16482 Federal Register / Vol. 76, No. 56 / Wednesday, March 23, 2011 / Proposed Rules 

FEDERAL COMMUNICATIONS 

COMMISSION 

47 CFR Part 54 

[WC Docket Nos. 11–42 and 03–109, CC 

Docket No. 96–45; FCC 11–32] 

Lifeline and Link Up Reform and 

Modernization; Federal-State Joint 

Board on Universal Service; Lifeline 

and Link-Up 

AGENCY: Federal Communications 

Commission. 

ACTION: Proposed rule. 

SUMMARY: In this document, the Federal 

Communications Commission 

(Commission) puts forward a set of 

proposals to reform and modernize 

Lifeline/Link Up, including 

recommendations of the Federal-State 

Joint Board on Universal Service, 

Government Accountability Office, and 

the National Broadband Plan. The 

reforms proposed will significantly 

bolster protections against waste, fraud, 

and abuse; control the size of the 

program; strengthen program 

administration and accountability; 

improve enrollment and outreach 

efforts; and support pilot projects that 

would assist the Commission in 

assessing strategies to increase 

broadband adoption, while not 

increasing overall program size. 

DATES: Comments are due on or before 

April 21, 2011, reply comments on 

Sections IV, V (Subsection A), VII 

(Subsections B & D) are due on or before 

May 10, 2011, and reply comments on 

the remaining sections are due on or 

before May 25, 2011. 

ADDRESSES: You may submit comments, 

identified by CC Docket No. 96–45 and 

WC Docket Nos. 03–109 and 11–42, by 

any of the following methods: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• Federal Communications 

Commission’s Web Site: http:// 

fjallfoss.fcc.gov/ecfs2/. Follow the 

instructions for submitting comments. 

• People with Disabilities: Contact the 

FCC to request reasonable 

accommodations (accessible format 

documents, sign language interpreters, 

CART, etc.) by e-mail: FCC504@fcc.gov 

or phone: (202) 418–0530 or TTY: (202) 

418–0432. 

• In addition to filing comments with 

the Secretary, a copy of any comments 

on the Paperwork Reduction Act 

information collection requirements 

contained herein should be submitted to 

the Federal Communications 

Commission via e-mail to PRA@fcc.gov 

and to Cathy.Williams@fcc.gov and to 

Nicholas A. Fraser, Office of 

Management and Budget, via e-mail to 

Nicholas_A._Fraser@omb.eop.gov or via 

fax at 202–395–5167. 

For detailed instructions for submitting 

comments and additional information 

on the rulemaking process, see the 

SUPPLEMENTARY INFORMATION section of 

this document. 

FOR FURTHER INFORMATION CONTACT: 

Kimberly Scardino, Wireline 

Competition Bureau, (202) 418–1442 or 

TTY: (202) 418–0484. For additional 

information concerning the Paperwork 

Reduction Act information collection 

requirements contained in this 

document contact Cathy Williams on 

(202) 418–2918. 

SUPPLEMENTARY INFORMATION: This is a 

synopsis of the Commission’s Notice of 

Proposed Rulemaking (NPRM) in WC 

Docket Nos. 03–109 and 11–42, CC 

Docket No. 96–45, FCC 11–32, adopted 

March 3, 2011, and released March 4, 

2011. The complete text of this 

document is available for inspection 

and copying during normal business 

hours in the FCC Reference Information 

Center, Portals II, 445 12th Street, SW., 

Room CY–A257, Washington, DC 20554. 

The document may also be purchased 

from the Commission’s duplicating 

contractor, Best Copy and Printing, Inc., 

445 12th Street, SW., Room CY–B402, 

Washington, DC 20554, telephone (800) 

378–3160 or (202) 863–2893, facsimile 

(202) 863–2898, or via the Internet at 

http://www.bcpiweb.com. It is also 

available on the Commission’s Web site 

at http://www.fcc.gov. 

Pursuant to §§ 1. 1.415 and 1.419 of 

the Commission’s rules, 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: (1) The Commission’s Electronic 

Comment Filing System (ECFS); (2) the 

Federal Government’s eRulemaking 

Portal; or (3) by filing paper copies. See 

Electronic Filing of Documents in 

Rulemaking Proceedings, 63 FR 24121, 

May 1, 1998. 

• Electronic Filers: Comments may be 

filed electronically using the Internet by 

accessing the ECFS: http://www.fcc.gov/ 

cgb/ecfs/or the Federal eRulemaking 

Portal: http://www.regulations.gov. 

Filers should follow the instructions 

provided on the Web site for submitting 

comments. 

Æ For ECFS filers, if multiple docket 

or rulemaking numbers appear in the 

caption of this proceeding, filers must 

transmit one electronic copy of the 

comments for each docket or 

rulemaking number referenced in the 

caption. In completing the transmittal 

screen, filers should include their full 

name, U.S. Postal Service mailing 

address, and the applicable docket or 

rulemaking number. Parties may also 

submit an electronic comment by 

Internet e-mail. To get filing 

instructions, filers should send an email to ecfs@fcc.gov, and include the 

following words in the body of the 

message, ‘‘get form.’’ A sample form and 

directions will be sent in response. 

Æ Paper Filers: Parties who choose to 

file by paper must file an original and 

four copies 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 

(although we continue to experience 

delays in receiving U.S. Postal Service 

mail). All filings must be addressed to 

the Commission’s Secretary, Office of 

the Secretary, Federal Communications 

Commission. 

Æ The Commission’s contractor will 

receive hand-delivered or messengerdelivered paper filings for the 

Commission’s Secretary at 236 

Massachusetts Avenue, NE., Suite 110, 

Washington, DC 20002. The filing hours 

at this location are 8 a.m. to 7 p.m. All 

hand deliveries must be held together 

with rubber bands or fasteners. Any 

envelopes must be disposed of before 

entering the building. 

Æ Commercial overnight mail (other 

than U.S. Postal Service Express Mail 

and Priority Mail) must be sent to 9300 

East Hampton Drive, Capitol Heights, 

MD 20743. 

Æ U.S. Postal Service first-class, 

Express, and Priority mail should be 

addressed to 445 12th Street, SW., 

Washington, DC 20554. 

In addition, one copy of each pleading 

must be sent to the Commission’s 

duplicating contractor, Best Copy and 

Printing, Inc, 445 12th Street, SW., 

Room CY–B402, Washington, DC 20554; 

Web site: http://www.bcpiweb.com; 

phone: 1–800–378–3160. Furthermore, 

three copies of each pleading must be 

sent to Kimberly Scardino, 

Telecommunications Access Policy 

Division, Wireline Competition Bureau, 

445 12th Street, Room 5–B448, 

Washington, DC 20554; e-mail 

Kimberly.Scardino@fcc.gov, and Charles 

Tyler, Telecommunications Access 

Policy Division, Wireline Competition 

Bureau, 445 12th Street, SW., Room 5– 

A452, Washington, DC 20554; e-mail: 

Charles.Tyler@fcc.gov. 


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Filings and comments are also 

available for public inspection and 

copying during regular business hours 

at the FCC Reference Information 

Center, Portals II, 445 12th Street, SW., 

Room CY–A257, Washington, DC 20554. 

Copies may also be purchased from the 

Commission’s duplicating contractor, 

BCPI, 445 12th Street, SW., Room CY– 

B402, Washington, DC 20554. 

Customers may contact BCPI through its 

Web site: http://www.bcpiweb.com, by 

e-mail at fcc@bcpiweb.com, by 

telephone at (202) 488–5300 or (800) 

378–3160 (voice), (202) 488–5562 (tty), 

or by facsimile at (202) 488–5563. 

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) or (202) 418–0432 

(TTY). Contact the FCC to request 

reasonable accommodations for filing 

comments (accessible format 

documents, sign language interpreters, 

CART, etc.) by e-mail: FCC504@fcc.gov; 

phone: (202) 418–0530 or TTY: (202) 

418–0432. 

To view or obtain a copy of this 

information collection request (ICR) 

submitted to OMB: (1) Go to this OMB/ 

GSA Web page: http://www.reginfo.gov/ 

public/do/PRAMain, (2) look for the 

section of the Web page called 

‘‘Currently Under Review,’’ (3) click on 

the downward-pointing arrow in the 

‘‘Select Agency’’ box below the 

‘‘Currently Under Review’’ heading, (4) 

select ‘‘Federal Communications 

Commission’’ from the list of agencies 

presented in the ‘‘Select Agency’’ box, 

(5) click the ‘‘Submit’’ button to the right 

of the ‘‘Select Agency’’ box, and (6) 

when the list of FCC ICRs currently 

under review appears, look for the OMB 

control number of this ICR as shown in 

the Supplementary Information section 

below (or its title if there is no OMB 

control number) and then click on the 

ICR Reference Number. A copy of the 

FCC submission to OMB will be 

displayed. 

For further information regarding this 

proceeding, contact Kimberly Scardino, 

Wireline Competition Bureau at (202) 

418–1442, Kimberly.Scardino@fcc.gov. 

Initial Paperwork Reduction Act of 

1995 Analysis 

This document contains proposed 

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. Public and agency 

comments are due May 23, 2011. 

Comments on the proposed 

information collection requirements 

should address: (a) Whether the 

proposed collection of information is 

necessary for the proper performance of 

the functions of the Commission, 

including whether the information shall 

have practical utility; (b) the accuracy of 

the Commission’s burden estimates; (c) 

ways to enhance the quality, utility, and 

clarity of the information collected; and 

(d) ways to minimize the burden of the 

collection of information on the 

respondents, including the use of 

automated collection techniques or 

other forms of information technology. 

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. 

OMB Control Number: 3060–0819. 

Tile: Lifeline Assistance (Lifeline) 

Connection Assistance (Link-Up) 

Reporting Worksheet and Instructions 

(47 CFR 54.400–54.417). 

Form Number: 497. 

Type of Review: Revision of a 

currently approved collection. 

Respondents: Individuals or 

households; Business or other for-profit. 

Number of Respondents and 

Responses: 8,601,400 respondents; 

8,601,400 responses. 

Estimated Time per Response: 2.5 

Hours. 

Obligation to Respond: Required to 

retain benefits. 

Frequency of Response: On occasion, 

Monthly, Annually, Other 1-Time. 

Total Annual Burden: 878,874 hours. 

Annual Cost Burden: $829,487.5. 

Privacy Impact Assessment: Yes. The 

Commission is preparing the Privacy 

Impact Assessment. 

Nature and Extent of Confidentiality: 

The Commission is not requesting that 

the respondents submit confidential 

information to the FCC. Respondents 

may, however, request confidential 

treatment for information they believe to 

be confidential under 47 CFR 0.459 of 

the Commission’s rules. 

Needs and Uses: Eligible 

Telecommunications carriers are 

permitted to receive universal service 

support reimbursement for offering 

certain services to qualifying lowincome customers. The 

telecommunciations carriers must file 

FCC Form 497 to solicit reimbursement. 

Collection of this data is necessary for 

the administor to accurately provide 

settlements for the low-income 

programs according to Commission 

rules. The Commission has issued a 

Notice of Proposed Rulemaking (FCC 

11–32) that proposes new and/or 

modified Commission rules to improve 

the effectiveness of the low-income 

support mechanism. As part of the 

Lifeline and Link Up Reform and 

Modernization NPRM, the Commission 

proposes a series of revisions to the 

information collected by ETCs and their 

Lifeline and Link Up subscribers, and 

provided to USAC to strengthen 

protections against waste, fraud, and 

abuse. The NPRM also proposes a 

Lifeline Broadband Pilot Program. 

I. Introduction 

1. Lifeline and Link Up are a critical 

part of the Commission’s universal 

service mission, ensuring that we 

implement Congress’s directive to 

ensure the availability of basic 

communications services to all 

Americans, including low-income 

consumers. For more than two decades, 

Lifeline and Link Up (together, 

‘‘Lifeline/Link Up’’ or ‘‘the program’’) 

have helped tens of millions of 

Americans afford basic phone service, 

providing a ‘‘lifeline’’ for essential daily 

communications as well as emergencies. 

But recent technological, market, and 

regulatory changes have put increasing 

strain on the program. Today, we begin 

to comprehensively reform and 

modernize the Lifeline and Link Up 

program. Building on proposals from 

the National Broadband Plan, as well as 

recent recommendations from the 

Federal-State Joint Board on Universal 

Service (‘‘Joint Board’’) and the 

Government Accountability Office 

(GAO), the reforms proposed here will 

significantly bolster protections against 

waste, fraud, and abuse; control the size 

of the program; strengthen program 

administration and accountability; 

improve enrollment and outreach 

efforts; and support pilot projects that 

would assist the Commission in 

assessing strategies to increase 

broadband adoption, while not 

increasing overall program size. 

2. Our effort is consistent with the 

Commission’s ongoing commitment to 

re-examine and modernize all 

components of USF to increase 

accountability and efficiency, while 

supporting broadband deployment and 

adoption. The Commission has already 

made important strides in this area: We 

have modernized our E-rate program so 

schools and libraries can get faster 

Internet connections and access 21st 

century learning tools. We have 

proposed changes to our rural health 


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care program so patients at rural clinics 

can benefit from broadband-enabled 

care such as remote consultations with 

specialists anywhere in the country. 

And we have proposed a Mobility Fund 

and a Connect America Fund to spur the 

build out of broadband networks, both 

mobile and fixed, in areas of the country 

that are uneconomic to serve. 

3. The Commission has not 

systematically re-examined Lifeline/ 

Link Up since the passage of the 1996 

Act. During this period, consumers have 

increasingly turned to wireless service, 

and Lifeline/Link Up now provides 

many participants discounts on wireless 

phone service. In the last several years, 

Lifeline/Link Up has grown 

significantly, from an inflation-adjusted 

$667 million in 2000 to $1.3 billion in 

2010, with new participation by firms, 

such as pre-paid wireless providers, that 

focus on serving low-income 

consumers. The time has come to 

review the program holistically, address 

the risks and challenges it now presents, 

and ensure that it is on a firm footing 

to efficiently and effectively achieve its 

statutory purpose. 

4. Accordingly, last year the 

Commission asked the Joint Board to 

recommend reforms focused on 

eliminating waste, fraud, and abuse; 

controlling costs; and improving 

program performance and 

accountability. In response, the Joint 

Board recommended that the 

Commission: (1) Encourage automatic 

enrollment as a best practice for all 

States; (2) adopt uniform minimum 

verification procedures and sampling 

criteria that would apply to all ETCs in 

all States; (3) allow States to utilize 

different and/or additional verification 

procedures so long as these procedures 

are at least as effective in detecting 

waste, fraud, and abuse as the uniform 

minimum required procedures; (4) 

require all ETCs in all States to submit 

the data results of their verification 

sampling to the Commission, the States, 

and the Universal Service 

Administrative Company and make the 

results publicly available; and (5) adopt 

mandatory outreach requirements for all 

ETCs that receive low-income support 

and maintain advisory guidelines for 

States with respect to performing lowincome outreach. We seek comment on 

the Joint Board’s recommendations here. 

The Wireline Competition Bureau has 

also taken a number of steps to combat 

waste, fraud, and abuse, including 

requiring one provider to contact 

annually all of its Lifeline subscribers to 

ensure those customers are only 

receiving one benefit per household and 

requiring another provider to remove 

customers from its Lifeline roster if they 

do not use their phones for sixty days. 

And late last year, the GAO issued a 

report with recommendations for 

program reforms, which also inform our 

proposals here. 

5. This Notice of Proposed 

Rulemaking (NPRM) puts forward a set 

of proposals to reform and modernize 

Lifeline/Link Up, including 

recommendations of the Joint Board, 

GAO, and the National Broadband Plan. 

6. We begin by proposing specific 

performance goals for the program, and 

metrics to measure its performance in 

advancing the universal service 

objectives established by Congress. We 

then propose immediate steps to 

address waste, fraud, and abuse and to 

bolster mechanisms to detect and deter 

rule violations. In particular, we 

propose to strengthen our rules and 

improve the incentives of program 

participants to ensure that the program 

does not provide multiple, duplicative 

discounts to the same residential 

address. We also propose to eliminate 

reimbursement for certain services, 

including initiation fees that may be 

inflated or selectively applied only to 

low-income households. To reduce 

waste by ensuring that the program 

supports only communications services 

that consumers actually use, we propose 

to eliminate funding for services that go 

unused for more than sixty days. We 

seek comment on expanding oversight, 

including through more extensive 

audits. We also seek comment on a 

proposal to impose an annual funding 

cap on Lifeline/Link Up, either 

temporarily—until implementation of 

the reforms proposed in this NPRM—or 

permanently. 

7. This NPRM also addresses the 

unique situations facing residents on 

Tribal lands, who historically have had 

phone penetration substantially below 

the national average. We propose to 

clarify eligibility requirements for lowincome Tribal households, and to 

permit Tribal enrollment based on 

participation in the Food Distribution 

Program on Indian Reservations. 

8. This NPRM also seeks comment on 

a number of proposals to streamline and 

improve overall program 

administration. We ask whether the 

current system—in which responsibility 

for enrolling customers and ensuring 

their continued eligibility is split among 

carriers, State agencies, and third-party 

administrators—provides the right 

framework for prudent management of 

public resources and effective program 

administration. We propose to require 

all States to utilize the same baseline 

eligibility requirements that exist in our 

Federal rules, which could streamline 

enrollment and facilitate verification of 

ongoing eligibility, and seek comment 

on allowing States to use eligibility 

standards that supplement the 

minimum Federal uniform standards. 

