands resides in a rural area according to this definition.  
USAC shall update this tool pursuant to the same update schedule used for the E-rate rurality tool.
14
6. Selection of the E-rate program’s “rural” definition is based on consideration of the 
record and matters of administrative efficiency.  In the 2015 Lifeline FNPRM, the Commission sought 
comment on focusing enhanced support to those Tribal lands with lower population densities.
15
  
Specifically, the Commission sought comment on “focus[ing] enhanced support only on areas of low 
population density that are likely to lack the facilities necessary to serve subscribers.”
16
  The Commission 
also sought comment on the approach taken by the United States Department of Agriculture’s Food 
Distribution Program on Indian Reservations (FDPIR), which excludes from eligibility residents of towns 
or cities in Oklahoma with populations of 10,000 or more, and sought comment on whether the 
Commission “should implement a similar approach that excludes urban areas on Tribal lands from 
receiving enhanced Tribal support.”
17
  Some commenters expressed concerns with a population density 
approach, but provided alternative density-based proposals ranging from limiting enhanced support to 
areas with fewer than 10,000 people and a county population density of less than 125 people per square 
mile,
18
or “only to Tribal lands that are located outside of a Metropolitan Statistical Area and that have 
                                                     
9
The Commission did not forbear from the Act’s facilities-based requirements at all until 2005.  See Petition of 
TracFone Wireless, Inc. for Forbearance, Order, 20 FCC Rcd 15095 (2005) (TracFone Forbearance Order).
10
See U.S.C. §§ 214(e), 254(b)(3).
11
47 CFR § 54.505(b)(3); Modernizing the E-rate Program for Schools and Libraries et al., Second Report and 
Order and Order on Reconsideration, 29 FCC Rcd 15538, 15592-96, paras. 136-43 (2014) (2014 E-rate Order).
12
2015 Lifeline FNPRM, 30 FCC Rcd at 7876, para. 170.
13
See, e.g., Lifeline and Link Up Reform and Modernization, Order, 31 FCC Rcd 895, para. 4 (WCB 2016).
14
2014 E-rate Order, 29 FCC Rcd at 15595, para. 141 & n.361 (directing USAC to update the E-rate rurality tool 
“as necessary to reflect the most recent decennial census data and nationwide population estimates and update its 
system within 90 days of any change” but not more than once in a twelve-month period).  
15
2015 Lifeline FNPRM, 30 FCC Rcd at 7876, para. 169.
16
Id.
17
Id. at 7876-77, para 170.  See also 7 CFR § 254.5(b) (“No household living in an urban place in Oklahoma shall 
be eligible for the Food Distribution Program on Indian Reservations.  However, an ITO can request the Department 
to grant individual exemptions from this limitation upon proper justification submitted by the ITO as determined by 
FNS”); 7 CFR. § 254.2(h) (“Urban Place means a town or city with a population of 10,000 or more.”).
18
Navajo Nation Telecommunications Regulatory Commission (NNTRC) Comments at 12-13.
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less than 100 persons per square mile.”
19
  These proposals are more restrictive than the E-rate program’s
definition of rural.  Other commenters opposed limiting the enhanced Tribal subsidy based on population 
density.
20
  We disagree with those commenters because their path would preserve the status quo of 
providing enhanced support to Lifeline subscribers on Tribal lands in densely populated areas where 
service providers already have sufficient incentive to deploy broadband facilities as in non-Tribal areas.
21
7. We agree that focusing enhanced support on less-dense areas will improve the Tribal 
support mechanism and better serve the goals of enhanced Tribal Lifeline support to incent deployment in 
areas that need it most and to increase the affordability of Lifeline services for Tribal lands residents.  
Based on the record, however, we decline to adopt a population-density threshold to identify the Tribal 
areas that are eligible for enhanced Tribal support.  Instead, we take an approach similar to the approach 
used by the FDPIR and use the E-rate program definition of “rural” to identify Tribal areas that are 
eligible for enhanced Lifeline support.  This approach provides consistency between the E-rate and 
Lifeline programs.  In addition, the Commission’s definition of “rural” in the E-rate program serves the 
goals of enhanced Tribal Lifeline support by focusing enhanced support where communications services 
are more costly.
22
  As explained in the 2014 E-rate Order, the Commission adopted the current E-rate 
program definition of “rural” after numerous parties demonstrated that a narrower definition would result 
in an urban classification for numerous schools and libraries in small towns and remote areas where E-
rate supported services are more costly.
23
  Using the E-rate definition of “rural” to identify Tribal areas 
that are eligible for enhanced support would ensure that the enhanced support is available for Tribal lands 
in these small towns and remote areas where supported services are more costly.  Further, the E-rate 
definition of “rural” is less restrictive than the alternative population density-based methodologies 
proposed by Smith Bagley and the Navajo Nation Telecommunications Regulatory Commission.
8. We also conclude that identifying less-dense areas by using the same definition of “rural”
as the E-rate program (which was adopted in December 2014 and implemented for E-rate Funding Year 
2015)
24
will allow for more accurate, efficient administration by USAC.  We expect that consistency 
between the two USF programs will simplify the urban/rural determinations for carriers and eligible 
households.  Specifically, standard program definitions of rurality would allow USAC to develop master 
data sources and simplify the development and updating of service provider tools for identifying 
addresses that qualify for enhanced support.  We therefore decline to adopt commenters’ proposals to 
                                                     
19
Smith Bagley Inc., Comments at 16.
20
Gila River Telecommunications, Inc. Comments at 5; Absentee Shawnee Tribe of Indians of Oklahoma Reply at 
3; National Congress of American Indians Comments at 5; Assist Wireless Comments at 4.
21
See, e.g., Letter from Catherine Sandoval, Commissioner, California Public Utilities Commission, et al., to 
Marlene Dortch, Secretary, FCC, WC Docket No. 11-42, Attach. at 2 (Feb. 22, 2016) (“Some tribal lands in 
California are near or in large cities or towns, and it is not reasonable to give the Enhanced Lifeline support where 
there is no additional cost to providing service to the eligible tribal customers.”); Public Utility Division of the 
Oklahoma Corporation Commission Comments at 14 (stating that Tribal Lifeline subscribers in Oklahoma City and 
Tulsa are eligible for enhanced support under the current rules and that “[i]t would be reasonable for the FCC to 
investigate further refinement of the availability of the enhanced Lifeline support in order to synchronize the support 
with the most pressing deployment needs.”).
22
See 2014 E-rate Order, 29 FCC Rcd at 15594-95, paras. 140-41.
23
See 2014 E-rate Order, 29 FCC Rcd at 15592, 15594, paras. 136, 140 & n.342 (citing to comments on various 
petitions for reconsideration discussing the impact of the Commission’s initial decision to adopt the Census Bureau 
definition of rural (i.e. areas that are not urbanized (Census tracts or blocs with population of 50,000 or more) or 
urban clusters (adjacent areas with population of 2,500 to 50,000)).  See also Census Bureau Website, 
https://www.census.gov/geo/reference/ua/uafaq.html (defining urbanized and urban clusters) (last visited Oct. 24, 
2017).
24
See 2014 E-rate Order, 29 FCC Rcd at 15594-95, paras. 140-41.
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create an entirely new definition of rurality based directly on the number of persons per square mile in a 
particular geographic area.  Those proposals would create unnecessary administrative difficulties and 
uncertainty for Lifeline providers, which we believe would in turn create confusion and fewer choices for 
eligible low-income consumers.
9. We also conclude that the provision of enhanced support in more densely populated 
Tribal lands, such as large cities (e.g., Tulsa, Oklahoma or Reno, Nevada),
25
is inconsistent with the 
Commission’s primary purpose of the enhanced support.  When the Commission first adopted enhanced 
support on Tribal lands, it noted that “unlike in urban areas where there may be a greater concentration of 
both residential and business customers, carriers may need additional incentives to serve Tribal lands that, 
due to their extreme geographic remoteness, are sparsely populated and have few businesses.”
26
  That 
remains too true today.  Approximately 98 percent of Americans in urban areas already have access to 
fixed broadband Internet access service at speeds of 25 Mbps/3 Mbps,
27
including residents of both 
Tulsa
28
and Reno.
29
  Directing enhanced support to Tribal lands in urban areas is unlikely to materially 
increase the deployment of facilities in such areas and, therefore, risks wasting scarce program resources.  
In contrast, rural Americans, particularly those residing on Tribal lands, are much less likely to have 
access to high-speed Internet access services, with Commission data showing that 63 percent of 
Americans living on rural, Tribal lands lack access to fixed broadband services at speeds of 25 Mbps/3 
Mbps,
30
making enhanced support more likely to incentivize deployment to serve low-income, rural 
residents on Tribal lands.  This policy supports our view that enhanced Tribal support should be targeted 
to rural areas where the need is greatest.  
B. Mapping Resources for Enhanced Rural Tribal Lands Support
10. We next identify mapping resources that can be used to locate “Tribal lands” under our 
rules.
31
  These maps can then be intersected with the maps delineating rural areas in order to create a map 
showing where enhanced Tribal lands Lifeline support is available.  We direct USAC to make these 
mapping resources available to providers.  
11. Our rules define Tribal lands as “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.”
32
  Before 2015, the Commission had not established any
mapping resources to provide ready access to the boundaries of these Tribal lands.
12. The geographic areas described in section 54.400(e) of the Lifeline program rules 
                                                     
25
Despite being “The Biggest Little City in the World,” Reno, NV has a population of 446,154 and, according to 
Form 477 data, 97.5% percent of the population in its county have access to fixed broadband speeds of at least 25 
Mbps/3 Mbps.  Tulsa, OK has a population of 637,215 and 100% percent of the population in its county has access 
to fixed broadband speeds of at least 25 Mbps/3 Mbps.  See Fixed Broadband Deployment Data, Deployment (last 
visited Oct. 24, 2017), https://www.fcc.gov/maps/fixed-broadband-deployment-data/. 
26
2000 Tribal Order, 15 FCC Rcd at 12235-36, para. 53.
27
See Fixed Broadband Deployment Data, Deployment (last visited Oct. 24, 2017), 
https://www.fcc.gov/maps/fixed-broadband-deployment-data/.
28
Id.
29
Id.
30
Id.
31
47 CFR § 54.400(e).
32
Id.
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correspond with the map of Hawaiian Home Lands maintained by the Department of Hawaiian Home 
Lands (DHHL),
33
the U.S. Census Bureau’s American Indians and Alaska Natives Map,
34
the Oklahoma 
Historical Map 1870-1890, as amended by the Commission to include the Cherokee Outlet,
35
and the 
Alaska Native regions established pursuant to the Alaska Native Claims Settlement Act.
36
   
13. To assist carriers and subscribers, we identify specific maps of these Tribal lands.  In the 
2015 Lifeline FNPRM, the Commission interpreted the term “former reservations in Oklahoma” to 
establish boundaries for Tribal lands in the Lifeline program for residents in Oklahoma.
37
  The 
Commission and USAC later provided a map and shapefile for carriers to use in determining whether 
their customers reside on Tribal lands in Oklahoma.
38
  We believe making this map available has 
successfully given clarity to providers and subscribers about the boundaries of Tribal lands in Oklahoma.  
We thus believe providing additional maps and data, including in shapefile format, is appropriate for the 
other Tribal lands listed in section 54.400(e) of the Commission’s rules.
39
  By providing carriers the 
information they need to quickly and accurately determine if an enrolling customer qualifies for enhanced 
support under the Lifeline rules, these maps and data will help prevent waste, fraud, and abuse in the 
program.  These maps and data will also help Lifeline providers avoid situations in which the provider 
improperly requests enhanced Tribal support for customers who self-certified their Tribal residence but 
did not actually reside on Tribal lands.
40
  
14. The Hawaiian Homes Commission Act of 1921
41
delineated the boundaries of “Hawaiian 
Home Lands” and tasked the DHHL with maintaining those boundaries, along with the responsibility of 
promulgating rules under that Act.  As part of its responsibilities, the DHHL makes available a map and 
shapefile that precisely defines the geographic areas within the state of Hawaii considered “Hawaiian 
Home Lands.”
42
  Using this map will assist both Lifeline providers and consumers.  Likewise, the Census 
Bureau maintains a map of every “federally recognized Indian tribe’s reservation, pueblo, or colony,” 
called the American Indian and Alaska Native Areas Map.
43
  This map, and its accompanying shapefile, 
comports with the data sources the Commission uses regularly
44
and will also provide clear guidance for 
Lifeline providers and consumers.
                                                     
33
See Department of Hawaiian Home Lands, GIS Maps, http://dhhl.hawaii.gov/po/maps/ (last visited Oct. 24, 
2017).
34
See 2016 Broadband Progress Report, 31 FCC Rcd at 731, n.238.
35
2016 Lifeline Order, 31 FCC Rcd at 4118-19, para. 434.
36
85 Stat. 688.
37
2015 Lifeline FNPRM, 30 FCC Rcd at 7904, para. 260.
38
See Universal Service Administrative Company, Oklahoma Tribal, http://www.usac.org/li/tools/rules-
orders/2015-order/oklahoma-tribal.aspx (last visited Oct. 24, 2017).
39
We note that the previous waivers of section 54.400(e) of our rules remain in effect.  Federal-State Joint Board on 
Universal Service, Smith Bagley, Inc., Petition for Waiver of Section 54.400(e) of the Commission’s Rules, 
Memorandum Opinion and Order, 20 FCC Rcd 7701 (2005); Sacred Wind Commc’ns, Inc. & Qwest Corp. Sacred 
Wind Commc'ns, Inc., Order, 21 FCC Rcd 9227 (WCB 2006).
40
See Blue Jay Wireless, LLC, Order, 31 FCC Rcd 7603 (EB 2016).
41
42 Stat. 108.
42
See Department of Hawaiian Home Lands, GIS Maps, http://dhhl.hawaii.gov/po/maps/ (last visited Oct. 24, 
2017).
43
See 47 CFR § 54.400(e).
44
See 2016 Broadband Progress Report, 31 FCC Rcd at 731, n.238.
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15. In light of these identified mapping resources, as well as the expected need for a 
reasonable transition period, we direct USAC to prepare a map and the corresponding shapefiles to 
delineate the areas on which subscribers may receive enhanced Lifeline support for rural Tribal lands.
45
  
USAC shall make this map and data available at least sixty (60) days before the effective date of this 
Order’s rule changes for enhanced Lifeline support on Tribal lands.  If, in the future, any of the sources 
identified in this section issue updated maps or shapefiles, we direct USAC to make an updated map and 
the underlying data available within a reasonable time period but no later than ninety (90) days after the 
updated map or shapefile is issued.  
16. We also direct USAC to incorporate the map discussed above in its administration and 
implementation of the National Lifeline Accountability Database (NLAD) and National Eligibility 
Verifier (NV).
46
  
C. Independent Verification of Residency on Rural Tribal Lands
17. In the 2015 Lifeline FNPRM, the Commission sought comment on requiring additional 
evidence of Tribal residency beyond the current self-certification requirement and placing the obligation 
to confirm Tribal residency with the Lifeline provider.
47
  To see that enhanced Lifeline support for rural 
Tribal lands is actually directed to subscribers who verifiably reside on Tribal lands, we now establish 
that only subscribers whose residential address or location is shown to fall within the boundary of the 
enhanced Tribal Lifeline map discussed above may receive enhanced support.  Previously, the 
Commission had permitted providers to accept subscribers’ self-certifications that they reside on Tribal 
lands according to the Commission’s Lifeline rules, which made the program vulnerable to fraud and 
abuse and resulted in a $2 million settlement with one provider for claiming enhanced Tribal support for 
subscribers who did not reside on Tribal lands.
48
  We find that the provision of maps delineating the 
boundaries of areas eligible for enhanced Tribal Lifeline support will give consumers and providers a 
more effective and simpler means of determining rural Tribal residency, thereby eliminating the need for 
reliance on self-certification.  Accordingly, going forward, Lifeline providers will be required to 
independently verify and document subscribers’ rural Tribal residency according to the map and data 
sources identified above.  An ETC may seek enhanced reimbursement only for subscribers whose 
residential address is located within the bounds of that map.
18. In response to the 2015 Lifeline FNPRM, some commenters urged the Commission to 
continue to permit consumers to self-certify their residence on Tribal lands.  Commenters supporting this 
approach argue that there is no evidence of abuse of the self-certification mechanism, and eliminating 
self-certification would only increase subscriber costs.
49
  However, the Commission has recently found 
concrete evidence of abuse of the self-certification mechanism, resulting in improper payments that had to 
                                                     
45
See Appendix E (Enhanced Tribal Support Map); U.S. Census Bureau, Cartographic Boundary Shapefiles -
American Indian/Alaska Native Areas/Hawaiian Home Lands, https://www.census.gov/geo/maps-
data/data/cbf/cbf_aiannh.html (last visited Oct. 24, 2017).
46
See 2016 Lifeline Order, 31 FCC Rcd at 4006-21, paras. 126-66.
47
2015 Lifeline FNPRM, 30 FCC Rcd at 7877, para. 171; see also Lifeline and Link Up Reform and Modernization 
et al., Report and Order and Further Notice of Proposed Rulemaking, 27 FCC Rcd 6656, 6727-28, paras. 164-66 
(2012) (2012 Lifeline Reform Order).  The Commission’s consultations with Tribal Nations have included the 
Lifeline proposals that the Commission sought comment on in the 2015 Lifeline FNPRM.  See, e.g., Lifeline and 
Link Up Reform and Modernization, Order, 31 FCC Rcd 895, para. 4 (WCB 2016).  We also note that the 
Commission’s Office of Native Affairs and Policy held additional meetings with the Affiliated Tribes of Northwest 
Indians on February 1-4, 2016 in Suquamish, WA, and on August 12-13, 2015 in Portland, OR where the 2015 
Lifeline FNPRM proposals were discussed.  A number of Tribal entities have also filed comments in this proceeding.
48
See Blue Jay Wireless, LLC, Order, 31 FCC Rcd 7603 (EB 2016).
49
See NNTRC Comments at 15; Boomerang Wireless Comments at 19-20 (noting that the Commission had not at 
that point made available a reliable mapping tool for carriers to use). 
Federal Communications Commission FCC 17-155
9
be reclaimed through an enforcement proceeding.
50
  In that instance, a Lifeline provider relied on 
subscriber self-certifications to improperly enroll several thousand customers as residents of Tribal lands, 
and continued to do so even after being informed that it was apparently over-claiming enhanced Tribal 
support.
51
  We also find that providing a map against which providers can verify eligibility for enhanced 
Tribal support provides greater certainty to providers and consumers alike, and thus eliminates questions 
about how to handle a consumer’s self-certification if that consumer seems to reside outside Tribal lands.
19. We conclude that a process by which providers determine enhanced eligibility by 
comparing the subscriber’s residential address to data sources delineating rural Tribal lands is a more 
accurate method of verifying that a subscriber is entitled to enhanced Tribal reimbursement.  If a 
subscriber does not reside within the bounds of the map that the Commission now provides, permitting 
that subscriber to receive reimbursement by simply certifying that she or he lives on Tribal lands leaves 
the program open to improper payments, waste, and possibly fraud and abuse.  
20. We are also sensitive to Tribal residences that have not been assigned conventional 
addresses and instead use descriptive addresses that are not recognized by the U.S. Postal Service.  For 
those residences, a Lifeline subscriber may provide a descriptive address when enrolling in the program.
52
  
A provider enrolling a subscriber with a descriptive residential address in a state where the National 
Verifier is not responsible for eligibility determinations must retain records documenting compliance with 
the program rules, including the rules we amend in this Order limiting enhanced Lifeline support to rural 
Tribal lands and removing subscriber self-certification of Tribal lands residency.  Accordingly, we remind 
providers that they must retain the documentation demonstrating how the provider determined that a 
subscriber with a descriptive address resides on rural Tribal lands to claim the enhanced Tribal Lifeline 
support. For example, as providers do today to verify the accuracy of consumers’ self-certification, 
providers may note if a subscriber has a ZIP code that is entirely located in an area eligible for enhanced 
support, or may record the latitude and longitude of the subscriber’s residence to compare against a map 
identifying areas eligible for enhanced support.  We direct USAC to develop a process for subscribers 
with descriptive addresses who reside on Tribal lands for use in the National Verifier, and to make public 
the steps in that process to better inform providers about acceptable methods of determining whether such 
subscribers are eligible for enhanced support.
D. Targeting Enhanced Lifeline Tribal Support to Facilities-Based Providers 
21. In the 2015 Lifeline FNPRM, the Commission sought comment on limiting enhanced 
Tribal Lifeline support to facilities-based service providers,
53
just as the Commission in 2012 had limited
enhanced Tribal Link Up support to facilities-based service providers that also received high-cost 
support.
54
  We now conclude that such a limitation is appropriate.  Accordingly, we amend section 
54.403(a)(3) of the Lifeline program rules to effectuate this change. 
22. We find that last-mile facilities are critical to deploying, maintaining, and building voice-
and broadband-capable networks on Tribal lands and Lifeline funds are more efficiently spent when 
supporting such networks.
55
  When the Lifeline discount is applied to a consumer’s bill for a facilities-
                                                     
50
See Blue Jay Wireless, LLC, Order, 31 FCC Rcd 7603 (EB 2016).
51
See id., 31 FCC Rcd at 7608, paras. 7-11.
52
See 2012 Lifeline Reform Order, 27 FCC Rcd at 6696, para. 87.
53
2015 Lifeline FNPRM, 30 FCC Rcd 7875-76, paras. 166-70.  See also supra n.48.
54
2012 Lifeline Reform Order, 27 FCC Rcd at 6767, para. 254.  The Commission eliminated all other Link Up 
support at that time.  See id. at 6767, para. 253.
55
See, e.g., Access Charge Reform et al., Fifth Report and Order and Further Notice of Proposed Rulemaking, 14 
FCC Rcd 14221, 14278-79, paras. 101-102 (1999) (arguing that special access channel terminations to end users are 
more costly to construct than interoffice transport); Policies Regarding Mobile Spectrum Holdings, 29 FCC Rcd 
6133, 6133, para. 1 (2014) (noting that wireless competition is reliant on access to spectrum); Implementation of 
(continued….)
Federal Communications Commission FCC 17-155
10
based service, those funds go directly toward the cost of providing that service, including provisioning, 
maintaining, and upgrading that provider’s facilities.  Since the introduction of enhanced Tribal and Link 
Up support in 2000, facilities-based providers have used that support to construct and upgrade networks 
on Tribal lands.
56
  
23. In contrast, Lifeline funds disbursed to non-facilities-based providers will still lower the 
cost of the consumer’s service, but cannot directly support the provider’s network because the provider 
does not have one.  When the Commission eliminated Link Up support for non-facilities-based carriers on 
Tribal lands in 2012, it noted that at least one wireless reseller “has received approximately a million in 
Link Up support for two months in 2011 on Tribal lands in [Oklahoma] without building 
infrastructure”—contravening the purposes of the enhanced support.
57
  And in the 2015 Lifeline FNPRM, 
the Commission explained, “Lifeline program data show that two-thirds of enhanced Tribal support goes 
to non-facilities based providers, and it is unclear whether the support is being used to deploy facilities in 
Tribal areas”
58
—which contravened the Commission’s express “desire to use enhanced support to incent 
the deployment of facilities on Tribal lands.”
59
24. For the purposes of the Lifeline program, to enforce our revised section 54.403(a)(3), we 
limit enhanced Tribal support to (1) fixed or mobile wireless facilities-based Lifeline service provided on 
Tribal lands with wireless network facilities covering all or a portion of the relevant Lifeline ETC’s 
service area on Tribal lands; and (2) facilities-based fixed broadband or voice telephony service provided 
through the ETC’s ownership or a long-term lease of last-mile wireline loop facilities capable of 
providing Lifeline service to all or a portion of the ETC’s service area on Tribal lands.  For purposes of 
enhanced Lifeline support, a fixed wireless provider must, consistent with FCC Form 477 instructions,
60
provision or equip a broadband wireless channel to the end-user premises over licensed or unlicensed 
spectrum, while a mobile wireless provider must hold usage rights under a spectrum license or a long-
term spectrum leasing arrangement
61
along with wireless network facilities that that can be used to 
provide wireless voice and broadband services.  For wireline providers, we consider a “long-term lease” 
as an indefeasible right of use (IRU) of 10 years or more over the last-mile facility in question.  The 
(Continued from previous page)                                                            
Section 6002(b) of the Omnibus Budget Reconciliation Act of 1993, Seventeenth Report, 29 FCC Rcd 15311, 15366, 
para. 110 (2014) (noting that “a specialized communications tower industry has developed to provide and manage 
support structures for the cell sites required by mobile wireless providers by leasing space to them.”).
56
See, e.g., Letter from David LaFuria, counsel to Smith Bagley Inc., to Marlene Dortch, Secretary, FCC, WC 
Docket No. 11-42, at 1 (filed Oct. 20, 2017) (“In SBI’s service area, enhanced Lifeline has been vital to its ability to 
construct a network with over 200 cell sites and to upgrade its network several times over the past 17 years.  On 
information and belief, it has also been an important reason why other facilities-based carriers have entered Tribal 
lands in Arizona and New Mexico to build facilities and provide competitive service.”); Letter from James Dunstan, 
counsel to Navajo Nation and Navajo Nation Telecommunications Regulatory Commission, to Marlene Dortch, 
Secretary, FCC, WC Docket No. 11-42, Attach. at 3 (filed Oct. 5, 2017) (Statement of Russell Begaye, President of 
Navajo Nation Before the Committee on Homeland Security and Governmental Affairs, United States Senate (Sept. 
14, 2017) (“It was only after the FCC extended Tier 4 Support [enhanced Lifeline] that carriers began to build out 
large portions of the Navajo Nation that were without service.”).
57
2012 Lifeline Reform Order, 27 FCC Rcd at 6767, n.689.
58
2015 Lifeline FNPRM, 30 FCC Rcd 7875, para. 167, & n.320 (citing 2014 USAC quarterly reports, USAC 
disbursement tool, and Lifeline Compliance Plans and Petitions).
59
Id., 30 FCC Rcd 7876, para. 169.
60
FCC Form 477, Local Telephone Competition and Broadband Reporting Instructions, at 5, 
https://transition.fcc.gov/form477/477inst.pdf (last visited Nov. 13, 2017).
61
We consider a long-term spectrum leasing arrangement as long-term de facto transfer spectrum leasing 
arrangements as defined and identified in 47 CFR §§ 1.9003, 1.9030, and long-term spectrum manager leasing 
arrangements as defined and identified in 47 CFR §§ 1.9003, 1.9020(e).
Federal Communications Commission FCC 17-155
11
Commission has found that IRUs carry many of the same indicia of control as full ownership and 
therefore are considered fully owned facilities in other regulatory contexts.
62
25. We conclude that, in the Lifeline program, an ETC’s use of tariffed and un-tariffed 
special access services, resold services offered pursuant to sections 251(b) and (c), commercially 
available resold services, or unbundled network elements (UNEs) does not demonstrate that the service is 
“facilities-based” because such services do not reflect investment in broadband-capable networks in the 
service area by the ETC.  Previously, the Commission found that competitors’ use of incumbent local 
exchange carrier (LEC) special access services is not relevant to whether there is sufficient facilities-
based competition in a market to justify forbearance from the incumbent LEC’s obligation to provide 
UNEs.  Additionally, UNEs themselves are only available in those cases where competitors are 
“impaired” without access—that is, UNEs are available to competitive carriers for those network 
components that a “reasonably efficient” competitor would not likely be able to construct on its own and 
without which market entry would likely be uneconomic.
63
  
26. If an ETC offers service using its own as well as others’ facilities in its service area on 
rural Tribal lands, it may only receive enhanced support for the customers it serves using its own last-mile 
facilities.  We find this definition is technology-neutral as between fixed and mobile services.  
27. For many of the same reasons the Commission limited Link Up support to facilities-
based carriers on Tribal lands,
64
we find that limiting enhanced Lifeline support to facilities-based service
provided to subscribers residing on Tribal lands will focus the enhanced support toward those providers 
directly investing in voice- and broadband-capable networks on rural Tribal lands.  We find that this 
result comports with the Act’s direction to the Commission to base its policies on the principle that “low-
income consumers and those in rural, insular, and high cost areas, should have access to 
telecommunications and information services... that are reasonably comparable to those services provided 
in urban areas....”
65
  Directing enhanced Lifeline funds to facilities-based services makes those services 
more affordable and competitive for low-income consumers and also encourages investment that will 
ultimately provide more robust networks and higher quality service on rural Tribal lands.  Doing so also 
ensures that the payments Lifeline providers receive from the Fund to serve rural Tribal lands will be 
reinvested in the “provision, maintenance, and upgrading” of facilities in those areas.
66
  A number of 
Tribal Nations, Tribally-owned Lifeline providers, and other Lifeline providers agree with this decision 
and favor limiting enhanced support to providers with facilities, arguing that it will ensure that the 
enhanced subsidies reach the Tribal lands and residences that have never been connected and will support 
those network facilities already constructed.
67
  
                                                     
62
See, e.g., Special Access for Price Cap Local Exchange Carriers et al., Report and Order, 28 FCC Rcd 13189, 
13211, para. 53 (2013).  
63
See Petition of Qwest Corporation for Forbearance Pursuant to 47 U.S.C. § 160(c) in the Phoenix, Arizona 
Metropolitan Statistical Area, Memorandum Opinion and Order, 25 FCC Rcd 8622, 8641, para. 35 (2010) (Qwest 
Order).  See Unbundled Access to Network Elements et al., Order on Remand, 20 FCC Rcd 2533, 2545-50, paras. 
20-28 (2004); Business Data Services in an Internet Protocol Environment, Report and Order, 32 FCC Rcd 3459, 
3476, para. 34 (2017).
64
2012 Lifeline Reform Order, 27 FCC Rcd at 6767, para. 254.  Notably, the Commission limited Link Up even 
further—to facilities-based carriers that also receive high-cost universal service support—but we do not find a need 
for such further limitation based on the present record.
65
47 U.S.C. § 254(b)(3).
66
47 U.S.C. § 254(e).
67
See, e.g., Letter from Gregory W. Guice, Counsel for Gila River Telecommunications, Inc. to Marlene H. Dortch, 
Secretary, FCC, WC Docket No. 17-287 et al. (filed Nov. 1, 2017) (“GRTI reiterated that facilities-based carriers 
should receive the enhanced Lifeline support so they can continue to deploy, build, and maintain infrastructure on 
Tribal lands.”); The Sovereign Councils of Hawaiian Homelands Assembly Comments at 4 (arguing that by 
(continued….)
Federal Communications Commission FCC 17-155
12
28. We disagree with parties who argue that resellers’ purchase of wholesale services from 
carriers that own facilities increases the incentive of those carriers to deploy and maintain their 
networks.
68
Resellers offer little evidence beyond their own assertions that funneling Lifeline enhanced 
support funding through middle men will spur facilities-based carriers to invest in their rural, Tribal 
networks.  Moreover, even if revenue from resellers marginally increases the ability and incentive of 
other providers to deploy or maintain facilities, we conclude that this benefit is outweighed by our need to 
prudently manage Fund expenditures.
69
  Indeed, these resellers cannot explain how passing only a fraction 
of funds through to facilities-based carriers will mean more investment in rural Tribal areas than ensuring 
that facilities-based carriers receive 100 percent of the support. We conclude that providing the enhanced 
support to Lifeline providers deploying, building, and maintaining critical last mile infrastructure is a 
more appropriate way to support the expansion of voice- and broadband-capable networks on Tribal 
lands.
70
  
29. To ensure compliance with this requirement and prevent potential waste, fraud, and 
abuse, we direct USAC to take appropriate measures to verify that any ETC claiming enhanced rural 
Tribal support satisfies the facilities requirement outlined in this section prior to disbursing the enhanced 
support.  
30. We also clarify that the “facilities-based” standard we describe bears only on whether the 
Lifeline provider is eligible to receive enhanced rural Tribal support.  Whether a provider is “facilities-
based” under the Act for purposes of seeking a Lifeline-only ETC designation and must obtain approval 
for a compliance plan to take advantage of blanket forbearance from the facilities requirement is 
unaffected by this standard and remains the same.
71
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restricting the enhanced benefit to facilities-based providers “the Commission may be able to further the goal of 
promoting deployment of facilities to Tribal lands.”); The Affiliated Tribes of Northwest Indians Reply at 5; Gila 
River Comments at 5; WTA-Advocates for Rural Broadband Comments at 19; Smith Bagley Inc. Comments at 14; 
Coquille Indian Tribe Comment at 2; Coeur D’Alene Tribe Comments at 2; Organized Village of Saxman
Comments at 2; Okhay Owingeh Reply at 2; Leech Lake Telecommunications Reply at 2; Mescalero Apache 
Telecom., Inc. Reply at 3; San Carlos Apache Telecommunications Utility Reply at 3; Red Lake Band of Chippewa 
Indians at 3; Alatna Village Council at 2; Confederated Tribes of the Colville Reservation Reply at 6 (“[We] agree 
with the Commission’s proposal to limit enhanced Lifeline support to those providers that deploy, build, and 
maintain infrastructure on Tribal lands.”). But see Letter from Dr. Michael E. Marchand, Chairman, Confederated 
Tribes of the Colville Reservation, to the Hon. Ajit Pai, Chairman, FCC, et al., WC Docket No. 17-287 et al., at 2 
(filed Nov. 7, 2017) (reversing prior support for facilities requirement).
68
See Letter from Joe RedCloud, Member, Oglala Sioux Tribe, to Marlene H. Dortch, Secretary, FCC, WC Docket 
No. 17-287 et al., at 1 (filed Nov. 9, 2017); Letter from Dr. Michael E. Marchand, Chairman, Confederated Tribes of 
the Colville Reservation, to the Hon. Ajit Pai, Chairman, FCC, et al., WC Docket No. 17-287 et al., at 2 (filed Nov. 
7, 2017); Letter of John J. Heitmann, Counsel, Boomerang, to Marlene H. Dortch, Secretary, FCC, WC Docket No. 
11-42 et al., Attach. at 8 (filed Dec. 2, 2015); Letter of John J. Heitmann, Counsel, Easy Wireless, to Marlene H. 
Dortch, Secretary, FCC, WC Docket No. 11-42 et al., at 2 (filed Feb. 24, 2016); Boomerang Reply at 6 (“By 
generating demand, wireless resellers like Boomerang help to improve the business case for… Tier 1 providers to 
make investments to achieve more extensive and reliable coverage in Tribal lands.”).
69
High-Cost Universal Service Support et al., Order on Remand and Memorandum Opinion and Order, 25 FCC Rcd 
4072, 4088, para. 29 (2010) (the Commission has a “responsibility to be a prudent guardian of the public’s 
resources”), aff’d Vt. Pub. Serv. Bd. v. FCC, 661 F.3d 54 (D.C. Cir. 2011).
70
We remind all ETCs that they may not discontinue Lifeline service to any community they serve without first 
relinquishing their ETC designation after the approval of the designating (state or federal) commission.  See 47 
U.S.C. § 214(e)(4).
71
See 47 U.S.C. § 214(e)(1)(A) (requiring ETCs to offer service “either using its own facilities or a combination of 
its own facilities and resale of another carrier’s services”); 2012 Lifeline Reform Order, 27 FCC Rcd at 6813-17, 
(continued….)
Federal Communications Commission FCC 17-155
13
E. Effective Dates for Changes to Enhanced Tribal Support 
31. To ensure all impacted parties have sufficient time to make the necessary changes 
adopted in this Fourth Report and Order, we provide a transition period.  The changes made in this Fourth 
Report and Order for enhanced Lifeline support on Tribal lands shall be effective 90 days after the 
Wireline Competition Bureau announces that the Commission has received approval from the Office of 
Management and Budget (OMB) for the new information collection requirements in this Fourth Report 
and Order subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13, or on August 1, 
2018, whichever date occurs later.  We direct ETCs to notify, in writing, any customers who are currently 
receiving enhanced support who will no longer be eligible for enhanced support as a result of the changes 
in this Order.  This notice must be sent no more than 30 days after the announcement of PRA approval.
72
  
