Before the

**Federal Communications Commission**

**Washington, D.C. 20554**

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| In the Matter of                 | * | CC Docket No. 96-45          |
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| Federal-State Joint Board On     | ) |                              |
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| Universal Service                | * |                              |
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| Bell Atlantic-Pennsylvania,      | * |                              |
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| Petition for Waiver of Section   | * |                              |
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**MEMORANDUM OPINION AND ORDER**

**Adopted: December 26, 2000 Released: December 27, 2000**

By the Accounting Policy Division:

# introduction

1.  In this Order, we grant the petition of Bell Atlantic-Pennsylvania,
    Inc. (Bell Atlantic[^1]) for a waiver of section 54.409(b) of the
    Commission's Lifeline eligibility rules[^2] to permit Bell Atlantic
    to use Pennsylvania's Department of Public Welfare (DPW) database to
    verify the eligibility of Lifeline subscribers.[^3] We find that
    this waiver will both speed the provision of Lifeline service to
    eligible subscribers and diminish the administrative costs of
    providing such service, without imposing any significant cost.

# background

## The Commission's Lifeline Rules

2.  The Commission's Lifeline program is designed to ensure that
    telephone service is affordable to low-income consumers by providing
    federal funds to reduce the price they pay for basic local telephone
    service.[^4] Federal Lifeline support supplements discounts that may
    be provided by similar state-mandated programs. In states that
    mandate their own Lifeline support for low-income customers,
    subscribers are eligible for federal Lifeline support if they meet
    the eligibility standards for the state Lifeline program.[^5] In
    states that do not mandate Lifeline support, customers are eligible
    for federal Lifeline support if they participate in at least one of
    five specific federal low-income programs.[^6] In such states,
    Commission rules require that the carrier providing Lifeline support
    obtain the signature of each qualifying subscriber "on a document
    certifying under penalty of perjury that the consumer receives
    benefits from one of the programs listed in \[the rules\] and
    identifying the program or programs from which that consumer
    receives benefits."[^7] The rules also require that the consumer
    "agree to notify the carrier if that consumer ceases to participate
    in the program or programs."[^8]

## Pennsylvania's Lifeline Programs & Petition for Waiver

3.  Pennsylvania has two separate Lifeline programs. Lifeline Option 1,
    which was Pennsylvania's sole Lifeline program until September 1999,
    includes state Lifeline support. Accordingly, Bell Atlantic has not
    needed to obtain written certifications to verify subscriber
    eligibility, as would be required under the federal rules, for the
    Lifeline Option 1 program. Rather, for the past four years, Bell
    Atlantic has relied upon the Pennsylvania DPW's database, which
    indicates subscriber participation in many of the low-income
    assistance programs that would qualify a customer for federal
    Lifeline support under the Commission's rules.[^9] Lifeline Option
    2, adopted by the Pennsylvania Public Utilities Commission in
    September 1999, does not include state-mandated support. Option 2
    expands eligibility for support to all subscribers with incomes at
    or below 150% of the federal poverty level and permits those
    customers to add vertical services. Because the program is funded
    entirely from federal support, Commission rules require Bell
    Atlantic to obtain written certifications of eligibility from
    subscribers to Lifeline Option 2.

4.  Bell Atlantic seeks a waiver of the written certification
    requirement for subscribers of the Lifeline Option 2 who are listed
    in the Pennsylvania DPW database. It asks that, given its four years
    of successful experience with the DPW database, it be allowed to
    continue to rely on that database when the database indicates that a
    customer is eligible for Lifeline Option 2. Bell Atlantic agrees
    that if its waiver request is granted, it will continue to require
    the written certification specified in section 54.409(b) of the
    rules where consumers qualify for the program based on their
    enrollment in the federal public housing assistance or Low-Income
    Home Energy Assistance programs, because data about participation in
    those programs is not contained in the DPW database.[^10]

# Discussion

5.  We find that Bell Atlantic has demonstrated that good cause exists
    to waive section 54.409(b) of the Commission's rules. Accordingly,
    we waive Section 54.409(b) to permit Bell Atlantic to rely on the
    Pennsylvania DPW database in lieu of customer certifications for
    those subscribers whose Lifeline eligibility can be determined from
    the database.[^11]

6.  Generally, the Commission's rules may be waived for good cause
    shown.[^12] As noted by the Court of Appeals for the D.C. Circuit,
    however, agency rules are presumed valid.[^13] The Commission may
    exercise its discretion to waive a rule where the particular facts
    make strict compliance inconsistent with the public interest.[^14]
    In addition, the Commission may take into account considerations of
    hardship, equity, or more effective implementation of overall policy
    on an individual basis.[^15] Waiver of the Commission's rules is
    therefore appropriate only if special circumstances warrant a
    deviation from the general rule, and such a deviation will serve the
    public interest.[^16]

7.  We find that Bell Atlantic has shown good cause for waiving this
    rule under the circumstances indicated. The Commission imposed the
    customer certification requirement in section 54.409(b) of the rules
    to deter fraud, waste, and abuse in the distribution of federal
    Lifeline support. Where states were mandating intrastate Lifeline
    support, the Commission's May 1997 *Universal Service Order*
    recognized that the states have an incentive to control fraud,
    waste, and abuse of the support mechanism, and, thus, it found no
    need to impose stricter federal verification requirements.[^17]
    Although Lifeline Option 2 includes no intrastate support, we find
    that Pennsylvania has an incentive to limit fraud, waste, and abuse
    with respect to the other programs for which it uses its DPW
    database and thus it has an incentive to ensure the accuracy and
    reliability of the DPW database. This diminishes the need for
    additional federal verification requirements. Furthermore, we note
    that Bell Atlantic's waiver petition is limited in scope. Bell
    Atlantic agrees to comply with the written certification requirement
    for customers who claim eligibility based on participation in
    federal public housing assistance or Low-Income Home Energy
    Assistance, which are programs not covered by the DPW database.