Consistent with the recommendation of 

the Joint Board, we propose uniform 

national standards for the minimum 

verification of ongoing customer 

eligibility to stay enrolled in Lifeline 

and seek comment on whether States 

should be permitted to impose 

additional verification requirements 

beyond that Federal standard. We also 

seek comment on a proposal to use an 

automated information management 

system to prevent duplicate claims for 

support, provide real-time electronic 

verification of consumer eligibility, and 

provide a means of ongoing verification 

of eligibility. 

9. We also ask how the program 

should be modernized in light of 

significant marketplace changes in the 

last fifteen years. We seek to develop a 

record on what basic services the 

program should support, and we seek 

comment on whether the current 

framework for determining 

reimbursement levels remains 

appropriate in an environment when 

many service offerings are not rate 

regulated. 

10. We also propose reforms to put 

Lifeline/Link Up on a more solid footing 

to achieve Congress’s goal of addressing 

the 21st century challenge of helping 

low-income households adopt 

broadband. Although access to 

affordable voice service remains vital to 

consumers, supporting basic voice 

service alone may no longer be adequate 

to meet the basic communications needs 

of low-income Americans. Broadband is 

becoming an essential communications 

platform. Broadband can help working 

parents stay involved in their child’s 

education, enroll in and complete a 

distance-learning class to improve 

professional skills, and complete 

everyday tasks like paying bills and 

shopping for necessities. Broadband can 

help children in inner-city 

neighborhoods and remote rural towns 

access high-quality online educational 

content that might not otherwise be 

available to them. Broadband can help 

the unemployed search for jobs and 

apply for job postings, many of which 

are simply not available offline. 

11. But many low-income Americans 

cannot afford a home broadband 

connection. Our 2010 Broadband 

Consumer Survey found that while 93 

percent of households with incomes 

greater than $75,000 have broadband at 

home, only 40 percent of adults with 

household incomes less than $20,000 

have broadband at home. And 

consumers cited cost as a primary 


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obstacle to adoption. This gap in 

broadband adoption is significantly 

greater than the gap in telephone 

penetration rates. While Lifeline and 

Link Up have significantly narrowed the 

telephone subscribership gap between 

low-income households and the 

national average, a new divide has 

emerged for broadband. 

12. Consistent with our statutory 

obligation to ensure access to quality, 

affordable communications, we seek 

comment on proposals to ensure 

Lifeline and Link Up meet the modern 

communications needs of low-income 

consumers. In particular, we propose 

that eligible households be permitted to 

use Lifeline discounts on bundled voice 

and broadband service offerings. We 

also seek comment on how best to 

design a broadband pilot program that 

will help inform the Commission’s 

inquiry into meeting the 21st century 

communications needs of low-income 

consumers. 

II. Establishing Program Goals and 

Measuring Performance 

13. As we move forward to reform and 

modernize the Commission’s lowincome support mechanisms, we seek 

comment on the program’s performance 

goals, consistent with our statutory 

obligations, and on how best to measure 

the program’s performance in achieving 

those goals. 

14. In establishing performance goals, 

we are guided in the first instance by 

the Act. Section 254(b) outlines the 

principles upon which the Commission 

and the Joint Board are to base policies 

for the ‘‘preservation and advancement 

of universal service.’’ These principles 

include the notion that quality services 

should be available at ‘‘just, reasonable 

and affordable’’ rates, and that 

consumers in all regions of the nation, 

including low-income consumers, 

should have access to 

telecommunications and information 

services that are reasonably comparable 

to services in urban areas at reasonably 

comparable rates. The statute specifies 

that there should be specific, 

predictable, and sufficient Federal and 

State mechanisms to preserve and 

advance universal service. Section 

254(c)(1) of the Act also sets forth 

certain criteria that we should consider 

when deciding what services are eligible 

for universal service support, including 

the extent to which those services are 

‘‘essential to education, public health, or 

public safety;’’ and ‘‘consistent with the 

public interest, convenience, and 

necessity.’’ 

15. Historically, the primary goal for 

the Lifeline/Link Up program has been 

to facilitate the availability of affordable 

phone service to low-income 

households. Over time, telephone 

penetration rates for low-income 

consumers have increased, although 

they still remain below the national 

average and a six percent gap has 

remained relatively stable in recent 

years. 

16. In 2007, the Commission took 

initial steps to improve the management 

of the low-income program by adopting 

measures of efficiency and effectiveness. 

At that time, however, the Commission 

concluded that it did not have sufficient 

data to determine appropriate 

performance goals. In 2010, GAO noted 

that while the Commission had 

developed performance measures, it had 

not quantified its goal of increased 

telephone subscribership among lowincome households. GAO also noted the 

importance of developing baseline and 

trend data for past performance, and of 

identifying target performance levels for 

multi-year goals. 

17. Clear performance goals and 

measures should enable the 

Commission to determine not just 

whether Federal funding is used for 

intended purposes, but whether that 

funding is accomplishing the program’s 

ultimate objectives. We now propose to 

establish explicit performance goals in 

order to provide a basis for determining 

whether Lifeline/Link Up is 

successfully promoting and advancing 

the availability of quality services at 

just, reasonable, and affordable rates for 

low income consumers. 

18. Consistent with the Act and 

GAO’s recommendations, we seek 

comment on three specific goals and 

related performance measures for the 

Lifeline/Link Up program. 

19. We propose that our first 

performance goal be to preserve and 

advance the availability of voice service 

for low-income Americans. We note the 

vital role that voice telephony continues 

to play for consumers, particularly for 

public safety and public health. We 

propose to define ‘‘availability’’ of voice 

service for purposes of Lifeline/Link Up 

to mean that low-income households 

have access to that service. We propose 

to adopt a goal of eliminating any 

difference in the availability of voice 

service for low-income consumers 

compared to non-low-income 

consumers. 

20. We seek comment on how to 

measure availability of voice services for 

low-income households. The 

Commission has historically measured 

telephone penetration, which measures 

voice service subscriptions, as a proxy 

for availability. We propose to establish 

as an outcome measure the difference 

between voice service subscribership 

rates for low-income households eligible 

for the Lifeline and Link Up program 

and voice service subscribership rates 

for the households in the next higher 

income level as defined in the CPS. 

Based on the most recent information 

this would suggest a target 

subscribership rate for low-income 

households of 96.9 percent, which is the 

subscribership rate for households with 

incomes in the $35,000–$39,999 range. 

We seek comment on whether we 

should use another measure of 

availability. We seek comment on how 

we should define ‘‘low-income 

household’’ for the purpose of this 

performance goal in light of the differing 

eligibility standards that exist today 

from State to State. For instance, for 

simplicity, should we use 135% of the 

Federal Poverty Guidelines for a family 

of four as the threshold for monitoring 

program performance? We seek 

comment on whether we should instead 

compare subscribership rates for eligible 

low-income households with some 

other measure, such as the mean or 

median subscribership rate for all nonlow income households. 

21. We propose as our second 

performance goal to ensure that lowincome consumers can access supported 

services at just, reasonable, and 

affordable rates. We have concluded in 

the past that the concept of affordability 

has both an absolute and a relative 

component. The absolute component 

takes into account whether an 

individual has enough money to pay for 

a service, and the relative component 

takes into account whether the cost of 

a service would require a consumer to 

spend a disproportionate amount of his 

or her income on that service. 

Comparing subscribership or adoption 

rates among low-income households to 

nationwide subscribership and adoption 

rates may be useful in evaluating 

whether supported services are 

available to low-income households and 

affordable in absolute terms, but those 

comparisons may not be dispositive in 

evaluating whether low-income 

households can afford those services in 

relative terms. We seek comment on 

whether an appropriate performance 

measure for this goal would be to 

compare the percentage of low-income 

household income spent on a voice 

service to the percentage of household 

income spent on voice service for the 

next highest income range as identified 

by the Bureau of Labor Statistics. 

22. As our third performance goal, we 

propose to ensure that our universal 

service policies provide Lifeline/Link 

Up support that is sufficient but not 

excessive to achieve our goals. 

Administering USF requires balancing 


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competing demands, recognizing that 

increased demand for funds imposes a 

greater contribution burden on 

consumers and businesses. As we have 

noted previously, the principles 

outlined in section 254 require us to 

ensure that quality services are 

affordable for all consumers but we 

must also be ‘‘mindful of the effects that 

expanded universal service mechanisms 

may have on consumers.’’ This goal 

includes ensuring that the Lifeline/Link 

Up program is accountable and fiscally 

responsible, with support disbursed 

efficiently and effectively only to those 

who need it. 

23. In the Connect America Fund 

Notice, 76 FR 11632, March 2, 2011, we 

sought comment on measuring the 

relative contribution burden on 

consumers over time, defined as total 

inflation-adjusted expenditures of the 

Fund each year, divided by the number 

of American households. We seek 

comment here on whether a similar 

measure would be appropriate for 

Lifeline/Link Up, specifically tracking 

whether the inflation-adjusted Lifeline/ 

Link Up expenditure per American 

household is increasing or decreasing 

over time. In 2010, the contribution 

burden for Lifeline/Link Up was 

equivalent to approximately $0.95 per 

U.S. household per month. 

24. We also recognize that a key 

component of achieving our goal of 

providing support that is sufficient but 

not excessive is to protect the universal 

service fund against waste, fraud, and 

abuse. That benefits consumers and 

keeps rates more affordable for all 

consumers by reducing the need to 

collect funds for the program that are 

not appropriately utilized. We propose 

a number of rule changes in this NPRM 

that would reduce waste, fraud, and 

abuse in the program. We seek comment 

on whether we should establish as a 

performance measure keeping erroneous 

payments in the program below a 

specified level, for instance by reducing 

levels of ineligible recipients to a 

specified percentage. 

25. We also seek comment on 

appropriate efficiency metrics. For 

example, is there a way to measure 

increases in the percentage of lowincome household subscribership 

relative to the amount of funding spent 

per household receiving Lifeline/Link 

Up? We seek comment on this and other 

measures of efficiency. 

26. Although we are committed to 

taking all necessary steps to eliminate 

reduce waste, fraud, and abuse, we also 

recognize the potential negative impact 

of increased government regulatory 

burden, especially on small companies, 

of some of the measures that can assist 

in detecting and deterring waste, fraud 

and abuse. We seek comment on how 

best to balance these competing 

interests. 

27. We seek comment on whether 

these three goals and associated 

performance measures are appropriate 

for the Lifeline/Link Up program and 

ask that commenters consider the 

reform proposals below in light of the 

proposed goals and performance 

measures outlined here. Are there 

additional or alternative goals and 

performance measures that we should 

consider? To the extent that these three 

goals and performance measures, or any 

others that the Commission may adopt, 

may be in tension with each other, 

commenters should suggest how we 

should prioritize among competing 

goals. 

28. Last month we sought comment 

on whether broadband should be a 

supported service. If broadband 

becomes a supported service, should we 

adopt a performance goal of advancing 

the availability of broadband to lowincome households? Analogous to our 

proposal in the voice context, we seek 

comment on whether the Commission 

should establish as an outcome measure 

the difference between the broadband 

penetration rates for low-income 

households and non-low-income 

households in the next higher income 

level as defined in the CPS, if 

broadband becomes a supported service. 

Should we consider broadband usage in 

addition to broadband adoption? Unlike 

voice service, there is a much larger gap 

in penetration rates for broadband 

between low-income households and 

the general population. Should we 

establish a specific numerical target for 

narrowing that gap over a particular 

time period? 

29. If Lifeline is modernized to 

support broadband, how should we 

measure affordability for broadband? 

Should we measure affordability 

separately for voice, broadband, and 

bundled offerings? We seek comment on 

what data we would need to monitor the 

program’s progress if we were to adopt 

such a performance measure, and the 

least burdensome means of obtaining 

such data. 

30. We invite commenters to propose 

additional or alternative goals and 

measures for the program. We also seek 

comment on how our performance 

measures should take into account the 

actions of other governmental agencies, 

such as State regulators, that may 

impact the Commission’s ability to meet 

its universal service goals. We note that 

developing the record on these issues is 

consistent with GAO’s suggestions. 

III. Immediate Reforms To Eliminate 

Waste, Fraud, and Abuse 

31. We are committed to eliminating 

waste, fraud, and abuse in Lifeline/Link 

Up, and to identifying and penalizing 

program violations when they occur. We 

recognize that the recent expansion in 

program demand, as well as 

marketplace developments, present 

increased concerns about potential 

waste and misconduct. We propose to 

strengthen our rules to more rigorously 

ensure that the program subsidizes no 

more than one subscription per eligible 

residential address, and to improve 

audits of the program. We also propose 

rule changes to ensure that carriers are 

reimbursed only for the provision of 

Lifeline services to current customers. 

Finally, we propose to modify our rules 

to the extent that they offer unnecessary 

reimbursement to carriers for expenses 

that may be inflated or unjustified. The 

continued success of Lifeline/Link Up 

depends on targeting support to those 

who qualify, and ensuring that support 

does not extend beyond the confines of 

our rules. 

A. Duplicate Claims 

32. We propose rules that will reduce 

the likelihood that residents of a single 

address will receive more than one 

subsidized service through the program. 

We understand that there may be 

reasons to create limited exceptions to 

the one-per-residential-address rule that 

we propose in Section V. In this 

proceeding, we plan to develop a full 

record to craft appropriately narrow 

exceptions to application of this 

proposed rule. We intend to consult 

with ETCs, Tribal communities, the 

States, and other interested parties to 

devise a rule that maximizes the number 

of Americans with access to 

communications services, but also 

protects the fund from waste, fraud, and 

abuse. 

33. In addition, it may be necessary 

for the Commission to take action on an 

interim basis while this proceeding is 

pending to address immediately the 

harm done to the Fund by USAC 

reimbursing ETCs for duplicate claims. 

The purpose of the Lifeline program is 

to provide telecommunications access to 

low-income subscribers. Recent audit 

results indicate there is a risk that a 

significant number of Lifeline 

consumers may be unnecessarily and 

improperly receiving support for more 

than one service per residential address. 

To address the problem of wasteful, 

duplicate Lifeline support, it may soon 

be necessary to adopt interim rules in 

this area while the record develops on 


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the issues on which we are seeking 

comment. 

34. To ensure that Lifeline support is 

limited to the amount necessary to 

provide access to telecommunications 

service for low-income subscribers, we 

propose several approaches to address 

duplicative support. We propose to 

adopt a new section 54.408 and to adopt 

several amendments to sections 54.400, 

54.405, and 54.410 that would facilitate 

the enforcement of a one-per-residential 

address limitation. We also propose to 

amend section 54.410 to require ETCs to 

submit to USAC unique householdidentifying information for every 

supported household to help determine 

whether two or more ETCs are 

providing Lifeline-supported service to 

the same residential address. We also 

propose remedies to address situations 

in which a consumer has received 

duplicate support and to deter such 

abuses. These proposals are a first step 

in deterring waste, fraud, and abuse, 

and we recognize there may be other 

appropriate actions that would take 

longer to implement, such as the 

creation of a database. 

35. With these proposed rules, we 

seek to create incentives for carriers to 

avoid requesting support for duplicative 

services, and to impose penalties for 

those who continue to do so. We also 

seek to ensure that our rules protect 

subscribers’ privacy and service 

providers’ proprietary business 

information. 

36. Measures To Assist in Detecting 

Duplicate Claims. A unique household 

identifier may be helpful to ensure that 

a residential address does not receive 

more than one subscription that is 

subsidized by the program. Specifically, 

we seek comment on amending section 

54.410 by requiring ETCs to provide 

such information as customer names, 

addresses, social security numbers 

(either the full number or the last four 

digits), birthdates, or other unique 

household-identifying information to 

USAC on their Forms 497. Would the 

benefits of requiring subscribers to 

provide such information outweigh the 

burdens, including possibly deterring 

some households from applying for 

benefits? 

37. We seek comment on the best way 

to accomplish this efficiently and 

effectively consistent with privacy 

statutes, such as the Electronic 

Communications Privacy Act (ECPA) 

and section 222 of the Communications 

Act. For example, what information 

could an ETC be required to provide to 

USAC on its Form 497 that would 

ensure that a household is not receiving 

multiple subsidized subscriptions at the 

residence? What measures could USAC 

put in place to ensure compliance with 

ECPA or other applicable laws, such as 

requiring ETCs first to obtain subscriber 

consent to share information? To the 

extent that use of customer proprietary 

network information (CPNI) is needed to 

ensure that a subscriber at a single 

residential address is not receiving 

multiple subsidized subscriptions, how 

do commenters suggest we ensure 

compliance with section 222 of the 

Communications Act and our 

implementing rules? Are there other 

laws we need to consider and address? 

We also seek comment on how best to 

address any other concerns about 

privacy, security, or proprietary data 

issues resulting from collection of this 

data. To streamline enforcement, we 

propose to require all ETCs to provide 

USAC with data in a consistent 

electronic format to facilitate USAC’s 

detection of duplicate claims. We seek 

comment on the burdens this would 

impose on carriers participating in the 

program. 

38. Remedies To Address Duplicate 

Claims. On January 21, 2011, the 

Wireline Competition Bureau provided 

guidance to USAC on how to resolve 

duplicate subsidies when more than one 

ETC seeks support from USAC for the 

same subscriber. We propose to amend 

section 54.405 to codify this guidance. 