This notice must inform any impacted customers that they will not receive the enhanced Lifeline discount 
beginning 90 days after the announcement of PRA approval or on August 1, 2018, whichever occurs later, 
and that customers residing on rural Tribal lands who are currently receiving service from a non-facilities-
based provider have the option of switching their Lifeline benefit to a facilities-based provider to continue 
receiving enhanced rural Tribal support.  The notice must also detail the ETC’s offerings for Lifeline 
subscribers who are not eligible for enhanced support. 
III. ORDER ON RECONSIDERATION
32. In this Order on Reconsideration, we address several issues pending before the 
Commission to encourage competition in the Lifeline market and decrease administrative burdens on 
providers.  Specifically, we eliminate the codified Lifeline benefit port freeze for voice and broadband 
services, clarify the application of Lifeline support, and amend our rules to minimize unnecessary 
document retention for providers in states where the National Verifier has launched. 
A. Increasing Lifeline Benefit Portability
33. By this Order, we eliminate the port freeze for voice and broadband Internet access 
services found in section 54.411 of the Commission’s rules.  We take this action in response to significant 
concerns regarding the port freeze raised in Petitions for Reconsideration and other recent filings in the 
docket.  In the 2016 Lifeline Order, the Commission codified port freezes lasting 12 months for 
broadband Internet access service and 60 days for voice telephony service.
73
  After reconsideration of 
certain findings in the 2016 Lifeline Order, we now eliminate the Lifeline port freeze for voice and 
broadband Internet access service.
34. The Commission established the extended port freeze for broadband Internet access 
service “[t]o facilitate market entry for Lifeline-supported BIAS [broadband Internet access service] 
offerings, provide additional consumer benefits, and encourage competition” by “allowing broadband 
providers the security of a longer term relationship with subscribers....”
74
  Since the Commission adopted 
these requirements, multiple parties have filed Petitions for Reconsideration raising a variety of concerns 
regarding the port freeze rule.
75
  Petitioners argue that the port freeze requirements adversely impact 
(Continued from previous page)                                                            
paras. 368-81 (providing conditional forbearance from the facilities requirement to ETCs filing and obtaining 
Bureau approval of their compliance plans).
72
Or, if the Commission has not received approval from the Office of Management and Budget (OMB) for the new 
information collection requirements in this Order subject to the Paperwork Reduction Act of 1995 (PRA), once 
OMB approval has been received.
73
2016 Lifeline Order, 31 FCC Rcd at 4105, para. 385.
74
Id. at 4106, para. 389.  The Commission adopted a 60-day port freeze for voice services for reasons similar to 
those outlined for Lifeline-supported broadband service.  Id. at 4107, para. 392.
75
Petition for Reconsideration/Clarification of NTCA – The Rural Broadband Association and WTA – Advocates 
for Rural Broadband, WC Docket No. 11-42 et al. (filed June 23, 2016) (NTCA/WTA Petition); USTelecom 
(continued….)
Federal Communications Commission FCC 17-155
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consumers by restricting consumer choice
76
and the record lacks evidence that demonstrates new entrants 
were or are having difficulty entering the Lifeline market.
77
  Petitioners also argue that the port freeze 
requirements were imposed without adequate notice, as required under the Administrative Procedure Act 
(APA);
78
and raise concerns regarding the challenges ETCs will face from an administrative perspective 
in attempting to comply with the 12-month port freeze requirement.
79
  Because we grant the petitions for 
reconsideration on other grounds below, we do not address the APA and administrative burden arguments 
here.  Additionally, since implementation of the port freeze rule, other parties have raised concerns 
regarding the alleged improper invocation of consumer port freezes by certain Lifeline providers, which 
limits consumer choice, especially with regard to the 12-month port freeze for broadband service.
80
  
35. We agree with arguments raised by Petitioners and others that the disadvantages to 
consumers of the port freeze rule, in practice, outweigh the anticipated advantages; accordingly, we 
eliminate the codified Lifeline benefit port freeze for voice and broadband Internet access service.
81
  We 
conclude that restricting the ability of Lifeline consumers to transfer their Lifeline benefit between service 
providers ultimately disadvantages Lifeline consumers.  Such a restriction limits Lifeline consumers’ 
ability to seek more competitive offerings and obtain those services that best meet their needs.  In 
addition, restricting consumers’ ability to transfer their Lifeline benefit will not promote competitive 
service offerings and, in fact, may diminish providers’ motivation to provide higher quality service after 
enrolling a Lifeline-supported broadband subscriber, because the provider is assured a 12-month 
commitment from the subscriber.
82
  We also agree that the record evidence does not clearly support the 
view that a 12-month port freeze is necessary to ease market entry, and indeed can discourage new 
providers from entering the Lifeline market or a new geographical area because a significant portion of 
Lifeline subscribers would not be able to transfer their benefit to otherwise compelling new services 
(Continued from previous page)                                                            
Association Petition for Reconsideration and Clarification, WC Docket No. 11-42 et al. (filed June 23, 2016) 
(USTelecom Petition).
76
NTCA/WTA Petition (“Low-income consumers deserve the same right as any other consumer to abandon service 
plans and providers that do not meet their needs.”)  Other parties support these arguments.  GVNW Consulting, Inc., 
for example, argues, “It is a strange economic proposition that the Commission contends that competition will be 
enhanced by limiting consumer choice.  Lifeline customers should have the same ability to find a better deal, either 
with a higher level of service or lower price, as customers not eligible to access the Lifeline discount.”  GVNW 
Consulting, Inc. Opposition to Petitions for Reconsideration, WC Docket No. 11-42 et al., at 8 (filed July 29, 2016) 
(“GVNW Opposition”).
77
NTCA/WTA Petition at 17.
78
USTelecom Petition at 4.
79
USTelecom Petition at 5-7 (referencing administrative burdens associated with the port freeze).  Because we grant 
the petitions for reconsideration on other grounds, we do not address the administrative burden arguments here.
80
See, e.g., Letter from Mitchell F. Brecher, Greenberg Traurig, LLP, to Marlene H. Dortch, Secretary, FCC, WC 
Docket No. 11-42 et al. (filed Jan. 18, 2017) (TracFone Request); Letter from Norina T. Moy, Government Affairs 
Director, Sprint, to Marlene H. Dortch, Secretary, FCC, WC Docket No. 11-42 et al. (filed Jan. 19, 2017) (Sprint 
Request); Letter from John J. Heitmann, Kelley Drye & Warren LLP, to Marlene H. Dortch, Secretary, FCC, WC 
Docket No. 11-42 et al. (filed Jan. 27, 2017) (Telrite Jan. 27 ex parte).
81
See 47 CFR § 54.411.
82
See Reply to Opposition of NTCA – The Rural Broadband Association and WTA – Advocates for Rural 
Broadband, WC Docket No. 11-42, et al., at 9 (filed Aug. 8, 2016) (NTCA/WTA Reply) (“The ability of low-
income consumers to shop for better service should they find their provider to be unsatisfactory, which in turn gives 
providers more incentive to better serve their customers, will further that goal better than a ‘port-freeze’ that only 
benefits providers concerned about recovering investment incurred as part of entering the Lifeline market”).
Federal Communications Commission FCC 17-155
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offerings.
83
  Nor do we believe that the 60-day port freeze for voice services adopted in the 2016 Lifeline 
Order, while leading to these disadvantages, is effective in furthering its desired goals.  
36. In general, parties that filed in support of a longer port freeze argued that carriers will be 
willing to make more significant investments as a result of longer term customer-carrier relationships and 
that a longer port freeze will discourage consumers from “flipping.”
84
  Indeed, several carriers decry 
“flipping” and explain how consumer churn makes it harder for carriers to recover their costs, including 
the costs of free phones.
85
  But flipping and consumer churn are not unique to the Lifeline marketplace, 
and companies have repeatedly turned to voluntary agreements (such as contracts) and alternative
business models (such as prepaid plans) to address such concerns without the federal government 
artificially limiting consumer choice.  In addition, we note that the primary intent of the Lifeline program 
is to provide a discount on service rather than devices.  To the extent that providing discounted or free 
devices incentivizes consumers to engage in flipping, that outcome primarily results from a service 
provider’s own marketing practices.  We also note that supporters of the port freeze generally did not 
assert the 12-month port freeze was needed to address impediments to entering the market.
86
  
37. We disagree with those commenters who contend that removing the 12-month broadband 
Internet access service port freeze will reduce provider participation in the Lifeline program and make it 
“impossible to meet the Commission’s minimum service standards and handset requirements at a cost that 
is affordable for low-income consumers.”
87
  The Commission adopted minimum service standards after 
considering the record and concluding that minimum service standards are not unduly burdensome.
88
  
Affordability was an important factor in adopting minimum service standards, and the standards the 
Commission adopted struck “a balance between the demands of affordability and reasonable 
comparability.”
89
  While the Commission considered concerns raised by some providers that they would 
not be able to offer services that meet the minimum standards, the Commission ultimately concluded that 
allowing the Lifeline benefit to be used on services that do not meet minimum service standards would 
lead to the type of “second class” service that the minimum service standards are meant to eliminate.
90
  
                                                     
83
NTCA/WTA Petition at 17.  NTCA/WTA argue that there was no evidence in the record, “beyond unsubstantiated 
claims that the ETC designation process was too burdensome,” that new entrants are having difficulty entering the 
Lifeline market.
84
See Letter from David A. LaFuria, Counsel, Smith Bagley, Inc., to Marlene H. Dortch, Secretary, FCC, WC 
Docket No. 11-42 et al., at 14 (filed Dec. 7, 2015); Comments of the Lifeline Joint Commenters, WC Docket No. 
11-42 et al., at 16-17 (filed Aug. 31, 2015); Lifeline Joint Commenters Reply, WC Docket No. 11-42 et al., at 22-24 
(filed Sept. 30, 2015); Telscape Communications, Inc. and Sage Telecom Communications, LLC Comments, WC 
Docket No. 11-42 et al., at 15-16 (filed Aug. 31, 2015).
85
See, e.g., Reply Comments of Air Voice Wireless, LLC, WC Docket Nos. 17-287, 11-42, 09-197 at 9 (filed Nov. 
8, 2017) (arguing that eliminating the port freeze will reduce the benefits ETCs can offer consumers because ETCs 
will have a shorter time to recover costs and will face increased costs of providing service due to flipping); Letter 
from John T. Nakahata, Counsel to Q Link Wireless, LLC. to Marlene H. Dortch, Secretary, FCC, WC Docket Nos. 
17-287, 11-42, 09-197 at 2 (filed Nov. 9, 2017) (discussing concerns regarding consumers repeatedly flipping 
between service providers).
86
In contrast, some supporters of a 12-month port freeze have argued that other barriers impact market entry—such 
as the process required to become eligible to participate in the program, Letter from John J. Heitmann and Joshua 
Guyan, Counsel to the Lifeline Connects Coalition, Boomerang Wireless, LLC and Easy Wireless, LLC; to Marlene 
H. Dortch, Secretary, FCC, WC Docket Nos. 17-287, 11-42, 09-197 at 5 (filed Nov. 2, 2017)—but retaining a 12-
month port freeze will hardly alleviate such problems.
87
See Joint Lifeline ETC Respondents’ Opposition at 7-8.
88
2016 Lifeline Order, 31 FCC Rcd at 3990, para. 75.
89
Id. at 3989, para. 71.
90
Id. at 4000, para. 104 (citing Native Nations Broadband Task Force Reply at 3).  
Federal Communications Commission FCC 17-155
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Furthermore, prior to the 2016 Lifeline Order, the shorter USAC-administered 60-day benefit port freeze 
for voice service did not drive providers out of the program.  Indeed, we are now acting in response to 
requests from Lifeline providers to eliminate or shorten the port freeze due to the administrative burdens 
associated with compliance.
91
  
38. The Commission codified the port freeze in part because it anticipated that consumers 
would benefit from greater choice and innovative service offerings as a result.  In addition, the 
Commission envisioned benefits would accrue to consumers from a longer term relationship with their 
service providers. Since the implementation of the port freeze, the Commission has been presented with 
evidence, however, that it has not delivered the consumer benefits the Commission envisioned when it 
codified the requirement, but instead has incented certain providers to enroll consumers in offerings that 
provide little meaningful residential broadband access while locking in their Lifeline benefit with that 
provider for the following 12 months.
92
  These providers have used the port freeze to prevent customer 
churn, asserting that the service falls within the 12-month port freeze timeframe, even when offering 
plans with only 10 MB of guaranteed mobile cellular data.
93
  As a result, although the port freeze rule has 
in some instances resulted in longer term relationships as anticipated, any benefits have come at the 
expense of consumers who find themselves trapped in low-quality plans for a full year.  Parties such as 
Consumer Action and the National Consumers League have urged the Commission “to stop the abuse of 
the so-called ‘port freeze’ rule, which is now being used to limit consumer choice and access to true 
broadband service and broadband-suitable devices.”
94
  Because implementation of the port freeze has not, 
on balance, resulted in the anticipated benefits to Lifeline consumers and instead appears to have harmed 
consumers, we now determine that this rule should be eliminated.  We also find that retaining existing 
customers’ port freezes would hinder consumer choice without leading or having led to improved 
offerings for consumers, and so we decline to continue subscribers’ existing port freezes.
95
39. Finally, we clarify the application of the Commission’s rolling recertification rule in the 
absence of the port freeze rule and the port freeze exceptions.
96
  For purposes of rolling recertification, the 
subscriber’s service initiation date is twelve months from the date of the most recent transfer or 
enrollment with the subscriber’s current service provider, and recertification will be required every twelve 
months thereafter.
97
40. These changes to section 54.411 of the Commission’s rules will become effective 60 days 
after publication of this Order in the Federal Register.  
                                                     
91
See USTelecom Petition at 5-7 (referencing administrative burdens associated with the port freeze); GVNW 
Opposition at 7-9.
92
See TracFone Request (requesting clarification of certain aspects of the 500 MB minimum standard for mobile 
broadband Internet access service and the applicability of the 12-month port freeze); Sprint Request.
93
See Telrite Corporation Comments at 6 (filed Mar. 2, 2017).
94
Letter from Ken McEldowney, Consumer Action, and Sally Greenberg, National Consumers League to Marlene 
H. Dortch, Secretary, FCC, WC Docket No. 11-42 (filed Mar. 2, 2017) (Consumer Action Letter).  See also
Comments of the Public Utility Division of the Oklahoma Corporation Commission, WC Docket No. 11-42 (filed 
Mar. 2, 2017); Letter of Betsy E. Huber, President, National Grange to Marlene H. Dortch, Secretary, FCC, WC 
Docket No. 11-42 (filed Mar. 8, 2017).
95
See Letter from Norina Moy, Director, Government Affairs, Sprint, to Marlene H. Dortch, Secretary, FCC, WC 
Docket No. 17-287 et al., at 1 (filed Nov. 9, 2017).  Notably, Sprint fails to offer a means for the Commission to 
administratively discern those port freezes that consumers intentionally agreed to be bound by and those apparently 
imposed on consumers without their knowledge or consent.
96
47 CFR § 54.410(f).
97
See Wireline Competition Bureau Provides Guidance on Rolling Recertification Pursuant to the Lifeline 
Modernization Order, Public Notice, 31 FCC Rcd 11895 (WCB 2016).
Federal Communications Commission FCC 17-155
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B. Application of Lifeline Support
41. To ensure that qualifying low-income Americans receive quality, affordable Lifeline-
supported broadband service, we revise our rules concerning the application of Lifeline support.  Section 
54.403(b)(1) of the Commission’s rules requires ETCs “that charge federal End User Common Line 
charges or equivalent federal charges” to apply federal Lifeline support to waive such charges for Lifeline 
subscribers.
98
  The rule is silent, however, on the application of Lifeline support for subscribers receiving 
the Lifeline benefit for broadband Internet access service, either in a bundle with qualifying voice 
telephony service or on a standalone basis, which does not have an End User Common Line charge.
99
  We 
hereby clarify that section 54.403(b)(1) of the Commission’s rules only applies to subscribers receiving 
Lifeline-supported standalone voice telephony service or a bundled offering where the ETC is requesting 
reimbursement from the Lifeline program for the voice telephony component of the bundle.  
42. USTelecom has filed a petition for reconsideration requesting, in relevant part, that we  
eliminate section 54.403(b) of the Commission’s rules to resolve the rule’s ambiguity with regard to 
Lifeline-supported broadband Internet access service.
100
  USTelecom argues that broadband Internet 
access service does not have a federal End User Common Line charge or intrastate service, creating 
confusion as to how ETCs may comply with section 54.403(b) of the Commission’s rules when the 
customer is receiving Lifeline-supported broadband Internet access service.
101
  No parties filed in 
opposition to USTelecom’s petition on this issue.
43. We decline to eliminate the rule, as requested by USTelecom, so that ETCs seeking 
reimbursement for Lifeline voice telephony service, either on a standalone basis or in a bundle, will 
continue to apply the Lifeline discount to the EUCL.  Instead we now modify section 54.403(b)(1) to 
clarify that this rule only applies to subscribers receiving standalone voice telephony service or a bundled 
offering where the ETC is requesting reimbursement from the Lifeline program for the voice telephony 
component of the bundle.  By not addressing whether and how section 54.403(b)(1) applies to Lifeline-
supported broadband Internet access service, the rule causes unnecessary uncertainty for ETCs and may 
result in less affordable offerings for subscribers without any corresponding benefit for Lifeline 
subscribers.  This revision of section 54.403(b)(1) also comports with the longstanding Commission goal 
of simplifying administration of the Lifeline program and reflecting current marketplace conditions.
102
  
Accordingly, we amend section 54.403(b)(1) to clarify that ETCs are only required to apply the Lifeline 
discount to the End User Common Line charge or equivalent federal charges where the ETC is receiving 
Lifeline support for that subscriber’s voice telephony service.
C. Minimizing Unnecessary Document Retention Burdens for Providers
44. The 2016 Lifeline Order modified section 54.410(b)(2)(ii), (c)(2)(ii), and (e) to require 
the National Verifier, where it is responsible for determining subscriber eligibility or conducting 
recertification, to provide a copy of the subscriber’s certification to the provider.
103
  We now resolve an 
apparent conflict in our rules and alter section 54.410(b)(2)(ii), (c)(2)(ii), and (e) of the Commission’s 
rules to eliminate the requirement that the National Verifier provide copies of certifications to ETCs 
where the National Verifier is responsible for eligibility determinations. 
                                                     
98
47 CFR § 54.403(b)(1).
99
Id.
100
USTelecom Petition at 18. 
101
Id. at 19. 
102
See 2012 Lifeline Reform Order, 27 FCC Rcd at 6682-83, paras. 54-58.
103
47 CFR § 54.410(b)(2)(ii), (c)(2)(ii), (e).
Federal Communications Commission FCC 17-155
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45. USTelecom filed a petition for reconsideration requesting, in relevant part, modifications 
to section 54.410(b)(2)(ii), (c)(2)(ii), and (e) of the Commission’s rules to properly reflect the 2016 
Lifeline Order’s intent with regard to the National Verifier.
104
  USTelecom argues that the text of the rule 
is in direct conflict with the 2016 Lifeline Order’s language and intent.
105
  The 2016 Lifeline Order states: 
“[t]he National Verifier will retain eligibility information collected as a result of the eligibility 
determination process” and that “Lifeline providers will not be required to retain eligibility 
documentation for subscribers who have been determined eligible by the National Verifier.”
106
  However, 
sections 54.410(b)(2)(ii), (c)(2)(ii), and (e) require Lifeline providers to retain eligibility documentation 
and certifications even when the National Verifier was responsible for the enrollment process.
107
  
USTelecom adds that the cost and burden to providers of maintaining duplicative subscriber eligibility 
information from the National Verifier are unsupported by any “sound policy basis.”
108
  Further, the rule 
may actually subvert program goals of “. . . ‘ensur[ing] that the National Verifier will incorporate robust 
privacy and data security best practices in its creation and operation of the National Verifier.’”
109
  No 
parties filed in opposition to USTelecom’s petition on this issue.
46. We now modify section 54.410(b)(2)(ii), (c)(2)(ii), and (e) to clarify that where the 
National Verifier is responsible for the consumer’s initial eligibility determination or recertification, the 
National Verifier is not required to deliver copies of those certifications to the ETC.  We find that this 
amendment to the rules is consistent with the goals of the National Verifier to ease burdens on Lifeline 
providers while improving privacy and security for consumers applying to participate in the program.  
This amendment also brings section 54.410 of the Commission’s rules in line with the Commission’s 
stated intent in the 2016 Lifeline Order that Lifeline providers would not be required to retain eligibility 
documentation for eligibility determinations made by the National Verifier.
110
  Additionally, we agree 
with USTelecom that requiring Lifeline providers to maintain duplicative subscriber enrollment 
documentation presents unnecessary risk to the privacy and security of subscriber information.
IV. MEMORANDUM OPINION AND ORDER
47. To fully realize the Commission’s objectives of providing Lifeline-support for 
broadband services, we provide clarity to ensure that service providers claiming Lifeline support for 
broadband service actually provide Lifeline customers with the level of broadband service intended in the 
2016 Lifeline Order.  In February 2017, the Wireline Competition Bureau solicited public comment on a 
TracFone Wireless, Inc. (TracFone) request for clarification regarding sections 54.408 and 54.411 of the 
Commission’s rules.
111
  We now remove any uncertainty in the record with respect to whether certain Wi-
Fi technologies qualify for Lifeline reimbursement by clarifying that broadband Internet access delivered 
via Wi-Fi is not eligible for reimbursement as mobile broadband under the Lifeline program rules, and we 
reiterate that mobile broadband service eligible for Lifeline reimbursement must be provided on a 
                                                     
104
USTelecom Petition at 10-11. 
105
Id.
106
2016 Lifeline Order, 31 FCC Rcd at 4017, para. 151.
107
See 47 CFR § 54.410(b)(2)(ii), (c)(2)(ii), (e).
108
Letter of USTelecom to Marlene H. Dortch, Secretary, FCC, WC Docket No. 11-42 et al., at 1-2 (filed May 18, 
2017).
109
Id. at 2.
110
2016 Lifeline Order, 31 FCC Rcd at 4017, para. 151.
111
Wireline Competition Bureau Seeks Comment on TracFone Request for Clarification, Public Notice, 32 FCC Rcd 
1389 (WCB 2017) (citing TracFone Request); Letter from Mitchell F. Brecher, Greenberg Traurig, LLP, to Marlene 
H. Dortch, Secretary, FCC, WC Docket No. 11-42 et al. (filed Jan. 18, 2017) (TracFone Request).  See also Sprint 
Request; Letter from John J. Heitmann, Kelley Drye & Warren LLP, to Marlene H. Dortch, Secretary, FCC, WC 
Docket No. 11-42 et al. (filed Jan. 27, 2017).
Federal Communications Commission FCC 17-155
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network using at least 3G (Third Generation) mobile technologies.
112
  We also clarify that a provider does 
not directly serve a customer with fixed broadband service under the Lifeline rules if that customer cannot 
access the services at their residential address and, therefore, Wi-Fi offerings like the “premium Wi-Fi” 
service described in the record also do not qualify for Lifeline support as fixed broadband service 
offerings. 
48. In its request for clarification, TracFone sought clarification regarding the types of 
service that meet the minimum service standards for Lifeline-supported mobile broadband and qualify for 
the twelve-month benefit port freeze.
113
  In response, several commenters expressed concerns that 
interpreting the minimum service standards for Lifeline-eligible mobile broadband to allow for Wi-Fi-
delivered broadband as described in the request would inhibit the Commission’s goal of supporting 
quality service to low-income consumers,
114
while others supported an interpretation of the Commission’s 
rules that would permit Lifeline support for “premium Wi-Fi” access offerings.
115
49. We clarify that “premium Wi-Fi” and other similar networks of Wi-Fi-delivered 
broadband Internet access service do not qualify as mobile broadband under the Lifeline program rules.
116
  
In the 2016 Lifeline Order, the Commission focused on “mobile network technologies” and mobile 
service offerings over different generations of mobile technologies in adopting rules for Lifeline-eligible 
mobile broadband service.
117
  Against this backdrop, the Commission established minimum service 
standards, including minimum 3G (Third Generation mobile network) speeds, to qualify for Lifeline 
support.  There is no evidence in the record that Wi-Fi-only technology, as deployed today, is a “mobile 
technology” or one of the “generations” of mobile technologies,
118
as contemplated by the Commission in 
the 2016 Lifeline Order.
119
  Further, nothing in the record demonstrates that Wi-Fi, including “premium 
Wi-Fi,”
120
as deployed today, should be treated as an industry accepted generation of mobile 
technology.
121
  
                                                     
112
2016 Lifeline Order, 31 FCC Rcd at 3995, para. 92.
113
TracFone Request at 2.
114
Sprint Corporation Comments at 1-2; Consumer Action Letter at 1-2; Public Utility Division of Oklahoma 
Corporation Comments at 2-3 (Oklahoma PUC Comments); TracFone Wireless Reply at 2 (TracFone Reply 
Comments); National Grange Reply at 1.
115
See Telrite Corporation Comments at 12-21; ETC Joint Commenters Reply Comments at 2; Telrite Corporation 
Reply Comments at 2-6.
116
See 47 CFR §§ 54.400 et seq.
117
See 47 CFR § 54.408(b)(2)(i).
118
See e.g., GSMA, The GSMA Spectrum Primer Series, available at https://www.gsma.com/spectrum/wp-
content/uploads/2014/03/The-Spectrum-Policy-Dictionary-Online-HighRes.pdf (last visited Oct. 24, 2017).
119
2016 Lifeline Order, 31 FCC Rcd at 3995-97, paras. 91-98; FCC Form 477, Local Telephone Competition and 
Broadband Reporting Instructions, https://transition.fcc.gov/form477/477inst.pdf (last visited Oct. 24, 2017).
120
“Premium Wi-Fi” service, as offered by providers seeking Lifeline reimbursement, allows users to access the 
Internet through a virtual private network (VPR) operating through Wi-Fi hotspots at a number of public venues.  
See Telrite Corporation Comments at 12-21; ETC Joint Commenters Reply at 2; Telrite Corporation Reply at 2-6.
121
FCC Form 477, Local Telephone Competition and Broadband Reporting Instructions, 
https://transition.fcc.gov/form477/477inst.pdf (last visited Oct. 24, 2017) (stand-alone Wi-Fi not included as one of 
the mobile technologies); Implementation of Section 6002(b) of the Omnibus Budget Reconciliation Act of 1993, 
Annual Report and Analysis of Competitive Market Conditions With Respect to Mobile Wireless, Including 
Commercial Mobile Services, Nineteenth Report, 31 FCC Rcd 10534, Web Appendix to Section III: Overall Mobile 
Wireless Industry Metrics (WTB 2016), https://www.fcc.gov/sites/default/files/19thReport_webappendix-3-
TablesCharts.pdf. 
Federal Communications Commission FCC 17-155
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50. We also disagree with Telrite that the use of the term “3G” in the section 54.408(b)(2)(i) 
of the Commission’s rules was only intended as a proxy for a particular minimum network speed 
threshold and not a generation of mobile technology.  In the 2016 Lifeline Order, the Commission’s 
discussion makes it clear that it was incorporating industry mobile technology generations, and that 3G 
was not just a proxy for a speed threshold.  The Commission, for example, stated that “[f]or the mobile 
broadband minimum service standard for speed, we rely on Form 477 data while also incorporating 
industry mobile technology generation (i.e. 3G, 4G).”
122
  
51. Unlike Wi-Fi, mobile networks provide ubiquitous mobility with large service area 
coverage.
123
  Wi-Fi access, however, can be a complement to a consumer’s primary broadband service.
124
  
Lifeline-eligible mobile broadband requires a mobile service provided through 3G mobile broadband 
technologies or subsequent and superior generations of mobile broadband technologies.
125
  Accordingly, 
the rules governing Lifeline support for a “mobile broadband service” contemplate not just a minimum of 
“3G” mobile network threshold speeds, but also a mobile network.
126
  As noted above, mobile networks, 
unlike current Wi-Fi networks, provide ubiquitous mobility within a large service area.  Were we to 
interpret the minimum service standard otherwise, an ETC could offer any fixed service with an arguably 
fast-enough speed, limit it to serve end users primarily using mobile devices, and claim that such a service 
was in fact “mobile” broadband because it offers speeds faster than “3G.”  As a result, the section 
establishing Lifeline minimum service standards for fixed broadband service would have no meaningful 
application, because ETCs could simply offer the much lower data allowances permitted under the mobile 
broadband standards, supplement that amount with Wi-Fi-delivered data, and receive the same Lifeline 
support amount.
127
52. We also clarify that a provider does not directly serve a customer with fixed broadband 
service under the Lifeline rules if that customer cannot access the service at their residential address.
128
  
The 2016 Lifeline Order contemplates Lifeline-supported fixed broadband service as a residential 
service.
129
  A service that, for example, purports to offer Lifeline-supported fixed broadband service but 
only provides customers with access to hotspots that a qualifying low-income subscriber cannot access 
from their own residence undermines the Commission’s requirement that carriers directly provide service 
to receive reimbursement.  A review of the Wi-Fi service disputed in the record before us indicates that 
the iPass network used to provide the premium Wi-Fi service keeps customers connected in “hotels, 
                                                     
122
2016 Lifeline Order, 31 FCC Rcd at 3995, para. 92 (emphasis added).  We note that we collect Form 477 mobile 
broadband coverage data by technology.  Wi-Fi is not one of the mobile broadband technologies listed in the Form 
477.  FCC Form 477, Local Telephone Competition and Broadband Reporting Instructions, 
https://transition.fcc.gov/form477/477inst.pdf (last visited Oct. 24, 2017).
123
Implementation of Section 6002(b) of the Omnibus Budget Reconciliation Act of 1993, Annual Report and 
Analysis of Competitive Market Conditions With Respect to Mobile Wireless, Including Commercial Mobile 
Services, WT Docket No. 17-69, Twentieth Report, Web Appendix I: Coverage Maps, Web Appendix III:  Elements 
of Interfirm Rivalry (Coverage based on Form 477 Data) (WTB 2017), available at https://www.fcc.gov/20th-
mobile-wireless-report-web-appendices.  
124
2016 Lifeline Order, 31 FCC Rcd at 4100, para. 376 (requiring providers that provide both Lifeline-supported 
mobile broadband service and devices to ensure that the devices are Wi-Fi enabled); Sprint Comments at 2.
125
See e.g., 2016 Lifeline Order, 31 FCC Rcd at 3997, para. 96.
126
47 U.S.C. § 153(33) (defining “mobile service”); 47 CFR § 20.3 (same).
127
See 47 CFR § 54.408(b)(1).
128
See 47 CFR § 54.407(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 customers it serves 
directly as of the first day of the month.”).  
129
See 2016 Lifeline Order, 31 FCC Rcd at 3978, 3981-84, 3988, 3990-91, paras. 45, 54, 56, 70, 77.
Federal Communications Commission FCC 17-155
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airports, and other business venues,” trains, airplanes, and convention centers, and in many towns only 
includes hotspots at establishments with pre-existing free public Wi-Fi offerings, like McDonald’s, 
Burger King, and Walmart.
130
  Some commenters indicated that these hot spot locations are  “likely to be 
of little use to most Lifeline customers” because few of the hot spots are located in low-income residential 
areas, and the hot spot locations “may not be common areas in which Lifeline customers would find 
themselves trying to utilize their Lifeline supported [broadband Internet access service].”
131
  TracFone 
also states that based on its sample testing for one Florida ZIP Code, “[l]ess than one percent of the 
10,223 Lifeline households within that ZIP Code reside within areas covered by iPass hotspots” and that 
nine of the twelve iPass hot spots within that ZIP Code “are located inside business locations (typically, 
restaurants and hotels, and only available to patrons of those businesses).”
132
  Accordingly, these types of 
premium Wi-Fi services would be functionally inaccessible to many Lifeline consumers and, thus, 
offering such services does not directly serve a Lifeline customer with fixed broadband service as 
required by section 54.407(a) of the Lifeline rules.  
V. NOTICE OF PROPOSED RULEMAKING
53. In this Notice of Proposed Rulemaking, we propose and seek comment on reforms to 
ensure that the Commission is administering the Lifeline program on sound legal footing, recognizing the 
important and Congressionally mandated role of states in Lifeline program administration, and rooting 
out waste, fraud, and abuse in the program.  These steps must precede broader discussions about how the 
Lifeline program can be updated to effectively bring digital opportunity to those who are currently on the 
wrong side of the digital divide. 
A. Respecting the States’ Role in Program Administration
54. We first seek comment on ways the Commission can better accommodate the important 
and lawful role of the states in the Lifeline program.  We propose to eliminate the Lifeline Broadband 
Provider category of ETCs and the state preemption on which it is based.  We also seek comment on ways 
to encourage cooperative federalism between the states and the Commission to make the National Verifier 
a success. 
1. Reauthorizing State Commissions to Designate Lifeline ETCs 
55. In this section, we address the serious concerns that have been raised that the 
Commission’s creation of Lifeline Broadband Provider (LBP) ETCs and preemption of state 
commissions’ designations of such LBPs was inconsistent with the role contemplated for the states in 
Section 214 of the Act.
133
  In the 2016 Lifeline Order, the Commission established a framework to 
designate providers as Lifeline Broadband Providers (LBPs), eligible to receive Lifeline reimbursement 
for qualifying broadband Internet access service provided to eligible low-income consumers, but not 
Lifeline voice service.
134
  The Commission’s role in this framework was premised on the Commission’s 
authority to designate a common carrier “that is not subject to the jurisdiction of a State commission.”
135
  
