NOTICES

Tentative Order

[38 Pa.B. 966]
[Saturday, February 16, 2008]

Public Meeting held
January 24, 2008

Commissioners Present: Wendell F. Holland, Chairperson; James H. Cawley, Vice Chairperson; Tyrone J. Christy; Kim Pizzingrilli

Re: Lifeline and Link-Up Programs;
Docket No. M-00051871

Tentative Order

By the Commission:

   By this Tentative Order, we amend our prior order, In Re: Lifeline and Link-Up Programs at Docket No. M-00051871, Final Order entered on May 20, 2005, so as to be consistent with the Federal Communication Commission's (FCC) Public Notice Released on July 10, 2007, DA 07-3088, regarding its Lifeline Order.¹ Notice is hereby given by the Commission that the action discussed herein is preliminary in nature and will become final in accordance with law after 30 days of the date of publication of this Tentative Order in the Pennsylvania Bulletin unless comments are received.

Procedural History

   In 1984, the FCC established its ''Lifeline'' program to promote universal telephone service by providing low-income consumers with discounts on the monthly cost of dial tone service. By 1987, the FCC implemented ''Link-Up America'' (Link-Up) to help low-income households pay phone connection charges. With the passage of the Telecommunications Act of 1996 (TA-96), the FCC expanded its rules² so that Lifeline service could be provided to low-income consumers in every state regardless of whether a state provided support. Under the amended rules, telephone companies designated as eligible telecommunications carriers (ETCs) are required to provide Lifeline service to eligible consumers as a condition to eligibility for receiving federal universal service funding.

   On April 29, 2004, the FCC released the Lifeline Order. The FCC modified its rules with the express intention of increasing the national telephone penetration rate above the current level of 94.7% and making phone service affordable to more low-income households. The order expanded the federal default eligibility criteria so as to include an income-based criterion of 135% of the Federal Poverty Guidelines (FPG) and added the National School Lunch Program's free lunch program (NSL)³ as a qualifying social assistance program.

   In order to combat fraud, the FCC added a proof-of-eligibility provision that places an additional administrative requirement on the LECs to get their customers to certify in writing, under oath, that they meet the eligibility requirements for household income and participation in qualifying social assistance programs. The FCC further required ETCs to verify annually the continued eligibility of a statistically valid sample of their Lifeline subscribers.

   In our Lifeline and Link-Up Programs Order⁴ we adopted a majority of the FCC's Lifeline Order provisions. Specifically, we adopted the FCC's statistically-valid sampling method except that because our order was being entered in late-May, we gave the ETCs a deadline of December 22, 2005, for submitting their verification samples to the Universal Service Administrative Company (USAC) instead of a deadline of June 22, 2005, which the FCC was imposing on ETCs operating in default states at the time. We did this in order to give the ETCs enough time to complete the verification sampling and send their results to USAC.

Discussion

   The Public Notice at DA-07-3088 released on July 10, 2007, states that each year ETCs are required to verify the continued eligibility of a statistically-valid sample of their Lifeline subscribers. Under the terms of the FCC's Lifeline Order, states that have their own state-based low-income programs are required to establish state-specific verification procedures. These state procedures should anticipate how ETCs are to verify continued eligibility and specify to whom the results should be submitted. States that do not have state-based low-income programs are designated ''Federal default states.'' ETCs in Federal default states must follow the certification and verification procedures set out in the Lifeline Order.

   The FCC's Public Notice further declared that an ETC in a state with its own State-based low-income program must submit a certification, signed by an officer of the company to USAC by August 31, 2007, and on August 31 of each subsequent year thereafter, attesting that the ETC has complied with the state verification procedures. The FCC expressly stated that ETCs in Federal default states must also submit their annual Lifeline verification survey results to USAC under the same time schedule. See 47 CFR 1.4(e)(2)(j).

   The Public Notice says that states with state-based Lifeline and Link-Up programs may either: (1) collect the verification results on a date that the state chooses; or (2) direct ETCs in their states to send the verification results to USAC. If companies are submitting the results to USAC, they should do so by August 31, 2007, and on August 31, of each subsequent year thereafter. Results submitted directly to USAC will be processed in the same manner as those received from ETCs in Federal default states.