We propose that when a duplicate 

subsidy is discovered, USAC is to notify 

the ETCs to discontinue including the 

duplicate subscriber in their list of 

subscribers for which the ETCs are 

claiming Lifeline support on the FCC 

Form 497. ETCs must notify the 

subscriber by phone, and in writing 

where possible, and explain that the 

subscriber has 30 days to select one 

Lifeline provider or face de-enrollment 

from the program. Once the subscriber 

selects a single Lifeline provider for the 

household by signing a new 

certification, the chosen ETC must so 

notify USAC and the other ETC. The 

selected ETC may then seek 

reimbursement for the subscriber going 

forward, while the other ETC must deenroll the household from its Lifeline 

service and may not seek 

reimbursement for that subscriber going 

forward. We seek comment on this 

proposal. 

39. Several ETCs and trade 

associations have suggested an 

alternative duplicate resolution process 

to the Commission. Under their 

proposal, USAC would send written 

notification, approved by the 

Commission, to all subscribers it 

identifies as receiving duplicate Lifeline 

subsidies. Such notice would require 

them to select one Lifeline provider 

from a list of providers on a form, which 

the subscriber would send back to 

USAC within 30 days. USAC would, in 

turn, notify the affected ETCs about the 

written notification to the subscriber, 

and the ETCs would continue to provide 

Lifeline-supported service to the 

subscriber and seek reimbursement from 

the Fund until the USAC resolution 

process is complete. When USAC 

receives a completed form from the 

customer with its selection, it would 

notify only the ETC not selected by the 

subscriber, and that ETC would be 

required to de-enroll the subscriber from 

its Lifeline service. Under this proposal, 

if USAC does not receive a completed 

form from the customer, USAC would 

be instructed to either notify both ETCs 

to de-enroll the subscriber, or contact 

the subscriber by phone to determine 

the subscriber’s provider selection. We 

seek comment on this proposal. 

Specifically, we seek comment on the 

advantages and disadvantages of USAC 

notifying the subscribers receiving 

duplicate support, as opposed to 

requiring ETCs to do so. Would 

subscribers be more or less likely to 

respond to an inquiry from USAC (an 

entity they likely are unfamiliar with) as 

opposed to their service provider? 

Would the form that USAC sends to the 

subscriber include every ETC serving 

the area or just the two ETCs involved 

with the request for duplicative 

support? To what extent would 

implementation of such a proposal 

increase administrative costs for USAC, 

and thereby impact the size of the 

Fund? 

40. In the alternative, we could adopt 

a rule that when duplicate payments are 

identified, ETCs must notify the 

customer that they have 30 days to 

select a single ETC to provide Lifeline 

service going forward. If the customer 

makes a timely selection, the carrier not 

selected will no longer receive Lifeline 

support for that customer. If the 

customer fails to make a timely 

selection, the carrier that has provided 

continuous Lifeline service to the 

customer for the longest period of time 

would continue to receive Lifeline 

support and the other carrier would no 

longer receive support for that customer. 

We seek comment on this proposal. 

41. We also seek comment on whether 

consumers receiving duplicative 

support should be de-enrolled in 

Lifeline after violating the one-perresidential-address requirement one or 

more times. After more than one 

duplicate subsidy is discovered, should 

the consumer listed as the subscriber, or 

the entire household, be de-enrolled 

from Lifeline? If de-enrollment is 

temporary, for how long should the 

exclusion from the program last? If 


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permanently, on what basis? Should we 

deny eligibility only if there is evidence 

of intent to violate the ‘‘single support 

per residential address’’ provision, or if 

this is not the subscriber or household’s 

first such violation? Should we impose 

stricter penalties on a consumer or 

household with multiple violations? 

Should we impose stricter penalties on 

a household receiving more than two 

Lifeline/Link Up subsidies? Should we 

first provide an opportunity for the 

subscriber to demonstrate that the 

household’s dual enrollment was due to 

an inadvertent mistake or 

misunderstanding of applicable 

requirements? What information would 

need to be collected and maintained by 

USAC in order to ensure that certain 

subscribers are prohibited from 

participating in the program in the 

future? If we do not permanently or 

temporarily bar such subscribers, what 

would be an appropriate remedy? 

Finally, we seek comment the potential 

impact on the telephone penetration 

rate among low-income households if 

this proposal were adopted. 

42. We also propose a mechanism for 

reimbursing the Universal Service Fund 

in the event of duplicate claims. Our 

rules currently direct USAC to suspend 

or delay discounts, offsets, and support 

amounts provided to a carrier if the 

carrier fails to provide adequate 

verification of those discounts, offsets, 

or support amounts upon reasonable 

request, or ‘‘if directed by the 

Commission to do so.’’ We propose that 

USAC be required to seek recovery for 

funds from all ETCs with duplicates for 

the applicable period—i.e., if one or 

more individual residing at the same 

address have been obtaining Lifeline 

support from two or more providers 

simultaneously, USAC would be 

required to seek recovery from all 

implicated providers for all support 

received during the period of 

duplicative service, which we propose 

to define as the period beginning at the 

time a duplicate is identified until the 

time at which it can be demonstrated 

that the consumer or household is no 

longer receiving duplicate benefits. This 

approach would create appropriately 

strong incentives for providers to take 

measures to ensure that they are not 

seeking excessive support. We note that 

in this situation support would have 

been provided in contravention of our 

‘‘single support per residential address’’ 

rule, and thus, arguably, neither ETC 

should have received support during the 

period of duplicative support. Further, 

if the customer does not reply to the 

notice and is terminated from Lifeline 

by both ETCs, we propose that USAC 

recover all Lifeline support sought for 

that subscriber from both ETCs for the 

period of time between when the 

duplicate was first identified to the 

point at which the customer is 

terminated from the Lifeline program. 

We seek comment on this proposal. We 

also seek comment on, alternatively, 

requiring that USAC seek recovery only 

from the ETC that is not chosen by the 

consumer for the period of time over 

which duplicate Lifeline support was 

provided. We seek comment on this 

proposal. Further, we seek comment on 

whether we should enable ETCs to 

avoid reimbursement obligations if they 

demonstrate responsible efforts to avoid 

duplicative funding. What would those 

efforts be and how could they be 

shown? Should we establish certain 

minimum safeguards that could act as a 

safe harbor for ETCs? Should we restrict 

recovery only upon a showing of 

negligence by the ETC? Should the ETCs 

be permitted to seek reimbursement for 

any recovered funds from the 

subscriber? For all of the above 

proposals, and any other approaches 

suggested by commenters, we seek 

comment on how we should determine 

the period of duplicative coverage. 

43. Addresses. Several stakeholders 

have noted that customers have not 

been permitted to obtain Lifeline or 

Link Up service when using a P.O. Box 

as their mailing address. Rather, ETCs 

have required applicants seeking 

support to provide a unique residential 

address. This practice has been used to 

ensure that the subscriber is eligible for 

supported service and is not receiving 

more than one subsidized service. We 

note that the other information we 

propose to collect—such as name, birth 

date, and social security number—are 

unique to individuals but do not fully 

address concerns that different members 

of the same household are receiving 

subsidized service. In contrast, address 

information might be particularly 

suitable to prevent that situation. We 

seek comment on whether to codify as 

a rule the current practice of requiring 

unique residential addresses, in order to 

assist both ETCs and USAC in 

determining whether an applicant is 

already receiving Lifeline- or Link Upsupported services. Under such a rule, 

ETCs would be required to collect the 

residential addresses of their Lifeline 

and Link Up applicants before they 

provided discounted service. Even if a 

customer receives mail at a P.O. Box, 

the customer would have to provide a 

residential address to which its service 

would be tied. 

44. We seek comment on this 

proposal. Are there circumstances 

where a residential address could not be 

provided? Are there privacy concerns 

that we should take into account when 

requiring customers to provide a 

residential address? How should we 

treat transient applicants who do not 

have a fixed address, or consumers who 

use rural route addresses, for whom 

there may be no other U.S. Postal 

Service address? Is there substitute 

information that we should require in 

the event that no residential address is 

available? 

B. Pro Rata Reporting Requirements 

45. We propose to codify the rule that 

all ETCs must report partial or pro rata 

dollars when claiming reimbursement 

for Lifeline customers who receive 

service for less than a month. Such a 

rule would ensure that all ETCs comply 

with the requirement that support may 

only be claimed for active subscribers, 

and thereby minimize waste of Lifeline 

funds. Carriers routinely bill customers 

for partial months, and should have the 

capacity in their billing systems to 

determine whether a customer is a 

Lifeline subscriber for the full billing 

period. We seek comment on our 

proposal. 

C. Eliminating Reimbursement for Toll 

Limitation Service 

46. We propose amending our rules to 

eliminate Lifeline support for the costs 

of providing TLS to Lifeline customers. 

This rule, adopted more than a decade 

ago, may have outlived its usefulness, 

given reductions in long-distance 

calling rates. We also note that there is 

great variance in TLS costs claimed by 

ETCs seeking reimbursement, ranging 

from $0 to $36 per Lifeline customer per 

month. Such variance may be due in 

part to the ambiguity of our rule 

governing TLS support, which States 

that support for TLS will be equal to the 

ETC’s incremental costs, but does not 

define incremental TLS costs eligible for 

Lifeline reimbursement. It is unclear, 

however, whether providing TLS 

imposes any incremental costs on 

carriers, since a number of ETCs do not 

seek any reimbursement for TLS costs, 

despite providing TLS to their 

subscribers. Moreover, the wide 

variance in support sought by ETCs 

suggests that some may be inflating their 

true costs. Elimination of Lifeline 

support for TLS could save the program 

roughly $23 million in 2011, which, in 

turn, could be used to conduct pilot 

programs to provide broadband support 

or otherwise utilized to provide eligible 

households with Lifeline discounts. We 

seek comment on this proposal. In the 

alternative, should we adopt a flat 

amount of reimbursement for TLS, and 


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if so, what would be an appropriate 

amount? 

D. Customary Charges Eligible for Link 

Up 

47. Defining Customary Charge. We 

seek to eliminate any incentive or 

opportunity for carriers to impose 

charges on program participants in 

order to increase universal service 

support, as that would represent a waste 

of funds. We therefore propose to 

amend our rules to define ‘‘customary 

charge for commencing 

telecommunications service’’ as the 

ordinary initiation charge that an ETC 

routinely imposes on all customers 

within a State. We seek comment on our 

proposed amendment. 

48. We also propose that Link Up 

rules make clear that activation charges 

that are waived, reduced, or eliminated 

when activation is accompanied by 

purchase of additional products, 

services, or minutes are not customary 

charges eligible for universal service 

support. TracFone’s petition indicates 

that it supports this proposal, but other 

ETCs disagree, arguing that there are 

legitimate reasons for an ETC to waive 

customary activation charges for lowincome consumers, including 

compliance with some State 

requirements. For instance, some 

commenters suggest we create an 

exception to the proposed rule in 

instances where a State commission has 

ordered ETCs to waive the remainder of 

the connection charge not reimbursed 

by USF. We seek comment on whether, 

if we amend our rules as described, we 

should recognize exceptions for certain 

categories or types of fee waivers or 

reductions. 

49. We also seek to develop a record 

regarding the prevalence of situations in 

which ETCs seek reimbursement for 

connecting the same customer more 

than one time, at the same location. For 

example, if a customer’s service was 

disconnected for non-payment, do ETCs 

ever impose another connection charge 

to resume service to that address? Do 

they do so frequently, or as a matter of 

course? How would we evaluate 

whether such charges are reasonable? 

We seek comment on whether our rules 

should be clarified to prohibit ETCs 

from seeking more than one Link Up 

subsidy for the same customer at the 

same location. 

50. We seek comment on whether our 

Link Up rules should be further 

amended to address concerns with 

waste, fraud and abuse in this area. For 

example, one commenter suggests that 

we require each ETC to certify that its 

activation charge is equally applicable 

to all customers. We seek comment on 

whether such a certification process 

would effectively prevent waste, and 

how burdensome such a certification 

requirement would be. In addition, we 

seek comment on whether we should 

adopt a rule that prohibits resellers from 

imposing a connection charge on 

consumers when the underlying 

wholesale provider has not assessed a 

similar connection charge on the 

reseller. 

51. Link Up Support Amount. 

Historically, incumbent telephone 

companies incurred costs in initiating 

service, such as the cost of visiting the 

housing unit to physically connect a 

telephone line to initiate service. In 

contrast, today, service initiation in 

virtually all instances for both wireless 

and wireline providers is done remotely 

via software, with the actual costs of 

installation likely to be significantly 

lower than several decades ago. 

52. Our rules specifying Link Up 

amounts have not been updated to 

reflect the changes in the industry that 

have occurred relating to service 

initiation. We seek comment on what 

the typical service initiation fee is for 

non-Lifeline subscribers and ask 

whether we should reduce the current 

$30 cap on Link Up support to some 

lower figure. 

53. Our current rules specify that 

ETCs may receive Link Up support for 

the revenue they forgo in reducing their 

customary charge for commencing 

telecommunications service. In order to 

receive Link Up support, ETCs are 

required to keep accurate records of the 

revenues they forgo in reducing their 

customary charge for commencing 

service. The forgone revenues for which 

the ETCs may receive reimbursement 

shall include only the difference 

between the carrier’s customary 

connection and the charges actually 

assessed to the participating low-income 

consumer. Moreover, the reduction shall 

be half of the customary charge or $30, 

whichever is less. As discussed above, 

there is concern that some ETCs may be 

inflating connection charges in an effort 

to collect money from the Fund. In 

order to make Link Up reimbursement 

more transparent and limit potential 

waste of funds, we seek comment on 

whether we should require all ETCs 

seeking Link Up reimbursement to 

submit cost support to USAC for the 

revenues they forgo in reducing their 

customary charges. Since ETCs are 

required to keep accurate records of the 

revenues they forgo for Link Up, it may 

not be too burdensome to require the 

ETCs to submit such data to USAC. We 

seek comment on this proposal and 

whether there are alternative ways to 

ensure that Link Up reimbursement is 

based on actual revenues forgone as a 

result of connecting low-income 

consumers. We also seek comment on 

what underlying costs may be recovered 

through Link Up. For instance, should 

Link Up be provided for costs associated 

with marketing and customer 

acquisition, or limited to costs 

associated with activating a phone line 

or establishing a billing relationship? 

E. Customer Usage of Lifeline-Supported 

Service 

54. We want to ensure that Lifeline 

support is used for the benefit of lowincome subscribers that are actually 

using the supported service, and we 

propose to amend our rules to prevent 

ETCs from obtaining Lifeline support for 

inactive consumers. Specifically, we 

propose to prohibit ETCs from seeking 

reimbursement from the Universal 

Service Fund for any Lifeline customer 

who has failed to use his or her service 

for 60 consecutive days. We seek 

comment on whether a customer’s 

failure to use service for a specific 

period of time may reasonably 

demonstrate, or serve as a proxy for, 

service discontinuation. If so, we seek 

comment on whether 60 days is a 

reasonable period, or whether the 

period of inactivity should be shorter 

(e.g., 30 days) or longer (e.g., 90 days). 

55. The proposed rule is intended to 

(1) prevent subsidies going to ETCs for 

customers that are not using the service; 

and (2) eliminate incentives that carriers 

might have to ignore or fail to report 

that a customer has (or appears to have) 

discontinued service. We do not seek to 

penalize subscribers for non-usage, and 

our proposed rule would not affect the 

terms or conditions of service that might 

exist between the ETC and the 

customer. Nor do we propose to require 

ETCs to disconnect subscribers for nonusage. We recognize that some 

customers may use their telephones 

sparingly, for emergencies or occasional 

communication. To protect consumers, 

we propose to require ETCs to alert 

customers if the ETC imposes any 

obligation to use service during a 

specified period of time in order to 

maintain subsidized service. We seek 

comment on how ETCs can best inform 

their Lifeline customers of any 

requirement to use the phone during a 

specified period of time. We also seek 

comment on whether our proposed 

rules could affect access to 911 services, 

and if so, how we can ensure that 

consumers maintain access to 

emergency services. We note that the 

Commission’s rules require commercial 

mobile radio service (CMRS) providers 

subject to the Commission’s 911 rules to 

transmit all wireless 911 calls, including 


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those from non-service initialized 

phones, to Public Safety Answering 

Points (PSAPs). We do not seek to 

modify this rule and our proposed rule 

would still require ETCs to transmit a 

Lifeline customer’s wireless 911 calls, 

even if the ETC is no longer providing 

service to that customer. 

56. Although the concern that ETCs 

may continue to count subscribers that 

have stopped using service appears 

greatest with respect to pre-paid 

wireless service, those concerns are not 

limited to pre-paid wireless service. We 

seek comment on whether the rules we 

propose in this subsection should be 

limited to particular types of service, or 

should apply to all types of service. 

57. Minimum Consumer Charges. In 

the 2010 Recommended Decision, the 

Joint Board expressed concern about 

consumers receiving Lifeline service 

offerings that are offered at no cost to 

the subscriber. In particular, the Joint 

Board raised concerns about prepaid 

wireless ETCs, which do not provide a 

monthly bill and, in some cases, provide 

handsets and service at no charge to 

consumers. The Joint Board 

recommended that, to guard against 

waste, fraud, and abuse in the Lifeline 

program, the Commission consider 

whether a minimum monthly rate 

should be paid by all Lifeline 

subscribers, including eligible Tribal 

subscribers. 