                                                     
130
See The iPass Global Wi-Fi Network, iPass (last visited Oct. 24, 2017), https://www.ipass.com/mobile-network/.  
See also, e.g., iPass hotspot locations in Indianola, Iowa, and Forrest City, Arkansas, https://hotspot-
finder.ipass.com/united-states/indianola-iowa, https://hotspot-finder.ipass.com/united-states/forrest-city-arkansas
(last visited Oct. 24, 2017). 
131
TracFone Reply at 7 & n. 12; Oklahoma PUC Comments at 4.
132
TracFone Reply at 7.
133
See generally National Association of Regulatory Commissioners v. FCC, Pet. for Review, Case No. 16-1170 
(filed D.C. Cir. June 3, 2016), http://pubs.naruc.org/pub/7DC24780-CCC2-F594-7AEE-9C4250CD861D; National 
Association of Regulatory Commissioners Comments, WC Docket Nos. 09-197, 11-42 (Mar. 16, 2017).
134
See 2016 Lifeline Order, 31 FCC Rcd 3962, 4040-68, paras. 217-89.
135
Id. at 4048, para. 240 (citing 47 U.S.C. § 214(e)(6)).
Federal Communications Commission FCC 17-155
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And to effectuate that policy goal, the agency preempted state authority in a manner wholly inconsistent 
with Section 214 of the Communications Act, which gives primary responsibility for designation of 
eligible telecommunications carriers to the states.
136
  Based on these circumstances and on further review, 
we believe the Commission erred in preempting state commissions from their primary responsibility to 
designate ETCs under section 214(e) of the Act and seek comment on this issue.
137
  
56. The 2016 Lifeline Order’s preemption of state designation of LBPs was challenged by 
the National Association of Regulatory Utility Commissioners (NARUC) and a coalition of states led by 
the State of Wisconsin (State Petitioners).
138
  Among other issues, NARUC and the State Petitioners 
contend the Commission’s decision to preempt states from exercising any authority to designate 
broadband providers as LBPs violates the Act and the Administrative Procedure Act.  The United States 
Court of Appeals for the D.C. Circuit has remanded the legal challenges to the Commission for further 
proceedings.
139
  The legal challenges to the LBP designation process question the Commission’s legal 
authority to create an LBP designation process and designate providers under that process.  Additionally, 
members of Congress have introduced legislation to reverse the Commission’s preemption and clarify 
that the Communications Act of 1934 and the Telecommunications Act of 1996 cannot be interpreted to 
limit the jurisdiction of any state to designate an ETC.
140
  Would reversing the preemption in the 2016 
Lifeline Order resolve the legal issues surrounding LBPs and their designation process?  How would 
reversing the preemption in the 2016 Lifeline Order impact the future of LBPs in the Lifeline program?  
Should ETCs be designated through traditional state and federal roles either for purposes of only Lifeline 
or for both the high-cost and Lifeline programs?
141
What rule changes would be needed to restore the 
traditional state and federal roles for ETC designations?  We seek comment on this proposal and on any 
alternatives.   
57. The 2016 Lifeline Order “applaud[ed] state programs for devoting resources designed to 
help close the affordability gap for communications services.”
142
  Although not formally constraining how 
states administer those state programs for voice and/or broadband support, the Order recognized that its 
approach to ETC designations could create inconsistencies with the operation of those state programs.
143
  
States continue to play an important role in ensuring affordability of voice, and also supporting 
broadband; accordingly, reversing the preemption in the 2016 Lifeline Order may resolve inconsistencies 
between state and federal efforts and provide benefits to the operation of state and federal programs.  We 
seek comment on these issues. 
58. We also propose eliminating stand-alone LBP designations to better reflect the structure, 
operation, and goals of the Lifeline program, as set forth in the Communications Act, as well as related 
state programs.  For example, the existence of an LBP designation enables entities to participate in the 
Lifeline program without assuming any obligations with respect to voice service.
144
  We seek comment on 
this proposal.
                                                     
136
47 U.S.C. § 214(e)(2), (3). 
137
See 47 U.S.C. § 214(e).
138
See NARUC v. FCC, Case No. 16-1170 (D.C. Cir., filed June 3, 2016); Wisconsin v. FCC, Case No. 16-1219 
(D.C. Cir. filed June 30, 2016).
139
NARUC v. FCC, Case No. 16-1170, Order (D.C. Cir., Apr. 19, 2017) (granting the Commission’s motion for 
voluntary remand).
140
See Preserving State Commission Oversight Act of 2017, S. 421, 115
th
Cong. (2017). 
141
See 47 U.S.C. § 214(e).
142
2016 Lifeline Order, 31 FCC Rcd at 4067-68, para. 287.
143
See id. at 4067-68, paras. 286-89.
144
Id. at 4094, para. 361.
Federal Communications Commission FCC 17-155
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2. Partnering with States for the Successful Implementation of the National 
Verifier
59. In the 2016 Lifeline Order, the Commission established the National Verifier to make 
eligibility determinations and perform a variety of other functions necessary to enroll eligible subscribers 
into the Lifeline Program.  As outlined in the 2016 Lifeline Order, “[t]he Commission’s key objectives 
for the National Verifier are to protect against and reduce waste, fraud, and abuse; to lower costs to the 
Fund and Lifeline providers through administrative efficiencies; and to better serve eligible beneficiaries 
by facilitating choice and improving the enrollment experience.”
145
  A strong cooperative effort between 
the Commission and its state partners is critical to advancing these laudable objectives.
146
  In this Notice 
of Proposed Rulemaking, we seek comment on ways to ensure the Commission can partner with states to 
facilitate the successful implementation of the National Verifier.  
60. We seek comment on ways states can be encouraged to work cooperatively with the 
Commission and USAC to integrate their state databases into the National Verifier without unnecessary 
delay.  Because the National Verifier is a critical part of improving the integrity of the Lifeline program, it 
is important all states join the National Verifier in a timely manner.  To protect the integrity of the 
enrollment and eligibility determination process, we seek comment on whether new Lifeline enrollments 
should be halted in a state at any point if the launch of the National Verifier has been unnecessarily 
delayed in that state.  For example, when the plan for National Verifier initiation in a state falls behind
schedule, what steps should be taken to ensure no ineligible subscribers enroll in the program because of 
the delay?  What is the proper response when the scheduled launch of the National Verifier in a state is 
not accomplished by the announced date and carriers relying on the launch announcement are unprepared 
to handle eligibility determinations?  Should enrollments be halted for all consumers in the state or only 
for those whose eligibility must be verified using a state database?
61. We seek comment on other steps to encourage cooperation and collaboration between the 
states, the Commission, and USAC to ensure the National Verifier is launched in a state in a timely 
fashion.  Should the Commission adopt specific benchmarks or proposed timelines to guide this process?  
Are there ways to streamline the process of developing and executing the agreements necessary to allow 
data sharing between states and the Commission?  In the event a state has demonstrated an unwillingness 
to engage in the effort to deploy the National Verifier or to do so at reasonable costs, are there other 
measures the Commission should take?  In these situations, USAC is able to conduct a manual review of 
all eligibility documentation for potential Lifeline subscribers in that state but that measure is costly, 
burdensome, and inefficient; we believe program expenses would be better directed towards electronic 
connections between state systems and the National Verifier platform.  How can we encourage states to 
work cooperatively with USAC to avoid unnecessary costs?
B. Improving Lifeline’s Effectiveness for Consumers
62. The Lifeline program has an important role in bringing digital opportunity to low-income 
Americans.  We believe that changes to Lifeline policies are warranted to ensure the Commission’s 
administration of Lifeline support is faithful to Congress’s stated universal service goals and is focused on 
helping low-income households obtain the benefits that come from access to modern communications 
networks.  In this section, we propose policy changes to focus Lifeline support on encouraging service 
provider investment in networks that offer quality, affordable broadband service.  We also seek comment 
on the Commission’s legal authority for these proposed changes.  
                                                     
145
2016 Lifeline Order, 31 FCC Rcd at 4007, para. 128.
146
See Testimony of Chris Nelson, Public Utilities Commissioner from the State of South Dakota, Senate 
Committee on Commerce, Science, and Transportation, at 2 (Sept. 6, 2017), 
http://puc.sd.gov/commission/News/2017/nelsontestimony.pdf (“State commissioners believe in cooperative 
federalism. That means we believe that state and federal regulators share a role in properly managing programs such 
as Lifeline.”). 
Federal Communications Commission FCC 17-155
24
1. Focusing Lifeline Support to Encourage Investment in Broadband-Capable 
Networks
63. Lifeline Support for Facilities-Based Broadband Service.  We seek comment on focusing 
Lifeline support to encourage investment in broadband-capable networks.  As explained in the 2016 
Lifeline Order, broadband service is increasingly important for participation in the 21st Century 
economy.
147
  However, broadband service is not as ubiquitous or as affordable as voice service.
148
  This is 
particularly true in rural and rural Tribal areas, where broadband deployment lags behind other areas of 
the country.
149
  
64. Section 254(b) of the Act requires the Commission to base its policies for the 
preservation and advancement of universal service on the principles that “[q]uality services should be 
available at just, reasonable, and affordable rates,” “[a]ccess to advanced telecommunications and 
information services shall be provided in all regions of the Nation” and “[c]onsumers in all regions of the 
Nation … should  have access to … advanced telecommunications and information services, that are 
reasonably comparable to those services provided in urban areas and that are available at rates that are 
reasonably comparable to rates charged for similar services in urban areas.”
150
  
65. Mindful of the direction given to the Commission by Congress, we believe Lifeline 
support will best promote access to advanced communications services if it is focused to encourage
investment in broadband-capable networks.  We therefore propose limiting Lifeline support to facilities-
based broadband service provided to a qualifying low-income consumer over the ETC’s voice- and 
broadband-capable last-mile network.  We believe this proposal would do more than the current 
reimbursement structure to encourage access to quality, affordable broadband service for low-income 
Americans.  In particular, Lifeline support can serve to increase the ability to pay for services of low-
income households.  Such an increase can thereby improve the business case for deploying facilities to 
serve low-income households.  In this way, Lifeline can serve to help encourage the deployment of 
facilities-based networks by making deployment of the networks more economically viable.  Furthermore, 
the competitive impacts of having multiple competing facilities-based networks can also help to lower 
prices for consumers.
151
  If Lifeline can help promote more facilities, it can then indirectly also serve to 
reduce prices for consumers.
                                                     
147
2016 Lifeline Order, 31 FCC Rcd at 3966, para. 13.
148
See 2016 Lifeline Order, 31 FCC Rcd at 3982, para. 55; Monica Anderson, Pew Research Center, Digital Divide 
Persists Even as Lower Income Americans Make Gains in Tech Adoption (2017), http://www.pewresearch.org/fact-
tank/2017/03/22/digital-divide-persists-even-as-lower-income-americans-make-gains-in-tech-adoption/; Pew 
Research, Internet/Broadband Fact Sheet (2017), http://www.pewinternet.org/fact-sheet/internet-broadband/; Adie 
Tomer, Elizabeth Kneebone, Ranjitha Shivaram, Brookings Institute, Signs of Digital Distress, Mapping Broadband 
Availability and Subscription in American Neighborhoods, at 11 (2017), https://www.brookings.edu/wp-
content/uploads/2017/09/broadbandreport_september2017.pdf; John Horrigan, Maeve Duncan, Pew Research 
Center, Home Broadband 2015, at 3 (2015), http://www.pewinternet.org/2015/12/21/home-broadband-2015/. 
149
See, e.g., 2016 Broadband Progress Report, 31 FCC Rcd at 702, 731-35, 738-40, 750-51, paras. 6, 79-80, 82-83, 
90-91, 119-21, 126, & Tables 1, 2, 4, and 8; Adie Tomer, Elizabeth Kneebone, Ranjitha Shivaram, Brookings 
Institute, Signs of Digital Distress, Mapping Broadband Availability and Subscription in American Neighborhoods, 
at 15-17 (2017), https://www.brookings.edu/wp-content/uploads/2017/09/broadbandreport_september2017.pdf; 
Andrew Perrin, Pew Research Center, Digital Gap Between Rural and Nonrural America Persists (2017), 
http://www.pewresearch.org/fact-tank/2017/05/19/digital-gap-between-rural-and-nonrural-america-persists/. 
150
47 U.S.C. § 254(b)(1)-(3).
151
See Letter from Thomas J. Navin, Counsel to Corning Inc., to Marlene Dortch, Secretary FCC, WC Docket No. 
17-84, Attach. A (Oct. 20, 2017), https://ecfsapi.fcc.gov/file/1020823627435/Corning%20Ex%20Parte.pdf (Hal 
Singer, Ed Naef, Alex King, Economists Incorporated and CMA Strategy Consulting, Assessing the Impact of 
Removing Regulatory Barriers on Next Generation Wireless and Wireline Broadband Infrastructure Investment, at 
42-5 (June 2017) (discussing consumer price declines resulting from increased competition, including “a decline in 
(continued….)
Federal Communications Commission FCC 17-155
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66. We seek comment on this proposal.  What rule changes would be necessary to implement 
this proposal?  How can the Commission ensure Lifeline support is only disbursed to ETCs that provide 
broadband service over facilities-based networks?  How would this proposal impact the availability and 
affordability of Lifeline broadband services?  Are there other steps the Commission should take to focus 
Lifeline support to encourage investment in broadband networks?  
67. Discontinuing Lifeline Support for Non-Facilities-Based Service.  Next, we seek 
comment on discontinuing Lifeline support for service provided over non-facilities-based networks, to 
advance our policy of focusing Lifeline support to encourage investment in voice- and broadband-capable 
networks.  We propose limiting Lifeline support to broadband service provided over facilities-based 
broadband networks that also support voice service.  Under this proposal, Lifeline providers that are 
partially facilities-based may obtain designation as an ETC, but would only receive Lifeline support for 
service provided over the last-mile facilities they own.  We seek comment on how the Commission 
should define “facilities” for this purpose.  Should the Commission adopt the same definition of facilities 
that the Fourth Report and Order uses for enhanced support on rural Tribal lands?  If the Commission 
adopts different facilities-based criteria for Lifeline generally, should we also use that definition of 
“facilities” for purposes of enhanced Tribal support?  We seek comment on any other rule changes that 
would be necessary to implement this proposal.  
68. How would this proposal impact the number of Lifeline providers participating in the 
program and the availability of quality, affordable Lifeline broadband services?  Are there other means of 
providing broadband service that should be considered facilities-based for purposes of the Lifeline 
program?  How should the facilities-based requirement apply in a situation where a reseller and a 
facilities-based provider form a joint venture to provide Lifeline services?  How should the Commission 
ensure Lifeline support is only issued to ETCs that satisfy the facilities requirement?  Would the facilities-
based requirement further the Commission’s goal of eliminating waste, fraud, and abuse in the Lifeline 
program?  On this last point, we note that the vast majority of Commission actions revealing waste, fraud, 
and abuse in the Lifeline program over the past five years have been against resellers, not facilities-based 
providers.  And the proliferation of Lifeline resellers in 2009 corresponded with a tremendous increase in 
households receiving multiple subsidies under the Lifeline program.  How do the incentives of resellers 
differ from those who use their own last-mile facilities?  Why have waste, fraud, and abuse increased—
including multiple-subsidies-per-household problems, self-certification problems, authentication-of-
subscriber problems, phantom-subscriber problems, and eligibility problems—since the advent of 
multiple resellers within the program in 2009?
69. We do not expect that this approach would impact the forbearance relief from section 
214(e)(1)(A)’s facilities requirement.  However, we recognize that not reversing this forbearance relief 
may create a tension that could be relieved by making the requirements for obtaining a Lifeline-only ETC 
designation under section 214(e)(1)(A) match the facilities requirement for receiving Lifeline 
reimbursement.  We seek comment on such matters.  
70. Alternatively, should the Commission reverse the forbearance from section 
214(e)(1)(A)’s facilities requirement?  If the Commission found that forbearing from the facilities-based 
requirement was no longer in the public interest, what other findings, if any, would the Commission need 
to make under section 10?  If the Commission rescinded this forbearance, what effective date would give 
impacted ETCs and their customers an appropriate amount of time to make the transition?  Furthermore, 
if the Commission were to rescind forbearance from the facilities requirement, should it reconsider its 
interpretation of that requirement?  For example, our current rules state that an ETC’s facilities need not 
be located within the relevant service area as long as the carrier uses them within the designated service 
area.
152
  But the Commission has previously noted that “[s]everal ETCs, some of which call themselves 
(Continued from previous page)                                                            
the monthly standard broadband price of between approximately $13 and $18 for plans for download speeds 
between 25 Mbps and 1 Gbps” when a competitor offering Gigabit Internet is present).  
152
47 CFR § 54.201(g).
Federal Communications Commission FCC 17-155
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‘facilities-based resellers,’ have previously maintained they are facilities-based based on facilities that 
provision operator and/or directory assistance services, which are provided in conjunction with their retail 
offering.”
153
  We seek comment on revising those rules to make clear that a carrier is only facilities-based 
under our rules if its facilities are located in its service area and it uses those facilities to provide last-mile 
service to its supported customers.  We also note that the Act defines a facilities-based carrier as one that 
offers service “either using its own facilities or a combination of its own facilities and resale of another 
carrier’s services.”
154
  We seek comment on how to balance Congress’s expectation that ETCs would 
invest universal service support in the areas they serve
155
and its recognition that some amount of resale 
should be permissible.  We seek comment on any other formulations of this rule we should consider to 
ensure that facilities-based Lifeline carriers are in fact reinvesting the support they receive in facilities in 
the communities they serve.
71. We also seek comment on the transition period for implementing this approach.  If 
Lifeline support is only provided to ETCs that provide Lifeline broadband services over facilities-based 
voice- and broadband-capable last-mile networks, what should the transition period and transition process 
be for non-facilities-based providers currently participating in the Lifeline program and their customers?  
Should the transition process consider whether there is a facilities-based provider in a specific market that 
intends to continue providing Lifeline service?  If so, what geographic area would be the appropriate 
focus of this determination?  What sources could the Commission use to determine whether a facilities-
based Lifeline provider is present in and plans to continue offering Lifeline service in a particular 
geographic market?  What other factors should the Commission consider in developing the transition 
process?  What would be an appropriate transition period for impacted ETCs and their customers?  
Should the Commission provide a three-year support phase down period for non-facilities-based ETCs 
participating in the Lifeline program, or would a shorter period be appropriate?  How would the transition 
process and period differ if the Commission reversed the forbearance from section 214(e)(1)(A)’s 
facilities requirement?  
72. We also seek comment on how to determine whether existing or future resellers have 
fully complied with the statute’s exhortation that universal service funding must be spent “only for the 
provision, maintenance, and upgrading of facilities and services for which the support is intended.”
156
  
Have Lifeline resellers passed through all Lifeline funding to their underlying carriers to ensure federal 
funding is appropriately spent on the required “facilities and services” rather than non-eligible expenses 
like free phones and equipment?  What accounting measures have Lifeline resellers instituted to ensure 
that Lifeline funding has only been used for eligible expenses?  Would eliminating resellers from the 
program address any concerns about the appropriate use of federal funds by Lifeline providers?  Would 
limiting payments to resellers to what they pay their wholesale carriers fully effectuate the congressional 
intent of section 254(e)?  What auditing or other review should the Commission or USAC carry out to 
ensure that resellers that have been receiving funds used them properly?
73. Alternatively, we seek comment on TracFone’s suggestions that we minimize waste, 
fraud, and abuse in the Lifeline program through “conduct-based requirements.”
157
  One form of conduct-
based requirement would be to suspend for a year or disbar any Lifeline ETC with sufficiently high 
improper payment rates, whether on the basis of Payment Quality Assurance reviews or program audits.  
We seek comment on such a conduct-based requirement.  If we were to adopt such a requirement, what 
                                                     
153
2012 Lifeline Reform Order, 27 FCC Rcd at 6854, para. 498.
154
47 U.S.C. § 214(e)(1)(A).
155
See 47 U.S.C. § 254(e).
156
47 U.S.C. § 254(e).
157
See Letter from Mitchell F. Brecher, Counsel for TracFone Wireless Inc., to Marlene H. Dortch, Secretary, FCC, 
WC Docket No. 17-287 et al., at 1 and Attach B. (filed Nov. 9, 2017).
Federal Communications Commission FCC 17-155
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should be the measuring stick we use and what should be the trigger?  Should we use a percent of Lifeline 
revenues improperly paid in a given state?  Should we establish a threshold amount of improper 
payments, such as $50,000, as a trigger for suspension in a state?  What levels should be established for 
disbarment?  And should we apply such a requirement to all Lifeline providers, as TracFone suggests, or 
only wireless resellers, the historic source of most of the Commission’s enforcement actions and 
investigations with respect to waste, fraud, and abuse?  Another conduct-based requirement could be the 
suspension of companies that regularly engage in fraud-related conduct—such as practices that TracFone 
has previously suggested eliminating from the program.
158
  Would banning such practices and suspending 
those who engaged in them mitigate our concerns about rampant waste, fraud, and abuse?  Would any of 
the conduct-based requirements minimize waste, fraud, and abuse in the Lifeline program to the same 
extent as the proposed facilities requirement?  How could TracFone’s proposals be implemented with 
minimal additional administrative burden on Lifeline service providers?  How would such proposals 
ensure that Lifeline support is being appropriately used to advance the deployment of broadband-eligible 
networks?
74. Continuing the Phase Down of Lifeline Support for Voice Service.  We also seek 
comment on continuing the phase down of Lifeline support for voice-only services.  In the 2016 Lifeline 
Order, the Commission adopted rules to gradually phase out Lifeline support for voice-only services to 
further the Commission’s goal of transitioning to a broadband-focused Lifeline program.
159
  The current 
rules provide that Lifeline support will decrease to zero dollars on December 1, 2021, with an exception 
permitting Lifeline voice support to continue in Census blocks where there is only one Lifeline 
provider.
160
  In deciding to phase down Lifeline support for voice-only service, the Commission explained 
that continuing to provide Lifeline support for voice-only service may “artificially perpetuate a market 
with decreasing demand” and may incent Lifeline providers to “avoid providing low-income consumers 
with modern services as Congress intended.”
161
  The Commission also cited the declining prices of fixed 
and wireless voice-only services and the availability of a wide-range of voice-only services in the 
marketplace.
162
75. Continuing the phase down of Lifeline support is faithful to section 254(b)’s mandates 
and would support our proposal to focus Lifeline support to encourage investment in broadband-capable 
networks.
163
  We acknowledge that some parties have argued against the phase down of Lifeline support 
                                                     
158
See id., Attach. B.
159
2016 Lifeline Order, 31 FCC Rcd at 3981, 3982-83, 4004, paras. 52, 55, 119. See also 47 CFR §§ 
54.403(a)(2)(i)-(iv).
160
47 CFR §§ 54.403(a)(2)(iv).
161
2016 Lifeline Order, 31 FCC Rcd at 3984, para. 57.
162
See 2016 Lifeline Order, 31 FCC Rcd at 3982, para. 55 (“Even outside the Lifeline program, costs decreases have 
led to a large variety of reasonably priced voice options provided by providers.”); Id. at 3983, para. 56 
(“Technological evolution and market dynamics have also resulted in more choices and decreasing prices for fixed 
voice service.”); Id. at 3984, para. 57 (“Mindful of Congress’s section 254 mandate that ‘[q]uality services should be 
available at just, reasonable and affordable rates’, we believe that the Lifeline program should directly support those 
services that are otherwise unaffordable to consumers, but for a Lifeline discount.”).
163
See 47 U.S.C. § 254(b)(1)-(3).  See also 2016 Lifeline Order, 31 FCC Rcd at 3982, para. 55; Monica Anderson, 
Pew Research Center, Digital Divide Persists Even as Lower Income Americans Make Gains in Tech Adoption 
(2017), http://www.pewresearch.org/fact-tank/2017/03/22/digital-divide-persists-even-as-lower-income-americans-
make-gains-in-tech-adoption/; Pew Research, Internet/Broadband Fact Sheet (2017), 
http://www.pewinternet.org/fact-sheet/internet-broadband/; Adie Tomer, Elizabeth Kneebone, Ranjitha Shivaram, 
Brookings Institute, Signs of Digital Distress, Mapping Broadband Availability and Subscription in American 
Neighborhoods, at 11 (2017), https://www.brookings.edu/wp-
content/uploads/2017/09/broadbandreport_september2017.pdf; John Horrigan, Maeve Duncan, Pew Research 
Center, Home Broadband 2015, at 3 (2015), http://www.pewinternet.org/2015/12/21/home-broadband-2015/.
Federal Communications Commission FCC 17-155
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for voice service, citing, among other concerns, the lack of affordable of voice service.
164
However, we 
expect that even without Lifeline voice support, low-income consumers would be able to obtain quality, 
affordable voice service in urban areas.  Based on the 2018 Urban Rate Survey, several providers charge 
monthly rates of fifteen dollars or less for fixed voice-only service, and the national average monthly rate 
for fixed voice-only service is $25.50.
165
  The 2016 Universal Service Monitoring Report indicates that 
telephone expenses represent under four percent of after-tax income for low-income households.
166
Therefore, we expect that even without Lifeline support for voice-only service, the monthly cost of such 
service in urban areas would represent a small percentage of low-income households’ after-tax income.  
We seek comment on continuing the phase down of Lifeline support for voice-only service.  Should the 
Commission make any changes to the current schedule for phasing out Lifeline support for voice services 
to support the policy changes we propose in this section?  Should the Commission retain the exception 
permitting Lifeline support for voice services after December 1, 2021 in areas where there is only one 
Lifeline provider?
167
  Would retaining this exception impede the adoption of Lifeline broadband service 
or investment in broadband-enabled networks?
76. In contrast, it is unclear whether low-income consumers would be able to obtain quality, 
affordable voice service in rural areas without Lifeline voice support. The Commission’s rules require
high-cost ETCs to offer voice service at rates that are reasonably comparable to the rates for similar 
services in urban areas.
168
  Although such rates may be affordable in theory, they may not be in practice:  
The 2018 reasonable-comparability benchmark for voice services is $45.38—almost double the average 
urban rate.  We accordingly seek comment on eliminating the phase down of Lifeline support for voice-
only service in rural areas.  Would eliminating the phase down be the best way to ensure that consumers 
in rural areas are offered affordable voice services?  Should voice-only support be limited to a subset of 
rural areas where voice rates are actually above the urban average?  If so, by how much?  And how 
should we determine the areas where voice-only support is available?  Would offering voice-only support 
to rural Tribal lands ensure more affordable voice services in those areas?  If so, what should be the level 
of support offered compared to the amount of support available for broadband? 
77. Legal Authority.  We believe the Commission has authority under Section 254(e) of the 
Act to provide Lifeline support to ETCs that provide broadband service over facilities-based broadband-
capable networks that support voice service.  Section 254(e) provides that a carrier receiving universal 
                                                     
164
See, e.g., NTCA/WTA Petition for Reconsideration, WC Docket No. 11-42 et al., at 6-7 (filed June 23, 2016); 
TracFone Petition for Reconsideration, WC Docket No. 11-42 et al., at 2-6 (filed June 23, 2016); Petition for 
Reconsideration of the National Association of State Utility Consumer Advocates (NASUCA), WC Docket 11-42 et 
al., at 3-4 (filed June 23, 2016) (NASUCA Petition); Joint Lifeline ETC Petitioners’ Petition for Partial 
Reconsideration and Clarification, WC Docket No. 11-42 et al., at 9-11 (filed June 23, 2016).  
165
See 2018 Urban Rate Survey, Voice Data, Column J, Rows 423, 496, 501, 763, 788,
https://www.fcc.gov/general/urban-rate-survey-data-resources; Wireline Competition Bureau Announces Results of 
2018 Urban Rate Survey for Fixed Voice and Broadband Services, Posting of Survey Data and Explanatory Notes, 
and Required Minimum Usage Allowance for ETCs Subject to Broadband Public Interest Obligations for all United 
States Carriers, Including Carriers in Alaska, Public Notice, DA 17-1093, at 1(WCB Nov. 8, 2017) (Urban Rate 
Survey Public Notice).
166
See Universal Service Monitoring Report, CC Docket No. 96-45, et al., at 57, Table 6.12 (2016),  
https://apps.fcc.gov/edocs_public/attachmatch/DOC-343025A1.pdf.  
167
47 CFR § 54.403(a)(2)(v).  
168
USF/ICC Transformation Order, 26 FCC at 17693, para. 81 aff’d sub nom. In re: FCC 11-161, 753 F.3d 1015 
(10th Cir. 2014); 47 C.F.R. § 54.313(a)(2) (“Any recipient of high-cost support shall provide the following…A 
certification that the pricing of the company’s voice services is no more than two standard deviations above the 
applicable national average urban rate for voice service, as specified in the most recent public notice issued by the 
Wireline Competition Bureau and Wireless Telecommunications Bureau.”).  The 2018 reasonable comparability 
benchmark for fixed voice service is $45.38.  Urban Rate Survey Public Notice at 1.
Federal Communications Commission FCC 17-155
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service support “shall use that support only for the provision, maintenance, and upgrading of facilities and 
services for which the support is intended.”
169
  Our proposed changes to Lifeline support comport with the 
Commission’s authority under Section 254 because voice service would continue to be defined as a 
supported service under the Commission’s rules, and the networks receiving Lifeline support would also 
support voice service.
170
  Thus, under the proposed changes, Lifeline support would be used “for the 
provision, maintenance, and upgrading of facilities and services for which the support is intended.”
171
  
This legal authority does not depend on the regulatory classification of broadband Internet access service 
and, thus, ensures the Lifeline program has a role in closing the digital divide regardless of the regulatory 
classification of broadband service.  
78. Relying on the Commission’s authority under Section 254(e) for the proposed changes to 
Lifeline support would also better reconcile the Commission’s authority to leverage the Lifeline program 
to encourage access to broadband with the Commission’s efforts to promote access to broadband through 
high-cost support.
172
  In the universal service high-cost program, the Commission relied on section 254(e) 
as its authority to require ETCs receiving support through the Connect America Fund (including the 
Mobility Fund) or the existing high cost-support mechanisms to invest in broadband-capable networks, 
but declined to add broadband Internet access service to the list of supported services.
173
  In adopting this 
requirement, the Commission explained that Section 254(e) grants the Commission the authority to 
“support not only voice telephony service but also the facilities over which it is offered” and that 
Congress’s use of the words “services” and “facilities” in Section 254(e) provides the “Commission the 
flexibility not only to designate the types of telecommunications services for which support would be 
provided, but also to encourage the deployment of the types of facilities that will best achieve the 
principles set forth in section 254(b) and any other universal service principle that the Commission may 
adopt under section 254(b)(7).”
174
The Commission further explained that it has a “‘mandatory duty’ to 
adopt universal service policies that advance the principles outlined in section 254(b) and we have the 
authority to ‘create some inducement’ to ensure that those principles are achieved.”
175
  In 2014, the U.S. 
Court of Appeals for the Tenth Circuit upheld the Commission’s interpretation of its section 254(e) 
authority in the USF/ICC Transformation Order.
176
  
79. We seek comment on the Commission’s legal authority to adopt the proposed changes to 
Lifeline support.  Are there other sources of authority that allow the Commission to make these changes 
to Lifeline support proposed in this section?  
2. Enabling Consumer Choice
80. We seek comment on ways the Lifeline program can responsibly empower Lifeline 
subscribers to obtain the highest value for the Lifeline benefit through consumer choice in a competitive 
market.  In particular, we seek comment on a request from TracFone Wireless, Inc. (TracFone) to allow 
providers to meet the minimum service standards through plans that provide subscribers with a particular 
                                                     
169
47 U.S.C. § 254(e).
170
47 CFR § 54.401(a)(2).  
171
47 U.S.C. § 254(e).
172
See. e.g., USF/ICC Transformation Order, 26 FCC Rcd at 17685-87, paras. 64-65 (2011), aff’d sub nom. In re: 
FCC 11-161, 753 F.3d 1015 (10th Cir. 2014).
173
See USF/ICC Transformation Order, 26 FCC Rcd at 17686-87, para. 65.
174
Id. at 17685, para. 64.  
175
Id. at 17685, para. 65.
176
See In re: FCC 11-161, 753 F.3d at 1046-1048.
Federal Communications Commission FCC 17-155
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number of “units” that can be used for either voice minutes or broadband service.
177
  TracFone argues that 
the Bureau’s previous guidance that such “units” plans do not meet the minimum service standards was 
given without public comment and represented an improper reading of the relevant rule.
178
  Should the 
Commission now allow “units” plans to receive reimbursement from the Lifeline program?  What impact 
would these plans have on consumer choice in the Lifeline market?  Would such a decision require a 
change in the Commission’s rules?  If the Commission permits such plans, how should the Commission 
determine the appropriate support amount for those plans that combine voice and broadband options when 
the support level for voice service decreases to $7.25 while the support amount for broadband service 
remains at $9.25?
179
81. We also seek comment on eliminating the Lifeline program’s “equipment 
requirement.”
180
  That rule mandates that any Lifeline provider that “provides devices to its consumers[] 
must ensure that all such devices are Wi-Fi enabled,” prohibits “tethering charge[s],” and requires mobile 
broadband providers to offer devices “capable of being used as a hotspot.”
181
  The Commission never 
sought comment on such requirements before imposing them on all Lifeline providers and appears to lack 
the statutory authority to adopt or enforce such requirements.
182
  And although well-intentioned, the 
equipment mandate appears unnecessary if not affirmatively harmful.  As the 2016 Lifeline Order
recognized, a “substantial majority” of Americans already own Wi-Fi enabled smartphones, suggesting 
such mandates are not needed.
183
  And even those Lifeline providers that appear to support offering Wi-
Fi-enabled devices or hotspot-enabled equipment acknowledge the increased cost of such equipment,
184
and fail to explain why consumers should not be free to choose lower-cost options.  For example, the 
equipment mandate would prohibit a cable Lifeline provider from offering a low-cost modem rather than 
an integrated modem-Wi-Fi-router, even if a Lifeline consumer wanted to use a desktop computer to 
access the Internet.  What is more, the 2016 Lifeline Order lacked record evidence suggesting that these 
mandates would have any meaningful impact on the homework gap—their nominal purpose.  As such, it 
appears these mandates are more likely to widen the digital divide than close it.  And so, for the first time, 
we seek comment on whether the Commission may or should retain the equipment mandates in our rules, 
or whether they instead should be eliminated. 
3. Removing Unnecessary Regulation
82. In the interest of removing regulations that no longer benefit consumers, we propose to 
eliminate section 54.418 of the Commission’s rules, and we seek comment on this proposal.
185
  When 
enacted, section 54.418 required ETCs to notify their customers about the then-upcoming transition for 
over-the-air full power broadcasters from analog to digital service (the “DTV transition”) over the course 
                                                     