   The fact that Verizon is mandated to contribute to its Lifeline programs qualifies Pennsylvania as a ''non-default'' state according to the FCC rules. The significance of being a non-default state is that the Commission or the State legislature can establish rules specific to Pennsylvania and address any issues that may be unique to the Commonwealth. Our May 20, 2005, Lifeline and Link-Up Programs Order held in pertinent part:

Finally, PTA asserts that it does not oppose the Commission's proposed annual recertification requirement as long as no additional recertification obligations exceed those put in place by the FCC. We agree with the PTA regarding this issue and are satisfied that the statistically valid sampling method imposed by the FCC is sufficient and will be adopted here in Pennsylvania, with the exception that the FCC has a deadline of June 22, 2005 for the sampling to be complete, and we will offer jurisdictional LECs an additional six months from that date (until December 22, 2005) to submit their samples to the Universal Service Administrative [sic Administration] Company (USAC). The sample may be verified through DPW, DOR or LIHEAP's separate program.

Lifeline and Link-Up Programs Order at p. 10.

   ETCs operating in Pennsylvania submitted their verification results to USAC after the August 31, 2007, deadline specified in the FCC's July 2007 Public Notice, but before the PUC's Lifeline and Link-Up Programs Order's deadline of December 22. In Ordering Paragraph Number 9 of our Lifeline and Link-Up Programs Order, we ordered that LECs offering Lifeline and Link Up services are directed to recertify their Lifeline customers at least annually. The FCC has since made it clear that in states such as ours with State-based lifeline and link-up programs, ETCs verification samplings annual recertification should be done so that the ETCs collect and send their verification results to USAC by August 31of each year in order for their data to be incorporated in USAC's annual report to the FCC; Therefore,

It Is Ordered That:

   1.  In the event this Tentative Order becomes final, our prior Order entered on May 23, 2005, is hereby amended in accordance with the FCC's July 10, 2007, Public Notice, that Pennsylvania-jurisdictional eligible telecommunications carriers are directed to send their verification results to the Universal Service Administrative Company (USAC) by August 31, 2008 and on August 31, of each subsequent year thereafter.

   2.  Comments to this Tentative Order shall be filed within 30 days of the date the Tentative Order is published in the Pennsylvania Bulletin.

   3.  If no adverse comments are filed to this Tentative Order by the end of the 30-day period, this Tentative Order shall become a Final Order by operation of law.

   4.  All LECs operating in this Commonwealth, the Pennsylvania Telephone Association, Nextel Partners, Inc., Office of Consumer Advocate, Department of Public Welfare, Pennsylvania Utility Law Project and AARP shall be served with a copy of this Tentative Order.

   5.  A copy of this Tentative Order shall be published in the Pennsylvania Bulletin.

JAMES J. MCNULTY,   
Secretary

[Pa.B. Doc. No. 08-310. Filed for public inspection February 15, 2008, 9:00 a.m.]

_______

¹  Federal-State Joint Board on Universal Service Lifeline and Link-Up, Report and Order and Further Notice of Proposed Rulemaking In the Matter of Lifeline and Link-Up, at CC Docket No. 04-87, WC Docket No. 03-109, 18 FCC Rcd 8302 (2004) (Lifeline Order).

²  Federal-State Board on Universal Service, (FCC May 8, 1997) CC Docket No. 96-45, FCC 97-157.

³  To be eligible for the NSL free lunch program, a consumer's household income must be at or below 130436000f the FPG. 68 Fed. Reg. at 6456-58. In addition, children are automatically eligible to participate in the NSL free lunch program if their household receives Food Stamps, benefits under the Food Distribution Program on Indian Reservations or, in most cases, benefits under the TANF program. http://www.fns.usda.gov/cnd/About/faqs.htm.

⁴  In Re: Lifeline and Link-Up Programs, M-00051871F0002, Final Order, May 23, 2005 (Lifeline and Link-Up Programs Order).

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