58. We seek comment on how best to 

prevent waste of universal service funds 

without creating unnecessary obstacles 

for low-income households to obtaining 

vital communications services. For 

instance, one option would be to adopt 

a rule requiring all ETCs in all States to 

collect some minimum monthly amount 

from participating households. If we 

were to adopt such a rule, what should 

that monthly amount be—e.g., $1 or 

some other amount? Alternatively, 

should we consider requiring ETCs to 

assess a monthly fee on all Lifeline 

consumers equivalent to half of the 

customary monthly Lifeline charges or 

half of the maximum subsidy provided 

for under our rules, whichever is less? 

Would either of these requirements, if 

adopted, appropriately balance the need 

to guard against waste, fraud, and abuse 

in the Lifeline program by ensuring that 

low-income households have the 

incentive to make appropriate use of 

their Lifeline-supported services, with 

the need to avoid deterring eligible 

consumers from participating in the 

program? 

59. Another option would be to 

require ETCs to collect some amount, 

such as $10 or $15, on a one-time basis 

from each Lifeline household prior to 

commencing Lifeline service. Such a 

rule could create appropriate incentives 

to ensure that Lifeline consumers 

genuinely want phone service and 

should deter situations in which 

Lifeline-supported service has been 

activated on a phone that is unused or 

improperly transferred to third parties. 

60. Would either of these proposals 

create an unreasonable barrier to 

enrollment for households that need 

support but cannot afford to pay any 

fee? What would be the proper amount 

of financial contribution from lowincome consumers that would 

appropriately balance our dual 

objectives of deterring waste, fraud, and 

abuse, while enabling those in need to 

obtain phone service? Should this 

amount vary based on the income of the 

qualifying low-income household? 

61. We seek comment on the 

administrative burdens for ETCs of a 

requirement to collect a minimal 

amount, such as $1 per month, from 

participating consumers. We 

acknowledge that in other, non-Lifeline 

contexts, carriers may choose not to bill 

their customers monthly, and it may not 

be cost-effective to send a bill to collect 

such a small amount. Should we allow 

ETCs to collect a monthly fee on a bimonthly basis? If we were to adopt a 

program-wide monthly fee requirement, 

should we explicitly prohibit carriers 

from waiving the fee? How can we 

adopt an approach that is 

technologically neutral and can be 

implemented easily by ETCs with 

diverse business models? 

62. Application of Minimum Charge 

to Tribal Consumers. The Commission’s 

rules currently require that the basic 

local residential rate for Tier 4 

subscribers (i.e., eligible low-income 

households residing on Tribal lands) 

may not fall below $1 per month. We 

have learned anecdotally that some 

carriers do not currently collect the $1 

from their Tribal customers. While the 

Commission’s current rules specify 

what the carrier must charge the Tribal 

subscriber, they do not explicitly 

require the ETC to collect such amounts, 

thereby allowing ETCs to waive the $1 

per month fee. 

63. If we adopt a proposal to require 

all ETCs to collect a minimum monthly 

fee from subscribers, we seek comment 

on whether to amend section 

54.403(a)(4)(i) of the Commission’s rules 

to specifically require a $1 monthly 

payment to be provided by each 

participating household to their ETC. 

Would this proposal, if adopted, 

adequately balance our objective of 

ensuring affordable service for eligible 

Tribal consumers while also guarding 

against waste, fraud, and abuse in the 

Lifeline program? 

64. How would any of these proposals 

impact subscribership for low-income 

households on Tribal lands, which 

continue to lag significantly behind 

subscribership for the nation as a 

whole? 

F. De-Enrollment Procedures 

65. We propose rules requiring ETCs 

to de-enroll their Lifeline customers or 

households from the program under 

specified circumstances. Specifically, 

we propose to require ETCs to de-enroll 

their Lifeline subscribers when: (1) The 

subscriber is receiving duplicate 

support and fails to select one ETC in 

the allotted time after being notified of 

a duplicate claim; (2) the subscriber 

does not use his or her Lifelinesupported service for 60 days and fails 

to confirm continued desire to maintain 

the service; or (3) the customer does not 

respond to the eligibility verification 

survey. Under our proposed rules, the 

subscriber would receive notice that 

they could be de-enrolled from the 

program if they did not take action by 

a specified date. Should that timeframe 

be 60 days? 

66. Some ETCs have argued that 

section 54.405(d) of our rules requires 

that they give customers 60-days’ notice 

prior to terminating their Lifeline 

benefits. In addition, some State laws 

may require similar notice provisions. 

The notice provisions currently set forth 

in section 54.405(d) of our rules are tied 

to consumer eligibility for Lifeline, and 

are not applicable to situations 

involving subscriber nonresponsiveness as a result of a duplicate 

claim or non-usage of the Lifeline 

service. For administrative simplicity, 

should the same timeframe be adopted 

for mandatory de-enrollment in the 

circumstances described above, or 

should we adopt a shorter period, such 

as de-enrollment within a 30-day 

period? We seek comment on our 

proposal to require ETCs to de-enroll 

Lifeline subscribers involved in the 

three scenarios described above. Would 

a shorter period be consistent with 

specific State notification requirements 

that may exist in non-default States? To 

the extent that commenters object to our 

proposal for mandatory de-enrollment, 

they should offer specific alternative 

solutions to protect the fund against 

waste, fraud, and abuse. 

G. Audits 

67. Waste, fraud, and abuse in the 

universal service program jeopardizes 

the availability of funds for supported 

services and imposes unjustifiable costs 

on carriers and ratepayers. We therefore 

seek to ensure there is a focused and 

effective system for identifying and 


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deterring program abuse. We seek 

comment on ways to improve the 

current low-income audit program in 

light of growing concerns about such 

issues as duplicate payments and 

consumer ineligibility. In particular, we 

seek comment on ways to improve the 

audit process to reduce improper 

payments and assess risks. In doing so, 

how can audits be targeted to better 

uncover the scope of errors associated 

with improper payments? What 

additional measures should be taken to 

mitigate the potential for program 

violations? Are there additional 

measures or incentives, beyond those 

that currently exist, that we should 

implement to encourage people to 

report abuses? Should we impose 

additional penalties, beyond deenrollment from the program, to 

discourage program abuse? 

68. With the growth of newly 

designated ETCs in a number of States, 

there may be a need for a more rigorous 

audit program to provide assurance that 

new participants have established 

adequate internal controls to meet their 

obligations. For that reason, we propose 

that all new ETCs be audited after the 

first year of providing Lifelinesupported service. We seek comment on 

the appropriate geographic scope of the 

initial audit. How should such audits be 

designed to ensure that any problem 

areas are easily and thoroughly 

identified? Most audits examine an 

ETC’s compliance with a wide variety of 

Commission requirements. Should 

initial audits focus on a smaller number 

of more important requirements, and if 

so, which ones? Although we seek 

comment on more rigorous, focused 

audits for new program participants, we 

note that we will also continue to direct 

USAC to conduct random audits to 

ensure ongoing compliance with our 

rules. 

69. We also seek comment on how to 

improve the Commission’s directive to 

USAC to establish a systematic 

approach to assessing internal controls 

and learning from audit findings. For 

example, we propose that negative audit 

findings above a specified dollar 

threshold, or impacting a specific 

percentage of an ETC’s Lifeline 

customers, trigger shorter intervals 

between audits, an expanded audit for 

the company at issue, and/or an 

additional audit the following year in 

the relevant study area. What should 

that dollar threshold be? Would the cost 

associated with such audits outweigh 

the benefits that would accrue? What 

follow-up should the Commission 

require of USAC in light of negative 

Lifeline/Link Up audit findings? 

70. We also seek comment on 

appropriate Commission responses to 

multiple findings of non-compliance, 

including repeated non-compliance 

above the specified thresholds or 

multiple findings of non-compliance 

with Lifeline or Link Up requirements 

in a single audit. 

71. The Commission’s rules already 

direct USAC to ‘‘suspend or delay 

discounts, offsets and support amounts 

provided to a carrier if the carrier fails 

to provide adequate verification of 

discounts, offsets and support amounts 

provided upon reasonable request.’’ 

Should we establish a threshold (either 

aggregate dollar amount or percentage of 

support payments) that would 

automatically result in a freeze on future 

payments from the program until the 

carrier remediates identified issues? 

Under what circumstances should we 

consider revoking an ETC’s grant of 

forbearance or designation as an ETC? 

We seek comment on other 

consequences that should result from 

negative audit findings. 

72. In 2005, the Commission sought 

comment on subjecting all USF 

recipients to independent audits, but 

ultimately did not adopt any such 

requirement. In light of increased 

concerns about potential waste, fraud, 

and abuse in the program, we again seek 

comment on whether to require some or 

all ETCs in the program to engage an 

independent firm to assess compliance 

with the program’s requirements. If we 

were to impose such a requirement, how 

often should we require the review (e.g., 

annually, or every few years)? Should 

all ETCs that participate in the program 

be subject to the requirement, or only 

some? If we were to limit this 

requirement to only certain ETCs, what 

would be the appropriate criteria for 

imposing such a requirement? For 

example, we might impose the 

requirement on ETCs that have been 

found to have committed violations in 

the past, that receive more than a 

particular amount of program support, 

or that have experienced significant 

increases in program support. Audits 

paid for by the ETCs could create a selfpolicing environment that would guard 

against waste, fraud, and abuse, but 

would also impose an expense on 

providers. We seek comment on the 

advantages and disadvantages of such a 

system, and on the burden of such a 

requirement on different carriers, 

including small ETCs. Commenters 

should discuss whether a lack of 

negative audit findings, or alternatively, 

proof of resolution of all negative 

findings, should impact the scope or 

frequency of future audits. We also seek 

comment on what type of audit 

engagements should be required, if we 

were to adopt such a requirement. If we 

were to adopt such a requirement, we 

propose to mandate that covered ETCs 

provide audit reports to the FCC, USAC, 

and relevant States, and that the FCC 

and USAC should be deemed 

authorized users of such reports. 

IV. Clarifying Consumer Eligibility 

Rules 

A. One-per-Residence 

73. In this NPRM, we propose to 

adopt a one-per-residential address 

requirement in section 54.408 of our 

rules. We seek comment on whether 

codifying this requirement as ‘‘one-perresidence’’ would aid in administration 

of the requirement by providing a bright 

line that could be determined by 

reference to external sources. The 

Commission has not codified any 

definition of a ‘‘household’’ for purposes 

of Lifeline and Link Up, and various 

qualifying programs may utilize 

different definitions of households. We 

also note that in other contexts, 

consumers seeking benefits from State 

or other Federal assistance programs 

may undergo a more robust process to 

qualify for benefits, such as an interview 

by social service agencies to determine 

eligibility, which may provide an 

additional level of assurance that the 

applicant in fact complies with relevant 

program criteria. We seek to adopt a rule 

that provides a bright line that is easy 

for USAC and ETCs to administer. 

74. The one-per-residential address 

rule that we propose to adopt is 

consistent with our existing single-line 

per residence requirement. But some 

ETCs dispute the validity of the singleline-per residence limitation, which 

raises concern that they are not adhering 

to an existing requirement that is 

designed to minimize waste, fraud and 

abuse; target support where it is needed 

most; and maximize the number of 

Americans with access to 

communications services. As noted 

above, it may be necessary for the 

Commission to take action on an interim 

basis while this proceeding is pending 

to address concerns with USAC 

reimbursing ETCs for duplicate claims. 

75. We understand that there may be 

situations—such as residents of 

commercially zoned buildings, those 

living on Tribal lands, and group living 

facilities—where application of the oneper-residential address rule may 

produce unintended consequences that 

would deprive deserving low-income 

consumers of the support that they 

otherwise would be entitled to. We 

encourage ETCs, Tribal Communities, 

the States and other interested parties to 


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provide input on a rule that maximizes 

the number of Americans with access to 

communications services, but also 

protects the fund from waste, fraud and 

abuse. 

76. We seek comment on how best to 

achieve the purposes for which the 

single line per residence requirement 

was designed. We propose to maintain 

this longstanding requirement, which 

balances our statutory obligation to 

ensure that low-income consumers have 

access to phone service at reasonable 

rates and to ensure that support is 

sufficient, but not excessive. We seek 

comment below on how to define a 

‘‘residential address’’ for the purposes of 

the Lifeline and Link Up programs. We 

also seek comment on how best to 

interpret the one-per-residential address 

restriction in light of current service 

offerings and in the context of group 

living arrangements or other situations 

that may pose unique circumstances.’’ 

77. In addition, we seek input on 

whether a different approach would 

better serve the needs of low-income 

consumers in light of our statutory 

obligations, as well as the changing 

communications marketplace. We note 

that several commenters in the Joint 

Board proceeding suggested that the 

Lifeline/Link-Up program should 

provide support for one wireless service 

per eligible adult, rather than one 

service per residential address, with 

some suggesting that would be in 

keeping with the statutory principle that 

low-income consumers should have 

access to services that are reasonably 

comparable to the services enjoyed in 

urban areas. This approach would take 

into account the fact that telephone use 

has changed since we first implemented 

the 1996 Act. Fifteen years ago, wireless 

service was not a mainstream consumer 

offering; today, 93 percent of the general 

population has wireless service. At the 

same time, providing support to each 

low-income adult rather than to each 

residential address could significantly 

increase the size of the program. Would 

allowing support for one wireless 

subscription per eligible adult be 

inconsistent with our statutory 

obligation to ensure that support is 

sufficient, but not excessive? We seek 

comment on whether the benefit that 

wireless service affords low-income 

consumers outweighs concerns 

associated with growth of the fund. If 

the funding dedicated to the program 

were capped, as discussed more fully 

below, a one-per-adult rule would likely 

mean that a much smaller benefit would 

be available to each program participant 

than under a one-per-residential address 

rule. We seek comment on these issues. 

1. Defining ‘‘Residence’’ 

78. We propose a rule in section 

54.408 to limit program support to a 

single subscription per U.S. Postal 

Service address, and seek comment on 

whether this approach would promote 

affordable access to telephone service 

consistent with the goals of section 254. 

Under this proposal, where unrelated 

individuals and/or families share a U.S. 

Postal Service address, such individuals 

and/or families would be limited to one 

subscription for that ‘‘residence.’’ We 

seek comment on whether this approach 

best serves program goals. The program 

was established to ensure that all 

consumers, even those of limited means, 

would have a ‘‘lifeline’’—a basic 

telephone service to connect them to the 

rest of society. Supporting one service at 

each residential address may effectively 

fulfill this goal, and may also help 

prevent waste and abuse of program 

resources. Moreover, this approach may 

be more administratively feasible than 

other options for defining who is 

eligible for support, such as familybased definitions that require an 

accurate determination of whether 

people living together are independent 

or related. 

79. Pursuant to this proposal, upon 

receiving an application for Lifeline 

support, an ETC could use the U.S. 

Postal Service residential address as a 

proxy to determine whether the ETC is 

already providing Lifeline support to 

that address. If so, the ETC would reject 

the application for support. 

Additionally, as discussed infra, we 

propose to require that Lifeline 

subscribers initially certify when 

applying for service, and thereafter 

verify annually, that they are receiving 

support for only one line per residential 

address (defined for these purposes as 

all of the persons who reside at a unique 

U.S. Postal Service address). 

80. We recognize that there may be 

some residences for which there is no 

unique U.S. Postal Service address. For 

example, we understand that there are 

apartment buildings where the residents 

live separately, but their units lack 

distinct identifiers and mail is delivered 

to and distributed by a single point of 

contact such as the building manager. 

Similarly, when multiple persons or 

families share a residence, unique 

addresses may not be available. 

Customers in rural areas may share a 

rural route address. We seek comment 

on what actions could be taken in such 

situations to ensure that Lifeline and 

Link Up benefits are available to eligible 

consumers. Is there other information 

that a carrier could collect to verify that 

the residence does not already receive 

support from the program? 

Alternatively, if one subsidized service 

were available for such locations, would 

that satisfy the congressional goal of 

ensuring affordable access to telephone 

service? 

81. As noted above, some customers 

rely on a P.O. Box rather than a U.S. 

Postal Service residential address. How 

should we determine eligibility in those 

situations? Should we require ETCs to 

collect additional verifying information, 

and if so, what? 

82. Our rules also limit support to the 

subscriber’s principal residence. We 

seek comment on how to ensure that a 

subscriber does not obtain support at 

more than one location. We propose that 

each subscriber provide unique 

identifying information (as discussed in 

Section IV) to prevent the same 

subscriber from receiving support at 

multiple locations. We seek comment 

on this proposal. We also seek comment 

on whether we should require 

subscribers to certify that the address 

provided is their principal residence, in 

order to receive Lifeline and Link Up 

support. 

83. We seek comment on whether our 

U.S. Postal Service address-based 

proposal should be modified to 

accommodate different types of living 

situations, and if so, how. For example, 

should the proposed definition of 

‘‘residential address’’ be modified to 

accommodate certain living 

arrangements? Should there be an 

exception for unrelated adult 

roommates or multiple families sharing 

a residence? Should we allow more than 

one discount per residence in the case 

of multi-generational families, for 

example if the low-income family 

includes an eligible adult child or 

elderly relative? Commenters that 

propose a different definition of 

‘‘residence’’ from the one we propose 

above, or exceptions to that definition, 

should explain how the Commission 

could ensure, in administratively 

feasible ways, that support is being 

provided appropriately, however that 

term is defined. 