177
See Letter from Mitchell F. Brecher, Counsel for TracFone Wireless, Inc., to Marlene Dortch, Secretary, FCC, 
WC Docket No. 11-42 (filed Sept. 7, 2017).
178
See id. at 1; 47 CFR § 54.408.
179
See 47 CFR § 54.403(a).
180
See 47 CFR § 54.408(f).
181
See 47 CFR § 54.408(f)(1)-(3).
182
See 2016 Lifeline Order, 31 FCC Rcd at 4099, para. 374 (relying on a comment by an outside party to connect 
the Notice’s discussion of closing the homework gap to its imposition of three separate equipment mandates); id. at 
4099-100, para. 375 (reciting several provisions of the Act, none of which discuss consumer premises equipment or 
equipment mandates).
183
Id. at 4100, para. 376.
184
See, e.g., TracFone Petition for Reconsideration at 15-16 & n.21 (noting the high-cost of postpaid broadband 
plans that incorporate hotspot capabilities).
185
See 47 CFR § 54.418.
Federal Communications Commission FCC 17-155
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of several months in 2009.  The DTV transition has since occurred, and it appears that the rule is no 
longer relevant.  We seek comment on this proposal.   
C. Steps to Address Waste, Fraud, and Abuse
83. As the Commission embarks on an effort to reform the incentives and effectiveness of the 
Lifeline program, it is incumbent on the Commission to consider ways we can continue to fight and 
prevent waste, fraud, and abuse in the program.  To that end, we seek comment on a number of proposals 
to improve the Lifeline program’s administration to preserve program integrity.
1. Improving Program Audits
84. We propose to adjust the process that USAC currently uses to identify which service 
providers will be subjected to Lifeline audits by transitioning to a fully risk-based approach.  We propose 
to transition the independent audit requirements required by section 54.420 of the Commission’s rules 
away from a $5 million threshold and, instead, to move toward identifying companies to be audited based 
on established risk factors and taking into consideration the potential amount of harm to the Fund.  We 
propose modifying section 54.420 to allow companies to be selected based on risk factors identified by 
the Wireline Competition Bureau and Office of Managing Director, in coordination with USAC.  This 
approach allows for adaptable, independent audits that respond to risk factors that change over time.  We 
believe this new audit approach will better target waste, fraud, and abuse in the program and also utilize 
administrative resources more efficiently and effectively than in prior years.  
85. USAC’s current audit program consists of audits targeted to high-risk participants as well 
as mandatory audits of certain carriers, such as all carriers offering Lifeline for the first time and any 
carrier receiving more than $5 million in program support in a given year.  Recognizing that some 
mandatory audits were unnecessary, the Commission in the 2016 Lifeline Order directed the Office of 
Managing Director to work with USAC to modify the approach for determining the first-year Lifeline 
providers to be audited.
186
  The Commission intended this direction to prevent wasteful auditing of 
companies with limited subscriber bases, for example, and to allow USAC to more efficiently direct audit 
resources to higher risk providers.
187
The Commission’s rules still require carriers drawing more than $5 
million annually from the program to obtain independent biennial audits.
188
  
86. We seek comment on transitioning from the mandatory $5 million threshold for the 
biennial independent audits under section 54.420(a) of the Commission’s rules to a purely risk-based 
model of targeted Lifeline audits.  Under this approach, the Wireline Competition Bureau and Office of 
Managing Director, with support from USAC, would establish risk factors to identify the companies 
required to complete the biennial independent audits.  The independent audits would then follow the same 
process currently outlined in the rules with the identified carriers obtaining an independent auditor and 
following a standardized audit plan outlined by the Commission.
189
  We believe this approach would be 
more efficient and more effective at rooting out waste, fraud, and abuse in the program because the 
identified risk factors would better target potential violations than merely focusing on companies 
receiving large Lifeline disbursements.  A wider range of risk factors would be more responsive to 
identified program risks.  
87. We also seek comment on the impact and burdens the current audit program imposes on 
providers and whether this risk-based approach reduces those burdens.  What resources have the current, 
non-risk-based audits consumed in terms of employee time, recordkeeping systems, and other related 
audit costs?  Would transitioning all Lifeline audits to a risk-based model improve the accountability of 
                                                     
186
2016 Lifeline Order, 31 FCC Rcd at 4118, para. 427.
187
Id.
188
47 CFR § 54.420.
189
47 CFR § 54.420(a).
Federal Communications Commission FCC 17-155
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the program?  What factors are key indicators of potential abuse in the program?  Are there other risk 
factors the Wireline Competition Bureau, Office of Managing Director, and USAC should consider when 
identifying companies that should be subject to audit?  How many companies should be required to obtain 
independent audits? 
88. In its recent report, the Government Accountability Office (GAO) identified significant 
fraud and an absence of internal controls by performing undercover work to determine whether ETCs 
would enroll subscribers who are not eligible for Lifeline support.
190
  We seek comment on conducting 
similar undercover work as part of the audits administered by USAC or a third-party auditor acting on 
USAC’s behalf.  Would such auditing techniques be a cost-effective way to eliminate fraud in the 
program?  What administrative challenges would the Commission or USAC face in undertaking such 
undercover work?
89. Finally, we seek comment on how Lifeline program audits can ensure that Lifeline 
beneficiaries are actually receiving the service for which ETCs are being reimbursed.  What 
documentation should an audit require to demonstrate that service is being provided?  How should an 
audit detect and report instances where the subscriber’s equipment makes it difficult or impossible for the 
subscriber to use the relevant service?  Would changes to auditing methods on this issue require any 
changes to the Lifeline program rules?  Should the Commission require Lifeline service providers to 
demonstrate that they have addressed any issues that resulted in PQA failures above a certain threshold, 
or audit findings that result in recovery of more than a certain percentage of the disbursements during the 
audit period?
191
2. Improving Program Integrity in Eligibility Verification
90. The Lifeline enrollment and recertification processes continue to demonstrate significant 
weaknesses that open the program to waste, fraud, and abuse that harms contributing ratepayers and fails 
to benefit low-income subscribers. We therefore seek comment on a number of potential changes to the 
eligibility verification and reverification processes in the Lifeline program.  
91. ETC Representatives.  We seek comment on prohibiting agent commissions related to 
enrolling subscribers in the Lifeline program and on codifying a requirement that ETC representatives 
who participate in customer enrollment register with USAC.  We believe these measures may benefit 
ratepayers by reducing waste, fraud, and abuse in the program.  Many ETCs compensate sales employees 
and contractors with a commission for each consumer enrolled, and these sales and marketing practices 
can encourage the employees and agents of ETCs to enroll subscribers in the program regardless of 
eligibility, enroll consumers in the program without their consent, or engage in other practices that 
increase waste, fraud, and abuse in the program.
192
  
92. We seek comment on codifying in the Commission’s rules the USAC administrative 
requirement that ETCs’ customer enrollment representatives register with USAC in order to be able to 
submit information to the NLAD or National Verifier systems.  We also seek comment on the scope of 
the use of representatives’ information.  USAC is currently implementing an ETC representative 
registration database to help detect and prevent impermissible activity when enrolling or otherwise 
                                                     
190
See GAO, Telecommunications: Additional Action Needed to Address Significant Risks in FCC’s Lifeline 
Program, GAO-17-538, at 44-46 (2017), http://www.gao.gov/products/GAO-17-538.
191
Letter from Mitchell F. Brecher, Counsel for TracFone Wireless Inc., to Marlene Dortch, Secretary, FCC, WC 
Docket No. 17-287 et al., Attach B. (filed Nov. 9, 2017).
192
See Total Call Mobile, Inc., Order, 31 FCC Rcd 13204 (EB 2016); Testimony of FCC Commissioner Ajit Pai 
Before the Subcommittee on Communications and Technology of the United States House of Representatives 
Committee on Energy and Commerce, Oversight of the Federal Communications Commission, at 4-5 (July 12, 
2016), available at https://www.fcc.gov/document/commissioner-pai-statement-house-oversight-hearing (Pai 
Testimony).
Federal Communications Commission FCC 17-155
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working with USAC to enroll Lifeline subscribers.
193
  We are aware of certain practices of sales 
representatives resulting in improper enrollments or otherwise violating the Lifeline rules.
194
  These 
practices include data manipulation to defeat NLAD protections, using personally identifying information 
(PII) of an eligible subscriber to enroll non-eligible subscribers, and obtaining false certifications from 
subscribers.  USAC’s current administrative efforts to create this database of ETC representatives would 
also combat waste in the event a representative using impermissible enrollment tactics is engaged by 
multiple ETCs.  We seek comment on codifying the ETC representative registration requirement.  How 
should we define an ETC enrollment representative for these purposes?  What information would be 
necessary for the creation of this database?  What privacy and security practices should be used to 
safeguard this information?
93. We also seek comment on our ability to take appropriate enforcement action against 
registered ETC representatives who violate the rules governing Lifeline enrollment.  For the Commission 
to exercise its forfeiture authority for violations of the Act and its rules without first issuing a warning, the 
wrongdoer must hold (or be an applicant for) some form of authorization from the Commission, or be 
engaged in activity for which such an authorization is required.
195
  Toward this end, we seek comment on 
whether we should implement a certification or blanket authorization process applicable to ETC 
representatives who register with USAC.  How would this blanket authorization coincide with the 
Commission’s existing authority over Lifeline providers’ officers, agents, and employees under Section 
217 of the Act?
196
94. We also seek comment on whether the Commission should require ETCs to implement 
procedures that prohibit commission-based ETC personnel from verifying eligibility of Lifeline 
subscribers.  By prohibiting commissions, we hope to dis-incent improper, fraudulent, or otherwise illegal 
enrollment processes sometimes utilized by ETCs’ representatives.  We propose that those employees, 
agents, or third parties who receive a significant portion of their compensation based on the number of 
Lifeline subscribers they enroll in the program be precluded from determining eligibility.  We are 
concerned that ETCs implementing procedures barring commission-based personnel from reviewing and 
verifying subscriber eligibility certifications and documentation will reduce financial incentives for 
commission-based personnel to enroll ineligible subscribers.  Should this proposal preclude ETCs from 
using commission-based personnel altogether, or should it instead require ETCs to simply implement 
procedures precluding commission-based personnel from determining eligibility?  As an additional 
safeguard, should the Commission require Lifeline providers to ensure that service provider 
representatives involved in soliciting customers are separated from service provider representatives who 
are involved in the verification process?
197
95. NLAD Dispute Resolution.  We seek comment on requiring USAC to directly review 
supporting documents for manual NLAD dispute resolutions, including information regarding the ETC 
agent submitting the documentation.  We believe this requirement would reduce improper enrollments in 
                                                     
193
See Letter from Ajit V. Pai, Chairman, FCC, to Vickie Robinson, Acting Chief Executive Officer and General 
Counsel, USAC, at 4 (July 11, 2017), http://transition.fcc.gov/Daily_Releases/Daily_Business/2017/db0711/DOC-
345729A1.pdf. 
194
Id. at 1-4; GAO, Telecommunications: Additional Action Needed to Address Significant Risks in FCC’s Lifeline 
Program, GAO-17-538 (2017), http://www.gao.gov/products/GAO-17-538.
195
See 47 U.S.C. § 503(b).
196
See 47 U.S.C. § 217 (“In construing and enforcing the provisions of this chapter, the act, omission, or failure of 
any officer, agent, or other person acting for or employed by any common carrier or user, acting within the scope of 
his employment, shall in every case be also deemed to be the act, omission, or failure of such carrier or user as well 
as that of the person.”).
197
Letter from Mitchell F. Brecher, Counsel for TracFone Wireless Inc., to Marlene Dortch, Secretary, FCC, WC 
Docket No. 17-287 et al., at 1 and Attach B. (filed Nov. 9, 2017).
Federal Communications Commission FCC 17-155
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the program.  Currently, manual documentation review is required when a subscriber wishes to dispute an 
NLAD denial.
198
  An NLAD denial occurs when a subscriber fails one of the protective checks contained 
in the NLAD system.
199
  For example, if USAC’s automated identity check rejects a consumer’s 
application, that consumer may produce documentation verifying their identity, because the databases that 
are available to automatically verify identity are not comprehensive.
200
  A Lifeline subscriber may dispute 
an NLAD denial by submitting the appropriate documentation to the ETC.
201
  The ETC then reviews the 
documents, verifies the information at issue in the dispute, and processes the dispute resolution with 
USAC.
202
96. The current system’s reliance on carrier certification for dispute resolution has been 
questioned for making the Lifeline program vulnerable to waste, fraud, and abuse.
203
  Having USAC 
conduct actual document review associated with NLAD dispute resolutions would increase the 
accountability of the resolutions.  We seek comment on this proposal.  Do the associated costs and 
administrative burdens associated with such review justify this additional step?  If the Commission 
directed USAC to adopt this measure, what would be the optimal response time for USAC to process 
such disputes?  How should USAC collect the documentation and what privacy safeguards should be 
taken to protect that information?  Should USAC offer a list of acceptable documentation, and what 
documentation should qualify?  
97. Subscriber Recertification.  We seek comment on prohibiting subscribers from self-
certifying their continued eligibility during the Lifeline program’s annual recertification process if the 
consumer is no longer participating in the program they used to demonstrate their initial eligibility for the 
program.  Section 54.410(f) of the Commission’s rules allows subscribers to self-certify that they 
continue to be eligible for the Lifeline program if their eligibility cannot be determined by querying an 
eligibility database.
204
  This is true even where the subscriber is seeking to recertify under a different 
qualifying program than the one they used to demonstrate their initial eligibility.  Requiring eligibility 
documentation to be submitted in such cases would help to ensure the self-certification option for the 
eligibility recertification process is accurate and the subscriber is still eligible to participate in the Lifeline 
program through a different eligibility path.  Should we amend the Commission’s rules to require 
documentation be submitted when the subscriber attempts to recertify by self-certification only when the 
subscriber seeks to recertify under a different program than the one through which they initially 
demonstrated eligibility and cannot be recertified through an eligibility database?  Should we require 
USAC to review that documentation?  
98. Independent Economic Household Forms.  We next seek comment on limiting ETCs’ use 
of the Independent Economic Household (IEH) worksheet only when the consumer shares an address 
with other subscribers already enrolled in the Lifeline program.  The 2016 Lifeline Order amended the 
                                                     
198
See USAC, National Lifeline Accountability Database: Dispute Resolution, https://usac.org/li/tools/nlad/dispute-
resolution/default.aspx (last visited Oct. 24, 2017).
199
See id.
200
See USAC, Third Party Identity Verification (TPIV) Failure Resolution, http://www.usac.org/li/tools/nlad/
dispute-resolution/tpiv-failure-dr.aspx (last visited Oct. 24, 2017).
201
See USAC, National Lifeline Accountability Database: Dispute Resolution, https://usac.org/li/tools/nlad/dispute-
resolution/default.aspx (last visited Oct. 24, 2017).
202
See id.
203
Testimony of FCC Commissioner Ajit Pai Before the Subcommittee on Communications and Technology of the 
United States House of Representatives Committee on Energy and Commerce, Oversight of the Federal 
Communications Commission, at 4-5 (July 12, 2016), available at https://www.fcc.gov/document/commissioner-
pai-statement-house-oversight-hearing (Pai Testimony).
204
47 CFR § 54.410(f)(2).
Federal Communications Commission FCC 17-155
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language of section 54.410(g) of the Commission’s rules to require a prospective subscriber to complete 
an IEH worksheet upon initial enrollment and during any recertification in which the subscriber changes 
households and as a result shared an address with another Lifeline subscriber.
205
  The intended purpose of 
the IEH worksheet was for use when multiple independent households reside at the same residence.
206
  If 
an ETC collects an IEH worksheet from all subscribers regardless of whether another Lifeline subscriber 
resides at the same address, it is more difficult for USAC to monitor aggregate trends and particular 
ETCs’ use of the IEH worksheet to detect improper activity.  Prophylactic use of the household worksheet 
can therefore subvert the duplicate address protections and may result in increased waste, fraud, and 
abuse.  We seek comment on amending the language of section 54.404(b)(3) to only permit the use of an 
IEH worksheet after the ETC has been notified by the NLAD, or state administrator in the case of NLAD 
opt-out states, that the prospective subscriber resides at the same address as another Lifeline subscriber.
99. Additionally, we seek comment on other methods to prevent abuse of the IEH worksheet 
process.  Should the Commission direct USAC to develop a list of addresses known to contain multiple 
households?  The addresses would primarily be assisted-living and retirement facilities, homeless shelters, 
public housing, and similar institutions.  This list would enable USAC or the Commission to more 
effectively investigate addresses with high numbers of enrollments that do not appear to be physically or 
organizationally capable of housing many independent economic households.  How should this list of 
known multiple-household addresses impact whether an ETC may collect an IEH worksheet from the 
prospective Lifeline consumer?  Should the Commission require Lifeline applicants residing in multi-
person residences (e.g., homeless shelters, nursing homes, assisted living facilities) to submit a 
certification from the facility manager confirming that the applicant resides at the address and is not part 
of the same economic household as any other resident already receiving Lifeline support?
207
  What 
administrative approaches would reduce burdens on subscribers without creating vulnerabilities in the 
program’s integrity? 
100. More broadly, we seek comment on other dispute resolutions or “overrides” to Lifeline 
enrollment requirements that should be restricted or eliminated.  Are there other points of the enrollment 
process that rely on the consumer’s certification or manual document review in a way that irreparably 
weakens the integrity of the enrollment process?  We note that, currently, a consumer may go through a 
dispute resolution process if that consumer is not found in a third-party identity verification database, has 
the same address as another Lifeline subscriber, has an address not recognized by the U.S. Postal Service, 
or cannot be found in an available eligibility program database.  What additional steps should we institute 
as part of this resolution process to reduce the opportunity for abuse?  Should the Commission limit the 
ability of providers or subscribers to override those initial failures with additional documentation to 
prevent fraudulent or abusive practices?  
101. Other Measures.  Finally, we seek comment on whether there are other measures the 
Commission could take to further reduce waste, fraud, and abuse and improve transparency in the 
program.  Should the Commission require USAC to conduct ongoing targeted risk-based reviews of 
eligibility documentation or dispute resolution documentation?
208
  Should the Commission codify a 
requirement that subscribers be compared to the Social Security Master Death Index during the 
enrollment and recertification processes?
209
  Should the Commission amend its rules to require that a 
                                                     
205
47 CFR § 54.410(g); 2016 Lifeline Order, 31 FCC Rcd at 4138-39.
206
2015 Lifeline FNPRM, 30 FCC Rcd at 7886, para. 204; 2012 Lifeline Reform Order, 27 FCC Rcd 6690-91, para. 
77. 
207
Letter from Mitchell F. Brecher, Counsel for TracFone Wireless Inc., to Marlene Dortch, Secretary, FCC, WC 
Docket No. 17-287 et al., Attach B. (filed Nov. 9, 2017).
208
See Letter from Ajit Pai, Chairman, FCC, to Vickie Robinson, Acting CEO and General Counsel, USAC, at 1-3 
(July 11, 2017), http://transition.fcc.gov/Daily_Releases/Daily_Business/2017/db0711/DOC-345729A1.pdf.
209
See id. at 4.
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provider’s Lifeline reimbursement be based directly on the subscribers it has enrolled in the NLAD to 
prevent claims for “phantom” subscribers?
210
  Should the Commission prohibit Lifeline providers from 
distributing handsets in person to Lifeline consumers and, if so, should there be any exceptions?
211
  Are 
there additional measures the Commission should take to address waste, fraud, and abuse in the program?  
We seek comment on these proposals.
3. Transparency and State Partnerships
102. We seek comment on additional reports USAC could make public or available to state 
agencies to increase program transparency and accountability.  We seek comment on directing USAC to 
periodically report suspicious activity or trends to the Wireline Competition and Enforcement Bureaus, as 
well as the Office of Managing Director, and any relevant state agencies.  Suspicious activity would 
include trend analysis of NLAD exemptions, subscriber churn, TPIV failure rates, and IEH worksheet 
rates.  It will also include information gained from analytics on the National Verifier data.  In addition to 
more transparent reporting of NLAD exemptions, what information would state agencies need to access 
to increase the effectiveness of state enforcement in the Lifeline program?  Further, what information 
should USAC make accessible to other Lifeline stakeholders to increase the effectiveness and 
transparency of the program?
103. We seek comment on what additional reports USAC should make available for state 
agencies.  USAC currently makes available a number of Lifeline program statistics and reports showing 
eligible Lifeline population estimates, Lifeline participation, and ETCs receiving Lifeline support.
212
  In 
addition to this information, state agencies may request NLAD access for their respective state.
213
  This 
access allows the state agency to review detailed subscriber information in the NLAD to aid their own 
program administration and enforcement, including information regarding which carriers are providing 
service.
214
  In the 2016 Lifeline Order, the Commission directed USAC to publish Lifeline subscriber 
counts on the study area code (SAC) level to “increase[] transparency and continue[] to promote 
accountability in the program.”
215
D. Adopting a Self-Enforcing Budget
104. In the 2016 Lifeline Order, the Commission implemented a budget process for the 
Lifeline program.
216
  This budget approach, however, does not include any mechanism that automatically 
curtails disbursements beyond the budget amount absent further action by the Commission.  Instead, if 
Lifeline disbursements in a given year meet or exceed 90 percent of that year’s budget, initially set at 
$2.25 billion, the Bureau is required to issue a report to the full Commission detailing the reasons for the
increased spending and recommending next steps.
217
  
105. We propose to adopt a self-enforcing budget mechanism to ensure that Lifeline 
disbursements are kept at a responsible level and to prevent undue burdens on the ratepayers who 
                                                     
210
See id. at 2-3.
211
Letter from Mitchell F. Brecher, Counsel for TracFone Wireless Inc., to Marlene Dortch, Secretary, FCC, WC 
Docket No. 17-287 et al., Attach B. (filed Nov. 9, 2017).
212
See USAC, Lifeline Program: Process Overview Program Statistics, http://www.usac.org/li/about/process-
overview/program-stats.aspx (last visited Oct. 24, 2017).
213
See USAC, National Lifeline Accountability Database: State Agency Access, 
http://www.usac.org/li/tools/nlad/state-agency-access.aspx (last visited Oct. 24, 2017).
214
See id.
215
2016 Lifeline Order, 31 FCC Rcd at 4117, para. 423.
216
2016 Lifeline Order, 31 FCC Rcd at 4108-10, paras. 395-403.
217
Id. at 4110, para. 402.
Federal Communications Commission FCC 17-155
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contribute to the program.  We believe a self-enforcing budget is appropriate to ensure the efficient use of 
limited funds.
218
  We therefore propose to replace the approach adopted in the 2016 Lifeline Order and 
require an annual cap for Lifeline disbursements.  We intend for the program to automatically make 
adjustments in order to maintain the cap in the event the budget is exceeded.  
106. We seek comment on the operation of such a self-enforcing budget.  What is the 
appropriate period over which we should measure and enforce the cap?  Would a six-month period be 
appropriate?  For example, under this proposal, for each upcoming six-month period, USAC would 
forecast expected Lifeline and Link Up disbursements, as well as administrative expenses attributable to 
the operation of these programs.  If projected disbursements and expenses are expected to exceed one half 
of the annual cap, USAC would proportionately reduce support amounts during the upcoming six-month 
period to bring total disbursements under one half of the annual cap.  If, however, total payments in the 
upcoming six-month period are projected to be less than one half the annual cap, USAC would provide 
the full support amounts as determined by the Commission and collect only what is necessary to fund the 
demand.  We seek comment on this proposal.  What administrative difficulties should USAC anticipate 
when forecasting disbursements?  What steps should USAC take, if any, in the midst of a six-month 
period in the event forecast disbursements and expenses vary significantly from actual disbursements and 
expenses?  We note that USAC currently projects quarterly requirements for the Lifeline program and 
submits those projections to the Commission.
219
  What can we learn from the accuracy of USAC’s past 
forecasts that would inform how this proposal would work?  Alternatively, would another period of time 
be more appropriate?  Would a one-year period be more suitable for the Lifeline market?  In particular, 
we seek comment on the concept of measuring the budget over a 12-month period and whether that 
concept fully protects the ratepayer from excessive spending.  
107. Alternatively, we seek comment on a different self-enforcing budget mechanism that 
would allow Lifeline spending in a given period to exceed the cap, but would result in Lifeline 
disbursements being reduced in the next period to accommodate the excessive spending.  In this 
mechanism, disbursements would be reduced proportionally throughout the following period to ensure the 
disbursements and expenses do not exceed the budget less the amount by which the previous period’s 
disbursements and expenses exceeded the budget.  We seek comment on this approach, noting that it has 
the benefit of not requiring a forecast or handling the inevitable under- or over-shooting of the actual 
demand.  Under this proposal, when should the cap for the second period of time be set?  At the beginning 
of the first period, or the second one?  We also seek comment on whether it is acceptable to allow 
disbursements to exceed the budget in a given period, even where adjustments made in the following 
period mean the program spends less than the total budgeted amount over the two periods.  Would any of 
the proposed budget mechanisms result in a significant variance in the disbursement cap for consecutive 
funding years, and if so, what impact would that have on Lifeline consumers and providers?
108. We also seek comment on whether Lifeline spending should be prioritized in the event 
that the cap is reached or USAC projects will be reached in a funding year.  If so, we propose that the 
Commission prioritize funding in the following order if disbursements are projected to exceed the cap: 
(1) rural Tribal lands, (2) rural areas, and (3) all other areas.  We seek comment on this prioritization 
scheme and whether any other factors should weigh in our analysis.  For example, should we prioritize 
Lifeline spending in low-income areas where the business case for deployment is harder to make?  If the 
Commission adopts such funding prioritizations, how should we implement such a system?  Should the 
Commission adjust all of the support amount categories to different extents, or should categories with less 
                                                     
218
See Jerry Ellig, Mercatus Center at George Mason University, Reforming the FCC’s Low-Income Phone 
Subsidies, at 4 (2013), available at https://www.mercatus.org/system/files/Ellig_FCC-phone-
subsidy_MOP_101813.pdf. 
219
See Universal Service Administrative Company, Federal Universal Service Support Mechanism Fund Size 
Projections for Fourth Quarter 2017, at 23-25 (2017), http://www.usac.org/about/tools/fcc/filings/2017/q4.aspx. 
Federal Communications Commission FCC 17-155
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prioritization receive no support before the support of the category with the next-highest prioritization is 
adjusted?  We seek comment on these issues.
109. We also seek comment on the appropriate initial amount for this cap.  Would historical 
disbursement levels be instructive in determining the appropriate annual cap?  In 2008, when the 
Commission first allowed a non-facilities-based ETC to receive Lifeline support, Lifeline expenditures 
totaled approximately $820 million.
220
  By 2012, that amount had grown to over $2.1 billion.
221
  The 
Commission’s initial steps to eliminate waste, fraud, and abuse within the program have reduced Lifeline 
disbursements to just over $1.5 billion in 2015.
222
  If the Commission adopted a previous disbursement 
level as the annual disbursement cap, which disbursement level would be appropriate?  We seek comment 
on these issues and other relevant matters, such as whether this cap should include USAC’s expenses for 
administering the Lifeline program.  If so, how should we incorporate these administrative expenses?   
110. We also seek comment on whether and how the program’s cap should be adjusted in 
subsequent years.  Should the cap remain the same, absent further action by the Commission, or should 
the cap be automatically indexed to inflation?  Should the cap be tied to other metrics, like the growth or 
decrease of poverty nationwide or participation in means-tested programs?
223
E. Improving Provider Incentives for Lifeline Service
111. In this section, we seek comment on ways to focus Lifeline support toward encouraging 
broadband adoption among low-income consumers and minimizing wasteful spending in the program.
112. Maximum Discount Level.  We seek comment on whether to apply a maximum discount 
level for Lifeline services above which the costs of the service must be borne by the qualifying household.  
Today, many service providers use the monthly Lifeline support amount to offer free-to-the-end-user 
Lifeline service, for which the Lifeline customer has no personal financial obligation.
224
  In 2016, certain 
wireless Lifeline service providers estimated that 11 million Lifeline participants (85 percent of all 
Lifeline program participants) subscribed to plans providing free-to-the-end-user Lifeline service.
225
  In 
contrast, the Commission’s other universal service support programs all require beneficiaries or support 
recipients to pay a portion of the costs of the supported service.
226
  For example, the E-rate program 
discount levels range from 20 percent to 90 percent of the costs of eligible goods and services, and E-rate 
beneficiaries are required to pay the remaining costs of the supported goods and services.
227
  Should the 
approach that the Commission has taken in other universal service support programs be instructive in the 
Lifeline context?  Do the users of the supported service value that service more if they contribute 
financially?  Are such users more sensitive to the price and quality of the service?  Is there any particular 
approach taken by another universal service support program that should inform the Commission’s 
                                                     
220
See Universal Service Monitoring Report, CC Docket No. 96-45 et al., at 26, Table 2.4 (WCB 2016),
https://apps.fcc.gov/edocs_public/attachmatch/DOC-343025A1.pdf.
221
Id.
222
Id.
223
See Florida Public Service Commission Comments, WC Docket No. 11-42, at 4-5 (filed Aug. 31, 2015).
224
See, e.g., Assurance Wireless, Lifeline Program Description, http://www.assurancewireless.com/
Public/MorePrograms.aspx (last visited Oct. 24, 2017); TAGMobile, Why TAG, https://www.tagmobile.com/
Support/WhyTag (last visited Oct. 24, 2017).  
225
See Letter from John Heitmann, Kelly Drye & Warren LLP, to Marlene Dortch, Secretary, FCC, WC Docket No. 
11-42 et al., at 2 (Feb. 3, 2016).
226
See 47 CFR §§ 54.505(b) (E-rate Program), 54.602(a), 54.633(a) (Rural Health Care Program); Connect America 
Fund High Cost Universal Support, Report and Order, 29 FCC Rcd 3964, 4035-36, para. 171 (2014) (High Cost 
Program).
227
47 CFR §§ 54.505(b), 54.504(a)(1)(iii).
Federal Communications Commission FCC 17-155
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analysis for the Lifeline program?  Under the Commission’s rules, providers of video relay service (VRS) 
are compensated for the reasonable costs of providing VRS.
228
  Do the policies underlying that approach 
apply in the Lifeline context?  The concept of maximum discount levels and mandatory contributions is 
not limited to federal benefit programs administered by the Commission.  For example, many participants 
in the U.S. Department of Housing and Urban Development’s (HUD’s) Public Housing and Housing 
Choice Voucher programs and the U.S. Department of Health and Human Services’ (DHHS’) Low-
Income Home Energy Assistance Program (LIHEAP) are required to pay a portion of the costs of their 
utilities or rent.
229
  We seek comment on the utility of comparing these programs to the Lifeline program, 
and if the Commission should consider the approach undertaken in other benefit programs with capped 
support amounts.  For those other benefit programs, has the efficacy of mandatory end user payments 
been evaluated?  Did the requirement of end user payments impact services provided to the consumer, 
program enrollment, or competition in the relevant market?  Importantly, did such a requirement reduce 
the waste, fraud, and abuse in those programs that would have occurred absent the cap?
113. We also seek comment on the impact a maximum discount level would have on the 
Lifeline program.  What impact would a maximum discount level have on the affordability, availability, 
and quality of communications service for low-income consumers?  Would a maximum discount level for 
the Lifeline program impact the types of services that consumers obtain through the program?  Would it 
change the quality of broadband service that Lifeline providers offer, including speed and data 
allowances?  Would this change affect the availability of certain types of service more than others, for 
example, mobile versus fixed service?  Would a maximum discount level help ensure that Lifeline funds 
are targeted at high-quality broadband service offerings that truly help close the digital divide for low-
income consumers?  Would adopting a maximum discount level encourage consumers to more carefully 
investigate and evaluate the service to which they wish to apply their Lifeline benefit, thereby decreasing 
Lifeline subscriber churn or violations of the one-per-household rule and helping further reduce waste, 
fraud, and abuse in the Lifeline program?
114. One proposal is to adopt a maximum discount level to improve the Lifeline program’s 
efficiency and further reduce waste, fraud, and abuse in the program.
230
  Under the current structure, 
service providers may engage in fraud or abuse by using no-cost Lifeline offerings to increase their 
                                                     
228
47 CFR § 64.604(c)(5)(iii)(E)(1).
229
See, e.g., HUD Public Housing Program, https://portal.hud.gov/hudportal/HUD?src=/topics/
rental_assistance/phprog (last visited Oct. 24, 2017) (“Your rent, which is referred to as the Total Tenant Payment 
(TTP) in this program, would be based on your family's anticipated gross annual income less deductions, if any.”); 
Housing Choice Vouchers Fact Sheet, https://portal.hud.gov/hudportal/HUD?src=/topics/
housing_choice_voucher_program_section_8 (last visited Oct. 24, 2017) (“The housing voucher family must pay 
30% of its monthly adjusted gross income for rent and utilities, and if the unit rent is greater than the payment 
standard the family is required to pay the additional amount” not to exceed 40% of the family’s monthly adjusted 
gross income.); LIHEAP Frequently Asked Questions for Consumers https://www.acf.hhs.gov/ocs/resource/
consumer-frquently-asked-questions#Q1(last visited Oct. 24, 2017),  (“LIHEAP is not meant to pay for all of your 
energy costs for the year, season, or even the month.”).
230
See, e.g., Remarks of FCC Commissioner Ajit Pai at the Citizens Against Government Waste Policy Breakfast 
(July 28, 2014), https://apps.fcc.gov/edocs_public/attachmatch/DOC-328469A1.pdf; Commissioner Michael 
O’Rielly, Sound Principles for Lifeline Reform (Feb. 23, 2015), https://www.fcc.gov/news-events/blog/2015/
02/13/sound-principles-lifeline-reform/; Jerry Ellig, Mercatus Center at George Mason University, Reforming the 
FCC’s Low-Income Phone Subsidies, at 4-5 (2013), https://www.mercatus.org/system/files/Ellig_FCC-phone-
subsidy_MOP_101813.pdf; Letter from Senator Claire McCaskill, U.S. Senate, to the Honorable Tom Wheeler et 
al., Chairman, FCC, at 1 (Mar. 1, 2016), https://www.mccaskill.senate.gov/imo/media/doc/McCaskill%20Letter%20
%20to%20FCC%20on%20Lifeline.pdf; California Emerging Technology Fund Comments, WC Docket No. 11-42 
et al., at 22, 24 (Aug. 31, 2015); Nebraska Public Service Commission Comments, WC Docket No. 11-42 et al., at 
8-9 (Apr. 21, 2011) (supporting the adoption of minimum consumer charges for the Lifeline program); Indiana 
Utility Regulatory Commission Comments, WC Docket No. 11-42 et al., at 5-6 (Apr. 21, 2011) (same). 
Federal Communications Commission FCC 17-155
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Lifeline customer numbers when the customers do not value or may not even realize they are purportedly 
receiving a Lifeline-supported service. We seek comment on whether Lifeline’s current benefit structure 
fails to ensure that the program supports services that consumers value.  Would a maximum discount 
level curtail such practices and prevent universal service funds from being spent on services of little to no 
value for the Lifeline consumer?  
115. What rule changes would be needed to implement a maximum discount level?  If the 
Commission established a maximum discount level requirement for Lifeline, how should such a 
requirement operate?  Are there specific pricing data or other data that would help the Commission 
determine an appropriate maximum discount level?  Should the required end user payment be a flat 
amount or a percentage of the price of the service?  Should the maximum discount level apply differently 
to enhanced Lifeline support than standard Lifeline support?  Should the maximum level apply to Link 
Up support?  How would a maximum discount level apply for prepaid services or consumer payment 
structures that otherwise do not require a monthly billing relationship between the provider and the 
consumer?  Should Lifeline service providers have flexibility to determine the timing of the customer’s 
payment (e.g., upfront payments, monthly, post-paid)?  What steps could the Commission take to ensure 
that Lifeline service providers actually collect the required customer share?  How should the Commission 
treat partial payments by Lifeline subscribers?  Should there be any exceptions to the maximum discount 
level and, if so, what is the justification for these exceptions?  How could the Commission implement a 
maximum discount level with minimal increases in Lifeline service provider costs and administrative 
burdens?  Are there specific data that would help the Commission evaluate the potential impact of a 
maximum discount level on the Lifeline participation rate of qualifying low-income consumers?  Are 
there other alternatives we should consider to ensure that the Lifeline program supports services that 
Lifeline customers value? 
116. In the 2016 Lifeline Order, the Commission adopted minimum service standards to make 
sure that Lifeline customers receive quality Lifeline-supported services.
231
  A maximum discount level 
may also achieve this goal because consumers who pay a portion of the costs may be more sensitive to the 
price and quality of the service.  Would a maximum discount level therefore make minimum service 
standards unnecessary?   Do the minimum service standards serve additional purposes that would not be 
served by a maximum discount level?  If the Lifeline program rules included both a maximum discount 
level and minimum service standards, should the Commission revise the formulas used to determine the 
minimum service standards or adjust the mechanisms by which the minimum service standards are 
updated?  Similarly, would adopting a maximum discount level eliminate the need for the usage 
requirement in section 54.407(c)(2) of the Lifeline program rules and the related non-usage de-enrollment 
rule in section 54.405(e)(3)?  
117. Targeting Non-Adopters.  The Lifeline program was originally created to promote low-
income consumers’ access to affordable services.
232
Some parties have suggested that the Commission 
should target Lifeline support to low-income consumers who have not yet adopted broadband service.
233
                                                     