8.  We are persuaded that Pennsylvania's DPW database contains reliable
    information about customers who are enrolled in Medicaid, food
    stamps, and Supplemental Security Income programs, which qualify
    such customers for federal Lifeline support under Pennsylvania's
    Lifeline Option 2.[^18] Accordingly, we find that Bell Atlantic's
    reliance on the DPW database to determine Lifeline eligibility
    should be as effective, in most cases, as written certification.

9.  Finally, we conclude that it is in the public interest to permit
    Bell Atlantic to employ the most efficient and reliable means of
    verifying eligibility for Lifeline. The Commission has explicitly
    endorsed the use of databases as an efficient method of verifying
    eligibility.[^19] We find that granting this waiver will not only
    speed the verification process, but it will also diminish the burden
    on Bell Atlantic and Lifeline customers without imposing any
    significant costs.

# Ordering Clauses

10. Accordingly, IT IS ORDERED that, pursuant to authority contained in
    sections 1, 4, and 254 of the Communications Act of 1934, as
    amended, 47 U.S.C. §§ 151, 154, 254, and the authority delegated
    under sections 0.91, 0.291, and 1.3 of the Commission\'s rules, 47
    C.F.R. §§ 0.91, 0.291, 1.3, the waiver request filed by Bell
    Atlantic-Pennsylvania on December 22, 1999 is GRANTED.

11. IT IS FURTHER ORDERED that a copy of this Memorandum Opinion and
    Order SHALL BE transmitted to the Universal Service Administrative
    Company.

    FEDERAL COMMUNICATIONS COMMISSION

Katherine L. Schroder

Chief, Accounting Policy Division

Common Carrier Bureau

[^1]: Subsequent to filing this waiver petition, Bell Atlantic merged
    with GTE to become Verizon.

[^2]: 47 C.F.R. § 54.409(b).

[^3]: *See Bell Atlantic-Pennsylvania, Inc., Petition for Waiver of
    Section 54.409(b) of the Commission's Rules and Regulations*, filed
    Dec. 22, 1999 (Waiver Petition).

[^4]: *See* 47 U.S.C. 254(b)(1)("Quality services should be available at
    just, reasonable, and affordable rates.").

[^5]: 47 C.F.R. § 54.409(a).

[^6]: The programs are: Medicaid, food stamps, Supplemental Security
    Income, federal public housing assistance, and Low-Income Home
    Energy Assistance Program. 47 C.F.R. § 54.409(b) & (c). In addition,
    customers living on Indian reservations, as defined in 25 C.F.R. §
    20.1(v), qualify for federal Lifeline support if they participate in
    one of the following programs: Bureau of Indian Affairs general
    assistance, Tribally administered Temporary Assistance for Needy
    Families, Head Start (only those meeting its income qualifying
    standard), and National School Lunch Program's free lunch program.
    47 C.F.R. § 54.409(c).

[^7]: 47 C.F.R. § 54.409(b). Section 54.409(c) imposes a similar
    requirement for customers living on Indian reservations. 47 C.F.R. §
    54.409(c).

[^8]: 47 C.F.R. § 54.409(b) & (c).

[^9]: Waiver Petition at 2.

[^10]: *Id*. at 2 n.2.

[^11]: We note that the Common Carrier Bureau has previously granted
    waivers of the Lifeline rule. *See, e.g.,* *Federal-State Joint
    Board on Universal Service*, CC Docket No. 96-45, Order, 15 FCC Rcd
    8544 (1999), *Federal-State Joint Board on Universal Service*, CC
    Docket No. 96-45, Order, 13 FCC Rcd 1 (1997).

[^12]: 47 C.F.R. § 1.3.

[^13]: *WAIT Radio v. FCC*, 418 F.2d 1153, 1159 (D.C. Cir. 1969),
    *cert.denied*, 409 U.S. 1027 (1972).

[^14]: *Northeast Cellular Telephone Co., v. FCC*, 897 F.2d 1164, 1166
    (D.C. Cir. 1990).

[^15]: *WAIT Radio*, 418 F.2d at 1159; *Northeast Cellular*, 897 F.2d at
    1166.

[^16]: *WAIT Radio*, 418 F.2d at 1159.

[^17]: *Federal-State Joint Board on Universal Service*, CC Docket No.
    96-45, Report and Order, 12 FCC Rcd 8776, 8975, para. 376 (1997), as
    corrected by Errata, CC Docket No. 96-45 (rel. June 4, 1997)
    (*Universal Service Order*), subsequent history omitted.

[^18]: Waiver Petition at 2 n.2.

[^19]: The Commission encouraged states to adopt Lifeline administrative
    procedures, including eligibility verification procedures, that are
    as efficient as possible. The Commission observed that New York,
    among other states, has substantially cut Lifeline overhead by
    mandating the exchange of computer files between social services
    agencies, which administer participation in the other public
    assistance programs that constitute Lifeline eligibility, and the
    states' LECs. *Universal Service Order*, 12 FCC Rcd. at 8976, para.
    378.