2. Application of the One-per-Residence 

Rule to Commercially Zoned Buildings 

84. Although the Commission’s rules 

provide low income support for 

residential customers, the Commission 

has learned of instances where 

otherwise eligible applicants have been 

denied Lifeline and Link Up service 

because they live in facilities that are 

zoned for commercial, rather than 

residential use. This may occur, for 

example, when individuals reside in 

single-room occupancy buildings, 

lodging houses, rooming houses, 


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shelters, and other group quarters. This 

appears to be a particular problem in 

urban areas. 

85. We seek comment on how we can 

ensure that consumers have access to 

low-income support even if they reside 

in a commercially-zoned location. We 

note that commercial residences tend to 

be group living facilities rather than 

individual residences. If the 

Commission adopted special rules for 

group living facilities, would those rules 

resolve concerns about providing 

support to eligible subscribers who live 

in commercially-zoned areas? Are there 

additional steps we should take to verify 

that Lifeline and Link Up subsidies are 

not being provided to commercial 

entities? 

3. Application of the One-per-Residence 

Rule in Tribal Communities 

86. On some Tribal lands, several 

households may occupy a single 

housing unit. We seek comment on 

whether we should adopt a special 

definition of ‘‘residence’’ on Tribal lands 

that will ensure that Lifeline and Link 

Up service is provided to eligible 

consumers. For example, to the extent 

there are multi-generational families 

sharing a residence in Tribal 

communities, should there be an 

exception to our proposed one-perresidence rule? How can the 

Commission ensure that the program 

does not provide duplicative support to 

households on Tribal lands? In order to 

craft a rule that appropriately takes into 

account conditions on Tribal lands, we 

seek additional information about 

housing arrangements in Tribal areas. 

87. Some commenters responding to 

the ‘‘One-Per-Household’’ Public Notice 

state that residents of Tribal Lands 

frequently lack unique U.S. Postal 

Service addresses, and instead receive 

mail at communal P.O. boxes. We thus 

seek comment on how to apply the 

‘‘one-per-residence’’ rule to Tribal lands 

if we were to adopt the proposal 

generally to define residential address 

on the basis of a U.S. Postal Service 

address. Given the very low telephone 

penetration rate on Tribal lands, we do 

not want our rules to impose barriers to 

consumers or households living on 

Tribal lands that are eligible for, and 

desperately need, Lifeline discounts. At 

the same time, we must act as 

responsible stewards of the Fund. If the 

Commission were to exempt Tribal 

members from providing a unique U.S. 

Postal Service address, what measures 

should the Commission adopt to guard 

against the possibility of waste, fraud, 

and abuse? 

4. Ensuring Access for Residents of 

Group Living Quarters 

88. Some commenters have suggested 

that the Commission should consider 

how better to ensure that the program is 

effectively serving low-income residents 

of group living quarters, such as 

residential facilities for seniors or for 

victims of domestic violence. We seek 

comment on how eligibility should be 

defined for residents of group living 

quarters, including the effects on 

eligibility when a resident moves out of 

a group living facility, and what 

measures are necessary to prevent 

waste, fraud, and abuse. 

89. Under the proposed rule, related 

or unrelated, living together at a single 

postal address, residents of a group 

living facility—which could be dozens 

or even hundreds of individuals— 

would be eligible for only a single 

Lifeline supported service. Is this 

approach adequate to ensure availability 

of basic communications services to all 

Americans, including low-income 

consumers, as section 254 requires? If 

not, how should the program support 

service to low-income consumers 

residing in group living facilities? 

Should the program provide support to 

each separate and unrelated individual 

or family (e.g., a married couple living 

together at a nursing home) living in 

group facilities? 

90. Alternatively, should we create an 

exception to our proposed one-perresidence rule for eligible consumers in 

a group living facility to obtain Lifeline 

or Link Up service? Is there an 

administratively feasible way to 

approach this challenge that also 

provides protections against waste, 

fraud, and abuse? For instance, should 

we require the administrator of group 

living facilities to certify to ETCs and/ 

or USAC the number of separate and 

unrelated individuals or families in the 

facility? In that situation, the facility 

would be responsible for applying for 

Lifeline/Link Up support on behalf of its 

residents. Under this approach, how 

could our rules ensure verification of 

the income eligibility of the subscribers 

for which a group facility is seeking 

support? Should the facility be required 

to provide the ETC documentation of 

the residents’ eligibility? 

91. Should we require that consumers 

residing in group facilities provide 

certification from facility staff that 

corroborates applicants’ residence in a 

group living facility, as well as 

information about the number and types 

of persons served by the facility? Should 

the Commission set different eligibility 

criteria for permanent and temporary 

residents of group living facilities? 

92. We seek comment on the 

feasibility of making Lifeline funding 

available to agencies or non-profit 

organizations that are able to provide 

communications services to residents of 

group living facilities. As the Joint 

Board acknowledged, such institutions 

do not qualify as ETCs eligible for 

support, and we therefore seek comment 

on the application of section 254(e) of 

the Act, which limits the recipients of 

universal service support to ETCs. If 

funding were made available to such 

organizations, what if any additional 

measures would be needed to guard 

against waste, fraud, and abuse? For 

example, in a situation where the 

applicant lacks a residential or mailing 

address, how would the ETC verify the 

customer’s initial and ongoing eligibility 

for Lifeline services? 

B. Tribal Lifeline Eligibility 

93. It is well established that 

Federally recognized Tribes have 

sovereignty, and exercise jurisdiction 

over their members and territory with 

the obligation to ‘‘maintain peace and 

good order, improve their condition, 

establish school systems, and aid their 

people’’ within their jurisdictions. In 

2000, the Commission formally 

recognized Tribal sovereignty in its 

Statement of Policy on Establishing a 

Government-to-Government 

Relationship with Indian Tribes. The 

Federal government also has a trust 

relationship with Indian Tribes, as 

reflected in the Constitution of the 

United States, treaties, Federal statutes, 

Executive orders, and numerous court 

decisions. Consistent with this 

relationship, the Commission, in its 

June 2000 Tribal Order, 65 FR 47941, 

August 4, 2000, adopted measures to 

promote telecommunications 

subscribership and infrastructure 

deployment within American Indian 

and Alaska Native Tribal communities. 

Accordingly, in the Tribal Order, the 

Commission modified its rules to create 

enhanced Lifeline and Link Up 

programs intended to provide access to 

telecommunications services for lowincome consumers living on Tribal 

lands. 

94. Income-based eligibility. The 

Commission’s current rules regarding 

Tribal eligibility for Lifeline support 

have been subject to differing 

interpretations. Specifically, ETCs, 

USAC, and Tribal groups have indicated 

there has been inconsistency and 

confusion among Federal default and 

non-default states regarding whether 

residents of Tribal lands may qualify for 

participation in the program based on 

income, even though there is language 

in Commission orders so indicating. 


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95. We propose to revise sections 

54.409(a) and 54.409(c) to more clearly 

reflect that residents of Tribal lands are 

eligible for Lifeline and Link Up support 

based on: (1) Income; (2) participation 

in any Tribal-specific Federal assistance 

program identified in our rules; or (3) 

any other program identified in section 

54.409(b) of our Lifeline and Link Up 

rules. We seek comment on this 

proposal. 

96. Program-based eligibility. Under 

section 54.409 of the Commission’s 

rules, participation in the Federal Food 

Stamp Program (or the Supplemental 

Nutrition Assistance Program (SNAP) as 

it is currently named), qualifies 

residents of Tribal lands for Lifeline/ 

Link Up support. The Lifeline/Link Up 

rules do not, however, grant eligibility 

based on participation in the Food 

Distribution Program on Indian 

Reservations (FDPIR), a Federal program 

that provides food to low-income 

households living on Indian 

reservations, and to Native American 

families residing in designated areas 

near reservations and in the State of 

Oklahoma. As discussed more fully 

below, eligible residents of Tribal lands 

for the purposes of the Lifeline/Link Up 

program are qualifying low-income 

households on a reservation, where 

‘‘reservation’’ is defined as any 

Federally-recognized Indian Tribe’s 

reservation, pueblo, or colony, 

including former reservations in 

Oklahoma, and Alaska Native regions. 

97. The service and eligibility criteria 

for FDPIR are similar to those of SNAP, 

and are based on income levels that 

must be recertified on a periodic basis. 

A household may not participate in both 

FDPIR and SNAP, and any given 

reservation could have certain 

households participating in FDPIR and 

others participating in SNAP. 

Approximately 276 Tribes currently 

receive benefits under FDPIR, 

suggesting that there are households on 

Tribal lands that are not be served by 

the Lifeline/Link Up program simply 

because they have chosen to receive 

FDPIR benefits instead of SNAP 

benefits. Further, we understand that 

Tribal elders, a particularly vulnerable 

population, often seek FDPIR benefits 

rather than SNAP benefits. As such, 

allowing residents on Tribal lands to 

qualify for low-income support based on 

participation in FDPIR is consistent 

with the purpose of the current Tribal 

eligibility criteria, furthers the goal of 

providing access to telecommunications 

services by low-income households on 

Tribal lands, and the goal of targeting 

those in the greatest need. 

98. Accordingly, we propose to 

amend section 54.409(c) of the 

Commission’s rules to allow program 

eligibility for residents of Tribal lands 

participating in FDPIR. We seek 

comment on this proposal. We also seek 

comment on whether there are any other 

Federally- or Tribally-administered, 

income-based assistance programs, such 

as those focused on the elderly, which 

should be included in our program 

eligibility rules for residents of Tribal 

lands. 

99. Location-based conditions. In the 

Tribal Order, the Commission defined 

the terms ‘‘Tribal lands,’’ ‘‘reservation,’’ 

and ‘‘near reservation’’ for the purposes 

of establishing eligibility for the Tribal 

Lifeline and Link-Up programs. 

Specifically, the Commission modified 

its rules to provide support to 

individuals residing on ‘‘any federally 

recognized Indian [T]ribe’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), and Indian allotments,’’ as 

well as those residing in ‘‘those areas or 

communities adjacent or contiguous to 

reservations that are designated as such 

by the Department of Interior’s 

Commissioner of Indian Affairs, and 

whose designations are published in the 

Federal Register.’’ 

100. In its August 2000 Tribal Stay 

Order and Further Notice, 65 FR 58721, 

October 2, 2000, however, the 

Commission stayed implementation of 

the Tribal Lifeline and Link Up 

programs as they applied to qualified 

low-income households ‘‘near 

reservations.’’ The Commission noted 

that, after its adoption of the definition 

of ‘‘Tribal lands’’ in the Tribal Order, it 

learned that the term ‘‘near reservation,’’ 

as defined by the Bureau of Indian 

Affairs (BIA), might include ‘‘wide 

geographic areas that do not possess the 

characteristics that warranted the 

targeting of enhanced Lifeline and 

Link[-]Up support to reservations, such 

as geographic isolation, high rates of 

poverty, and low telephone 

subscribership.’’ Accordingly, in its 

Tribal Stay Order and Further Notice 

and its May 2003 Second Tribal Order, 

68 FR 41936, July 16, 2003, the 

Commission sought comment on how to 

identify geographic areas adjacent to 

reservations that share similar 

characteristics with the reservations. 

Since then, the Commission has not 

taken further action regarding the 

definition of ‘‘near reservation,’’ and 

currently provides enhanced lowincome support only to those living on, 

not near, Tribal lands. 

101. We now propose to amend 

section 54.400(e) of our rules to remove 

the term and definition of ‘‘near 

reservation,’’ as its inclusion in the rules 

creates confusion. We also propose to 

adopt a new rule section 54.402 to adopt 

a designation process for those Tribal 

groups and communities seeking 

designation as Tribal lands under the 

Commission’s rules. We seek comment 

on this proposal. The designation 

process we propose is consistent with 

the process recently proposed by the 

Commission in the Rural Radio Service 

Second R&O. That Order addresses the 

definitions of ‘‘Tribal lands’’ and ‘‘near 

reservation areas’’ for the purpose of 

determining whether a radio station 

application seeking to serve a Tribal 

community of license is a ‘‘licensable 

community’’ that qualifies for special 

consideration. The Commission adopted 

a process whereby an applicant seeking 

to establish eligibility may submit any 

probative evidence of a connection 

between a defined community or area 

and the Tribe itself. We propose to 

adopt a similar process for Tribal groups 

and communities seeking to receive 

Lifeline and Link Up support, but 

whose land is not defined by section 

54.400(e). Use of such a process would 

serve the public interest by affording 

flexibility to Tribes in non-landed 

situations, particularly given that the 

circumstances of such Tribes are so 

varied. 

102. We propose to delegate authority 

to resolve such designations to the 

Wireline Competition Bureau. We 

propose that such a request to designate 

an area as a Tribal land for purposes of 

Lifeline and Link Up should be formally 

requested by an official of a Federally 

recognized Tribe who has proper 

jurisdiction. The request should explain 

why the communities or areas 

associated with the Tribe do not fit the 

definition of Tribal lands set forth in the 

Commission’s Lifeline/Link Up program 

rules, but which are regions so Native in 

their character or location, as to support 

the purpose of providing enhanced 

Tribal Lifeline/Link Up program 

support. A showing should also detail 

how providing program support to the 

area would aid the Tribe in serving the 

needs and interests of its citizens in that 

community, and thus further the 

Commission’s goals of providing Tribal 

support. Most probative would be 

evidence that a Tribe delivers services 

to the area at issue. However, the Tribe 

could offer other evidence, including 

the Federal government’s provision of 

services to Tribal members in the 

identified area. Probative evidence 

might also include a showing that the 

Census Bureau defines the area as a 

Tribal service area that is used by 

agencies like the Department of Housing 


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and Urban Development. Further, 

persuasive evidence of a nexus between 

a community and a Tribe might also 

include showings that a Tribal 

government has a defined seat, such as 

a headquarters or office, in the area, 

combined with evidence that Tribal 

citizens live and/or are served by the 

Tribal government in the area at issue. 

A Tribe might also provide evidence 

that a majority of members of the Tribal 

council or board live within a certain 

radius of the area. An applicant might 

also show that more than 50 percent of 

Tribal members live exclusively in the 

geographical area. Additionally, Tribes 

might provide other indicia of a 

connection, such as Tribal institutions 

(e.g., hospitals or clinics, museums, 

businesses) or activities (e.g., 

conferences, festivals, fairs). We seek 

comment on any other factors that could 

help determine whether a geographical 

area is predominantly Tribal, such that 

low-income residents in the area should 

receive the benefits of enhanced Tribal 

program support. 

103. In addition to the showing 

required, it is important that an 

applicant seeking to take advantage of 

enhanced Tribal program support set 

forth a clearly defined area to be 

covered. The need for such a 

demonstration is in line with the 

purposes of enabling Tribes to serve 

their citizens, to perpetuate Tribal 

culture, and to promote selfgovernment. In evaluating such 

requests, we propose to delineate the 

‘‘Tribal Lands’’ equivalents as narrowly 

as possible and view most favorably 

proposals that describe narrowly 

defined Tribal lands, to enable the 

provision of services to Tribal citizens 

rather than to non-Tribal members 

living in adjacent areas or communities. 

We seek comment on this proposal. 

104. ETC Designation on Tribal lands. 

Additionally, we acknowledge that 

carriers serving households residing on 

Tribal lands could benefit from greater 

clarity regarding the ETC designation 

process for Tribal lands. However, as 

this issue has broader applicability 

beyond just the Lifeline/Link Up 

program, the corresponding issues and 

request for comment are addressed in 

the Office of Native Affairs and Policy’s 

Native Nations Notice of Inquiry. For 

example, the Notice of Inquiry seeks 

comment on how specific an ETC 

designation including Tribal lands 

should be, particularly for carriers 

seeking designation for the sole purpose 

of participating in the Lifeline program. 

The Notice of Inquiry also seeks 

comment on the nature of consultation 

with Tribal governments that should be 

included in the ETC designation process 

and whether carriers and Tribal 

governments should be required to file 

a proposed plan to serve with the Tribal 

lands. Finally, the Notice of Inquiry 

seeks comment on whether varying 

amounts of Lifeline support should be 

available on Tribal lands. We also seek 

comment on these issues and on the 

Lifeline program proposals contained in 

the Native Nations Notice of Inquiry. 

105. Self-Certification of Tribal land 

residence. Section 54.409(c) of the 

Commission’s rules require that ETCs 

offering Lifeline services to residents of 

Tribal lands must obtain the consumer’s 

signature on a document certifying that 

the consumer receives benefits from at 

least one of the qualifying programs and 

lives on a reservation. On April 25, 

2008, Qwest Communications 

International Inc. (Qwest) filed a request 

for review of certain USAC audit 

findings. The USAC audit found that, 

among other things, Qwest provided 

Tier 4 support for subscribers who were 

not residing on eligible Tribal lands and 

did not provide Tier 4 support to 

subscribers who were eligible residents 

of Tribal lands. Qwest asked the 

Commission to find that USAC erred 

when it concluded that Qwest is 

inappropriately seeking enhanced 

Lifeline support for customers that do 

not reside on Tribal lands. Qwest argued 

that it has fulfilled its obligation to 

ascertain whether a customer lives on a 

reservation by obtaining a signed 

certifications stating that the customer 

lives on a reservation. USAC responded 

that Qwest should establish additional 

controls. The Commission sought 

comment on the Qwest Petition in 2008. 

106. As discussed above, Tribal land 

addresses are often not straightforward. 