231
  See 2016 Lifeline Order, 31 FCC Rcd at 3988-4000, paras. 69-103.  See also 47 CFR § 54.408.
232
See 2016 Lifeline Order, 31 FCC Rcd at 4003, para. 116. 
233
See, e.g., Commissioner Michael O’Rielly and Rep. Marsha Blackburn, FCC’s Lifeline Program Ripe for Fraud, 
Abuse, Politico (July 12, 2015) (“Second, the program must be better targeted to eligible low-income individuals 
who would not otherwise sign up for service”), http://www.politico.com/magazine/story/2015/07/fccs-lifeline-
program-expansion-without-reform-120008; John Mayo, Olga Ukhaneva, and Scott Wallsten, Toward a More 
Efficient and Effective Lifeline Program, Economic Policy Vignette, at 3 (2015) (“A reformed Lifeline program 
should focus on better targeting consumers that would not subscribe to voice/broadband without a subsidy, thereby 
increasing its cost effectiveness.”), http://cbpp.georgetown.edu/sites/cbpp.georgetown.edu/files/Mayo-Wallsten-
Ukhaneva-toward-more-efficient-lifeline-program.pdf; Daniel Lyons, American Enterprise Institute, To Narrow the 
Digital Divide, the FCC Should Not Simply Extend Lifeline to Broadband, at 6 (2016) (“[P]olicy makers should 
study the profile of low-income non-broadband households in particular and design an application system tailored to 
(continued….)
Federal Communications Commission FCC 17-155
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We seek comment on changes the Commission could make to target consumers who have not yet adopted 
broadband, and to what extent the Commission should weigh efforts that facilitate reaching those 
consumers specifically? We seek comment on whether and how the Commission should adopt a support 
framework that encourages adoption of high quality communications service by low-income consumers.  
What rule changes would be necessary to implement these changes?
F. Regulatory Impact Analysis
118. We seek comment on the need for regulatory action to address the problems identified 
here, as well as the costs and benefits of our proposals along with data and other information that can be 
used to quantify these.  Specifically, we seek comment on the need for and costs and benefits of 
regulatory action of the following proposals, relative to the status quo: encouraging cooperative 
federalism between state data sources and the National Verifier; directing Lifeline support to facilities-
based providers; alternatives to a facilities requirement; adopting a maximum discount level; changes to 
encourage Lifeline consumers to adopt broadband services; adopting a self-enforcing budget; enhancing 
targeted audits of participating providers; and acting on the other interpretive and policy changes for 
which we seek comment above.  Commenters proposing alternatives to our proposals should discuss the 
need for and costs and benefits of their proposal, including relative costs and benefits of their proposal as 
compared to those set forth here, and should provide supporting evidence.  We also seek comment on 
options to achieve the most effective use of resources to achieve the purposes of the Lifeline program, and 
specifically to lower the cost of adoption to lower-income subscribers.  We seek data and information 
commenters believe is necessary for these analyses and comment on specific methodologies commenters 
believe are best suited for this purpose.  We also seek comment generally on how to evaluate the relative 
importance of public interest outcomes that are not readily susceptible to quantification, such as “equity, 
human dignity, fairness, and distributive impacts.”
234
VI. NOTICE OF INQUIRY 
119. The Lifeline program is an important means of achieving universal service.  In the 2016 
Lifeline Order the Commission took the step of allowing Lifeline to support broadband to help low-
income Americans obtain access to quality, affordable service.
235
  However, we remain concerned about 
the well-documented digital divide for low-income Americans, and in particular low-income Americans 
residing in rural Tribal, rural, and underserved areas.
236
120. To ensure that the Lifeline program achieves universal service for 21
st
Century services, 
it is necessary to evaluate the ultimate purposes of the Lifeline program and identify the policies that will 
best accomplish those purposes.  Sharpening the focus of the Lifeline program would further promote 
(Continued from previous page)                                                            
this segment of the population. This will reduce the risk of spending program dollars on those who would have 
bought Internet access anyway.”), http://www.aei.org/publication/to-narrow-the-digital-divide-the-fcc-should-not-
simply-extend-lifeline-to-broadband/?utm_source=tpd&utm_medium=publink&utm_campaign=cict.
234
See Executive Order 13563, 76 Fed. Reg. 3821, 3821-23 (Jan. 18, 2011).
235
2016 Lifeline Order, 31 FCC Rcd at 3972-77, paras. 38-43.
236
Several studies indicate that the current Lifeline program is not well targeted.  See, e.g., Olga Ukhaneva, 
Universal Service in a Wireless World, at 4-5, 20-21, 23 (2015), https://www.aeaweb.org/conference/
2016/retrieve.php?pdfid=1011; Daniel A. Ackerberg, David R. DeRemer, Michael H. Riordan, Gregory L. Rosston, 
and Bradley S. Wimmer, Center for Economic Studies, Estimating the Impact of Low-Income Universal Service 
Programs, CES 13-33, at 6, 26, 27 (2013), https://www2.census.gov/ces/wp/2013/CES-WP-13-33.pdf.  See also, 
e.g., John Mayo, Olga Ukhaneva, and Scott Wallsten, Toward a More Efficient and Effective Lifeline Program, 
Economic Policy Vignette, at 2-4, 6 (2015), http://cbpp.georgetown.edu/sites/cbpp.georgetown.edu/files/Mayo-
Macher-Ukhaneva-toward-more-efficient-lifeline-program.pdf; Daniel Lyons, American Enterprise Institute, To 
Narrow the Digital Divide, the FCC Should Not Simply Extend Lifeline to Broadband, at 1, 3-4, 6 (2016), 
http://www.aei.org/wp-content/uploads/2016/03/To-Narrow-the-Digital-Divide.pdf. 
Federal Communications Commission FCC 17-155
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digital opportunity for low-income individuals, and in particular for low-income Americans who have not 
adopted broadband, or who reside in rural Tribal or rural areas. 
A. Lifeline Support that Targets the Digital Divide
121. To focus the Lifeline program on supporting affordable communications service for the 
nation’s low-income households and on improving the economic incentives of providers serving them, we 
begin a proceeding to reexamine the Lifeline program’s support structure to encourage affordable access 
to high quality services for low-income consumers while we continue to discourage the practices leading 
to program waste, fraud, and abuse.  Accordingly, we seek comment on potential changes to the Lifeline 
program funding paradigm that will help the Lifeline program more efficiently target funds to areas and 
households most in need of help obtaining digital opportunity. 
122. Ensuring that service providers have appropriate incentives to deploy and provide 
services to these populations can further the Commission’s efforts to bring digital opportunity to low-
income Americans who have not yet adopted broadband and low-income Americans residing in rural or 
rural Tribal areas who typically experience difficulty obtaining access to affordable, quality broadband.  
We seek comment on actions the Commission could take to create better economic incentives for 
providers participating in the Lifeline program.  We also seek comment on how those incentives would 
impact the program’s effectiveness at reaching certain subsets of the low-income population.  
123. We also seek comment on how the Commission could leverage the Lifeline program to 
encourage broadband deployment in areas that have found themselves on the wrong side of the digital 
divide.  Where a provider has already invested in building a broadband-capable network, that provider 
often has incentives to create mutually beneficial offerings that make affordable connectivity options 
available to low-income households within the network’s footprint.
237
  We seek comment on whether the 
Commission should shape its Lifeline support structure to provide enhanced support in areas where 
providers do not have sufficient incentive to make available affordable high-speed broadband service. 
124. We seek comment on whether and how the Commission should adopt rule changes to 
target Lifeline support to bring digital opportunity to areas that offer less incentive for deployment of 
high-speed broadband service, such as rural areas and rural Tribal areas.  Rural and rural Tribal areas 
have higher percentages of broadband non-adopters compared to other areas.
238
  It is also well 
documented that lower-income households have lower broadband adoption rates and lower in-home 
broadband connectivity rates compared to higher-income households.
239
  Some have suggested that the 
                                                     
237
See, e.g., Comcast Internet Essentials, https://www.internetessentials.com/ (last visited Oct. 24, 2017) (offering 
broadband at speeds of 15 Mbps to qualifying low-income households); Charter Spectrum Internet Assist Program, 
https://www.spectrum.com/browse/content/spectrum-internet-assist.html (last visited Oct. 24, 2017) (offering 
broadband at speeds of 30 Mbps to qualifying low-income households); CenturyLink, CenturyLink Internet Basics,  
http://www.centurylink.com/home/internetbasics/ (last visited Oct. 24, 2017) (offering broadband at speeds of up to 
1.5 Mbps to qualifying low-income households); AT&T, Access from AT&T https://www.att.com/shop/
internet/access/#/ (last visited Oct. 24, 2017) (offering broadband at speeds as high as 10 Mbps to qualifying low-
income households).
238
See, e.g., Andrew Perrin, Pew Research Center, Digital Gap Between Rural and Non-rural America Persists (May 
19, 2017), http://www.pewresearch.org/fact-tank/2017/05/19/digital-gap-between-rural-and-nonrural-america-
persists/; Edwin Carlson and Justin Goss, National Telecommunications and Information Administration, The State 
of the Urban Rural Digital Divide (Aug. 10, 2016), https://www.ntia.doc.gov/blog/2016/state-urbanrural-digital-
divide; 2016 Broadband Progress Report, 31 FCC Rcd 744, at para. 100 & Table 10; Lennard G. Kruger, 
Congressional Research Service, Tribal Broadband: Status of Deployment and Federal Funding Programs at 14-15, 
(2016), https://fas.org/sgp/crs/misc/R44416.pdf; Letter from M. Theresa Hopkins, Executive Director, Navajo 
Nation Telecommunications Regulatory Commission, to Thomas Wheeler, Chairman, FCC, WC Docket No. 11-42, 
at 1 (Feb. 24, 2016).
239
See, e.g.,Monica Anderson, Pew Research Center, Digital Divide Persists Even as Lower-Income Americans 
Make Gains in Tech Adoption (Mar. 22, 2017), http://www.pewresearch.org/fact-tank/2017/03/22/digital-divide-
(continued….)
Federal Communications Commission FCC 17-155
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Commission should therefore target Lifeline support primarily to nonadopters to improve the 
effectiveness and efficiency of the Lifeline program.
240
  In light of these analyses, we seek comment on 
whether the Lifeline program could better reach nonadopters of broadband by focusing Lifeline support in 
areas where providers need additional incentive to offer high-speed broadband service.
125. Rural and Rural Tribal Areas.  We specifically seek comment on whether and how the 
Commission should adjust the Lifeline support amount to encourage affordable broadband access for low-
income consumers in rural areas.  Low-income consumers in rural or rural Tribal areas may have 
difficulty obtaining affordable, quality broadband service because service providers have less incentive to 
incur the costs to deploy advanced facilities or to provide a wide range of services at competitive prices in 
these areas.
241
  In rural areas, higher deployment costs can also lead to fewer service options and higher 
prices that disproportionately impact low-income consumers.
242
  We also focus on rural Tribal areas in 
which affected stakeholders have suggested that the current Lifeline Tribal enhanced subsidy amount is 
(Continued from previous page)                                                            
persists-even-as-lower-income-americans-make-gains-in-tech-adoption/; U.S. Department of Housing and Urban 
Development, Office of Policy Development and Research, Evidence Matters, Digital Inequality and Low-Income 
Households, at 1, 3 (Fall 2016), https://www.huduser.gov/portal/periodicals/em/fall16/highlight2.html; 2016 
Broadband Progress Report, 31 FCC Rcd at 744-45, para. 102 & Table 11.
240
See, e.g., Commissioner Michael O’Rielly and Rep. Marsha Blackburn, FCC’s Lifeline Program Ripe for Fraud, 
Abuse, Politico (July 12, 2015) (“Second, the program must be better targeted to eligible low-income individuals 
who would not otherwise sign up for service”), http://www.politico.com/magazine/story/2015/07/fccs-lifeline-
program-expansion-without-reform-120008; John Mayo, Olga Ukhaneva, and Scott Wallsten, Toward a More 
Efficient and Effective Lifeline Program, Economic Policy Vignette, at 3 (2015) (“A reformed Lifeline program 
should focus on better targeting consumers that would not subscribe to voice/broadband without a subsidy, thereby 
increasing its cost effectiveness.”), http://cbpp.georgetown.edu/sites/cbpp.georgetown.edu/files/Mayo-Wallsten-
Ukhaneva-toward-more-efficient-lifeline-program.pdf; Daniel Lyons, American Enterprise Institute, To Narrow the 
Digital Divide, the FCC Should Not Simply Extend Lifeline to Broadband, at 6 (2016) (“[P]olicy makers should 
study the profile of low-income non-broadband households in particular and design an application system tailored to 
this segment of the population. This will reduce the risk of spending program dollars on those who would have 
bought Internet access anyway.”), http://www.aei.org/publication/to-narrow-the-digital-divide-the-fcc-should-not-
simply-extend-lifeline-to-broadband/?utm_source=tpd&utm_medium=publink&utm_campaign=cict.
241
See, e.g., 2016 Broadband Progress Report, 31 FCC Rcd at 702, 731-35, 738-40, 750-51, paras. 6, 79-80, 82-83, 
90-91, 119-21, 126, & Tables 1, 2, 4, and 8; Lennard G. Kruger, Congressional Research Service, Tribal Broadband: 
Status of Deployment and Federal Funding Programs at 1 (2016), https://fas.org/sgp/crs/misc/R44416.pdf; Lennard 
G. Kruger and Angele A. Gilroy, Congressional Research Service, Broadband Internet Access and the Digital 
Divide: Federal Assistance Programs, at 1, 7-8 (2016), https://fas.org/sgp/crs/misc/RL30719.pdf; Oregon Business 
Development Department, Strategies for Broadband Infrastructure Deployment, Adoption and Utilization in Rural 
Cities and Counties, at 7 (2016), http://www.orinfrastructure.org/Infrastructure-Programs/Telecommunications/
OBAC/Reports/RuralBbStrategiesRpt16.pdf.  
242
See Andrew Perrin, Pew Research Center, Digital Gap Between Rural and Nonrural America Persists (May 19, 
2017), http://www.pewresearch.org/fact-tank/2017/05/19/digital-gap-between-rural-and-nonrural-america-persists/
(stating that 63 percent of rural Americans report that they have a home broadband connection, compared to 73 
percent in urban areas and 76 percent in suburban areas); Emily Guerin, High Country News, Rural Americans Have 
Inferior Internet Access (2014), http://www.hcn.org/issues/46.2/rural-americans-have-inferior-internet-access; 
Jeremy Craig, Georgia State University, In Rural America a Lingering Digital Divide at 2 (2016), 
http://www.gsu.edu/2016/03/03/in-rural-america-a-lingering-digital-divide/; Allan Holmes et al., The Center for 
Public Integrity, Rich People Have Access to High-Speed Internet; Many Poor People Still Don’t at 8 (2016), 
https://www.publicintegrity.org/2016/05/12/19659/rich-people-have-access-high-speed-internet-many-poor-people-
still-dont; Letter from Michael R. Romano, Senior Vice President, and Brian Ford, Senior Regulatory Counsel, 
NTCA, to Marlene Dortch, Secretary, FCC, WC Docket No. 11-42, at 2 (July 14, 2017) (“[T]he average rural low-
income consumer pay[s] tens or even hundreds of dollars more per month for standalone broadband service than 
what the average urban consumer pays.”).
Federal Communications Commission FCC 17-155
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insufficient to incentivize broadband deployment in rural Tribal areas.
243
  Although broadband 
deployment in both rural and rural Tribal areas is lagging compared to other areas, the current Lifeline 
program rules only provide targeted enhanced monthly Lifeline support (up to an additional $25 per 
month) for Lifeline customers residing on Tribal lands.
244
   
126. We are also mindful about the need to establish the correct support amounts.  If the 
Commission establishes enhanced Lifeline support for consumers living in rural and rural Tribal areas, 
how could the Commission provide targeted support while also promoting the interests of fiscal 
responsibility and minimizing the burden on the ratepayers who support the Fund?  Are there specific 
pricing data or other data that we should consider in determining the appropriate enhanced monthly 
support amounts for Lifeline subscribers in rural and rural Tribal areas?  Should a single enhanced 
monthly support amount apply in all rural areas or should Lifeline consumers in rural areas on Tribal 
lands or another subset of rural residents receive a higher monthly support amount?  How should the 
enhanced monthly support amounts compare to the monthly support amount for Lifeline subscribers who 
do not live in rural areas?  What data or metrics should the Commission use to identify the rural areas that 
qualify for enhanced support?  What geographic level (e.g., county, Census tracts, Census block groups) 
should the Commission use to identify these rural areas?  Is the E-rate program’s definition of “rural” the 
best option for identifying rural areas in the Lifeline program, or should the Commission consider some 
other definition to identify rural areas?
245
127. Underserved Areas.  We next seek comment on whether and how the Commission should 
also target Lifeline support to bring digital opportunity to low-income areas where service providers have 
less incentive to invest in facilities or offer robust broadband offerings compared to other areas.  Recent 
reports argue that certain low-income areas experience less facilities deployment when compared to other 
areas, and that low-income consumers in those areas may experience increased difficulty obtaining 
affordable, robust communications services.
246
  
128. We seek comment on how the Commission can address this issue with the Lifeline 
program.  If the Commission permits an enhanced subsidy amount for households in these areas, how 
should we define underserved areas for the purpose of this enhanced support, and how should we identify 
these underserved areas?  What data could inform the Commission as to the prevalence of service 
providers electing not to invest as much in facilities or robust broadband offerings compared to other 
areas, and the areas where this has occurred?  What types of broadband deployment, service offerings, 
adoption data or other measures could we use to determine whether areas are underserved because service 
                                                     
243
See Nez Perce Tribe Comments, WC Docket No. 11-42 et al., at 2 (Aug. 31, 2015) (“[I]n extreme rural and high 
cost areas of Indian Country, the Enhanced Lifeline value of $25.00 per household is an insufficient amount to 
incentivize broadband infrastructure buildout.”); Coeur D’Alene Tribe Reply, WC Docket No. 11-42 et al., at 3 
(Sept. 30, 2015) (stating the enhanced Tribal subsidy “has not been raised since it was established in 2000” and 
urging the Commission to “increase the subsidy to appropriate levels that would bring [broadband] services to 
unserved and underserved tribal lands….”).
244
47 CFR § 54.403(a)(3).  
245
47 CFR § 54.505(b)(3)(i)-(ii).  See also 2014 E-rate Order, 29 FCC Rcd at 15592-95, paras. 136-41 (2014).
246
See, e.g., Press Release, Advocates for Basic Legal Equality, Inc., AT&T Fails to Invest in Low-Income 
Montgomery County Neighborhoods (Mar. 21, 2017), http://ablelaw.org/media-room/news-and-press-releases/3403-
att-fails-to-invest-in-low-income-montgomery-county; Allan Holmes, Center for Public Integrity, DSL Providers 
Save Faster Internet for Wealthier Communities (Oct. 14, 2016), https://www.publicintegrity.org/2016/10/14/20341/
dsl-providers-save-faster-internet-wealthier-communities.  See also Clare Malone, Lots of People in Cities Still 
Can’t Afford Broadband, FiveThirtyEight (Aug. 2, 2017), https://fivethirtyeight.com/features/lots-of-people-in-
cities-still-cant-afford-broadband/ (discussing potential causes of low broadband adoption rates in low-income urban 
areas); Clare Malone, The Worst Internet in America, FiveThirtyEight (July 27, 2017), 
https://fivethirtyeight.com/features/the-worst-internet-in-america/ (discussing broadband deployment and adoption 
in rural areas).
Federal Communications Commission FCC 17-155
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providers have less incentive to invest in facilities and broadband services in those areas compared to 
other areas?  Are there certain income levels or other markers in a geographic area that could help the 
Commission reliably identify whether an area is likely to be underserved?  For example, could the 
Commission address underserved areas by offering enhanced Lifeline support in areas where the median 
household income and/or broadband investment rates are significantly lower than the national average?  
129. What changes should the Commission make to the Lifeline program support structure to 
target support to underserved areas?  Are there specific pricing or other data we could use to determine 
the appropriate support amount for underserved areas?  How should the targeted support for underserved 
areas compare to and interact with the support amounts for rural or Tribal areas?  What level of 
geographic granularity (e.g., county, Census tracts, Census block groups) should the Commission use to 
identify areas that qualify for enhanced Lifeline support as underserved areas?  How frequently should the 
Commission update the threshold for areas that qualify for enhanced support as underserved areas?
B. Benefit Limits
130. We next seek comment on whether the Commission should implement a benefit limit that 
restricts the amount of support a household may receive or the length of time a household may participate 
in the program.  The objectives of such restrictions include encouraging broadband adoption without 
reliance on the Lifeline subsidy and controlling the disbursement of scarce program funds.  Such a limit 
would provide low-income households incentives to not take the subsidy unless it is needed, since taking 
the subsidy in a given month will forfeit the opportunity to use it in a future month.  We seek comment on 
whether the Commission should adopt a benefit limit for the Lifeline program.  
131. What rule changes would be necessary to implement a benefit limit or time limit for 
consumer participation in the Lifeline program?  If the Commission established a benefit limit or time 
limit for Lifeline, how should such a requirement operate and how should it be enforced?  Are there 
specific data that would help the Commission determine an appropriate monetary or temporal limit in 
support?  Currently in the Lifeline program, households remain enrolled for 1.75 years on average.
247
  
How should this information affect our decision to impose this restriction?  Should the limit be applied to 
households or individuals, and how would the Commission or USAC track benefits received if consumers 
transfer to different providers?  Should there be any exceptions to the benefit limit or time limit and, if so, 
what is the justification for these exceptions?  How could the Commission implement a benefit limit or 
time limit with minimal increases in the costs or administrative burdens for Lifeline service providers?  
Are there specific data that would help the Commission evaluate the potential impact of a benefit or time 
limit on the Lifeline participation rate of qualifying low-income consumers?  Are there other alternatives 
to a benefit limit that we should consider to better focus Lifeline funds on those households who need it 
most?  
C. Program Goals and Metrics 
132. This Notice of Inquiry seeks comments on potential ways to sharpen the focus of the 
Lifeline program to further promote digital opportunity for all Americans.  We now seek comment on the 
program’s goals and metrics that would allow us to better determine if Lifeline support is truly achieving 
the purpose of closing the digital divide.  In 2015, the GAO reported that “outcome-based performance 
goals and measures will help illustrate to what extent, if any, the Lifeline program is fulfilling the guiding 
principles set forth by Congress.”
248
  In 2016, the Commission revised its Lifeline program goals by 
including the affordability of voice and broadband service, as measured as the percentage of disposable 
household income spent on those services, to the goals established in the Commission’s 2012 Lifeline 
                                                     
247
See USAC 2015 Annual Report at 11, https://www.usac.org/_res/documents/about/pdf/annual-reports/usac-
annual-report-2015.pdf. 
248
GAO, Telecommunications: FCC Should Evaluate the Efficiency and Effectiveness of the Lifeline Program, 
GAO-15-335, at 13 (2015), http://www.gao.gov/assets/670/669209.pdf.  
Federal Communications Commission FCC 17-155
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Order.
249
  We agree outcome-based performance goals and measures have an important role ensuring 
Lifeline support is achieving Congress’s universal service goals.  We seek comment on how the 
Commission should determine and define the Lifeline program’s goals and metrics and how those goals 
should inform the Commission’s efforts to sharpen the focus of the Lifeline program, as discussed in this 
Notice of Inquiry. 
VII. PROCEDURAL MATTERS
A. Final Regulatory Flexibility Analysis
133. As required by the Regulatory Flexibility Act of 1980 (RFA),
250
the Commission has 
prepared a Final Regulatory Flexibility Analysis (FRFA) relating to this Fourth Report and Order, Order 
on Reconsideration, and Memorandum Opinion and Order.  The FRFA is set forth in Appendix C.
B. Paperwork Reduction Act Analysis
134. This Fourth Report and Order contains new information collection requirements subject 
to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13.  It 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 revised 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,
251
the Commission previously sought specific comment on how it 
might further reduce the information collection burden on small business concerns with fewer than 25 
employees.
C. Congressional Review Act
135. The Commission will include a copy of this Fourth Report and Order, Order on 
Reconsideration, Memorandum Opinion and Order, Notice of Proposed Rulemaking, and Notice of 
Inquiry in a report to be sent to Congress and the Government Accountability Office (GAO) pursuant to 
the Congressional Review Act.
252
D. Initial Regulatory Flexibility Analysis
136. As required by the Regulatory Flexibility Act of 1980, as amended,
253
the Commission 
has prepared an Initial Regulatory Flexibility Analysis (IRFA) for the Notice of Proposed Rulemaking 
(NPRM), of the possible significant economic impact on a substantial number of small entities by the 
policies and rules proposed in this NPRM.  The IRFA is in Appendix D.  Written public comments are 
requested on this IRFA.  Comments must be identified as responses to the IRFA and must be filed by the 
deadlines for comments on the NPRM.  The Commission will send a copy of the NPRM, including this 
IRFA, to the Chief Counsel for Advocacy of the Small Business Administration.
254
  In addition, the 
NPRM and IRFA (or summaries thereof) will be published in the Federal Register.
255
                                                     
249
See 2016 Lifeline Order, 31 FCC Rcd at 4111-13, paras. 404-10.  See also 2012 Lifeline Order, 27 FCC Rcd at 
6670-80, paras. 24-50.
250
See 5 U.S.C. § 604.  The RFA, see 5 U.S.C. §§ 601-612, has been amended by the Small Business Regulatory
Enforcement Fairness Act of 1996 (SBREFA), Pub. L. No. 104-121, Title II, Stat. 857 (1996).  The SBREFA was 
enacted as Title II of the Contract with America Advancement Act of 1996. 
251
See 44 U.S.C. § 3506(c)(4).
252
See 5 U.S.C. § 801(a)(1)(A).
253
See 5 U.S.C. § 603.
254
See 5 U.S.C. § 603(a).
255
See id.
Federal Communications Commission FCC 17-155
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E. Initial Paperwork Reduction Act Analysis
137. This document contains proposed modified information collection requirements.  The 
Commission, as part of its continuing effort to reduce paperwork burdens, invites the general public and 
the Office of Management and Budget (OMB) to comment on the information collection requirements 
contained in this document, as required by the Paperwork Reduction Act of 1995, Public Law 104-13.  In 
addition, pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 
U.S.C. § 3506(c)(4), we seek specific comment on how we might further reduce the information 
collection burden for small business concerns with fewer than 25 employees.
F. Ex Parte Rules – Permit-But-Disclose
138. The proceeding for this NPRM and NOI initiates shall be treated as a “permit-but-
disclose” proceeding in accordance with the Commission’s ex parte rules.
256
  Persons making ex parte
presentations must file a copy of any written presentation or a memorandum summarizing any oral 
presentation within two business days after the presentation (unless a different deadline applicable to the 
Sunshine period applies).  Persons making oral ex parte presentations are reminded that memoranda 
summarizing the presentation must (1) list all persons attending or otherwise participating in the meeting 
at which the ex parte presentation was made, and (2) summarize all data presented and arguments made 
during the presentation.  If the presentation consisted in whole or in part of the presentation of data or 
arguments already reflected in the presenter’s written comments, memoranda, or other filings in the 
proceeding, the presenter may provide citations to such data or arguments in his or her prior comments, 
memoranda, or other filings (specifying the relevant page and/or paragraph numbers where such data or 
arguments can be found) in lieu of summarizing them in the memorandum.  Documents shown or given 
to Commission staff during ex parte meetings are deemed to be written ex parte presentations and must 
be filed consistent with rule 1.1206(b).  In proceedings governed by rule 1.49(f) or for which the 
Commission has made available a method of electronic filing, written ex parte presentations and 
memoranda summarizing oral ex parte presentations, and all attachments thereto, must be filed through 
the electronic comment filing system available for that proceeding, and must be filed in their native 
format (e.g., .doc, .xml, .ppt, searchable .pdf).  Participants in this proceeding should familiarize 
themselves with the Commission’s ex parte rules.
G. Comment Filing Procedures
139. Pursuant to 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.  Comments may be filed using the Commission’s Electronic Comment Filing 
System (ECFS).  See Electronic Filing of Documents in Rulemaking Proceedings, 63 FR 24121 (1998).
? Electronic Filers: Comments may be filed electronically using the Internet by accessing the 
ECFS: http://fjallfoss.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.
o All hand-delivered or messenger-delivered paper filings for the Commission’s Secretary 
must be delivered to FCC Headquarters at 445 12th St., SW, Room TW-A325, 
Washington, DC 20554.  The filing hours are 8:00 a.m. to 7:00 p.m.  All hand deliveries 
                                                     
256
47 CFR §§ 1.1200 et seq.
Federal Communications Commission FCC 17-155
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must be held together with rubber bands or fasteners.  Any envelopes and boxes must be 
disposed of before entering the building.
o Commercial overnight mail (other than U.S. Postal Service Express Mail and Priority 
Mail) must be sent to 9050 Junction Drive, Annapolis Junction, MD 20701.
o U.S. Postal Service first-class, Express, and Priority mail must be addressed to 445 12
th
Street, SW, Washington, DC 20554.
140. Availability of Documents.  Comments, reply comments, and ex parte submissions will be 
publicly available online via ECFS.
257
  These documents will also be available for public inspection 
during regular business hours in the FCC Reference Information Center, which is located in Room 
CYA257 at FCC Headquarters, 445 12
th
Street, SW, Washington, DC 20554.  The Reference Information
Center is open to the public Monday through Thursday from 8:00 a.m. to 4:30 p.m. and Friday from 8:00 
a.m. to 11:30 a.m.
141. 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 & Governmental Affairs Bureau at 202-418-0530 (voice), 202-418-0432 (tty).
VIII. ORDERING CLAUSES
142. ACCORDINGLY, IT IS ORDERED, that pursuant to the authority contained in sections 
1 through 4, 201 through 205, 254, and 403 of the Communications Act of 1934, as amended, 47 U.S.C. 
§§ 151-154, 201-205, 254, and 403, and section 1.2 of the Commission’s rules, 47 CFR § 1.2, this Fourth 
Report and Order, Order on Reconsideration, Memorandum Opinion and Order, Notice of Proposed 
Rulemaking, and Notice of Inquiry IS ADOPTED effective thirty (30) days after the publication of this 
Fourth Report and Order, Order on Reconsideration, Memorandum Opinion and Order, Notice of 
Proposed Rulemaking, and Notice of Inquiry in the Federal Register, except to the extent provided herein 
and expressly addressed below.  
143. IT IS FURTHER ORDERED, that pursuant to the authority contained in sections 1 
through 4, 201 through 205, 254, and 403 of the Communications Act of 1934, as amended, 47 U.S.C. §§ 
151-154, 201-205, 254, and 403, Part 54 of the Commission’s rules, 47 CFR Part 54, is AMENDED as 
set forth in Appendix A, and such rule amendments to sections 54.403(b) and 54.410 of the 
Commission’s rules shall be effective thirty (30) days after the publication of this Fourth Report and 
Order, Order on Reconsideration, Memorandum Opinion and Order, Notice of Proposed Rulemaking, and 
Notice of Inquiry in the Federal Register. 
144. IT IS FURTHER ORDERED, that pursuant to the authority contained in sections 1 
through 4, 201 through 205, 254, and 403 of the Communications Act of 1934, as amended, 47 U.S.C. §§ 
151-154, 201-205, 254, and 403, that the removal and reservation of section 54.411 of the Commission’s 
rules shall be effective sixty (60) days after the publication of this Fourth Report and Order, Order on 
Reconsideration, Memorandum Opinion and Order, Notice of Proposed Rulemaking, and Notice of 
Inquiry in the Federal Register.
145. IT IS FURTHER ORDERED, that pursuant to the authority contained in sections 1 
through 4, 201 through 205, 254, and 403 of the Communications Act of 1934, as amended, 47 U.S.C. §§ 
151-154, 201-205, 254, and 403, Part 54 of the Commission’s rules, 47 CFR Part 54, is AMENDED as 
set forth in Appendix A, and such rule amendments to sections 54.403(a)(3), 54.413, and 54.414 of the 
Commission’s rules are subject to the PRA and shall be effective ninety (90) days after announcement in 
the Federal Register of OMB approval of the subject information collection requirements or on August 1, 
2018, whichever occurs later.
                                                     
257
Documents will generally be available electronically in ASCII, Microsoft Word, and/or Adobe Acrobat.
Federal Communications Commission FCC 17-155
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146. IT IS FURTHER ORDERED that, pursuant to the authority contained in sections 1-5 and 
254 of the Communications Act of 1934, as amended, 47 U.S.C. §§ 151-155 and 254, and section 1.429 
of the Commission’s rules, 47 CFR § 1.429, the Petition for Reconsideration filed by United States 
Telecom Association on June 23, 2016 and the Petition for Reconsideration/Clarification of NTCA – The 
Rural Broadband Association and WTA – Advocates for Rural Broadband ARE GRANTED to the extent 
described above.
147. IT IS FURTHER ORDERED that the Commission SHALL SEND a copy of this Fourth 
Report and Order, Order on Reconsideration, Memorandum Opinion and Order, Notice of Proposed 
Rulemaking, and Notice of Inquiry to Congress and to the Government Accountability Office pursuant to 
the Congressional Review Act, see 5 U.S.C. § 801(a)(1)(A).
148. IT IS FURTHER ORDERED that the Commission’s Consumer and Governmental 
Affairs Bureau, Reference Information Center, SHALL SEND a copy of the Fourth Report and Order, 
Order on Reconsideration, Memorandum Opinion and Order, Notice of Proposed Rulemaking, and Notice 
of Inquiry including the Initial Regulatory Flexibility Analysis and Final Regulatory Flexibility Analysis, 
to the Chief Counsel for Advocacy of the Small Business Administration. 
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Secretary
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APPENDIX A
FINAL RULES
1. Amend § 54.403 to revise paragraphs (a)(3) and (b)(1) to read as follows: 
§ 54.403 Lifeline support amount.
(a)  * * *
* * * * *
(3) Tribal lands support amount. Additional federal Lifeline support of up to $25 per month will be made 
available to a eligible telecommunications carrier providing facilities-based Lifeline service to an eligible 
resident of Tribal lands, as defined in § 54.400(e), if the subscriber’s residential location is rural, as 
defined in § 54.505(b)(3)(i)-(ii), and 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 if the carrier is seeking Lifeline reimbursement for eligible voice 
telephony service provided to those 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 at least one supported service as described in § 54.101(a), and charge Lifeline 
subscribers the resulting amount.
2. Amend § 54.410 to revise paragraphs (b)(2), (c)(2), (e), and (f)(4) to read as follows:
§ 54.410 Subscriber eligibility determination and certification.
* * * * *
(b) * * *
(2) * * *
* * * * *
(ii) If a state Lifeline administrator or other state agency is responsible for the initial determination of a 
subscriber’s eligibility, a copy of the subscriber’s certification that complies with the requirements set 
forth in paragraph (d) of this section.
* * * * *
(c) * * *
(2) * * *
* * * * *
(ii) If a state Lifeline administrator or other state agency is responsible for the initial determination of a 
subscriber’s eligibility, a copy of the subscriber’s certification that complies with the requirements set 
forth in paragraph (d) of this section.
* * * * *
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(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 for that 
carrier’s subscribers.
* * * * *
3. Remove and reserve § 54.411.
      4. Amend § 54.413 to read as follows:
§ 54.413 Link Up for rural Tribal lands.
(a) Definition.  For purposes of this subpart, the term “Tribal Link Up” means an assistance program for 
eligible residents of Tribal lands, if the subscriber’s location is rural, as defined in § 54.505(b)(3)(i)-(ii), 
seeking telecommunications service from a telecommunications carrier that is receiving high-cost support 
on rural 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 rural 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 rural Tribal lands, 
pursuant to subpart D of this part, for which the eligible resident of rural Tribal lands does not pay 
interest.  The interest charges not assessed to the eligible resident of rural Tribal lands shall be for a 
customary charge for connecting the 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 rural 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.  
      5. Amend § 54.414 to read as follows:
§ 54.414 Reimbursement for Tribal Link Up.
* * * * *
(b) In order to receive universal support reimbursement for providing Tribal Link Up, eligible 
telecommunications carriers must use the maps made available by the Administrator to determine an 
eligible resident of rural 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.
* * * * *
Federal Communications Commission FCC 17-155
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APPENDIX B
PROPOSED RULES
1. Amend § 54.201 to remove paragraph (j).
2. Amend § 54.202 to remove paragraphs (d)-(e).
3. Amend § 54.205 to remove paragraph (c).
4. Amend § 54.404 to revise paragraph (b) to read:
§ 54.404 The National Lifeline Accountability Database.
* * * * *
(b) * * *
* * * * *
(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. This certification may only be obtained after the 
eligible telecommunications carrier receives a notification from the Database or state administrator that 
another Lifeline subscriber resides at the same address as the prospective subscriber.
5. Amend § 54.408 to remove paragraph (f).
6. Amend § 54.410 to remove paragraph (g) and revise paragraph (f) to read:
§ 54.410 Subscriber eligibility determination and certification.
* * * * *
(f) Annual eligibility re-certification process.
* * * * * 
(2) * * *
* * * * *
(iii) If the subscriber’s program-based or income-based eligibility for Lifeline cannot be determined by 
accessing one or more state databases containing information regarding enrollment in qualifying 
assistance programs, then the eligible telecommunications carrier may obtain a signed certification from 
the subscriber on a form that meets the certification requirements in paragraph (d) of this section. The 
subscriber must present documentation meeting the requirements in sections (b)(1)(i)(B) or (c)(1)(i)(B) to 
establish continued eligibility. If a Federal eligibility recertification form is available, entities enrolling 
subscribers must use such form to re-certify a qualifying low-income consumer.
* * * * * 
(3) * * *
* * * * *
(iii) If the subscriber’s eligibility for Lifeline cannot be determined by accessing one or more databases
containing information regarding enrollment in qualifying assistance programs, then the National 
Verifier, state Lifeline administrator, or state agency may obtain a signed certification from the subscriber 
on a form that meets the certification requirements in paragraph (d) of this section. The subscriber must 
present documentation meeting the requirements in sections (b)(1)(i)(B) or (c)(1)(i)(B) to establish 
continued eligibility.  If a Federal eligibility recertification form is available, entities enrolling subscribers 
must use such form to recertify a qualifying low-income consumer.
Federal Communications Commission FCC 17-155
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* * * * *
(g) * * * 
1. Remove and reserve § 54.418.
Federal Communications Commission FCC 17-155
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APPENDIX C
Final Regulatory Flexibility Analysis
1. As required by the Regulatory Flexibility Act of 1980, as amended (RFA),
1
the Federal 
Communications Commission (Commission) included an Initial Regulatory Flexibility Analysis (IRFA) 
of the possible significant economic impact on a substantial number of small entities by the policies and 
rules proposed in the 2015 Lifeline FNPRM in WC Docket Nos. 11-42, 09-197, 10-90.
2
  The Commission 
sought written public comment on the proposals in the 2015 Lifeline FNPRM, including comment on the 
IRFA.  This Final Regulatory Flexibility Analysis (FRFA) conforms to the RFA.
3
  
A. Need for, and Objectives of, the Final Rules
2. The Commission is required by section 254 of the Communications Act of 1934, as 
amended, to promulgate rules to implement the universal service provisions of section 254.
4
  The Lifeline 
program was implemented in 1985 in the wake of the 1984 divestiture of AT&T.
5
  On May 8, 1997, the 
Commission adopted rules to reform its system of universal service support mechanisms so that universal 
service is preserved and advanced as markets move toward competition.
6
  Since the 2012 Lifeline Reform 
Order, the Commission has acted to address waste, fraud and abuse in the Lifeline program and improved 
program administration and accountability.
7
  In this Fourth Report and Order, Order on Reconsideration, 
Memorandum Opinion and Order, Notice of Proposed Rulemaking, and Notice of Inquiry (Order), the 
Commission takes steps to focus Lifeline program support to effectively and efficiently bridge the digital 
divide for low-income consumers while minimizing the contributions burden on ratepayers.  We resolve 
questions regarding enhanced Lifeline support for Tribal lands, which were raised in the 2015 Lifeline 
Further Notice of Proposed Rulemaking but left unaddressed by the 2016 Lifeline Order.
8
  We resolve 
Petitions for Reconsideration to improve competition and efficiency in the Lifeline program.  We enable 
competition and empower Lifeline consumers by increasing their ability to switch their Lifeline benefit to 
a new provider.  We also clarify how Lifeline providers should apply the Lifeline discount to service 
offerings that include Lifeline-supported broadband Internet access service.
                                                     
1
See 5 U.S.C. § 603.  The RFA, see 5 U.S.C. §§ 601–612, has been amended by the Small Business Regulatory 
Enforcement Fairness Act of 1996 (SBREFA), Pub. L. No. 104-121, Title II, 110 Stat. 847 (1996). 
2
Lifeline and Link Up Reform and Modernization et al., Second Further Notice of Proposed Rulemaking, Order on 
Reconsideration, Second Report and Order, and Memorandum Opinion and Order, 30 FCC Rcd 7818, 7929-40, 
paras. 1-40 (2015) (2015 Lifeline FNPRM).
3
See 5 U.S.C. § 604.
4
See 47 U.S.C. § 254 passim.  
5
See MTS and WATS Market Structure, and Amendment of Parts 67 & 69 of the Commission’s Rules and 
Establishment of a Joint Board, Report and Order, 50 Fed. Reg. 939 (Jan. 8, 1985) (MTS and WATS Market 
Structure Report and Order).   
6
See Federal-State Joint Board on Universal Service, Report and Order, 12 FCC Rcd 8776, 9006-9008, paras. 431-
34 (1997) (Universal Service First Report and Order).
7
See Lifeline and Link Up Reform and Modernization et al., Report and Order and Further Notice of Proposed 
Rulemaking, 27 FCC Rcd 6656 (2012) (2012 Lifeline Reform Order); 2015 Lifeline FNPRM; 47 U.S.C. § 254 
(b)(1),(3).  See also 47 U.S.C. § 151.
8
Lifeline and Link Up Reform and Modernization et al., Third Report and Order, Further Report and Order, and 
Order on Reconsideration, 31 FCC Rcd 3962 (2016) (2016 Lifeline Order); Lifeline and Link Up Reform and 
Modernization et al., Second Further Notice of Proposed Rulemaking, Order on Reconsideration, Second Report 
and Order, and Memorandum Opinion and Order, 30 FCC Rcd 7818, 7873-77, paras. 158-71 (2015) (2015 Lifeline 
FNPRM).
Federal Communications Commission FCC 17-155
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B. Summary of Significant Issues Raised by Public Comments to the IRFA
3. The Commission received one comment specifically addressing the IRFA from the Small
Carriers Coalition (Coalition).
9
  In the 2015 Lifeline FNPRM, in order to increase eligible 
telecommunications carrier (ETC) accountability and compliance with the Lifeline rules, the Commission
proposed a requirement that all company employees and third-party agents interfacing with customers 
receive sufficient training on the Lifeline rules, and that such persons receive training annually.
10
  The 
Coalition notes that the Commission’s analysis of the compliance burden of this requirement on small 
entities was insufficient.
11
Specifically, the Coalition asserts that, while the burden of executing a 
certification that appropriate training has been received may be minor, the burden of arranging and paying 
for such training, and requiring employees and agents to undergo such training, is much higher.
12
4. In this Order or the 2016 Lifeline Order, the Commission did not adopt this proposal as a 
final rule.  We recognize the additional compliance burden and cost imposed upon small entities of this 
requirement.  As an alternative measure to increase eligible telecommunications carrier (ETC) 
accountability and compliance with the Lifeline rules, the Commission has established the National 
Verifier in the prior 2016 Lifeline Order with its primary function being to verify customer eligibility for 
Lifeline support.
13
  The National Verifier will also perform a variety of other functions necessary to enroll 
eligible subscribers into the Lifeline program, such as, but not limited to, enabling access by authorized 
users, providing support payments to providers, and conducting recertification of subscribers, to add to 
the efficient administration of the Lifeline program.
14
C. Response to Comments by the Chief Counsel for Advocacy of the Small Business 
Administration
5. Pursuant to the Small Business Jobs Act of 2010, which amended the RFA, the 
Commission is required to respond to any comments filed by the Chief Counsel of the Small Business 
Administration (SBA), and to provide a detailed statement of any change made to the proposed rule(s) as 
a result of those comments.
15
6. The Chief Counsel did not file any comments in response to the proposed rule(s) in this 
proceeding.
D. Description and Estimate of the Number of Small Entities to Which the Final May
Apply
7. 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.
16
  The RFA generally 
defines the term “small entity” as having the same meaning as the terms “small business,” “small 
organization,” and “small governmental jurisdiction.”
17
  In addition, the term “small business” has the 
                                                     
9
See Small Carriers Coalition Comments at 5-6.
10
See 2015 Lifeline FNPRM, 30 FCC Rcd at 7888-89, paras. 210-14.
11
See Small Carriers Coalition Comments at 5-6.
12
Id. at 6.
13
See 2016 Lifeline Order, 31 FCC Rcd at 4006-21, paras. 126-66.
14
Id.
15
5 U.S.C. § 604(a)(3).
16
5 U.S.C. § 603(b)(3).
17
5 U.S.C. § 601(6).
Federal Communications Commission FCC 17-155
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same meaning as the term “small business concern” under the Small Business Act.
18
  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).
19
  
Nationwide, there are a total of approximately 28.2 million small businesses, according to the SBA.
20
  A 
“small organization” is generally “any not-for-profit enterprise which is independently owned and 
operated and is not dominant in its field.”
21
8. Small Entities, Small Organizations, Small Governmental Jurisdictions.  Our actions, 
over time, may affect small entities that are not easily categorized at present.  We therefore describe here, 
at the outset, three comprehensive small entity size standards that could be directly affected herein.
22
  As 
of 2016, according to the SBA, there were 28.8 million small businesses in the U.S., which represented 
99.9 percent of all businesses in the United States.
23
Additionally, a “small organization is generally any 
not-for-profit enterprise which is independently owned and operated and not dominant in its field.”
24
Nationwide, as of 2014, there were approximately 2,131,200 small organizations.
25
  Finally, 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”.
26
  U.S. Census 
Bureau data published in 2012 indicates that there were 89,476 local governmental jurisdictions in the 
United States.
27
  We estimate that, of this total, as many as 88,761 entities may qualify as “small 
governmental jurisdictions.”
28
  Thus, we estimate that most governmental jurisdictions are small.
1. Wireline Providers
9. 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.  
                                                     
18
5 U.S.C. § 601(3) (incorporating by reference the definition of “small business concern” in 15 U.S.C. § 632).  
Pursuant to the RFA, the statutory definition of a small business applies “unless an agency, after consultation with 
the Office of Advocacy of the Small Business Administration and after opportunity for public comment, establishes 
one or more definitions of such term which are appropriate to the activities of the agency and publishes such 
definition(s) in the Federal Register.”  5 U.S.C. § 601(3).
19
See 15 U.S.C. § 632.
20
See SBA, Office of Advocacy, “Frequently Asked Questions,” 
https://www.sba.gov/sites/default/files/advocacy/SB-FAQ-2016_WEB.pdf (last visited Oct. 24, 2017). 
21
5 U.S.C. § 601(4).
22
See 5 U.S.C. § 601(3)-(6).
23
See SBA, Office of Advocacy, “Frequently Asked Questions,” 
https://www.sba.gov/sites/default/files/advocacy/SB-FAQ-2016_WEB.pdf (last visited Oct. 24, 2017).
24
5 U.S.C. § 601(4).
25
Independent Sector, The New Nonprofit Almanac and Desk Reference (2015).
26
5 U.S.C. § 601(5).
27
U.S. Census Bureau, Statistical Abstract of the United States: 2012 at 267, Table 428 (2011), 
http://www2.census.gov/library/publications/2011/compendia/statab/131ed/2012-statab.pdf  (citing data from 2007). 
28
The 2012 U.S. Census Bureau data for small governmental organizations are not presented based on the size of 
the population in each organization.  There were 89,476 local governmental organizations in the Census Bureau data 
for 2012, which is based on 2007 data.  As a basis of estimating how many of these 89,476 local government 
organizations were small, we note that there were a total of 715 cities and towns (incorporated places and minor 
civil divisions) with populations over 50,000 in 2011.  See U.S. Census Bureau, City and Town Totals Vintage: 
2011, http://www.census.gov/popest/data/cities/totals/2011/index.html.  If we subtract the 715 cities and towns that 
meet or exceed the 50,000 population threshold, we conclude that approximately 88,761 are small.  
Federal Communications Commission FCC 17-155
57
Under that size standard, such a business is small if it has 1,500 or fewer employees.
29
According to 
Commission data, 3,117 firms operated in that year.  Of this total, 3,083 operated with fewer than 1,000 
employees.
30
  Consequently, the Commission estimates that most providers of incumbent local exchange 
service are small businesses that may be affected by the rules and policies adopted.  1,307 Incumbent 
LECs reported that they were incumbent local exchange service providers.
31
  Of this total, an estimated 
1,006 have 1,500 or fewer employees.
32
  Thus using the SBA’s size standard the majority of Incumbent 
LECs can be considered small entities.  
10. 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 category for this service is the category Wired Telecommunications Carriers.  Under the 
category of Wired Telecommunications Carriers, such a business is small if it has 1,500 or fewer 
employees.
33
  U.S. Census data for 2012 indicate that 3,117 firms operated during that year.  Of that 
number, 3,083 operated with fewer than 1,000 employees.
34
  Based on these data, the Commission 
concludes that the majority of Competitive LECS, CAPs, Shared-Tenant Service Providers, and Other 
Local Service Providers, are 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.
35
  Of these 1,442 carriers, an estimated 1,256 have 1,500 or fewer employees.
36
  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.
37
  Also, 72 carriers have reported that they are Other Local Service 
Providers.
38
Of this total, 70 have 1,500 or fewer employees.
39
  Consequently, based on internally 
researched FCC data, 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. 
11. Interexchange Carriers (IXCs).  Neither the Commission nor the SBA has developed a 
small business size standard specifically for providers of interexchange services.  The appropriate 
category for IXCs is the category Wired Telecommunications Carriers.  Under that size standard, such a 
                                                     
29
13 CFR § 121.201.  The Wired Telecommunications Carrier category formerly used the NAICS code of 517110.  
As of 2017 the U.S. Census Bureau definition shows the NAICs code as 517311 for Wired Telecommunications 
Carriers.  See https://www.census.gov/cgi-bin/sssd/naics/naicsrch?code=517311&search=2017.
30
http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?
pid=ECN_2012_US_51SSSZ5&prodType=table.
31
See FCC, Trends in Telephone Service, at Table 5.3 (Sept. 2010), https://apps.fcc.gov/edocs_public/
attachmatch/DOC-301823A1.pdf (Trends in Telephone Service).
32
Id.
33
13 CFR § 121.201.  The Wired Telecommunications Carrier category formerly used the NAICS code of 517110.  
As of 2017 the U.S. Census Bureau definition shows the NAICs code as 517311 for Wired Telecommunications 
Carriers.  See, https://www.census.gov/cgi-bin/sssd/naics/naicsrch?code=517311&search=2017.
34
http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?
pid=ECN_2012_US_51SSSZ5&prodType=table.
35
See Trends in Telephone Service, at tbl. 5.3.
36
Id.
37
Id.
38
Id.
39
Id.
Federal Communications Commission FCC 17-155
58
business is small if it has 1,500 or fewer employees.
40
  Census Bureau data for 2012 indicates that 3,117 
firms operated during that year.  Of that number, 3,083 operated with fewer than 1,000 employees.
41
  
According to internally developed Commission data, 359 companies reported that their primary 
telecommunications service activity was the provision of interexchange services.
42
  Of this total, an 
estimated 317 have 1,500 or fewer employees.
43
  Consequently, the Commission estimates that the 
majority of interexchange service providers are small entities that may be affected by the rules proposed. 
12. Operator Service Providers (OSPs).  Neither the Commission nor the SBA has developed 
a small business size standard specifically for operator service providers.  The appropriate category for 
Operator Service Providers is the category Wired Telecommunications Carriers.  Under that size standard, 
such a business is small if it has 1,500 or fewer employees.
44
  Census Bureau data for 2012 shows that 
there were 3,117 firms that operated that year.  Of this total, 3,083 operated with fewer than 1,000 
employees.
45
  Thus, under this size standard, the majority of firms in this industry can be considered 
small.  According to Commission data, 33 carriers have reported that they are engaged in the provision of 
operator services.
46
  Of these, an estimated 31 have 1,500 or fewer employees and two have more than 
1,500 employees.
47
  Consequently, the Commission estimates that the majority of OSPs are small entities 
that may be affected by the rules proposed.
13. Local Resellers. The SBA has not developed a small business size standard specifically 
for Local Resellers. The SBA category of Telecommunications Resellers is the closest NAICs code 
category for local resellers.  The Telecommunications Resellers industry comprises establishments 
engaged in purchasing access and network capacity from owners and operators of telecommunications 
networks and reselling wired and wireless telecommunications services (except satellite) to businesses 
and households.  Establishments in this industry resell telecommunications; they do not operate 
transmission facilities and infrastructure.  Mobile virtual network operators (MVNOs) are included in this 
industry.
48
  Under the SBA’s size standard, such a business is small if it has 1,500 or fewer employees.
49
  
2012 Census Bureau data shows that 1,341 firms provided resale services during that year.  Of that 
number, all operated with fewer than 1,000 employees.
50
  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, 213 carriers have reported that they are engaged in the provision of local resale 
                                                     
40
13 CFR § 121.201.  The Wired Telecommunications Carrier category formerly used the NAICS code of 517110.  
As of 2017 the U.S. Census Bureau definition shows the NAICs code as 517311 for Wired Telecommunications 
Carriers.  See, https://www.census.gov/cgi-bin/sssd/naics/naicsrch?code=517311&search=2017.
41
http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?
pid=ECN_2012_US_51SSSZ5&prodType=table.
42
See Trends in Telephone Service, at tbl. 5.3.
43
Id.
44
13 CFR § 121.201.  The Wired Telecommunications Carrier category formerly used the NAICS code of 517110.  
As of 2017 the U.S. Census Bureau definition shows the NAICs code as 517311 for Wired Telecommunications 
Carriers.  See https://www.census.gov/cgi-bin/sssd/naics/naicsrch?code=517311&search=2017.
45
http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml? 
pid=ECN_2012_US_51SSSZ2&prodType=table.
46
Trends in Telephone Service, tbl. 5.3.
47
Id.
48
https://www.census.gov/cgi-in/sssd/naics/naicsrch?input=517911&search=2012+NAICS+Search&search=2012.
49
13 CFR § 121.201, NAICS code 517911.
50
U.S. Census Bureau, 2012 Economic Census, Subject Series: Information, “Establishment and Firm Size,” 
NAICS code 517911.
Federal Communications Commission FCC 17-155
59
services.
51
  Of these, an estimated 211 have 1,500 or fewer employees and two have more than 1,500 
employees.
52
  Consequently, the Commission estimates that the majority of local resellers are small 
entities that may be affected by the rules adopted. 
14. Toll Resellers.  The Commission has not developed a definition for Toll Resellers.  The 
closest NAICS Code Category is Telecommunications Resellers.  The Telecommunications Resellers 
industry comprises establishments engaged in purchasing access and network capacity from owners and 
operators of telecommunications networks and reselling wired and wireless telecommunications services 
(except satellite) to businesses and households.  Establishments in this industry resell 
telecommunications; they do not operate transmission facilities and infrastructure.  MVNOs are included 
in this industry.
53
  The SBA has developed a small business size standard for the category of 
Telecommunications Resellers.
54
  Under that size standard, such a business is small if it has 1,500 or 
fewer employees.
55
  2012 Census Bureau data shows that 1,341 firms provided resale services during that 
year.  Of that number, 1,341 operated with fewer than 1,000 employees.
56
  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.
57
  Of this total, an estimated 857 have 1,500 or fewer employees.
58
  Consequently, 
the Commission estimates that the majority of toll resellers are small entities.  
2. Wireless Carriers and Service Providers
15. Wireless Telecommunications Carriers (except Satellite).  This industry comprises 
establishments engaged in operating and maintaining switching and transmission facilities to provide 
communications via the airwaves.  Establishments in this industry have spectrum licenses and provide 
services using that spectrum, such as cellular services, paging services, wireless internet access, and 
wireless video services.
59
  The appropriate size standard under SBA rules is that such a business is small 
if it has 1,500 or fewer employees.
60
  2012 Census Bureau data for 2012 shows that there were 967 firms 
that operated for the entire year.
61
  Of this total, 955 firms had employment of 999 or fewer employees 
and 12 had employment of 1000 employees or more.
62
  Thus under this category and the associated size 
                                                     
51
See Trends in Telephone Service, at Table 5.3.  
52
See id.
53
https://www.census.gov/cgi-bin/sssd/naics/naicsrch?input=517911&search=2012+NAICS+Search&search=2012.
54
13 CFR § 121.201, NAICS code 517911.
55
http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2012_US_51SSSZ5
&prodType=table.
56
https://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2012_US_51SSSZ2
&prodType=table
57
Trends in Telephone Service, at tbl. 5.3.
58
Id.
59
NAICS Code 517210.  See https://factfinder.census.gov/faces/affhelp/jsf/pages/metadata.xhtml?lang=en&type=
ib&id=ib.en./ECN.NAICS2012.517210.
60
13 CFR § 121.201, NAICS code 517210.  
61
U.S. Census Bureau, Subject Series: Information, Table 5, “Establishment and Firm Size: Employment Size of 
Firms for the U.S.: 2012 NAICS Code 517210” (rel. Jan. 8, 2016).
62
See U.S. Census Bureau, American Factfinder, 
http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2007_US_51SSSZ2&prod
Type=table (last visited Oct. 24, 2017).  Available census data does not provide a more precise estimate of the 
number of firms that have employment of 1,500 or fewer employees; the largest category provided is for firms with 
“1000 employees or more.” 
Federal Communications Commission FCC 17-155
60
standard, the Commission estimates that the majority of wireless telecommunications carriers (except 
satellite) are small entities.  The Commission’s own data—available in its Universal Licensing System—
indicate that, as of October 25, 2016, there are 280 Cellular licensees that will be affected by our actions 
today.
63
  The Commission does not know how many of these licensees are small, as the Commission does 
not collect that information for these types of entities.  Similarly, according to internally developed 
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.
64
  Of this total, an estimated 261 have 1,500 or fewer employees, and 152 
have more than 1,500 employees.
65
  Thus, using available data, we estimate that the majority of wireless 
firms can be considered small.
16. 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 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.
66
  The SBA has approved these definitions.
67
  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. 
17. Satellite Telecommunications Providers.  This category comprises firms “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.”
68
  The category has a small business size standard of $32.5 
million or less in average annual receipts, under SBA rules.
69
  For this category, 2012 Census Bureau data 
shows that there were a total of 333 firms that operated for the entire year.
70
  Of this total, 299 firms had 
annual receipts of less than $25 million.
71
  Consequently, we estimate that the majority of satellite 
telecommunications providers are small entities.
                                                     
63
See http://wireless.fcc.gov/uls. For the purposes of this FRFA, consistent with Commission practice for wireless 
services, the Commission estimates the number of licensees based on the number of unique FCC Registration 
Numbers.  
64
See Trends in Telephone Service, at tbl. 5.3, https://apps.fcc.gov/edocs_public/attachmatch/DOC-301823A1.pdf. 
65
See id.
66
Amendment of the Commission’s Rules to Establish Part 27, the Wireless Communications Service (WCS), Report 
and Order, 12 FCC Rcd 10785, 10879, para. 194 (1997).
67
See Letter from Aida Alvarez, Administrator, SBA, to Amy Zoslov, Chief, Auctions and Industry Analysis 
Division, Wireless Telecommunications Bureau, FCC (filed Dec. 2, 1998) (Alvarez Letter 1998).
68
U.S. Census Bureau, 2012 NAICS Definitions, “517410 Satellite Telecommunications”; 
http://www.census.gov/naics/2007/def/ND517410.HTM.  
69
13 CFR § 121.201, NAICS code 517410.
70
  U.S. Census Bureau, 2012 Economic Census of the United States, Table EC1251SSSZ4, Information: Subject 
Series - Estab and Firm Size: Receipts Size of Firms for the United States: 2012, NAICS code 517410 
http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2012_US_51SSSZ4&prodT
ype=table. 
71
Id.
Federal Communications Commission FCC 17-155
61
18. Common Carrier Paging.  As noted, since 2007 the Census Bureau has placed paging 
providers within the broad economic census category of Wireless Telecommunications Carriers (except 
Satellite).
72
  
19. In addition, in the Paging Second Report and Order, the Commission adopted a size 
standard for “small businesses” for purposes of determining their eligibility for special provisions such as 
bidding credits and installment payments.
73
  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.
74
  The SBA has approved this definition.
75
  An initial auction of Metropolitan Economic Area 
(“MEA”) licenses was conducted in the year 2000.  Of the 2,499 licenses auctioned, 985 were sold.
76
  
Fifty-seven companies claiming small business status won 440 licenses.
77
  A subsequent auction of MEA 
and Economic Area (“EA”) licenses was held in the year 2001.  Of the 15,514 licenses auctioned, 5,323 
were sold.
78
  One hundred thirty-two companies claiming small business status purchased 3,724 licenses.  
A third auction, consisting of 8,874 licenses in each of 175 EAs and 1,328 licenses in all but three of the 
51 MEAs, was held in 2003.  Seventy-seven bidders claiming small or very small business status won 
2,093 licenses.
79
20. Currently, there are approximately 74,000 Common Carrier Paging licenses.  According 
to the most recent Trends in Telephone Service, 291 carriers reported that they were engaged in the 
provision of “paging and messaging” services.
80
  Of these, an estimated 289 have 1,500 or fewer 
employees and two have more than 1,500 employees.
81
  We estimate that the majority of common carrier 
paging providers would qualify as small entities under the SBA definition.
21. Wireless Telephony.  Wireless telephony includes cellular, personal communications 
services, and specialized mobile radio telephony carriers.  The closest applicable SBA category is 
Wireless Telecommunications Carriers (except Satellite)
82
and the appropriate size standard for this 
category under the SBA rules is that such a business is small if it has 1,500 or fewer employees.
83
  2012 
                                                     
72
See U.S. Census Bureau, 2007 NAICS Definitions, “517210 Wireless Telecommunications Categories (Except 
Satellite)”, http://www.census.gov/naics/2007/def/ND517210.HTM#N517210 (last visited Oct. 24, 2017). 
73
Revision of Part 22 and Part 90 of the Commission’s Rules to Facilitate Future Development of Paging Systems et 
al., WT Docket No. 96-18 et al., Second Report and Order and Further Notice of Proposed Rulemaking, 12 FCC 
Rcd 2732, 2811-12, paras. 178-81 (1997) (Paging Second Report and Order); Revision of Part 22 and Part 90 of the 
Commission’s Rules to Facilitate Future Development of Paging Systems et al., Memorandum Opinion and Order 
on Reconsideration and Third Report and Order, 14 FCC Rcd 10030, 10085-88, paras. 98-107 (1999).
74
Paging Second Report and Order, 12 FCC Rcd at 2811, para. 179.
75
See Letter from Aida Alvarez, Administrator, SBA, to Amy Zoslov, Chief, Auctions and Industry Analysis 
Division, Wireless Telecommunications Bureau, FCC (dated Dec. 2, 1998).
76
See 929 and 931 MHz Paging Auction Closes, Public Notice, 15 FCC Rcd 4858 (WTB 2000).
77
See id.
78
See Lower and Upper Paging Bands Auction Closes, Public Notice, 16 FCC Rcd 21821 (WTB 2001).
79
See Lower and Upper Paging Bands Auction Closes, Public Notice, 18 FCC Rcd 11154 (WTB 2003).  The current 
number of small or very small business entities that hold wireless licenses may differ significantly from the number 
of such entities that won in spectrum auctions due to assignments and transfers of licenses in the secondary market 
over time.  In addition, some of the same small business entities may have won licenses in more than one auction.
80
2010 Trends Report at Table 5.3, page 5-5.
81
Id.
82
13 CFR § 121.201, NAICS code 517210.
83
Id.
Federal Communications Commission FCC 17-155
62
Census Bureau data shows that there were 967 firms that operated for the entire year.  Of this total, 955 
firms had fewer than 1,000 employees and 12 firms has 1000 employees or more.
84
Thus under this 
category and the associated size standard, the Commission estimates that a majority of these entities can 
be considered small.  According to Commission data, 413 carriers reported that they were engaged in 
wireless telephony.
85
  Of these, an estimated 261 have 1,500 or fewer employees and 152 have more than 
1,500 employees.
86
  Therefore, more than half of these entities can be considered small.
22. All Other Telecommunications.  This category is comprised of establishments that are
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.
87
  The SBA has developed a small business size standard for “All Other 
Telecommunications,” which consists of all such firms with gross annual receipts of $32.5 million or 
less.
88
  For this category, U.S. Census data for 2012 shows that there were 1,442 firms that operated for 
the entire year.  Of these firms, a total of 1,400 had gross annual receipts of less than $25 million.
89
  Thus, 
a majority of “All Other Telecommunications” firms potentially affected by our action can be considered 
small.
3. Internet Service Providers
23. Internet Service Providers (Broadband).  Broadband Internet service providers include 
wired (e.g., cable, DSL) and VoIP service providers using their own operated wired telecommunications 
infrastructure fall in the category of Wired Telecommunication Carriers.
90
  Wired Telecommunications 
Carriers are comprised of establishments primarily engaged in operating and/or providing access to 
transmission facilities and infrastructure that they own and/or lease for the transmission of voice, data, 
text, sound, and video using wired telecommunications networks.  Transmission facilities may be based 
on a single technology or a combination of technologies.
91
  The SBA size standard for this category 
classifies a business as small if it has 1,500 or fewer employees.
92
  2012 Census Bureau data shows that 
there were 3,117 firms that operated that year.  Of this total, 3,083 operated with fewer than 1,000 
employees.
93
  Consequently, under this size standard the majority of firms in this industry can be 
considered small.  
                                                     
84
Id.  Available census data do not provide a more precise estimate of the number of firms that have employment of 
1,500 or fewer employees; the largest category provided is for firms with “1000 employees or more.”
85
2010 Trends in Telephone Service, tbl.  Report at Table 5.3, page 5-5.
86
Id.
87
http://www.census.gov/cgi-bin/ssssd/naics/naicsrch.
88
13 CFR § 121.201; NAICS Code 517919.
89
http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2012_US_
51SSSZ4&prodType=table.
90
See, 13 CFR § 121.201. The Wired Telecommunications Carrier category formerly used the NAICS code of 
517110.  As of 2017 the U.S. Census Bureau definition show the NAICs code as 517311.  See https://www.census.
gov/cgi-bin/sssd/naics/naicsrch?code=517311&search=2017
91
Id.
92
Id.
93
http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml? pid=ECN_2012_US_
51SSSZ2&prodType=table.
Federal Communications Commission FCC 17-155
63
24. Internet Service Providers (Non-Broadband).  Internet access service providers such as 
Dial-up Internet service providers, VoIP service providers using client-supplied telecommunications 
connections and Internet service providers using client-supplied telecommunications connections (e.g., 
dial-up ISPs) fall in the category of All Other Telecommunications.  The SBA has developed a small 
business size standard for All Other Telecommunications which consists of all such firms with gross 
annual receipts of $32.5 million or less.
94
  For this category, U.S. Census data for 2012 shows that there 
were 1,442 firms that operated for the entire year.  Of these firms, a total of 1,400 had gross annual 
receipts of less than $25 million.
95
  Consequently, under this size standard a majority of “All Other 
Telecommunications” firms can be considered small.
E. Description of Projected Reporting, Recordkeeping, and Other Compliance 
Requirements for Small Entities
25. A number of our rule changes will result in additional reporting, recordkeeping, or 
compliance requirements for small entities.  For all of those rule changes, we have determined that the 
benefit the rule change will bring for the Lifeline program outweighs the burden of the increased 
requirement/s.  Other rule changes decrease reporting, recordkeeping, or compliance requirements for 
small entities.  We have noted the applicable rule changes below impacting small entities.   
F. Increase in Projected Reporting, Recordkeeping and Other Compliance 
Requirements
26. Compliance burdens.  All of the rules we implement impose some compliance burdens 
on small entities by requiring them to become familiar with the new rules to comply with them.  For 
several of the new rules the burden of becoming familiar with the new rule in order to comply with it is 
the only additional burden the rule imposes.
27. Formally Delineate Tribal Lands.  Our rules define Tribal lands as “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.”
96
  Before 
2015, we had not provided mapping resources to delineate the boundaries of “any federally recognized 
Indian tribe’s reservation, pueblo, or colony,” “former reservations in Oklahoma,” or “Hawaiian 
Homelands.”  We now clarify the lands encompassed by section 54.400(e) of the Commission’s rules, and 
we limit enhanced support for Tribal lands to those areas encompassed by the maps discussed.  ETCs will 
no longer be permitted to seek reimbursement for a subscriber whose residential address is not located 
within the bounds of the maps discussed below, regardless of any customer self-certification as to 
residency on Tribal lands.  By providing a clearly drawn and accessible map of Tribal Lands as 
recognized by other federal agencies, the program will help eliminate improper payments of enhanced 
Tribal benefits.  While this process will require an additional step for carriers to verify Tribal eligibility of 
its subscribers, the mapping functionality will improve the accuracy and reliability of the payments.
G. Decrease in Projected Reporting, Recordkeeping and Other Compliance 
Requirements
28. Limiting the Lifeline Benefit Port Freeze.  Eliminating the 12-month Lifeline benefit port 
freeze rule for broadband Internet access service and the 60-day port freeze for both broadband and voice 
                                                     