AT&T and the US Telecom Association 

(USTelecom) filed comments supporting 

Qwest, stating that the Commission did 

not intend ETCs to take additional steps 

beyond obtaining a self-certification, to 

determine whether an applicant lives on 

Tribal lands. Alltel Communications, 

LLC (Alltel, which subsequently was 

acquired by Verizon), Rural Cellular 

Corporation (Rural Cellular), and Smith 

Bagley, Inc. (SBI) also filed reply 

comments supporting Qwest. Alltel 

acknowledged that Tribal lands are 

historically underserved areas in which 

residents and experience very low 

telephone penetration rates. Alltel 

argued that an increased burden on 

ETCs to verify Tribal residency would 

not improve service on Tribal lands, but 

would only serve to discourage ETCs 

from serving these areas as conducting 

additional verification procedures is 

very challenging due to the unique 

living arrangements and identification 

practices of many Tribes. For example, 

the Rosebud Sioux Tribe acknowledged 

that there are no physical addresses on 

the Rosebud Indian Reservation. 

Additionally, the Spirit Lake Tribe 

stated that all mail sent to the 

reservation is addressed to P.O. Boxes or 

General Delivery. 

107. We propose to amend section 

54.409(c) of the Commission’s rules to 

disallow self-certification of income or 

program eligibility for residents of 

Tribal lands receiving Lifeline/Link Up 

support, consistent with our proposal 

below to require all Lifeline/Link Up 

recipients to provide proof of income or 

participation in a qualifying program. 

We propose to require a consumer 

receiving low-income support and 

living on Tribal lands to show 

documented proof of participation in an 

eligible program or eligibility based on 

income, like all other low-income 

consumers as there do not appear to be 

unique reasons why Tribal households 

should be exempt from a general 

requirement to produce documentation 

of qualification for program support. We 

seek comment on this proposal. 

108. We do, however, recognize there 

may be challenges in verifying Tribal 

residency due to unique living 

arrangements on Tribal lands, and 

therefore maintain the self-certification 

requirement as to Tribal land residence. 

We propose to clarify that receipt of 

self-certification of residence on Tribal 

lands, along with documentation of 

income or participation in an eligible 

program, is sufficient documentation for 

an ETC to provide enhanced Lifeline 

support. The current rules do not 

require the ETC to establish further 

verification processes or controls to 

ascertain that the customer is a Tribal 

member or lives on Tribal lands before 

providing enhanced Lifeline support. 

We seek comment on this proposed 

clarification. 

V. Constraining the Size of the LowIncome Fund 

109. We are mindful of the impact of 

the growth in the program on the 

consumers and businesses that 

ultimately support USF through fees on 

their phone bills. As we undertake 

comprehensive reform and 

modernization of USF, we are 

committed to controlling costs and 

constraining the overall size of the 

Fund. Many of the proposals contained 

herein to eliminate waste, fraud, and 

abuse and improve program 

administration could reduce 

expenditures and the size of the 

program. For example, eliminating 

duplicate claims and tightening our 

rules on customary charges eligible for 

Link Up support should result in 


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reduced expenditures. We note that 

fund growth is not necessarily 

indicative of waste, fraud, and abuse. 

We recognize that demand for lowincome support fluctuates based on a 

number of factors, including changes in 

qualifying assistance programs and 

macroeconomic conditions. We also 

note that the program has an ultimate 

cap in that only a defined population of 

eligible low-income households may 

participate in the program, and support 

is limited to a maximum of $10 per 

month per household (other than on 

Tribal lands). We seek comment 

generally on how to balance these 

principles, while retaining our 

commitment to enabling households in 

economic distress to obtain access to 

essential communications services. 

110. In light of concerns about the 

growth of Lifeline/Link Up, we seek 

comment on a proposal to cap the size 

of the Lifeline/Link Up program, for 

example at the 2010 disbursement level 

of $1.3 billion. We ask whether and how 

a capped fund could continue to ensure 

telephone access for low-income 

households and support potential 

expansion for broadband as discussed 

below. We seek comment on whether 

any cap should be permanent or 

temporary, perhaps lasting for a set 

period of years or until the 

implementation of structural reforms 

proposed in this NPRM. 

111. If the Commission were to cap 

the program, either as an interim 

measure or permanently, what would be 

an appropriate cap level? How should 

such a level be determined? For 

example, should it be higher or lower 

than the 2010 size of the program? 

Should a cap be indexed to inflation, 

similar to other USF program funds 

subject to caps, or adjusted based on 

unemployment rates? We seek comment 

on whether there should be exceptions 

to a cap. For example, should lowincome support for eligible residents of 

Tribal lands be exempt, given the very 

low telephone penetration rate on Tribal 

lands, as well as the unique 

circumstances and challenges faced by 

residents of Tribal lands? If we were to 

adopt a cap, should that cap be 

adjusted, for instance, if national or 

local unemployment exceeded a 

specified level? 

112. We also seek comment on the 

appropriate way to administer a cap. Is 

a national cap more efficient, or would 

a State-by-State cap be a more equitable 

way to administer the Low Income 

program fund? As noted above, the Act 

contemplates achieving reasonably 

comparable access in all regions of the 

country. Should regional differences be 

accounted for under a cap? 

113. If the Commission were to cap 

the program, we may also need to 

implement methods for prioritizing 

support among potential recipients. 

Should current participants in the 

program receive priority funding within 

a capped system? Alternatively, should 

funding be available on a first-come, 

first-served basis after a specified date 

for re-enrollment in the program? If so, 

given that disbursements vary monthly, 

how could ETCs be notified when the 

cap had been reached? If a participant 

loses services for any reason, such as 

non-use, should that participant 

necessarily receive funding upon reenrollment, or would that person 

potentially have to wait until the next 

funding year? Should monthly benefits 

be reduced to ensure that all eligible 

households that seek to participate in 

the program can do so, even if they 

would receive a smaller benefit than 

program participants currently receive? 

We seek comments on these issues and 

other practical and operational issues 

that would need to be addressed if the 

program were capped. 

114. If the Commission adopts a rule 

capping the low-income fund, should 

that cap be maintained if the 

Commission decides to support 

broadband with program funds? Would 

the inclusion of broadband necessitate 

different a different approach to 

prioritizing benefit allocations? 

VI. Improving Program Administration 

115. In this section, we seek comment 

on how to improve key aspects of the 

current administration of Lifeline/Link 

Up, consistent with our goals of 

reducing waste, fraud, and abuse and 

modernizing the program. As discussed 

above, the Commission has historically 

provided considerable discretion to the 

States to administer key aspects of the 

program, such as eligibility, enrollment, 

and ongoing verification of eligibility. In 

order to bolster oversight of this Federal 

program, we propose a core set of 

Federal eligibility, certification, and 

verification requirements that would 

apply in all States, while seeking 

comment on allowing States to adopt 

additional measures that could 

complement the Federal standards. 

Specifically, we propose to eliminate 

the option of self-certifying eligibility 

and to require all consumers in all 

States to present documentation of 

program eligibility when enrolling. We 

propose to increase sample sizes for 

ongoing verification and to require ETCs 

in all States to submit verification data 

to USAC and the Commission. 

116. We also seek comment on ways 

to reduce barriers to participation in the 

program by service providers and lowincome households, specifically through 

the use of coordinated enrollment with 

other social service assistance programs 

and the development of a national 

database that could be used for 

enrollment and verification of ongoing 

eligibility. These proposals are intended 

to improve administrative efficiency, 

improve service delivery, and protect 

and improve program access for eligible 

beneficiaries. 

A. Eligibility Criteria for Lifeline and 

Link Up 

117. We propose to amend our rules 

to require all States to utilize, at a 

minimum, the program criteria 

currently utilized by Federal default 

states. We further propose to allow 

States to maintain existing State-specific 

eligibility criteria that supplement the 

Federal criteria. Currently, some States’ 

criteria are more permissive than the 

Federal criteria. For example, Georgia 

extends program eligibility to senior 

citizens participating in low-income 

discount plans offered by local power 

and gas companies. If we were no longer 

to allow States to utilize these existing 

State-specific eligibility criteria, current 

subscribers would become ineligible for 

Lifeline benefits, which could result in 

considerable consumer disruption. We 

seek comment on whether, going 

forward, States should be able to impose 

additional permissive eligibility criteria 

they deem appropriate, so long as these 

additional eligibility criteria are 

reasonably tied to income and the State 

in question provides additional 

monetary support to supplement the 

Federal support. We recognize that more 

permissive eligibility criteria could 

increase the number of Lifeline 

subscribers, and seek comment on how 

to strike the right balance between 

national uniformity and State flexibility 

to address local circumstances. We 

further seek comment on the nature and 

magnitude of the potential impact, 

costs, and benefits of imposition of our 

proposed minimum eligibility 

requirements. 

118. Today, ETCs operating in 

multiple States have to develop Statespecific policies and procedures to 

assure compliance with State-specific 

program eligibility requirements. More 

uniform eligibility requirements could 

potentially lead to more streamlined 

and effective enrollment of eligible 

consumers, while lessening regulatory 

burdens on service providers. Moreover, 

as we explore cost-effective ways to 

strengthen the process of certification 

and validation of household eligibility, 

more uniform requirements could also 

lessen administrative costs for the 

program and facilitate more effective 


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monitoring and auditing. We ask 

whether requiring all States to utilize 

the Federal eligibility criteria would 

simplify ETC processes for enrolling 

eligible households and verifying 

ongoing eligibility. 

119. Would establishing a Federal 

baseline of eligibility criteria place any 

burdens upon the States? What 

administrative changes would be 

required in those States where 

enrollment and ongoing verification of 

eligibility functions are performed by a 

State governmental agency or thirdparty administrator? Would any such 

burdens be justified by the benefits of a 

minimum uniform system? From the 

perspective of States or service 

providers, what are the benefits or 

burdens of maintaining the current 

system in which requirements vary from 

State to State? We ask whether allowing 

States to maintain and add permissive 

eligibility criteria beyond any minimum 

uniform criteria would prevent existing 

eligible Lifeline customers from losing 

Lifeline support. Finally, we ask 

whether a Federal baseline of eligibility 

criteria would increase program 

participation. 

120. In its 2010 Recommended 

Decision, the Joint Board also 

recommended that we seek comment on 

raising the program’s income eligibility 

criteria of 135 percent or below of 

Federal Poverty Guidelines to 150 

percent or below of the FPGs. We seek 

comment on raising the Federal income 

threshold for program participation to 

150 percent or below of the Federal 

Poverty Guidelines. Some Federal 

programs linked by the low-income 

program, such as LIHEAP, already have 

a 150 percent threshold. A number of 

commenters in the Joint Board 

proceeding urged that the income 

eligibility standard be increased in 150 

percent. The FPG formula has been 

criticized as dated and inaccurate, with 

the Consumer Groups noting that some 

studies have suggested income levels for 

economic ‘‘self-sufficiency’’ at 161 

percent of the poverty level. In 2004, the 

Commission sought comment on 

whether the income-based criteria for 

Federal default states should be 

increased to 150 percent of the Federal 

Poverty Guidelines. At that time, the 

Commission presented a staff analysis 

that concluded that raising the income 

threshold might only have minimal on 

telephone penetration rates, but could 

result in many new Lifeline subscribers, 

potentially resulting in an additional 

$200 million in demand for Lifeline. We 

seek to update the record on this issue. 

We also seek comment on lowering the 

threshold from the current level (135 

percent of the FPG). 

B. Certification and Verification of 

Consumer Eligibility for Lifeline 

121. The applicability of Federal and 

State rules governing initial certification 

and ongoing verification of consumers’ 

eligibility for support currently depends 

on whether the customer resides in a 

Federal default state or non-Federal 

default state. Accordingly, ETCs 

providing service in multiple States may 

be required to comply with various 

State and/or Federal certification and 

verification procedures. ‘‘Certification’’ 

refers to the initial determination of 

eligibility for the program; ‘‘verification’’ 

refers to subsequent determinations of 

ongoing eligibility. 

122. We believe it is time to take a 

fresh look at these rules, taking into 

account both our experience with the 

program over the past 15 years and the 

many changes in service offerings since 

the program began. Our analysis is 

informed by the Joint Board’s 

Recommended Decision, and by the 

recent GAO review of the program. 

According to GAO, some States find that 

consumers are deterred from enrolling 

by the difficulty of certification and 

verification procedures. GAO also notes 

that there are risks associated with the 

self-certification of subscriber eligibility 

and the accuracy of amounts claimed by 

ETCs for reimbursement. Our proposals 

are intended to improve the integrity of 

the program by improving Federal 

requirements and introducing greater 

consistency throughout the country. We 

seek to balance the need to ensure that 

the program supports only intended 

beneficiaries, with the need for 

administratively workable requirements 

that do not impose excessive burdens or 

costs. 

123. One-per-residential address 

certification and verification. We 

propose to amend section 54.410 of our 

rules to require that all ETCs obtain a 

certification when initially enrolling a 

subscriber in Lifeline that only one 

Lifeline service will be received at that 

address. We also propose to amend 

section 54.410 of our rules to require 

that all ETCs obtain a certification from 

every subscriber verified during the 

annual verification process that the 

subscriber is receiving Lifeline support 

for only one line per residence. 

Requiring ‘‘one-per-residence’’ 

certification initially at sign-up and then 

on an ongoing basis should highlight 

and remind the consumer that support 

is available for only one line per 

residence and reduce inadvertent 

program violations. We seek comment 

on these proposals. 

124. The form used for such 

certification shall explain in clear and 

simple terms that this Federal benefit is 

available for only one line per 

residence, and that consumers are not 

permitted to receive benefits from 

multiple providers. Further, the 

certification form shall contain language 

stating that violation of this requirement 

would constitute a violation of the 

Commission’s rules and may constitute 

the Federal crime of fraud, which will 

be prosecuted to the fullest extent. We 

seek comment on this proposal and ask 

whether there is any other language that 

should be required on the form. 

125. We propose that compliance 

with the one-per-residence rule shall be 

verified annually, using the same 

procedures and forms described above. 

Annual one-per-residence verification 

results should be reported along with 

the sampling data to USAC and the 

Commission, as discussed more fully 

below. Finally, any subscriber 

indicating they are receiving more than 

one subsidy per address shall be deenrolled pursuant to the process for 

duplicates described above. Any nonresponders shall also be de-enrolled 

pursuant to the termination process 

identified in our rules. We seek 

comment on these proposals. 

126. Modifying certification 

procedures. We propose to amend 

section 54.409(d)(1) to eliminate the 

self-certification option and require all 

consumers in all States to present 

documents to establish eligibility for the 

program. We are concerned that the selfcertification process does not provide 

adequate assurance that support is being 

provided only to qualifying customers. 

Self-certification offers minimal 

protection against those intentionally 

seeking to defraud the program and fails 

to exclude customers that are not 

eligible to participate but simply 

misunderstand the eligibility 

requirements. This proposal would 

reduce the number of ineligible 

consumers in the program and reduce 

opportunities for waste, fraud, and 

abuse. 

127. We seek comment on this 

proposed rule change to eliminate selfcertification for program eligibility. Will 

the rule change help identify and 

eliminate ineligible consumers from 

enrolling in the program? To the extent 

that any commenter opposes this 

proposed change, we encourage 

alternative suggestions that we could 

implement quickly to reduce 

opportunities for ineligible customers to 

participate in the program. We seek 

comment on whether this proposed 

change would present an undue burden 

on ETCs and/or consumers. 

128. We also propose to amend 

section 54.409(d)(3) to require that a 


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consumer notify the ETC within 30 days 

if the consumer has knowledge that he 

or she no longer qualifies for Lifeline 

program support. A consumer would be 

required to notify its carrier upon 

knowledge that they no longer meet the 

income criteria, no longer participate in 

a qualifying program, are receiving 

duplicate support, or otherwise no 

longer qualify for program support. We 

seek comment on this proposal. 

129. Modifying annual verification 

procedures. We are concerned that 

although the current sampling 

methodology for Federal default states 

may provide some insights into the 

percentage of ineligible subscribers for a 

given ETC, we are concerned that it may 

not adequately protect the program from 

waste, fraud, and abuse as it does not 

result in de-enrollment of all ineligible 

subscribers. 

130. We propose changes to our 

annual verification procedures in three 

areas. First, consistent with the Joint 

Board’s recommendation, we propose to 

amend section 54.410 of the 

Commission’s rules to adopt a uniform 

Federal rule to serve as a minimum 

threshold for verification sampling. 

Second, we propose to require ETCs to 

de-enroll from the program consumers 

who decline to respond to an ETC’s 

verification attempts. Third, consistent 

with the Joint Board recommendations, 

we propose uniform procedures for the 

collection and submission of 

verification data across all states. We 

seek comment on these proposals and 

ask whether there are other verification 

issues for which we should consider 

adopting a set of uniform procedures. 

We also seek comment how these 

proposals would impact existing ETC 

compliance plans for specific wireless 

providers. 

131. We propose that these uniform 

minimum standards apply to all ETCs in 

all states regardless of any variances in 

state eligibility criteria. We recognize 

that individual states may have statespecific Lifeline programs, and therefore 

may have concerns that are not 

applicable to ETCs in all states. 

Therefore, we propose that states be 

allowed to implement additional 

verification procedures beyond the 

uniform minimum required procedures 

to accommodate those differences. We 

seek comment on this proposal. We also 

seek comment on whether there are any 

state verification processes that would 

be useful to adopt as a minimum 

uniform verification requirement to be 

applicable in all states. 

132. The Joint Board also 

recommended that ‘‘states be allowed to 

utilize different and/or additional 

verification procedures so long as those 

procedures are at least as effective in 

detecting waste, fraud, and abuse as the 

uniform minimum required 

procedures.’’ We seek comment on this 

proposal. For commenters that support 

this option, how, if at all could the 

Commission monitor whether different 

state procedures are ‘‘at least as 

effective’’ as the Federal standards? 

Would this proposal adequately address 

our concerns about the administrative 

burdens created by inconsistent 

standards among states? 

133. Uniform sampling methodology. 

We propose to amend section 54.410 of 

the Commission’s rules to establish a 

uniform methodology for conducting 

verification sampling that would apply 

to all ETCs in all states and provide 

additional protections against waste, 

fraud and abuse. 

134. As noted above, the 

Commission’s rules require ETCs in 

Federal default states to implement 

procedures to verify annually the 

continued eligibility of a statistically 

valid random sample of Lifeline 

consumers and provide findings to 

USAC. The Commission has previously 

specified that the size of annual samples 

should be based on a number of factors, 

including the number of Lifeline 

subscribers served by the ETC and the 

previously estimated proportion of 

Lifeline subscribers served that are 

‘‘inappropriately taking’’ Lifeline 

service. The Joint Board recommended 

that the Commission reconsider the 

equation used to calculate acceptable 

sample sizes, suggesting that current 

samples are not large enough to reveal 

the percentage of ineligible consumers 

receiving support. The Joint Board also 

stated that a uniform minimum standard 

for conducting the ‘‘statistically valid 

random sample’’ would help ensure 

accuracy, improve consistency among 

the sampling data, and assist in 

analyzing regional and national 

verification issues. 

135. There are several potential issues 

with our current sampling methodology. 

First, although our calculation method 

is designed so that poor results from 

prior years require an ETC to sample a 

larger number of customers in following 

years, the current methodology assumes 

that no more than six percent of 

customers would be found ineligible in 

any given year. As such, the tables that 

many ETCs use to determine the 

number of customers they must survey 

do not contemplate a situation in which 

more than six percent of customers are 

found ineligible. To illustrate the point, 

the minimum number of customers 

surveyed increases as the number found 

ineligible in the previous year increases 

from zero to fifty percent. However, 

because our instructions set a ‘‘cut off’’ 

of six percent ineligible, an ETC with 

400,000 Lifeline subscribers (half of 

whom were estimated to be ineligible) 

would only need to survey 244 

customers. As such, some ETCs may be 

sampling too few customers for their 

annual verification survey results to be 

statistically valid. 

136. Second, our current methodology 

creates little incentive for the ETCs to 

obtain responses from all consumers in 

the sample; the only consequence for 

non-response is to de-enroll an 

admittedly small number of consumers 

in the sample population. The penalties 

for non-response largely fall on the 

subscriber (who may lose service 

despite eligibility), while there is little 

incentive for the ETC to educate 

customers about the importance of a 

prompt response. 

137. Third, a statistically valid sample 

by definition provides only a basis for 

estimating the total number of ineligible 

consumers for a particular ETC; it does 

not result in de-enrollment of all (or 

even most) ineligible subscribers for that 

ETC. A hypothetical example illustrates 

the problem: If the annual verification 

survey estimates that half of a large 

ETC’s customers are ineligible in one 

year, the ETC need only survey 0.27% 

of its customers the following year. In 

other words, if an ETC has 400,000 

Lifeline subscribers and half (or 

200,000) were estimated to be ineligible, 

the ETC would only need to survey 

1,082 Lifeline customers the following 

year for the sample to be statistically 

valid (and assuming the same 

ineligibility rate, would then de-enroll 

no more than half, or 541, of the 

sampled customers for ineligibility). In 

short, the current methodology fails to 

identify the ineligibles who are not part 

of the sample. 

138. Given these potential issues, we 

propose to amend section 54.410 of the 

Commission’s rules to establish a 

uniform methodology to be used by all 

states for determining minimum 

verification sample sizes to provide 

additional protections against waste, 

fraud and abuse. Specifically, we set 

forth two alternative proposals for 

determining how many Lifeline 

customers an ETC must survey each 

year. The first alternative is a sampleand-census proposal, which would 

allow an ETC to sample its customers so 

long as the rate of ineligibility among 

responders to the survey is below a 

fixed threshold. If that ineligibility rate 

exceeds the threshold, however, the 

ETC would be required to take a census 

of all customers. The second alternative 

is to modify the current formula used in 

the Federal default states and apply it 


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uniformly to all states. Both alternative 

proposals are intended to address the 

three issues with our current sampling 

methodology, but in distinct ways. We 

describe each alternative below and 

invite comment on the relative 

advantages and disadvantages of these 

two alternatives. 

139. We describe the possible 

implementation of the sample-andcensus approach by providing an 

example using 5 percent as the 

threshold for a full census: Each year, 

ETCs would sample enough customers 

so that at least 300 customers respond 

to the verification survey; if the lower 

bound of the confidence interval for the 

estimate of ineligible subscribers is at or 

above 5 percent of total respondents, 

then the ETC would be required to take 

a census of all Lifeline customers that 

year and verify that each and every 

customer is eligible to participate in the 

Lifeline program. We seek comment on 

each component of the sample-andcensus approach: (1) The minimum 

number of customers that must respond 

to the survey for each ETC, (2) the 

threshold rate that would determine 

when the number of ineligible 

respondents is unacceptably high, and 

(3) the census requirement to remove 

ineligible customers from Lifeline’s rolls 

if that threshold is crossed. 

140. First, we seek comment on the 

appropriate minimum number of 

respondents needed for an accurate 

sample. We note that under our current 

rules, an ETC with 400,000 Lifeline 

subscribers in a given state is required 

to sample no more than 244 customers, 

while an ETC with 10,000 subscribers is 

required to sample no more than 238 

customers, and an ETC with 500 

subscribers is required to sample no 

more than 164 customers. Our objective 

is to establish a minimum required 

number of respondents that would 

provide sufficient assurance that the 

results of the sample are indicative of 

the population at large, regardless of the 

expected margin of error. As set forth 

more fully in Appendix C, a sample size 

of 300 would have a margin of error no 

greater than 5.7 percent, regardless of 

the number of ineligibles ultimately 

identified. Thus, for instance, if there 

were 300 respondents, and the survey 

identified a 10 percent ineligibility rate, 

that would suggest the actual eligibility 

rate in the entire subscriber base is 

somewhere between 6.6 percent and 

13.4 percent. Should we consider a 

larger or smaller sample size based on 

the number of Lifeline customers an 

ETC has in a state? Reducing the 

required number of respondents for 

smaller ETCs could result, for example, 

in sizably larger margins of error. On the 

other hand, a uniform number of 

respondents applicable to all ETCs 

could require smaller ETCs to survey all 

or most of their Lifeline customers each 

year, which could be burdensome. Such 

a requirement also could pose burdens 

to the extent that not all of the surveyed 

subscribers respond to the survey. Our 

goal is to establish a minimum number 

of respondents that is expansive enough 

to fully understand the scope of 

violations and de-enroll those who are 

ineligible, but that does not impose 

unnecessary costs on the program or on 

ETCs. We seek comment on how to 

appropriately balance the costs and 

benefits associated with implementing a 

standard minimum number of 

respondents, including the burdens that 

may be imposed on consumers as well 

as ETCs. 

141. Next, we seek comment on the 

threshold rate that would be used to 

determine when the number of 

ineligible customers found in the survey 

warrants a full census. For these 

purposes, we distinguish between 

Lifeline subscribers that fail to respond 

to a verification attempt and those that 

are affirmatively are found to be 

ineligible. The example above set the 

threshold at 5% of respondents. Is this 

threshold appropriate? If not, what 

should be the triggering threshold? 

Should the threshold be higher in 

recognition of the fact that program 

rules allow a subscriber to remain in the 

program for a period of sixty days after 

becoming ineligible? Should it be lower, 

in order to further reduce waste, fraud, 

and abuse? In the same vein, should we 

establish an analogous threshold for the 

percentage of customers who do not 

respond to the ETC’s verification 

survey? In other words, is there a level 

of non-responsiveness that should be 

deemed acceptable? If so, how could the 

Commission determine that threshold? 

If non-response rates exceed a specified 

threshold, should that level of nonresponse also trigger a full census, or are 

less burdensome measures to verify 

subscriber eligibility more appropriate. 

142. Finally, we seek comment on the 

census component, i.e., on the 

requirement that an ETC must verify the 

eligibility of all Lifeline customers in a 

state if the ineligibility rate of survey 

respondents exceeds the threshold. 

Should an ETC be required to conduct 

the census immediately, i.e., within a 

specified number of months of 

completing the survey, or the following 

year (in place of the annual verification 

sample)? If the number of ineligible 

respondents found during the census 

exceeds the threshold rate, should the 

ETC be required to conduct another 

census the following year in lieu of a 

statistically valid sample? Should an 

ETC whose ineligibility rate exceeds the 

threshold be required to perform a 

census of all Lifeline customers each 

year until the ETC can establish that 

fewer than 5 percent of respondents are 

ineligible? 

143. Should we establish another, 

higher threshold of ineligibility that 

would trigger a proceeding to determine 

whether that ETC’s ability to participate 

in the Lifeline program should be 

revoked? For example, if two censuses 

in a row show that more then 10% of 

a particular ETC’s Lifeline customers are 

ineligible, would that be evidence that 

the ETC has failed to implement 

adequate internal controls to assure 

compliance with Commission rules to 

such degree that it would be appropriate 

to revoke that ETC’s designation to 

receive Federal Lifeline and Link Up 

support? If so, what would be the effect 

on subscribers receiving service from 

the offending ETC? For example, should 

subscribers be offered an automatic 

transfer to a different ETC or be required 

to re-enroll? 

144. In the alternative, we seek 

comment on how to modify the current 

formula used in Federal default states 

and applying that revised formula in all 

states. We propose to eliminate the 

current cap on the estimated 

ineligibility rate of 6 percent. Should we 

require a larger sample size that would 

gradually increase the number of 

customers that an ETC must survey each 

year when a specified level of 

ineligibility is found? We recognize that 

a statistically valid sample is likely 

sufficient when the percentage of 

customers found ineligible is very low 

and the sample size is sufficiently large. 

But if the number of ineligible 

subscribers (including those that do not 

respond to the verification survey) 

becomes significant, should ETCs be 

required to verify eligibility of a 

proportionately larger number of 

customers than necessary for a 

statistically valid sample, to provide 

increasing incentives for the ETC to root 

out any potential waste, fraud, and 

abuse? We seek comment on potential 

modifications to the existing formula to 

better comport with our goals for 

revising the annual verification 

sampling procedures of ETCs. 

145. We seek comment on both 

alternative proposals. To what extent 

would each proposal address the 

potential issues with today’s 

methodology? Each proposal would 

eliminate the 6 percent ‘‘cut-off’’ that 

may distort the statistical reliability of 

today’s sampling methodology. Each 

could incentivize ETCs to educate their 

customers and increase the response 


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rates of customers—the sample-andcensus proposal would do so by putting 

the onus on ETCs to get a sufficient 

number of respondents, while a 

modified formula potentially could 

allow smaller verification surveys the 

following year if more customers 

respond to the verification survey. The 

first proposal includes a method for 

weeding out ineligible customers when 

one year’s survey suggests that the 

number of ineligible customers is 

unacceptably high. Under the second 

approach, it could take several years to 

more fully identify ineligible 

subscribers for a given ETC and in the 

meanwhile, ineligible consumers would 

continue to receive support in 

contravention of our rules. We also 

acknowledge while our current 

statistical sampling methodology may 

work well for ETCs with a large number 

of subscribers, there is a risk of highly 

uncertain results for ETCs with small 

Lifeline subscriber populations. 

146. We seek comment on these two 

proposals. We also seek comment on 

alternative proposals. Are there other 

ways to modify the current Federal 

methodology to improve it as we seek to 

make that the uniform minimum 

Federal standard in all states? We also 

seek comment on methods used by nonFederal default states to select a sample 

of subscribers that might provide a 

model for a uniform Federal standard. 

What sample size and confidence 

intervals are used by the various states 

that require statistical sampling? 

147. Procedures to be followed after 

sampling. When an ETC samples its 

customers, there are three possible 

outcomes: (1) Some subscribers will not 

respond; (2) some respondents are 

eligible; and (3) other respondents are 

ineligible. 

148. We propose to require ETCs to 

de-enroll from the program consumers 

who decline to respond to the ETC’s 

verification attempts. Our rules require 

ETCs in all states and territories to 

terminate Lifeline service if the carrier 

has a reasonable basis to believe that a 

subscriber no longer satisfies the 

qualifying criteria. Codifying the 

specific requirement that they be deenrolled for non-response in our rules 

would further protect the program from 

waste, fraud, and abuse. ETCs 

conducting verification surveys 

typically receive responses from only 

some of the consumers surveyed. We 

note that ETCs already routinely deenroll customers that do not respond to 

the ETC’s verification efforts, so this 

rule would not impose significant 

burdens on ETCs. We seek comment on 

this proposal. 

149. Collection and submission of 

verification sampling data. Under 

current rules, the Commission has 

access to verification results only from 

ETCs in Federal default states and in a 

handful of states that require ETCs to 

submit information annually to USAC. 

The Joint Board noted that gathering the 

same minimal data from all states would 

provide the Commission a more 

complete picture of how the Lifeline 

program is utilized, and would help 

identify regional and national 

verification issues. A more 

comprehensive data set would also 

allow the Commission to continue 

refining its rules and policies to reduce 

waste, fraud, and abuse in the program. 

We propose to require all states to 

submit verification sampling data to 

USAC. We seek comment on this 

proposal. 

150. Consistent with the Joint Board’s 

recommendation, we seek comment on 

whether verification results submitted 

to USAC and the Commission should be 

shared with all states. The Joint Board 

also points out that making aggregate 

verification results available to the 

public could better inform interested 

parties about whether universal service 

funds are being used for their intended 

purposes. Accordingly, we seek 

comment on whether the Commission 

should periodically publish aggregated 

verification results. Finally, we seek 

comment on whether information 

relating to any other Lifeline or Link-Up 

eligibility criteria should be gathered by 

ETCs and submitted to USAC and the 

Commission during the certification and 

verification processes. 

151. Certification and verification best 

practices. Consistent with the Joint 

Board’s recommendation, we seek 

comment on states’ certification and 

verification practices. The Joint Board 

noted that it received limited 

information regarding state certification 

and verification practices. More 

comprehensive data on states’ practices 

would assist the Commission with 

establishing appropriate uniform 

minimum standards. Therefore, we seek 

to build the record regarding best 

practices for certifying and verifying 

household eligibility. We encourage 

states, ETCs, Tribal governments, 

consumer groups, and others to provide 

us with their experiences with different 

certification and verification 

procedures, and to identify those that 

could be adopted as uniform minimum 

standards for all states. 

152. In particular, we seek data on 

how program eligibility is verified in 

particular states, how frequently 

verification is required, by whom 

verification is conducted, and the scope 

of the verification process (e.g., the 

proportion of subscribers that are 

sampled). We also seek data on whether 

states impose different verification 

responsibilities on different types of 

carriers. For example, we understand 

that in some states Lifeline-only prepaid wireless carriers may be subject to 

verification requirements different from 

other types of carriers. 

153. Certification and verification 

responsibilities and cost. Consistent 

with the Joint Board’s 2010 

Recommended Decision, we seek to 

develop a fuller record on who should 

be certifying and verifying continued 

eligibility. In the Federal default states 

ETCs perform these functions, while in 

other states, third-party administrators 

or social services agencies may perform 

them. Comprehensive data on 

certification and verification 

responsibilities and costs would assist 

the Commission in determining the 

most appropriate entity to certify and 

verify Lifeline consumers’ eligibility. 

Specifically, as suggested by the Joint 

Board, we seek comment on the costs of 

requiring ETCs, states, or third-parties to 

undertake certification and verification 

procedures. 

154. Requiring ETCs to verify 

eligibility by interacting with consumers 

may present challenges, including 

consumers’ hesitancy to provide 

personal information to ETCs. We also 

note that to the extent an ETC is seeking 

to build a Lifeline customer base, it may 

not have the same incentives to verify 

continued eligibility for benefits as 

would a neutral third party or 

government agency. Additionally, 

Federal, state, or Tribal agencies 

administering qualifying programs may 

be able to provide more reliable and 

more accurate information than 

consumers for verifying program or 

income eligibility. Therefore, we seek 

comment on whether ETCs should 

continue to be responsible for 

conducting eligibility certification and 

verification directly with Lifeline 

consumers, and on how income-based 

eligibility can be verified if not directly 

through the consumer. Further, we seek 

comment on the relative merits of 

relying upon ETCs, state agencies, 

Tribal governments, or other third-party 

entities to conduct initial certification 

and subsequent verification of 

eligibility. We seek comparisons of state 

practices or procedures, including how 

various practices have impacted the 

number of ineligible subscribers and 

duplicates, and other forms of waste, 

fraud, and abuse. 