94
13 CFR § 121.201; NAICS Code 517919.
95
http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml? pid=ECN_2012_US_
51SSSZ4&prodType=table.
96
47 CFR § 54.400(e).
Federal Communications Commission FCC 17-155
64
services decreases the burden of the recordkeeping requirement for small businesses by eliminating the 
need to record and process port-freeze periods for Lifeline subscribers.  Thus, making the enrollment
process more manageable for small businesses by eliminating the need to determine whether the 
subscriber is in a port freeze period with another Lifeline provider.
29. Clarifying the Application of Lifeline Support.  Modifying section 54.403(b)(1) of our 
rules to only apply to subscribers receiving Lifeline-supported standalone voice telephony service or a 
bundled offering where the ETC is requesting reimbursement from the Lifeline program for the voice 
telephony component of the bundle simplifies the reimbursement requests for small businesses.
H. Steps Taken to Minimize the Significant Economic Impact on Small Entities, and 
Significant Alternatives Considered
30. The RFA requires an agency to describe any significant, specifically small business, 
alternatives that it has considered in reaching its proposed 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 and 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 such small entities.”
97
31. This rulemaking could impose minimal additional burdens on small entities.  In this 
Order, the Commission modifies certain Lifeline rules to target funding to areas where it is most needed.  
In developing these rules, the Commission worked to ensure the burdens associated with implementing 
these rules would be minimized for all service providers, including small entities.  In taking this action, 
the Commission considered potential impacts on service providers, including small entities.  We 
considered alternatives to the rulemaking changes that increase projected reporting, recordkeeping and 
other compliance requirements for small entities, including alternatives on how to define “rural” for 
purposes of describing rural Tribal lands and how the Commission and USAC could provide mapping 
resources to help small entities identify with certainty areas that are eligible for enhanced support.  In 
developing our rules related to Tribal benefits, we carefully crafted the requirements to be easier on all 
service providers and determined that a specific carve-out for small businesses was not necessary.
I. Alternatives Permitted, Considered, or Rejected
32. No commenters specifically offered alternatives to the changes made in this Order.  
Further, given the narrow and targeted scope of the changes being made no alternative readily presents 
itself to limit the burdens on small business or organizations.  The identified increase in burden is 
minimal and outweighed by the advantages in combating waste, fraud, and abuse in the program.
33. Report to Congress:  The Commission will send a copy of this Fourth Report and Order, 
Order on Reconsideration, Memorandum Opinion and Order, Notice of Proposed Rulemaking and Notice 
of Inquiry, including this FRFA, in a report to be sent to Congress pursuant to the SBREFA.
98
  In 
addition, the Commission will send a copy of this Fourth Report and Order, Order on Reconsideration, 
Memorandum Opinion and Order, Notice of Proposed Rulemaking and Notice of Inquiry, including the 
FRFA, to the Chief Counsel for Advocacy of the SBA.  A copy of the Fourth Report and Order, Order on 
Reconsideration, Memorandum Opinion and Order, Notice of Proposed Rulemaking and Notice of 
Inquiry, and the FRFA (or summaries thereof) will also be published in the Federal Register.
99
                                                     
97
5 U.S.C. § 603(c)(1)-(c)(4).
98
See 5 U.S.C. § 801(a)(1)(A).
99
See 5 U.S.C. § 604(b).
Federal Communications Commission FCC 17-155
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APPENDIX D
Initial Regulatory Flexibility Analysis 
1. As required by the Regulatory Flexibility Act of 1980, as amended (RFA),
1
the 
Commission has prepared this Initial Regulatory Flexibility Analysis (IRFA) of the possible significant 
economic impact on a substantial number of small entities from the policies and rules proposed in this 
Notice of Proposed Rulemaking (Notice).  The Commission requests written public comment on this 
IRFA.  Comments must be identified as responses to the IRFA and must be filed by the deadlines for 
comments on the Notice provided on the first page of the Notice.  The Commission will send a copy of 
the Notice, including this IRFA, to the Chief Counsel for Advocacy of the Small Business Administration 
(SBA).
2
  In addition, the Notice and IRFA (or summaries thereof) will be published in the Federal 
Register.
3
2. The Commission is required by section 254 of the Communications Act of 1934, as 
amended, to promulgate rules to implement the universal service provisions of section 254.
4
  The Lifeline 
program was implemented in 1985 in the wake of the 1984 divestiture of AT&T.
5
  On May 8, 1997, the 
Commission adopted rules to reform its system of universal service support mechanisms so that universal 
service is preserved and advanced as markets move toward competition.
6
  The Lifeline program is 
administered by the Universal Service Administrative Company (USAC), the Administrator of the 
universal service support programs, under Commission direction, although many key attributes of the 
Lifeline program are currently implemented at the state level, including consumer eligibility, eligible 
telecommunication carrier (ETC) designations, outreach, and verification.  Lifeline support is passed on 
to the subscriber by the ETC, which provides discounts to eligible households and receives 
reimbursement from the universal service fund (USF or Fund) for the provision of such discounts.  
A. Need for, and Objectives of, the Proposed Rules
3. When the Commission overhauled the Lifeline program in its 2016 Lifeline Order, it 
included broadband Internet access service as a supported service; laid the groundwork for a National 
Verifier; strengthened protections against waste, fraud and abuse; improved program administration and 
accountability; and improved enrollment and consumer disclosures.
7
  In this NPRM, the Commission 
proposes steps to focus Lifeline program support to effectively and efficiently bridge the digital divide for 
low-income consumers while minimizing the contributions burden on ratepayers.  The actions and 
proposals in this NPRM aim to facilitate the Lifeline program’s goal of supporting affordable, high-speed 
Internet access for low-income households. 
4. In this NPRM, we seek comment on a number of significant reforms that will effectively 
and responsibly leverage the Lifeline program to bridge the digital divide for low-income consumers.  We 
                                                     
1
See 5 U.S.C. § 603.  The RFA, see 5 U.S.C. §§ 601-12, has been amended by the Small Business Regulatory 
Enforcement Fairness Act of 1996 (SBREFA), Pub. L. No. 104-121, Title II, 110 Stat. 857 (1996).
2
See 5 U.S.C. § 603(a).
3
Id.
4
See 47 U.S.C. § 254.  
5
See MTS and WATS Market Structure, and Amendment of Parts 67 & 69 of the Commission’s Rules and 
Establishment of a Joint Board, Report and Order, 50 Fed. Reg. 939 (Jan. 8, 1985) (MTS and WATS Market 
Structure Report and Order).   
6
See Federal-State Joint Board on Universal Service, CC Docket No. 96-45, Report and Order, 12 FCC Rcd 8776, 
9006-9008, paras. 431-34 (1997) (First Universal Service Report and Order).
7
See Lifeline and Link Up Reform and Modernization et al., Third Report and Order, Further Report and Order, and 
Order on Reconsideration, 31 FCC Rcd 3962 (2016) (2016 Lifeline Order).
Federal Communications Commission FCC 17-155
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seek comment on respecting the states’ primary role in eligible telecommunications carrier designation by 
eliminating Lifeline Broadband Provider designations.  We also seek comment on proposals to enable 
consumer choice and proposed policies to focus Lifeline support to encourage investment in broadband-
capable networks.  Finally, we propose several program accountability improvements to reduce waste, 
fraud, and abuse and improve transparency in the program. 
B. Legal Basis
5. The legal basis for the NPRM is contained in sections 1 through 4, 201-205, 254, and 403 
of the Communications Act of 1934, as amended by the Telecommunications Act of 1996, 47 U.S.C. §§ 
151 through 154, 201 through 205, 254, and 403.
C. Description and Estimate of the Number of Small Entities to Which the Proposed 
Rules Will Apply
6. 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.
8
  The RFA generally 
defines the term “small entity” as having the same meaning as the terms “small business,” “small 
organization,” and “small governmental jurisdiction.”
9
  In addition, the term “small business” has the 
same meaning as the term “small business concern” under the Small Business Act.
10
  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).
11
  
Nationwide, there are a total of approximately 28.2 million small businesses, according to the SBA.
12
  A 
“small organization” is generally “any not-for-profit enterprise which is independently owned and 
operated and is not dominant in its field.”
13
7. Small Entities, Small Organizations, Small Governmental Jurisdictions. Our actions, 
over time, may affect small entities that are not easily categorized at present.  We therefore describe here, 
at the outset, three comprehensive small entity size standards that could be directly affected herein.
14
  As 
of 2016, according to the SBA, there were 28.8 million small businesses in the U.S., which represented 
99.9 percent of all businesses in the United States.
15
  Additionally, a “small organization is generally any 
not-for-profit enterprise which is independently owned and operated and not dominant in its field.”
16
Nationwide, as of 2014, there were approximately 2,131,200 small organizations.
17
  Finally, the term 
“small governmental jurisdiction” is defined generally as “governments of cities, towns, townships, 
                                                     
8
5 U.S.C. § 603(b)(3).
9
5 U.S.C. § 601(6).
10
5 U.S.C. § 601(3) (incorporating by reference the definition of “small business concern” in 15 U.S.C. § 632).  
Pursuant to the RFA, the statutory definition of a small business applies “unless an agency, after consultation with 
the Office of Advocacy of the Small Business Administration and after opportunity for public comment, establishes 
one or more definitions of such term which are appropriate to the activities of the agency and publishes such 
definition(s) in the Federal Register.”  5 U.S.C. § 601(3).
11
See 15 U.S.C. § 632.
12
See SBA, Office of Advocacy, “Frequently Asked Questions,” 
https://www.sba.gov/sites/default/files/advocacy/SB-FAQ-2016_WEB.pdf (last visited Oct. 24, 2017). 
13
5 U.S.C. § 601(4).
14
See 5 U.S.C. § 601(3)-(6).
15
See SBA, Office of Advocacy, “Frequently Asked Questions,” 
https://www.sba.gov/sites/default/files/advocacy/SB-FAQ-2016_WEB.pdf (last visited Oct. 24, 2017).
16
5 U.S.C. § 601(4).
17
Independent Sector, The New Nonprofit Almanac and Desk Reference (2015).
Federal Communications Commission FCC 17-155
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villages, school districts, or special districts, with a population of less than fifty thousand.”
18
  U.S. Census 
Bureau data published in 2012 indicates that there were 89,476 local governmental jurisdictions in the 
United States.
19
  We estimate that, of this total, as many as 88,761 entities may qualify as “small 
governmental jurisdictions.”
20
  Thus, we estimate that most governmental jurisdictions are small.
1. Wireline Providers
8. 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.
21
According to 
Commission data, 3,117 firms operated in that year.  Of this total, 3,083 operated with fewer than 1,000 
employees.
22
  Consequently, the Commission estimates that most providers of incumbent local exchange 
service are small businesses that may be affected by the rules and policies adopted.  1,307 Incumbent 
LECs reported that they were incumbent local exchange service providers.
23
  Of this total, an estimated 
1,006 have 1,500 or fewer employees.
24
  Thus using the SBA’s size standard the majority of Incumbent 
LECs can be considered small entities.  
9. 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 category for this service is the category Wired Telecommunications Carriers.  
Under the category of Wired Telecommunications Carriers, such a business is small if it has 1,500 or 
fewer employees.
25
  U.S. Census data for 2012 indicate that 3,117 firms operated during that year.  Of that 
number, 3,083 operated with fewer than 1,000 employees.
26
  Based on these data, the Commission 
concludes that the majority of Competitive LECS, CAPs, Shared-Tenant Service Providers, and Other 
                                                     
18
5 U.S.C. § 601(5).
19
U.S. Census Bureau, Statistical Abstract of the United States: 2012 at 267, Table 428 (2011), 
http://www2.census.gov/library/publications/2011/compendia/statab/131ed/2012-statab.pdf  (citing data from 2007). 
20
The 2012 U.S. Census Bureau data for small governmental organizations are not presented based on the size of 
the population in each organization.  There were 89,476 local governmental organizations in the Census Bureau data 
for 2012, which is based on 2007 data.  As a basis of estimating how many of these 89,476 local government 
organizations were small, we note that there were a total of 715 cities and towns (incorporated places and minor 
civil divisions) with populations over 50,000 in 2011.  See U.S. Census Bureau, City and Town Totals Vintage: 
2011, http://www.census.gov/popest/data/cities/totals/2011/index.html.  If we subtract the 715 cities and towns that 
meet or exceed the 50,000 population threshold, we conclude that approximately 88,761 are small.  
21
13 CFR § 121.201.  The Wired Telecommunications Carrier category formerly used the NAICS code of 517110.  
As of 2017 the U.S. Census Bureau definition shows the NAICs code as 517311 for Wired Telecommunications 
Carriers.  See, https://www.census.gov/cgi-bin/sssd/naics/naicsrch?code=517311&search=2017.
22
http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?
pid=ECN_2012_US_51SSSZ5&prodType=table.
23
See FCC, Trends in Telephone Service, at Table 5.3 (Sept. 2010), https://apps.fcc.gov/edocs_public/
attachmatch/DOC-301823A1.pdf (Trends in Telephone Service).
24
Id.
25
13 CFR § 121.201.  The Wired Telecommunications Carrier category formerly used the NAICS code of 517110.  
As of 2017 the U.S. Census Bureau definition shows the NAICs code as 517311 for Wired Telecommunications 
Carriers.  See, https://www.census.gov/cgi-bin/sssd/naics/naicsrch?code=517311&search=2017.
26
  http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2012_US_
51SSSZ5&prodType=table.
Federal Communications Commission FCC 17-155
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Local Service Providers, are 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.
27
  Of these 1,442 carriers, an estimated 1,256 have 1,500 or fewer employees.
28
  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.
29
  Also, 72 carriers have reported that they are Other Local Service 
Providers.
30
Of this total, 70 have 1,500 or fewer employees.
31
  Consequently, based on internally 
researched FCC data, 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. 
10. Interexchange Carriers (IXCs).  Neither the Commission nor the SBA has developed a 
small business size standard specifically for providers of interexchange services.  The appropriate 
category for IXCs is the category Wired Telecommunications Carriers.  Under that size standard, such a 
business is small if it has 1,500 or fewer employees.
32
  Census Bureau data for 2012 indicates that 3,117 
firms operated during that year.  Of that number, 3,083 operated with fewer than 1,000 employees.
33
  
According to internally developed Commission data, 359 companies reported that their primary 
telecommunications service activity was the provision of interexchange services.
34
  Of this total, an 
estimated 317 have 1,500 or fewer employees.
35
  Consequently, the Commission estimates that the 
majority of interexchange service providers are small entities that may be affected by the rules proposed. 
11. Operator Service Providers (OSPs).  Neither the Commission nor the SBA has developed 
a small business size standard specifically for operator service providers.  The appropriate category for 
Operator Service Providers is the category Wired Telecommunications Carriers.  Under that size standard, 
such a business is small if it has 1,500 or fewer employees.
36
  Census Bureau data for 2012 shows that 
there were 3,117 firms that operated that year.  Of this total, 3,083 operated with fewer than 1,000 
employees.
37
  Thus, under this size standard, the majority of firms in this industry can be considered 
small.  According to Commission data, 33 carriers have reported that they are engaged in the provision of 
operator services.
38
  Of these, an estimated 31 have 1,500 or fewer employees and two have more than 
1,500 employees.
39
  Consequently, the Commission estimates that the majority of OSPs are small entities 
                                                     
27
See Trends in Telephone Service, at tbl. 5.3.
28
Id.
29
Id.
30
Id.
31
Id.
32
13 CFR § 121.201.  The Wired Telecommunications Carrier category formerly used the NAICS code of 517110.  
As of 2017 the U.S. Census Bureau definition shows the NAICs code as 517311 for Wired Telecommunications 
Carriers.  See, https://www.census.gov/cgi-bin/sssd/naics/naicsrch?code=517311&search=2017.
33
http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2012_US_
51SSSZ5&prodType=table.
34
See Trends in Telephone Service, at tbl. 5.3.
35
Id.
36
13 CFR § 121.201.  The Wired Telecommunications Carrier category formerly used the NAICS code of 517110.  
As of 2017 the U.S. Census Bureau definition shows the NAICs code as 517311 for Wired Telecommunications 
Carriers.  See, https://www.census.gov/cgi-bin/sssd/naics/naicsrch?code=517311&search=2017.
37
http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml? 
pid=ECN_2012_US_51SSSZ2&prodType=table.
38
Trends in Telephone Service, tbl. 5.3.
39
Id.
Federal Communications Commission FCC 17-155
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that may be affected by the rules proposed.
12. Local Resellers. The SBA has not developed a small business size standard specifically 
for Local Resellers. The SBA category of Telecommunications Resellers is the closest NAICs code 
category for local resellers.  The Telecommunications Resellers industry comprises establishments 
engaged in purchasing access and network capacity from owners and operators of telecommunications 
networks and reselling wired and wireless telecommunications services (except satellite) to businesses 
and households.  Establishments in this industry resell telecommunications; they do not operate 
transmission facilities and infrastructure.  Mobile virtual network operators (MVNOs) are included in this 
industry.
40
  Under the SBA’s size standard, such a business is small if it has 1,500 or fewer employees.
41
  
2012 Census Bureau data shows that 1,341 firms provided resale services during that year.  Of that 
number, all operated with fewer than 1,000 employees.
42
  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, 213 carriers have reported that they are engaged in the provision of local resale 
services.
43
  Of these, an estimated 211 have 1,500 or fewer employees and two have more than 1,500 
employees.
44
  Consequently, the Commission estimates that the majority of local resellers are small 
entities that may be affected by the rules adopted. 
13. Toll Resellers. The Commission has not developed a definition for Toll Resellers.  The 
closest NAICS Code Category is Telecommunications Resellers.  The Telecommunications Resellers 
industry comprises establishments engaged in purchasing access and network capacity from owners and 
operators of telecommunications networks and reselling wired and wireless telecommunications services 
(except satellite) to businesses and households.  Establishments in this industry resell 
telecommunications; they do not operate transmission facilities and infrastructure.  MVNOs are included 
in this industry.
45
  The SBA has developed a small business size standard for the category of 
Telecommunications Resellers.
46
  Under that size standard, such a business is small if it has 1,500 or 
fewer employees.
47
  2012 Census Bureau data shows that 1,341 firms provided resale services during that 
year.  Of that number, 1,341 operated with fewer than 1,000 employees.
48
  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.
49
  Of this total, an estimated 857 have 1,500 or fewer employees.
50
  Consequently, 
the Commission estimates that the majority of toll resellers are small entities.  
                                                     
40
https://www.census.gov/cgi-in/sssd/naics/naicsrch?input=517911&search=2012+NAICS+Search&search=2012.
41
13 CFR § 121.201, NAICS code 517911.
42
U.S. Census Bureau, 2012 Economic Census, Subject Series: Information, “Establishment and Firm Size,” 
NAICS code 517911.
43
See Trends in Telephone Service, at Table 5.3.  
44
See id.
45
https://www.census.gov/cgi-bin/sssd/naics/naicsrch?input=517911&search=2012+NAICS+Search&search=2012.
46
13 CFR § 121.201, NAICS code 517911.
47
http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2012_US_51SSSZ5
&prodType=table.
48
https://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2012_US_51SSSZ2
&prodType=table
49
Trends in Telephone Service, at tbl. 5.3.
50
Id.
Federal Communications Commission FCC 17-155
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2. Wireless Carriers and Service Providers
14. Wireless Telecommunications Carriers (except Satellite).  This industry comprises 
establishments engaged in operating and maintaining switching and transmission facilities to provide 
communications via the airwaves.  Establishments in this industry have spectrum licenses and provide 
services using that spectrum, such as cellular services, paging services, wireless internet access, and 
wireless video services.
51
  The appropriate size standard under SBA rules is that such a business is small 
if it has 1,500 or fewer employees.
52
  2012 Census Bureau data for 2012 shows that there were 967 firms 
that operated for the entire year.
53
  Of this total, 955 firms had employment of 999 or fewer employees 
and 12 had employment of 1000 employees or more.
54
  Thus under this category and the associated size 
standard, the Commission estimates that the majority of wireless telecommunications carriers (except 
satellite) are small entities.  The Commission’s own data—available in its Universal Licensing System—
indicate that, as of October 25, 2016, there are 280 Cellular licensees that will be affected by our actions 
today.
55
  The Commission does not know how many of these licensees are small, as the Commission does 
not collect that information for these types of entities.  Similarly, according to internally developed 
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.
56
  Of this total, an estimated 261 have 1,500 or fewer employees, and 152 
have more than 1,500 employees.
57
  Thus, using available data, we estimate that the majority of wireless 
firms can be considered small.
15. 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 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.
58
  The SBA has approved these definitions.
59
  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. 
16. Satellite Telecommunications Providers.  This category comprises firms “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 
                                                     
51
NAICS Code 517210.  See https://factfinder.census.gov/faces/affhelp/jsf/pages/metadata.xhtml?lang=en&type=
ib&id=ib.en./ECN.NAICS2012.517210.
52
13 CFR § 121.201, NAICS code 517210.  
53
U.S. Census Bureau, Subject Series: Information, Table 5, “Establishment and Firm Size: Employment Size of 
Firms for the U.S.: 2012 NAICS Code 517210” (rel. Jan. 8, 2016).
54
Id.  Available census data does not provide a more precise estimate of the number of firms that have employment 
of 1,500 or fewer employees; the largest category provided is for firms with “1000 employees or more.” 
55
See http://wireless.fcc.gov/uls. For the purposes of this FRFA, consistent with Commission practice for wireless 
services, the Commission estimates the number of licensees based on the number of unique FCC Registration 
Numbers.  
56
See Trends in Telephone Service, at tbl. 5.3, https://apps.fcc.gov/edocs_public/attachmatch/DOC-301823A1.pdf. 
57
See id.
58
Amendment of the Commission’s Rules to Establish Part 27, the Wireless Communications Service (WCS), Report 
and Order, 12 FCC Rcd 10785, 10879, para. 194 (1997).
59
See Letter from Aida Alvarez, Administrator, SBA, to Amy Zoslov, Chief, Auctions and Industry Analysis 
Division, Wireless Telecommunications Bureau, FCC (filed Dec. 2, 1998) (Alvarez Letter 1998).
Federal Communications Commission FCC 17-155
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reselling satellite telecommunications.”
60
  The category has a small business size standard of $32.5 
million or less in average annual receipts, under SBA rules.
61
  For this category, 2012 Census Bureau data 
shows that there were a total of 333 firms that operated for the entire year.
62
  Of this total, 299 firms had 
annual receipts of less than $25 million.
63
  Consequently, we estimate that the majority of satellite 
telecommunications providers are small entities.
17. Common Carrier Paging.  As noted, since 2007 the Census Bureau has placed paging 
providers within the broad economic census category of Wireless Telecommunications Carriers (except 
Satellite).
64
  
18. In addition, in the Paging Second Report and Order, the Commission adopted a size 
standard for “small businesses” for purposes of determining their eligibility for special provisions such as 
bidding credits and installment payments.
65
  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.
66
  The SBA has approved this definition.
67
  An initial auction of Metropolitan Economic Area 
(“MEA”) licenses was conducted in the year 2000.  Of the 2,499 licenses auctioned, 985 were sold.
68
  
Fifty-seven companies claiming small business status won 440 licenses.
69
  A subsequent auction of MEA 
and Economic Area (“EA”) licenses was held in the year 2001.  Of the 15,514 licenses auctioned, 5,323 
were sold.
70
  One hundred thirty-two companies claiming small business status purchased 3,724 licenses.  
A third auction, consisting of 8,874 licenses in each of 175 EAs and 1,328 licenses in all but three of the 
51 MEAs, was held in 2003.  Seventy-seven bidders claiming small or very small business status won 
2,093 licenses.
71
19. Currently, there are approximately 74,000 Common Carrier Paging licenses.  According 
                                                     
60
U.S. Census Bureau, 2012 NAICS Definitions, “517410 Satellite Telecommunications”; 
http://www.census.gov/naics/2007/def/ND517410.HTM.  
61
13 CFR § 121.201; NAICS code 517410.
62
  U.S. Census Bureau, 2012 Economic Census of the United States, Table EC1251SSSZ4, Information: Subject 
Series - Estab and Firm Size: Receipts Size of Firms for the United States: 2012, NAICS code 517410 
http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2012_US_51SSSZ4&prodT
ype=table. 
63
Id.
64
See U.S. Census Bureau, 2007 NAICS Definitions, “517210 Wireless Telecommunications Categories (Except 
Satellite)”, http://www.census.gov/naics/2007/def/ND517210.HTM#N517210 (last visited Oct. 24, 2017). 
65
Revision of Part 22 and Part 90 of the Commission’s Rules to Facilitate Future Development of Paging Systems et 
al., WT Docket No. 96-18 et al., Second Report and Order and Further Notice of Proposed Rulemaking, 12 FCC 
Rcd 2732, 2811-12, paras. 178-81 (1997) (Paging Second Report and Order); Revision of Part 22 and Part 90 of the 
Commission’s Rules to Facilitate Future Development of Paging Systems et al., Memorandum Opinion and Order 
on Reconsideration and Third Report and Order, 14 FCC Rcd 10030, 10085-88, paras. 98-107 (1999).
66
Paging Second Report and Order, 12 FCC Rcd at 2811, para. 179.
67
See Letter from Aida Alvarez, Administrator, SBA, to Amy Zoslov, Chief, Auctions and Industry Analysis 
Division, Wireless Telecommunications Bureau, FCC (Dec. 2, 1998).
68
See 929 and 931 MHz Paging Auction Closes, Public Notice, 15 FCC Rcd 4858 (WTB 2000).
69
See id.
70
See Lower and Upper Paging Bands Auction Closes, Public Notice, 16 FCC Rcd 21821 (WTB 2001).
71
See Lower and Upper Paging Bands Auction Closes, Public Notice, 18 FCC Rcd 11154 (WTB 2003).  The current 
number of small or very small business entities that hold wireless licenses may differ significantly from the number 
of such entities that won in spectrum auctions due to assignments and transfers of licenses in the secondary market 
over time.  In addition, some of the same small business entities may have won licenses in more than one auction.
Federal Communications Commission FCC 17-155
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to the most recent Trends in Telephone Service, 291 carriers reported that they were engaged in the 
provision of “paging and messaging” services.
72
  Of these, an estimated 289 have 1,500 or fewer 
employees and two have more than 1,500 employees.
73
  We estimate that the majority of common carrier 
paging providers would qualify as small entities under the SBA definition.
20. Wireless Telephony.  Wireless telephony includes cellular, personal communications 
services, and specialized mobile radio telephony carriers.  The closest applicable SBA category is 
Wireless Telecommunications Carriers (except Satellite)
74
and the appropriate size standard for this 
category under the SBA rules is that such a business is small if it has 1,500 or fewer employees.
75
  2012 
Census Bureau data shows that there were 967 firms that operated for the entire year.  Of this total, 955 
firms had fewer than 1,000 employees and 12 firms has 1000 employees or more.
76
Thus under this 
category and the associated size standard, the Commission estimates that a majority of these entities can 
be considered small.  According to Commission data, 413 carriers reported that they were engaged in 
wireless telephony.
77
  Of these, an estimated 261 have 1,500 or fewer employees and 152 have more than 
1,500 employees.
78
  Therefore, more than half of these entities can be considered small.
21. All Other Telecommunications.  This category is comprised of establishments that are 
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.
79
  The SBA has developed a small business size standard for “All Other 
Telecommunications,” which consists of all such firms with gross annual receipts of $32.5 million or 
less.
80
  For this category, U.S. Census data for 2012 shows that there were 1,442 firms that operated for 
the entire year.  Of these firms, a total of 1,400 had gross annual receipts of less than $25 million.
81
  Thus, 
a majority of “All Other Telecommunications” firms potentially affected by our action can be considered 
small.
3. Internet Service Providers
22. Internet Service Providers (Broadband).  Broadband Internet service providers include 
wired (e.g., cable, DSL) and VoIP service providers using their own operated wired telecommunications 
                                                     
72
2010 Trends Report at Table 5.3, page 5-5.
73
Id.
74
13 CFR § 121.201; NAICS code 517210.
75
Id.
76
Id.  Available census data do not provide a more precise estimate of the number of firms that have employment of 
1,500 or fewer employees; the largest category provided is for firms with “1000 employees or more.”
77
Trends in Telephone Service, tbl. 5.3.
78
Id.
79
http://www.census.gov/cgi-bin/ssssd/naics/naicsrch.
80
13 CFR § 121.201; NAICS Code 517919.
81
http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2012_US_
51SSSZ4&prodType=table.
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infrastructure fall in the category of Wired Telecommunication Carriers.
82
  Wired Telecommunications 
Carriers are comprised of establishments primarily engaged in operating and/or providing access to 
transmission facilities and infrastructure that they own and/or lease for the transmission of voice, data, 
text, sound, and video using wired telecommunications networks.  Transmission facilities may be based 
on a single technology or a combination of technologies.
83
  The SBA size standard for this category 
classifies a business as small if it has 1,500 or fewer employees.
84
  2012 Census Bureau data shows that 
there were 3,117 firms that operated that year.  Of this total, 3,083 operated with fewer than 1,000 
employees.
85
  Consequently, under this size standard the majority of firms in this industry can be 
considered small.  
23. Internet Service Providers (Non-Broadband).  Internet access service providers such as 
Dial-up Internet service providers, VoIP service providers using client-supplied telecommunications 
connections and Internet service providers using client-supplied telecommunications connections (e.g., 
dial-up ISPs) fall in the category of All Other Telecommunications.  The SBA has developed a small 
business size standard for All Other Telecommunications, which consists of all such firms with gross 
annual receipts of $32.5 million or less.
86
  For this category, U.S. Census data for 2012 shows that there 
were 1,442 firms that operated for the entire year.  Of these firms, a total of 1,400 had gross annual 
receipts of less than $25 million.
87
  Consequently, under this size standard a majority of “All Other 
Telecommunications” firms can be considered small.   
D. Description of Projected Reporting, Recordkeeping, and Other Compliance 
Requirements for Small Entities
24. In this NPRM, we seek public input on new and additional solutions for the Lifeline 
program, including reforms that would bring the program closer to its core purpose and promote the 
availability of modern services for low-income families.  The issues we seek comment on in this NPRM 
are directed at enabling us to meet our goals and objectives for the Lifeline program, and reducing waste, 
fraud, and abuse.  Specifically, we seek comment on a number of potential changes that would increase 
the economic burdens on small entities, and also seek comment on proposals that would decrease those 
burdens.  We have identified the applicable potential changes below that impact small entities.  
25. Focusing Lifeline Support to Encourage Investment in Broadband-Capable Networks.  
We seek comment on several policy changes that would focus Lifeline support to encourage investment 
in broadband-capable networks, including limiting Lifeline support to facilities-based broadband service 
provided to Lifeline customers over the ETC’s voice-and-broadband-capable network, discontinuing 
Lifeline support for non-facilities-based service, and continuing the phase down of Lifeline support for 
voice service in urban areas.
26. Reforms to Increase Efficient Administration of the Lifeline Program.  We seek comment 
on a number of reforms to increase the efficient administration of the program, including requiring ETCs 
to supply documentation to USAC for National Lifeline Accountability Database (NLAD) dispute 
resolutions, ETCs to collect documentation for subscribers seeking to self-certify to continued eligibility, 
                                                     
82
See 13 CFR § 121.201.  The Wired Telecommunications Carrier category formerly used the NAICS code of 
517110.  As of 2017 the U.S. Census Bureau definition show the NAICs code as 517311.  See https://www.census.
gov/cgi-bin/sssd/naics/naicsrch?code=517311&search=2017
83
Id.
84
Id.
85
http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml? pid=ECN_2012_US_
51SSSZ2&prodType=table.
86
13 CFR § 121.201; NAICS Code 517919.
87
http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?
pid=ECN_2012_US_51SSSZ4&prodType=table.
Federal Communications Commission FCC 17-155
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and limiting the use of independent economic household forms to only NLAD dispute resolutions.
E. Steps Taken to Minimize the Significant Economic Impact on Small Entities, and 
Significant Alternatives Considered
27. The RFA requires an agency to describe any significant, specifically small business, 
alternatives that it has considered in reaching its proposed 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 and 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 such small entities.”
88
28. The NPRM seeks comment on several policies that would bring the program closer to its 
core purpose and promote the availability of modern services for low-income families, and also reduce 
waste, fraud, and abuse in the program.  As explained below, several of the policies would increase the 
economic burdens on small entities, and certain changes would lessen the economic impact on small 
entities.  In those instances in which a policy would increase burdens on small entities, we have 
determined that the benefits from such changes outweigh the increased burdens on small entities because 
those proposed changes would facilitate the Lifeline program’s goal of supporting affordable, high-speed 
Internet access for low-income Americans or would minimize waste, fraud, and abuse in the program.  
The Commission invites comments on ways in which the Commission can achieve its goals, but at the 
same time further reduce the burdens on small entities.  The Commission expects to consider the 
economic impact on small entities, as identified in comments filed in response to the NPRM and this 
IRFA, in reaching its final conclusions and taking action in this proceeding. 
F. Proposed Changes that Lessen Economic Impact on Small Entities
29. Eliminating Lifeline Device Requirements.  We seek comment on eliminating the Lifeline 
program’s device requirements.  This would decrease the burdens for small entities because they would 
no longer be required to meet criteria imposed by the rule, including the requirement that devices 
provided to consumers be Wi-Fi enabled and the requirement that mobile broadband providers offer 
devices that are “capable of being used as a hotspot.”  Eliminating these requirements should reduce 
compliance costs for small entities because they will no longer be required to include these capabilities.
G. Proposed Changes that Increase Economic Impact on Small Entities
30. Focusing Lifeline Support to Encourage Investment in Broadband-Capable Networks.  
We seek comment on several potential policies that would focus Lifeline support to encourage investment 
in broadband-capable networks.  We also seek comment on TracFone’s suggested alternatives to the 
proposed facilities requirement.
89
  The Commission’s proposed policies would change the services 
eligible for Lifeline support and would also change the type of providers that can receive Lifeline support.  
In particular, these policies would eliminate Lifeline support for ETCs that do not offer facilities-based 
broadband service over their own networks, or would continue the phase down of Lifeline support for 
voice-only service in urban areas.  However, these policies would facilitate the Lifeline program goals of 
providing low-income consumers access to quality, affordable broadband services, in particular by 
encouraging service providers to invest in broadband networks in unserved and underserved areas.  We 
also note that these policies may benefit small entities that operate facilities-based broadband-capable 
networks, whose services would be more affordable for low-income consumers through the application of 
                                                     
88
5 U.S.C. § 603(c)(1)-(c)(4).
89
Letter from Mitchell F. Brecher, Counsel for TracFone Wireless Inc., to Marlene Dortch, Secretary, FCC, WC 
Docket No. 17-287 et al., Attach B. (filed Nov. 9, 2017).
Federal Communications Commission FCC 17-155
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the Lifeline discount. The benefits of these policies to Lifeline customers outweighs any impact of these 
changes on small entities.  TracFone’s suggested alternatives to the proposed facilities requirement would 
impact Lifeline service provider in-person hand-set distribution, operations practices concerning Lifeline 
solicitations and eligibility verifications, and application processes.  These alternatives would increase 
service providers’ administrative burdens.  However, they would also minimize waste, fraud, and abuse in 
the program, which in turn benefits consumers and service providers that pay into the Universal Service 
Fund.  Therefore, the benefits of these changes would outweigh and impact of these changes on small 
entities. 
31. Focusing Lifeline Support on Modern Communications Services.  We seek comment on 
adopting a maximum discount level for Lifeline subscribers, and potential changes to encourage Lifeline 
consumers to adopt broadband services.  These changes could increase costs associated with ETCs’ 
administrative processes, including billing.  However, we expect these burdens to be manageable for 
ETCs.  Further, these proposed changes would help minimize waste, fraud, and abuse in the Lifeline 
program, and would also increase the effectiveness of Lifeline support by targeting support to Lifeline 
consumers who have not yet adopted broadband services.  Therefore, the benefits of these proposed 
changes outweigh the impact of the proposed changes on small entities.  
32. Reforms to Increase Efficient Administration of the Lifeline Program.  We seek comment 
on a number of reforms to increase the efficient administration of the program, including requiring ETCs 
to supply documentation to USAC for National Lifeline Accountability Database (NLAD) dispute 
resolutions, ETCs to collect documentation for subscribers seeking to self-certify to continued eligibility, 
and limiting the use of independent economic household forms to only NLAD dispute resolutions.  These 
reforms could increase costs associated with ETCs’ administrative processes.  However, we expect these 
burdens to be manageable for ETCs.  In addition, in states where the National Verifier will be 
implemented, these burdens would be temporary because the National Verifier would take over eligibility 
verification and recertification in those states.  Further, these proposed changes would help minimize 
waste, fraud, and abuse in the Lifeline program, which in turn would benefit consumers and providers that 
pay into the Universal Service Fund.  Therefore, the benefits of these proposed changes outweigh the 
impact of these proposed changes on small entities.   
33. Compliance burdens.  Implementing any of our proposed rules (e.g., requiring ETCs to 
supply documentation to USAC for National Lifeline Accountability Database (NLAD) dispute 
resolutions, ETCs to collect documentation for subscribers seeking to self-certify to continued eligibility, 
and limiting the use of independent economic household forms to only NLAD dispute resolutions) would 
impose some burden on small entities by requiring them to make such certifications and entries on FCC 
forms, and requiring them to become familiar with the new rules to comply with them. For many of 
proposed the rules, there is a minimal burden.  Thus, these new requirements should not require small 
businesses to seek outside assistance to comply with the Commission’s rule but rather are more routine in 
nature as part of normal business processes.  The importance of bringing the Lifeline program closer to its 
core purpose and promoting the availability of modern services for low-income families, however, 
outweighs the minimal burden requiring small entities to comply with the new rules would impose.
H. Federal Rules that May Duplicate, Overlap, or Conflict with the Proposed Rules
34. None.
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APPENDIX E
Enhanced Lifeline Support on Rural Tribal Lands Map
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Federal Communications Commission FCC 17-155
78
STATEMENT OF 
CHAIRMAN AJIT PAI
Re: Bridging the Digital Divide for Low-Income Consumers, WC Docket No. 17-287; Lifeline and 
Link Up Reform and Modernization, WC Docket No. 11-42; Telecommunications Carriers 
Eligible for Universal Service Support, WC Docket No. 09-197
This past summer, the Government Accountability Office (GAO) published a report identifying 
deeply disturbing problems with the Lifeline program.  For example, GAO discovered 1,234,929 Lifeline 
subscribers who apparently were not eligible to participate in the program as well as 6,378 individuals 
who apparently reenrolled after being reported dead.  That limited sample alone constituted more than 
$137 million in abuse each year.  Just two months ago, the U.S. Senate Homeland Security and 
Governmental Affairs Committee asked me to testify at a hearing entitled “FCC’s Lifeline Program: A 
Case Study of Government Waste and Mismanagement.”  The message I heard was clear, urgent, and 
bipartisan.  Among other members, Chairman Johnson and Ranking Member McCaskill declared that 
Lifeline’s problems are serious and persistent—and the time for action is now.  As Ranking Member 
McCaskill put it, “the idea that we can continue a program that is still structurally deficient, in the same 
way we have been doing it, is frankly a non-starter for me.”
1
It’s a non-starter for the FCC, too.  So today, we take action.
The reforms that we implement and propose today seek to accomplish two important objectives: 
(1) curtail the waste, fraud, and abuse that continue to plague the Lifeline program and (2) make Lifeline 
more effective at bridging the digital divide on behalf of low-income Americans.
Let’s start with what specifically will change as a result of this Order.
First, we will reduce waste by appropriately targeting enhanced Tribal Lifeline support.  Right 
now, the Lifeline program provides subsidies of up to $9.25 a month to those living in most parts of the 
country.  But it provides up to $34.25 a month in subsidies to those living on Tribal lands, a $25 per 
month bump.  In many cases, that enhanced subsidy rightly reflects the limited deployment and high cost 
of providing service on many Tribal lands.  But the definition we’ve used for Tribal lands includes cities 
like Tulsa, Oklahoma and Reno, Nevada.  So any low-income person in Tulsa and Reno is eligible for a 
$34.25-per-month subsidy while those living in Wichita, Las Vegas, and the vast majority of cities in the 
United States only qualify for $9.25.  This makes no sense.  I was just in Reno this summer and—
consistent with being “the Biggest Little City in the World”—it seems to be a pretty significant 
population center with good connectivity, especially when compared to Tribal areas I’ve visited, like the 
Rosebud Sioux Reservation and Navajo Nation.  Targeting enhanced Lifeline Tribal support to rural 
Tribal areas ends this waste and directs federal help to members who really need the help.
Second, we direct enhanced Tribal support to those providers who are actually building networks 
and deploying infrastructure on Tribal lands.  I’ve participated in three official Tribal consultations as 
Chairman and numerous other meetings with Tribal representatives.  I’ve discussed the Lifeline program 
with Tribal representatives and talked about ways it can be improved.  And what I have heard repeatedly 
is that communities on Tribal lands desperately need broadband investment.  That’s why many Tribes and 
Tribal organizations have weighed in with their support for the step we are taking today, from the 
Affiliated Tribes of Northwest Indians in Oregon to Gila River in Arizona to the Coeur D’Alene Tribe in 
                                                     
1
Opening Statement of Senator Claire McCaskill, Hearing before U.S. Senate Committee on Homeland Security 
and Government, “FCC’s Lifeline Program: A Case Study of Government Waste and Mismanagement” (Sept. 14, 
2017), available at https://www.hsgac.senate.gov/hearings/fccs-lifeline-program-a-case-study-of-government-waste-
and-mismanagement.
Federal Communications Commission FCC 17-155
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Idaho to the Sovereign Councils of Hawaiian Homelands Assembly to the Ohkay Owingeh in New 
Mexico to the Red Lake Band of Chippewa Indians in Minnesota to the Alatna Village Council in Alaska.  
These tribes understand that a $34.25-per-month subsidy is a significant sum that, when aggregated, can 
greatly improve a facilities-based provider’s business case for building out broadband networks on Tribal 
lands.
Third, we take the simple and common-sense step of requiring independent certification of 
residency on Tribal lands for those seeking enhanced Tribal support.  Until now, the Lifeline program has 
allowed for self-certification of Tribal residency.  That flawed system allowed one reseller to sign up 
more Tribal customers in Hawaii than there were Tribal residents!  Simply put, the honor system is not an 
adequate safeguard for scarce taxpayer funds.  Today, we close this loophole and require residency on 
Tribal lands to be independently verified.  
Fourth, we reverse an anti-consumer rule that the prior Commission established just last year.  
The so-called “port freeze” allowed Lifeline providers to lock-in consumers for a year when providing 
broadband service.  And this past year, we’ve heard of Lifeline customers dissatisfied with their service 
but blocked from switching to a different Lifeline provider because of this rule.  All consumers—
including low-income consumers—deserve choice and flexibility, and I’m glad that we’re repealing this 
ill-considered rule. 
Fifth, we take an important step to ensure that Lifeline consumers are receiving the quality of 
service they deserve.  Right now, some resellers are claiming to meet Lifeline’s minimum service 
standards through “premium Wi-Fi”—a service that might work at the local McDonald’s but won’t 
connect students who want to do their homework at home.  Low-income families deserve high-quality 
services, not cheap knock-offs.  Today, we say second-class service isn’t good enough.
Taken together, these five targeted measures will reduce waste, fraud, and abuse in the program.  
They will help bridge the digital divide on rural Tribal lands.  And they will improve service for Lifeline 
consumers.
Turning from our reforms to our proposals, we’re exploring further ways to crack down on waste, 
fraud, and abuse—for example, by improving our Lifeline audits and making the National Verifier work 
better once it’s up and running.  We take a hard look at wireless resellers—the group of Lifeline providers 
that have been the subject of the vast majority of Commission investigations for waste, fraud, and abuse.  
And we finally propose to adopt a real, self-enforcing Lifeline budget for the first time.  Some say that the 
Lifeline program is too important to have a meaningful budget.  I say it’s too important not to have one.  
Having an enforceable budget mechanism promotes good government and helps ensure that every dollar
spent is spent more wisely.  And every other Universal Service Fund program—E-Rate, high cost, and 
rural health care—has a real budget, and every one of those programs is critical, too.
We also examine how the Lifeline program can support investment in broadband networks where 
they are needed most—in the low-income communities in our cities, in rural areas, and on Tribal lands 
that have been digitally redlined.  Far too many Americans lack the affordable broadband options that 
many of us take for granted.  And for far too long, policymakers have let unscrupulous wireless resellers 
waste Lifeline funding rather than demand these funds go to support real digital opportunity and 
infrastructure in underserved communities.
Finally, I want to make clear my hope that the past shouldn’t be prologue.  In 2016, we reached a 
bipartisan deal that, while imperfect, would have addressed some of the problems with the Lifeline 
program.  But that agreement was scuttled at the last moment.  As a result, it falls to this Commission to 
reform the program and make it a more effective tool for bridging the digital divide and expanding digital 
opportunity.  Going forward, I remain willing to work with anyone who shares those goals and is 
interested in meaningful reform rather than defending a failed status quo.
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Thank you to the staff who worked on this item: Allison Baker, Tom Buckley, Tavi Carare, Terry 
Cavanaugh, Rashann Duvall, Nathan Eagan, Chas Eberle, Jim Eisner, Jeff Gee, Jodie Griffin, Nese 
Guendelsberger, Garnet Hanley, Trent Harkrader, Christian Hoefly, Jerry Ellig, Allison Jones, Paul 
Lafontaine, Kalun Lee, Wayne Leighton, Ken Lynch, Marcus Maher, Rick Mallen, Maura McGowan, 
Betsy McIntyre, Kris Monteith, Keith Morgan, Chuck Needy, Dangkhoa Nguyen, Roger Noel, Linda 
Oliver, Ryan Palmer, Eric Ralph, Bill Richardson, John Schauble, Geoffrey Starks, Mark Stephens, Craig 
Stroup, Patrick Sun, Geoff Waldau, and Sanford Williams.
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DISSENTING STATEMENT OF 
COMMISSIONER MIGNON L. CLYBURN
Re: Bridging the Digital Divide for Low-Income Consumers, WC Docket No. 17-287; Lifeline and 
Link Up Reform and Modernization, WC Docket No. 11-42; Telecommunications Carriers 
Eligible for Universal Service Support, WC Docket No. 09-197
There is a simple question, I fear, that is too rarely asked in these quarters: Just who is a Lifeline 
subscriber? According to survey data, it is a she. She makes $14,000 per year. She is middle-aged, single, 
and has a child within her care. She is trapped in systemic poverty and she has picked the only device and 
telephone plan she could afford. Or to state it more boldly, the plan has picked her.
That service is delivered primarily by a wireless reseller because she can only afford one form of 
communication. That service enables her to call 911; that service allows her to speak with her child’s 
educators, and help her child with her homework; and that service enables her to stay on top of her full-
time, or multiple part-time, but all too often dead-end minimum-wage shift schedule. 
And just what has the FCC majority teed up for her today, in the final order that was circulated 
after this meeting was called to order: a more efficient, user-friendly means to bridge the communications 
divide? No. Before us is a carefully crafted proposal which is more likely to rip that phone from her 
hands, than provide her with enhanced service.
Now if I were to rename this agency the Federal Punitive Rulemaking Commission, you would 
accuse me of being over-the-top. But this Fourth Report and Order, Order on Reconsideration, 
Memorandum Opinion and Order, Notice of Proposed Rulemaking and Notice of Inquiry is in fact, a 
punitive rulemaking. And what should be most telling even to a casual observer, is that no filer in the 
docket thus far supports any of the specific policy proposals. There is a slight exception in the form of one 
filer who damns the proposal with the faintest of praise, but every other commenter is categorically 
against this item. Veterans groups, public interest groups, civil rights groups, carriers, Tribes, and more, 
all express deep concern about this rulemaking.
So I draped myself primarily in black this morning because I mourn for that mother and her 
prospects when it comes telephone service. I mourn because before us is an absurd proposal devoid of 
promise and empathy, and I mourn because I am forced to be critical of the majority that leads an agency 
I hold dear. I mourn, because the majority would rather toss out viable solutions already teed up when it 
comes to service reforms, more choice, and ensuring that low-income Americans can afford voice and 
broadband service.
The majority proclaims that the item is all about bridging the digital divide and has boldly labeled 
this item as such. But, this proposal does nothing to make the lives of those who qualify better, and no 
amount of Orwellian doublespeak in the docket’s title will suggest otherwise. Make no mistake: this is the 
Widen the Digital and Opportunity Divide item. 
This Administration goes on and on about the urgency of reducing regulatory barriers. Indeed, we 
have had before us, item after item over the past 10 months that purport to do just that. But when it comes 
to those most in need, the most they are willing to pay is lip service. For them, we have
1
and will
2
make it 
                                                     
1
See Telecommunications Carriers Eligible for Universal Service Support, Lifeline and Link Up Reform and 
Mondernization, Order or Reconsideration, 32 FCC Rcd 1095 (WCB 2017) (LBP Revocation Order) (revoking the 
designations of nine companies to provide Lifeline service, with no showing of wrongdoing); Statement of FCC 
Chairman Ajit Pai on the Future of Broadband in the Lifeline Program (Mar. 29, 2017) (refusing to let more 
broadband providers into the program and committing to undo Lifeline Broadband Provider process). 
Federal Communications Commission FCC 17-155
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more difficult for providers to enter and stay in the Lifeline program. For those looking to serve 
economically poor people, this majority is quite comfortable attacking even blameless companies as they 
force them to divest customers,
3
lose millions of dollars even after they have entered the market,
4
and 
ensuring that it will take 25 years instead of one year to enter into the nationwide market.
5
This Administration is all about ensuring that the Commission encourages innovative service 
offerings,
6
but not if that offering is designed to help those who are economically poor. For those less 
fortunate, the majority is happy to dictate the exact type of facilities a provider must use to provide 
service,
7
ignoring the Act,
8
and the ability of the marketplace to respond and provide solutions that meet 
people where they are, and ignoring every other docket where they extol the benefits of a free and open 
market.
I could go on pointing out how this Administration enables providers to provide free data to 
consumers,
9
but not if they are economically poor;
10
How this Administration allows universal service 
benefits to flow in perpetuity for companies,
11
but not for the economically poor;
12
that this 
Administration praises competition and choice,
13
but not for the economically poor;
14
and that this 
Administration decries consumers having to pay a minimum fee for voice service,
15
but for the 
economically poor, we are just fine with suggesting they do just that.
16
Finally, we have raised budgets for 
other universal service programs, but here we are seeking comment on halving (or worse) the amount we 
(Continued from previous page)                                                            
2
  Bridging the Digital Divide for Low-Income Consumers et al., Fourth Report and Order, Order on 
Reconsideration, Memorandum Opinion and Order, Notice of Proposed Rulemaking, and Notice of Inquiry FCC 
(2017) (Widen the Divide).
3
LBP Revocation Order, paras. 15-16.
4
See LBP Revocation Order.
5
Remarks of Michael Flood, Vice President of Education Markets, Kajeet, MMTC Lifeline Update (Mar. 21 2017).
6
Chairman Pai Statement on Free Data Programs (Feb. 3, 2017), http://transition.fcc.gov/Daily_Releases/
Daily_Business/2017/db0203/DOC-343345A1.pdf.
7
Widen the Divide NPRM, passim (proposing to limit Lifeline support to only fixed and mobile providers that 
provide last-mile service over Commission-specified technology and own or long-term lease last-mile facilities).
8
47 U.S.C. § 214(e)(1) (explicitly contemplating resale as an option for ETCs).
9
Chairman Pai Statement on Free Data Programs (Feb. 3, 2017), http://transition.fcc.gov/Daily_Releases/
Daily_Business/2017/db0203/DOC-343345A1.pdf.
10
Widen the Divide NPRM, paras. 112-15.
11
No other universal service program limits the total amount of support an entity may receive over the course of 
their participation in the program.
12
Widen the Divide NOI, paras. 130-31.
13
See, e.g., Implementation of Section 6002(b) of the Omnibus Budget Reconciliation Act of 1993, Annual Report 
and Analysis of Competitive Market Conditions with Respect to Mobile Wireless, Including Commercial Mobile 
Services, Twentieth Report, FCC 17-126 (2017).
14
Widen the Divide NPRM, passim (proposing to limit Lifeline support to facilities-based providers, even if there is
no facilities-based Lifeline ETC in the area).
15
Connect America Fund, et al., Report and Order, 29 FCC Rcd 7051 (2014) (Statement of Commissioner Pai)
(criticizing policy where the “FCC sets a minimum price that telephone companies can charge their customers for 
local telephone service”). 
16
Widen the Divide NPRM, paras. 112-15.
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spend bringing the vulnerable online.
17
Could it be because these consumers are the economically poor?
The impact of these actions and proposed actions will be severe, but the actions themselves are 
heartless. Over 70% of wireless Lifeline consumers will be told they cannot use their preferred carrier and 
preferred plan, and on top of that, they may not have a carrier to turn to after that happens. And just where 
is the analysis of where these customers will go, or how we can ensure that they continue to be able to 
afford connectivity?  The item contains no analysis of this sort. And at a time when eligible 
telecommunications carriers are actively relinquishing their designations,
18
or have elected forbearance 
from the obligation to provide Lifeline service,
19
just where will these consumers turn?
As I have said before and will repeat today, the federal Lifeline Program is not, nor should it be, 
an infrastructure program. It is certainly a complement to infrastructure programs, but ultimately it is an 
affordability program. Even when the Commission has said that additional Lifeline monies would have 
the effect of spurring infrastructure deployment in the context of Tribal Lifeline,
20
it has said that the 
“primary goal is to reduce the monthly cost of service”
21
and went on with a detailed analysis of how that 
additional funding would impact affordability.
22
It has never suggested that affordability is an
infrastructure problem and it never should.
Most disheartening, however, is the immediate impact this proposal will have on Tribal lands, 
and that it is occurring during Native American Heritage Month, is most distressing. During my travels in 
New Mexico last year, I met Lucienda, a young Navajo woman. She told me that without the Lifeline 
program her community would “really be living in the 1800s.” Unfortunately, many other Tribes are 
plagued by a disproportionate share of their citizens living in poverty, and some of them lack the basics, 
like electricity and running water. What this means is that their Lifeline phone is their only real 
connection with the outside world, and sometimes, it is their only functioning utility. The Tribes
23
have 
told us that losing enhanced Lifeline support would be devastating, because very few wireless ETCs 
actually provide Lifeline service on Tribal lands. And for some inexplicable reason, this item prohibits 
satellite service from participating in Lifeline on Tribal lands. As if all of this were not painful enough, 
this item offers no transition or phase-down period, unlike what we have done in the past for multiple 
other universal service and disability programs when we change rate and subsidy structures.
Process-wise, this item fails. Making radical changes without engaging Tribes is contrary to our 
own best practices. While the draft re-circulated yesterday makes reference to mapping-related 
consultation completed over a year ago in the last Administration, there is no mention of any consultation 
that this Administration has done. We have an internal Office of Native Affairs and Policy - were they 
consulted during this process? If not, that is truly bad process. 
                                                     
17
Id. at paras. 104-10.
18
For example, one large ILEC has relinquished their designations in several states. Others have done the same.
19
Over 80 carriers filed to opt-out of offering Lifeline service. NECA, Carriers Seeking Forbearance from Lifeline 
BIAS requirements, https://prodnet.www.neca.org/publicationsdocs/wwpdf/12116lifelinebias.pdf (last visited Nov. 
16, 2017).
20
Federal-State Joint Board on Universal Service et al., Twelfth Report and Order, Memorandum Opinion and 
Order, and Further Notice of Proposed Rulemaking, 15 FCC Rcd 12208, 12231, para. 44 (2000).
21
Id. at para. 44.
22
Id. at paras. 41-51.
23
See, e.g., Letter from Jefferson Keel, President, National Congress of American Indians, to Marlene H. Dortch, 
Secretary, FCC (filed Nov. 8, 2017). 
Federal Communications Commission FCC 17-155
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At a minimum, we should have sought further comment on this and actively consulted with 
Tribes on these issues as we said we would.
24
And, like many others on the agenda today, this item does 
not include a cost-benefit analysis unlike what the FCC majority repeatedly demanded of the previous 
Administration.
It did not have to be this way. I was willing to meet my colleagues half-way, I have shown in the 
past that I would vote for Notices that seek comment even on things that I do not believe in, particularly if 
it would result in an Order that saves low-income Tribal consumers from losing service once it is 
effective. But unfortunately, this was not to be. 
Days after the item was first circulated, my office began a conversation with the Chairman’s 
office about potential edits. In the interest of compromise, I suggested that we pump the brakes a bit and 
build a record on the major changes in this item, like the elimination of resellers from the program and 
changes to Tribal Lifeline. That suggestion was flatly rejected. I proposed that we retain a streamlined, 
LBP-like process for states that do not certify Lifeline-only ETCs. That suggestion was flatly rejected. I 
suggested that we not re-open the door to fraud by eliminating the port freeze right now, seeking 
comment before proceeding. That proposal was flatly rejected. I asked that we seek comment on 
alternative legal authority so that we do not prejudge our discussion of whether only facilities-based 
providers should be allowed in the program. That was flatly rejected. And I suggested that we not 
hamstring the program through an ill-advised budget cap methodology.  You guessed it: flatly rejected.
It is inevitable that someone will bring up my admittedly failed attempt at compromise on one 
item: the budget. Let me speak to this. We have a budget mechanism for Lifeline now, that may not go as 
far as the punitive cap the majority seeks comment on here. Indeed, the lead sentence in the paragraph 
that seeks comment on the budget, suggests an $820 million cap. Irrespective of my past attempt at 
compromise, leading with a proposal that would cut the program’s current budget by more than half is not 
something I can ever support.
This item does not bridge the digital divide as it purports, it is a bridge to nowhere. It proposes to 
shirk one of the four pillars of our universal service promise – affordability –  but I can only hope that this 
Commission and its majority sees the error of its ways before it does further harm to those Americans 
trapped in economic distress.
I dissent. 
                                                     
24
Statement of Policy on Establishing a Government-to-Government Relationship with Indian Tribes, Policy 
Statement, 16 FCC Rcd 4078, 4078, para. 2 (2000).
Federal Communications Commission FCC 17-155
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STATEMENT OF 
COMMISSIONER MICHAEL O’RIELLY
Re: Bridging the Digital Divide for Low-Income Consumers, WC Docket No. 17-287; Lifeline and 
Link Up Reform and Modernizations, WC Docket No. 11-42; Telecommunications Carriers 
Eligible for Universal Service Support, WC Docket No. 09-197
I commend the Chairman for undertaking this proceeding to make critical reforms to the Lifeline 
program.  He and his team have worked diligently for years to identify and quantify waste, fraud, and 
abuse in the program.  They have frequently done so in the face of unfair and blistering criticism simply 
for highlighting the many ways the program has gone off the rails, including by enabling providers to 
claim support for dead people.  These are basic, undeniable facts.  
I have raised similar concerns, as has the Government Accountability Office (GAO) in report after 
report after report.  Indeed, given the miserable track record of the program, many have called for ending
it altogether.  Yet the Chairman, from the very start of his term, has attempted to institute necessary fixes, 
bringing the program back in line with the statute, directing USAC to improve oversight, and accelerating 
progress on the National Lifeline Eligibility Verifier (NLEV).  Now, we are seeking comment on more 
fundamental revisions.  
Some have argued that changes adopted by the prior Commission are sufficient.  But some of 
those reforms, like the NLEV, won’t be completely in place for years – if ever.  In the meantime, we can 
and must do better to safeguard the program and the ratepayer dollars that fund it.  
During this latest push to overhaul Lifeline, I have focused on three particular reforms:  
establishing a real, enforceable budget for the program; targeting the subsidies to those consumers who 
would not otherwise have service; and returning the program to its original purpose of providing 
discounted – not free – service by requiring a minimum contribution from as many recipients as feasible.  
These are reasonable requests that I will continue to press for and will expect to see in any final rules.  
First, my call for a real budget – not some phony “budget mechanism” – is not unique to the 
Lifeline program.  All other federal universal service programs are subject to a cap or very firm budget to 
limit the overall cost to consumers who pay fees to support these programs. A budget is also the first line 
of defense against a rapid increase in a program’s size, and it acts as a deterrent to providers and 
recipients to prevent oversubscription or abuse.  It is unfathomable to me that some of my colleagues, 
who previously sat before Congress and agreed on the need for a budget, would seek to remove any 
discussion of a budget from this item.  Indeed, had the prior Commission followed through with a 
bipartisan deal that had been struck to implement a budget, this proceeding might have been in a very 
different posture. 
Second, to avoid excess spending and regulatory overreach, all federal programs must be carefully 
tailored to solve the identified market failure.  The Lifeline program fails miserably in that regard.  The
GAO and academics have pointed out that only 1 out of 8 subscribers (and 1 out of 20 wireless 
subscribers) would not have service absent the Lifeline subsidy. Those are failure rates of almost 88 and 
95 percent, respectively. Let me repeat: consumers are paying more on their phone bills each month to 
support service for people that would have signed up and paid in full without a subsidy. A better targeted 
program would enable more deserving consumers to obtain service without unfairly charging ratepayers.
Third, Lifeline was intended to be a discount program.  Many of the problems with waste, fraud, 
and abuse in the program stem from the fact that, when wireless service was added to the program, the 
subsidized voice service became free to end users, along with the phone and even a data allowance.  
Federal Communications Commission FCC 17-155
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Requiring a minimum contribution would also be consistent with rules for other federal assistance 
programs.  
I recognize that some portion of Lifeline-eligible consumers are truly destitute and could not 
afford to contribute even one dollar to the service.  However, there are other individuals at the top end of 
the eligibility spectrum that should be able to do so and, in fact, may already pay some additional amount 
to “top up” their Lifeline plans.  In those circumstances, we should be able to find some way to 
implement a minimum contribution.  I’ve already heard some ideas worth exploring, such as requiring a 
minimum contribution when consumers recertify their eligibility each year.     
While some would solve the problem by raising program requirements so that providers cannot 
economically offer the service for free, that raises its own set of problems.  For some consumers, simply 
having a voice line or the ability to text is the “lifeline” they want, so requiring providers to offer high-
speed broadband can be counterproductive.  
I appreciate the chance to work with the Chairman and any willing partners on further reforms to 
stamp out remaining waste, fraud, and abuse, and to ensure that the program is run efficiently, effectively, 
and in accordance with the statute. But for those that just want to lambaste any possible changes to the 
program, far from protecting it, you are causing its creditability to further erode and doing a great 
disservice to its many recipients.    
I vote to approve.  
Federal Communications Commission FCC 17-155
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STATEMENT OF 
COMMISSIONER BRENDAN CARR
Re: Bridging the Digital Divide for Low-Income Consumers, WC Docket No. 17-287; Lifeline and 
Link Up Reform and Modernizations, WC Docket No. 11-42; Telecommunications Carriers 
Eligible for Universal Service Support, WC Docket No. 09-197
The Lifeline program is an important part of the FCC’s obligation to ensure that quality services 
are available to consumers at just, reasonable, and affordable rates.  
But the important purposes served by the program have been undermined by the waste, fraud, and 
abuse that has plagued it over the last several years.  The Government Accountability Office (GAO) 
highlighted just some of this abuse in its May 2017 report.  For example, the GAO could not confirm 
whether more than a million individuals actually participate in the qualifying benefit programs claimed on 
their Lifeline enrollment applications.  And the GAO identified over 6,000 individuals who were reported 
as deceased by the Social Security Administration but are nonetheless signed up for Lifeline.  What’s 
more, their enrollments and annual recertifications all took place after the supposed subscribers had 
passed away.  And despite the program’s “one-per-household rule,” in one instance the GAO found 
10,000 separate enrollments associated with a single address.
Even setting the GAO’s findings aside, serious questions remain about whether Lifeline funds are 
being spent to help those that the program is intended to serve.  In 2015, Icon Telecom and its owner were 
ordered to serve a federal sentence for money laundering and making false statements in connection with 
the Lifeline program.  In a related case, the owner of another company that recruited low-income 
consumers to apply for Lifeline pled guilty to money laundering.  He was charged with directing sales 
staff to forge Lifeline applications to “enroll” individuals in the program whose names they found in the 
phone book. 
These concerns have been echoed by members of Congress on both sides of the political aisle, as 
well as members of the Commission in 2012 and 2016 when they voted on reforms.  Now, I don’t view 
these widespread instances of fraud as a basis for eliminating the program, but they are certainly a call for 
serious reform.  Indeed, the Commission has a responsibility to both the ratepayers who fund Lifeline and 
to the consumers who benefit from it to ensure our program goals are being met.  So I am glad that we’re 
now taking action to increase accountability while at the same time considering ways to target Lifeline 
support to consumers and communities that need it most.
One place where the digital divide is most stark is on Tribal lands.  In fact, the FCC has found 
that 68 percent of people living in rural areas on Tribal lands lack access to broadband.  We need to do 
more to close the digital divide in these communities, and doing so requires us to incentivize greater 
facilities-based deployment.  The Commission recognized this point on a bipartisan basis in 2012 when it 
voted to limit the $100 Link Up discount to facilities-based carriers serving Tribal lands.  The 
Commission reasoned back then that by limiting this support to facilities-based providers, the agency 
would help incentivize the deployment of broadband on Tribal lands.  The record developed since then 
supports that finding, and thus we build on the Commission’s 2012 decision in today’s Order by 
extending the existing facilities-based requirement to providers that receive enhanced Tribal Lifeline 
support. The record shows that taking this step will incentivize carriers to deploy and invest in broadband 
facilities on Tribal lands.
The item also asks important questions about potential program changes to ensure Lifeline works 
effectively.  For example, recognizing that universal service funds are finite, we propose to adopt a self-
enforcing budget mechanism and seek comment on how it could work.  We propose to eliminate the 
preemption of state authority over the eligible telecommunications carrier designation process for 
broadband, which will make sure that states continue their vital role in protecting Lifeline subscribers 
Federal Communications Commission FCC 17-155
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from bad actors.  And we seek comment on ways to incentivize continued provider participation in the 
program.  
These are all important steps towards making Lifeline more accountable and effective, so this 
item has my support.
Federal Communications Commission FCC 17-155
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DISSENTING STATEMENT OF 
COMMISSIONER JESSICA ROSENWORCEL
Re: Bridging the Digital Divide for Low-Income Consumers, WC Docket No. 17-287; Lifeline and 
Link Up Reform and Modernizations, WC Docket No. 11-42; Telecommunications Carriers Eligible for 
Universal Service Support, WC Docket No. 09-197
The future belongs to the connected.  No matter who you are or where you live you need access 
to modern communications to have a fair shot at 21
st
century success.  But the fact of the matter is that 
today too many Americans lack access to broadband.
Last year, the FCC decided to do something about it.  It took a hard look at the Lifeline program, 
which got its start in 1985, when President Reagan was in the White House and nearly all 
communications involved a cord.  It updated this program—which was about helping low-income 
households secure access to telephony—and refocused it on broadband.  I think this was the right thing to 
do.  I think this was the modern thing to do.  That’s because Internet connections are the dial tone of the 
digital age.  
If you want an object lesson in why this is true, consider kids and homework.  Today, seven in ten 
teachers assign homework that requires broadband access.  But data from the FCC show that as many as 
one in three households do not subscribe to Internet service.  Where those numbers overlap is what I call 
the Homework Gap.  According to the Senate Joint Economic Committee, the Homework Gap is real.  By 
their estimate, it affects 12 million children across the country.  
Let me tell you what it looks like.  I have sat with students in Texas who do homework at fast 
food restaurants with fries—just to get a free Wi-Fi signal.  I have listened to students in Pennsylvania 
who make elaborate plans every day to head to the homes of friends and relatives just to be able to get 
online.  I have heard from high school football players in rural New Mexico who linger in the school 
parking lot after games in the pitch-black dark because it is the only place they can get a reliable 
connection.  These kids have grit.  But it shouldn’t be this hard.  Because today no child can be left 
offline—developing digital skills is flat-out essential for education and participation in the modern 
economy.  
You know what could help the Homework Gap?  The Lifeline program could help—if properly
reformed and refocused on getting broadband to low-income households, including those with kids in 
school.  
But instead of thinking about the future and doing something modern, today the FCC sets out to 
slash it from front to back.  
Instead of honoring our statutory duty to support low-income consumers, we cast them aside and 
cuts them off. 
Instead of taking into account the millions of dollars that have already been spent on a new 
system of national verification to reduce waste, fraud, abuse, we discard its possibilities before we even 
begin.  
Instead of reviewing new in-depth audits, we toss them in the trash rather than use them to inform 
change.  
Instead of recognizing that there are Lifeline enrollees in Texas, Florida, and Puerto Rico who are 
using the program to pull their lives back together after devastating storms, we seek to cut off their 
Internet and phone service.  
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Instead of consulting with Tribal authorities about changes to Lifeline that impact native 
communities, we hang up on the least connected.  
Instead of helping out the veterans who rely on Lifeline for jobs, health care, and reacclimating to 
civilian life, we turn them away.  
Instead of assisting the low-income elderly with access to modern communications, we deny 
them service.  
Instead of helping kids do their schoolwork and navigate the Homework Gap, we disconnect their 
signal.  We deny them a fair shot at future success.  
This is not real reform.  This is cruelty.  It is at odds with our statutory duty.  It will do little more 
than consign too many communities to the wrong side of the digital divide.
I dissent.