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C. Coordinated Enrollment 

155. We agree with the Joint Board’s 

recommendation that coordinated 

enrollment should be encouraged as a 

best practice by the states. Coordinated 

enrollment can provide an important 

protection against fraud because 

eligibility is certified by the appropriate 

state or Tribal agency. We also agree 

with the Joint Board and many 

commenters that there are certain 

administrative, technological, and 

funding issues associated with 

coordinated enrollment. We seek 

comment on whether mandating 

coordinated enrollment would be 

appropriate, though we note that the 

record is not yet well developed on this 

issue. We seek further information about 

the costs and benefits of coordinated 

enrollment. We also seek to understand 

what if any steps the Commission might 

take to facilitate coordinated enrollment 

in all states. 

156. Administrative issues. We seek to 

build on the information we have 

collected from states and Tribal 

governments that are developing 

electronic interfaces to administer the 

Lifeline/Link Up program through 

coordinated enrollment. In the Joint 

Board proceeding, a few states provided 

detailed information regarding their 

coordinated enrollment best practices. 

For example, California explained that it 

moved from an automatic enrollment 

system to a system that pre-qualifies 

eligible consumers who must then 

affirmatively accept the service. 

Additionally, the GAO Report noted 

that states in its survey found that using 

various types of automatic enrollment 

procedures has a positive impact on 

reaching and enrolling eligible 

consumers. We seek comment on ways 

to ensure that coordinated enrollment 

provides fair and equivalent access to 

all providers of Lifeline service in a 

state, how to provide prompt and 

accurate notification of customer 

eligibility to carriers, and whether and 

how to ensure that a coordinated 

enrollment program would not prevent 

eligible consumers from qualifying 

under the income criteria. We also seek 

comment on how many and which 

states and Native Nations would require 

changes in state or Tribal laws to 

effectuate coordinated enrollment. 

157. Technological issues. Individual 

states or Tribal governments may face 

unique technological circumstances and 

burdens that make it impractical or 

unduly burdensome to implement 

coordinated enrollment. For example, 

the ability of a state or Tribal 

government to implement coordinated 

enrollment may depend upon the 

capabilities of existing data processing 

equipment, software, and data 

communication networks. We seek 

comment on these burdens and seek 

detailed information on the 

technological hurdles that states or 

Tribal governments would face, and 

how these challenges can be overcome. 

How many states and Tribal 

governments would need to upgrade or 

add data processing equipment, 

software, data networks, or other 

technology solutions in order to 

implement coordinated enrollment? 

158. Funding issues. We are aware 

that there could be significant costs 

associated with coordinated enrollment, 

including the costs of safeguarding 

consumers’ privacy and security, 

administering the program, and 

developing and maintaining software 

and equipment. How have states that 

have implemented coordinated 

enrollment funded associated costs? If 

the Commission were to mandate 

coordinated enrollment, should states 

and Tribal governments be required to 

provide all of the necessary funding, or 

should the Universal Service Fund bear 

some of those costs, and if so, what 

portion? We ask states that have 

developed or are developing 

coordinated enrollment programs to 

provide data on the associated costs. We 

also seek comment on the overall cost 

savings, if any, associated with 

coordinated enrollment, and on any 

other benefits that arise from 

coordinated enrollment. For example, 

have coordinated enrollment procedures 

helped states or Tribal governments 

better target benefits to intended 

beneficiaries? We ask for comment on 

the extent to which coordinated 

enrollment might lead to increased 

participation in the low income 

program. We seek comment on whether 

coordinated enrollment would reduce 

fraud if participants were required to 

use a coordinated enrollment process in 

order to obtain benefits. We encourage 

commenters to quantify, to the extent 

possible, the magnitude of any 

administrative costs and potential 

savings of coordinated enrollment. 

D. Database 

159. Administration. We seek 

comment on who should administer the 

program database. Should USAC be the 

primary administrator of a centralized 

system, or should the Commission 

select another third-party to administer 

the database? Is a governmental agency 

in a better position to safeguard 

consumers’ highly sensitive 

information, such as household income, 

than a third-party? Several commenters 

note that state social service agencies 

interact most closely with the program’s 

target population, and may be most 

competent to deal with low-income 

households’ sensitive documents. What 

models or best practices are there in 

other contexts for social service 

programs? 

160. Functionality. We have heard 

from several ETCs that a national 

database may be the best means to 

protect against waste, fraud, and abuse. 

We seek comment on how we can create 

and implement a database that would 

enable efficient enrollment by 

households in the program, but also 

guard against waste, fraud and abuse. 

For example, AT&T proposes a national 

PIN database that would answer two 

questions: (1) Has a consumer been 

deemed eligible by the state; and (2) is 

the consumer already receiving Lifeline 

discounts? Under AT&T’s proposal, 

states would assume responsibility for 

determining consumer eligibility and 

assigning a PIN that would be provided 

in blocks to various states by USAC. 

ETCs would access the database and be 

able to determine and change the status 

of a consumer. 

161. We seek comment on what 

functions should be served by a 

centralized database and the priorities 

for implementation. We are interested in 

understanding whether there are 

databases or systems used to facilitate 

other government-supported programs 

that can serve as models. 

162. First, we seek comment on the 

functionality that should be included in 

any information system that facilitates 

enrollment certification, and ongoing 

verification of eligibility. For example, 

how could a system simplify the 

certification process and provide realtime electronic verification of consumer 

eligibility? How can we ensure that the 

database provides ongoing verification 

of consumer eligibility? In addition, we 

seek comment on the type of 

information that the database would 

need to contain regarding a consumer’s 

current Lifeline enrollment status. How 

would ETCs access eligibility 

information? CGM notes that Wisconsin 

provides real-time certification of 

customer eligibility at the time of 

enrollment. Could Wisconsin’s system 

provide a model for a nationwide 

database? 

163. In addition, we seek comment on 

whether a nationwide database could 

efficiently and effectively facilitate 

ongoing verification of customer 

eligibility. We seek comment on how a 

database would receive updates on 

changes in consumers’ eligibility from 

appropriate social service agencies so 

that eligibility for Lifeline could be 

monitored in a timely manner. For 


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example, if a database is linked to a 

Federal or state system that contains 

information regarding customer 

enrollment in a qualifying program and 

the subscriber becomes ineligible in that 

qualifying program sometime after 

enrolling in Lifeline, how would the 

system notify the ETC that the 

subscriber is no longer eligible for 

Lifeline? Would the system alert the 

ETCs on a periodic basis or every time 

a subscriber drops out of the qualifying 

program? We seek comment on the 

procedures ETCs would follow when a 

subscriber becomes ineligible. For 

example, would the subscriber be given 

a grace period to secure alternative 

service once de-enrolled in Lifeline? 

How, if at all, could a database be 

updated to reflect changes in income 

eligibility? 

164. We also seek comment on 

whether a national database would 

resolve the issue of annual verification 

by providing an effective means of 

verifying customer eligibility monthly, 

quarterly, or annually? How could a 

nationwide database accommodate the 

differences in state Lifeline practices, 

which include varying Lifeline 

eligibility criteria and verification 

mechanisms? Additionally, we seek 

comment on the impact a national 

database would have on carriers’ 

administrative burden. 

165. Second, we seek comment on the 

functionality required to eliminate 

duplicate claims for support and 

generally guard against waste, fraud, 

and abuse. Stakeholders have stated that 

a national database could eliminate 

fraudulent and duplicate claims for 

Lifeline support by performing a prequalification address verification. 

Currently, only Texas has a database 

that can identify duplicate claims, but 

the database does not allow ETCs to 

determine immediately if a household is 

enrolled in another program. Rather, 

ETCs must wait to hear from the system 

administrator whether the potential 

household is being served by another 

ETC. Because the Texas database is not 

updated in real-time, stakeholders 

report that there is significant lag-time 

in signing up customers. Is it necessary 

or desirable to update the database on 

a real-time basis? 

166. Third, we seek comment on how 

the database would be populated and by 

whom. Some commenters have pointed 

out that a national database populated 

by the states as well as ETCs could 

simplify the certification process by 

providing accurate and up-to-date 

information on eligibility. Other 

commenters explain that state social 

service agencies are best situated to 

provide these inputs. We seek comment 

on what authority the Commission has 

to require state social service agencies to 

provide inputs in the database. We seek 

comment on who should be charged 

with populating the database. 

167. A national database would need 

to have the ability to normalize or 

standardize data into a common format 

in order to account for variations in 

consumer- or ETC-provided data fields, 

especially addresses. What entity or 

entities would be responsible for 

populating a national database with the 

necessary customer eligibility 

information? Would ETCs populate the 

database for all customer data, and if 

that is the responsibility of ETCs, 

should we impose different deadlines 

for completion depending on the 

number of Lifeline subscribers for each 

ETC. Would a phased implementation 

schedule be an appropriate way to 

populate such a national database? If we 

were to adopt such an approach, what 

threshold should we establish to 

determine when different providers are 

required to participate, and should that 

be based on the size of the ETC (total 

subscribers) or the number of lowincome subscribers it has? 

168. Fourth, we seek comment on the 

system requirements of a national 

database. For example, Emerios noted 

that a database must be flexible enough 

to allow for consumers to easily switch 

between providers, and CTIA points out 

that a database should include enough 

fields so that if the fund supports other 

services in the future that the database 

would remain relevant and useful. We 

seek comment on these issues as well as 

other matters implicated by a national 

database. 

169. Costs and Funding. We seek 

comment on the best way to fund and 

maintain a national database. Should 

database administration be funded 

completely or partially from the 

Universal Service Fund? Alternatively, 

if fees are assessed on ETCs to fund a 

national database, should fees be 

assessed on a per Lifeline-applicant 

basis, per instance of accessing the 

database (per ‘‘dip’’ into the database), or 

both? Emerios estimates that a 

centralized database would cost 

approximately $1 per application to 

administer. CGM and YourTel suggest 

that ETCs pay $.05–$.10 per dip. How 

many ‘‘dips’’ would be expected per 

year? Is there some other ETC 

assessment mechanism that would be 

more appropriate, such as a one-time 

flat fee? Verizon suggests that 

California’s model of funding a thirdparty administrator using a customerbilled surcharge is an effective strategy. 

Are there examples of funding for 

program participation databases in other 

contexts that could serve as a model? 

170. We seek comment on what costs 

the states might incur if a national 

database were established. For example, 

what costs would be associated with setup, continuous operation, and updating 

of appropriate state databases that may 

be used for state low-income programs, 

as well as establishing appropriate 

telecommunications and information 

links and electronic data interfaces 

(EDIs) with a national database. 

Additionally, would existing state 

databases need to be modified in order 

to be compatible with a national 

database and at what cost? Could a 

national database have the inherent 

capability to perform seamless data 

protocol conversions while interacting 

with the state databases? The existing 

proposals have not addressed how the 

related non-recurring and recurring 

costs would be allocated among the 

individual states, the national/Federal 

level, and ETCs. However, as Emerios 

points out, states could be incentivized 

to connect to an existing national 

database because of the reduced costs of 

interfacing with a single database rather 

than potentially interacting with 

numerous providers. Thus, even in the 

absence of a state mandate to interface 

with a national database, states may find 

moving towards automation to be 

fiscally sound. Alternatively, are there 

Federal agencies with which we could 

partner to populate consumer eligibility 

data? 

171. Data Security and Privacy Issues. 

We note that the privacy-based 

limitations on the government’s access 

to customer information in Title II of 

Electronic Communications Privacy Act 

(ECPA), section 222 of the 

Communications Act, and our 

implementing rules and the privacy 

provisions of the Cable Act, may be 

implicated by collection of the data 

discussed here. We seek comment on 

whether any of these pre-existing 

regulatory or statutory requirements 

would impose any restrictions on the 

storage by a database administrator of 

customer eligibility, certification, and 

verification data. We seek comment on 

how best to address these concerns. We 

ask commenters to suggest ways in 

which a database could comply with 

any such requirements, and how could 

it be set up both to get useful data and 

to minimize the burden on consumers 

and reporting entities? Are the concerns 

alleviated if consumers provide 

information directly to the Commission, 

or if the ETC obtains consumer consent 

through a waiver at the time of 

enrollment? If the latter, what steps 

could the Commission take to ensure 


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that consumers have provided consent? 

How could the Commission address any 

other privacy issues, and any other legal 

impediments to the creation and 

maintenance of such a database? Are 

there other databases that have been 

constructed that could serve as a model 

for developing a database for Lifeline/ 

Link Up? Specifically, we seek input 

from the states that have developed 

similar databases on how best to achieve 

our goal of allowing ETCs to access 

relevant data while protecting 

consumers’ privacy. 

172. We note that different states have 

different laws governing privacy of 

consumer data. We seek comment to 

better understand the differences in 

state privacy and security laws 

concerning the program eligibility data. 

We also seek comment to explore how 

to construct an IT platform that could 

ensure data security while enabling 

convenient access for all Lifeline 

providers across the country. Emerios 

points out that having a single platform, 

populated by ETCs, which all states can 

access, decreases the risk of security 

breaches by reducing the number of 

portals for inputting sensitive 

information. Would a national database 

be a more effective way to ensure 

consumer privacy than requiring 

individual ETCs to gather 

documentation establishing household 

eligibility? 

173. State/Regional Database. We also 

seek comment regarding the feasibility 

and potential advantages and 

disadvantages of regional and state 

databases as opposed to, or in addition 

to, a national database. We seek 

comment on several key factors that 

parallel the critical issues outlined 

above for a national database, such as 

administration, cost and funding, 

privacy, and data security issues. We are 

interested in the advantages and 

disadvantages of these possible models. 

Consistent with the goal of preventing 

waste, fraud, and abuse, where a state 

has taken steps to automate the process 

to streamline or enhance eligibility and 

certification procedures and/or to 

prevent duplicate claims, we propose to 

require all ETCs operating in that state 

to utilize that state-managed process. 

We seek comment on this proposal. 

E. Electronic Signature 

174. Section 54.409(d) requires 

carriers to ‘‘obtain [a] consumer’s 

signature on a document certifying 

under penalty of perjury’’ that the 

consumer meets certain Lifeline 

eligibility requirements. Section 54.410 

requires carriers to verify continued 

eligibility by surveying consumers who 

must prove their continued eligibility 

and ‘‘self-certify under penalty of 

perjury’’ to certain requirements relevant 

to continued eligibility. Virgin Mobile 

has requested to enroll Lifeline 

consumers online by allowing 

applicants to electronically sign the 

application and to enroll customers by 

telephone using an Interactive Voice 

Response (IVR) system, which records 

and saves by phone an applicant’s 

certification of eligibility. 

175. The Electronic Signatures in 

Global and National Commerce Act (E– 

Sign Act) and Government Paperwork 

Elimination Act make clear that 

electronic signatures have the same 

legal effect as written signatures. We 

propose to allow consumers to 

electronically sign the ‘‘penalty of 

perjury’’ requirements of sections 

54.409(d) and 54.410 of the 

Commission’s rules. Because there is no 

general Commission rule on use of 

electronic signatures, we seek comment 

on the rules defining and guidelines for 

accepting electronic signatures for 

Lifeline enrollment, certification, and 

verification. For example, should 

sections 54.409(d) and 54.410 be 

amended to make clear that electronic 

signature is an acceptable ‘‘signature on 

a document’’ as required by the rules? 

We seek comment on how we can 

ensure that ETCs maintain copies of the 

household certifications in the event of 

duplicates or other questions 

concerning compliance with our rules. 

176. We seek comment on whether an 

IVR telephone system is an acceptable 

method to verify a consumer’s signature 

under sections 54.409(d) and 54.410 of 

the Commission’s rules. Unlike section 

54.410, section 54.409(d) specifically 

requires a signature by an eligible 

consumer, and we seek comment on 

whether an interactive voice response 

(IVR) telephone system satisfies the 

signature requirement of the rules. We 

note that the Commission has allowed 

the use of automated processes in other 

instances requiring verification by 

adopting rules specifically authorizing 

the use of such automated processes. 

How would ETCs satisfy the 

recordkeeping requirements of section 

54.417 using an IVR telephone system? 

VII. Consumer Outreach & Marketing 

177. Section 214(e)(1)(B) of the Act 

requires ETCs to advertise the 

availability of services supported by 

universal service funds ‘‘using media of 

general distribution.’’ Over the years, the 

Commission has highlighted the 

importance of outreach to low-income 

consumers, including by adopting 

outreach guidelines in its 2004 Lifeline 

and Link Up Order, 69 FR 34590, June 

22, 2004. 

178. Advertising the availability of 

discounted services available to lowincome households falls into two 

related categories: Outreach and 

marketing. Outreach entails increasing 

public awareness of the program, while 

marketing relates to how ETCs describe 

and sell their USF-supported products 

to consumers. The Commission wants to 

ensure that eligible consumers are made 

aware of the availability of Lifeline and 

Link Up and seeks comment below on 

effective outreach methods to lowincome households. Moreover, as 

discussed below, some ETCs are 

energetically marketing Lifeline- and 

Link Up-supported products. We seek 

comment on whether we should impose 

marketing guidelines on ETCs to ensure 

that consumers fully understand the 

benefit being offered, which may help 

prevent the problem of duplicate 

support. 

179. In its 2010 Recommended 

Decision, the Joint Board looked at both 

outreach and marketing and urged the 

Commission to adopt mandatory 

outreach requirements for all ETCs that 

receive low-income support from the 

Universal Service Fund. In support, the 

Joint Board cited USAC data showing 

that, in 2009, only 36 percent of eligible 

consumers participated in Lifeline. 

Based on this statistic, the Joint Board 

expressed concern that current outreach 

is ineffective or that some ETCs are 

neglecting low-income outreach 

altogether. The Joint Board also 

recommended that the Commission 

review carrier best practices on 

community-based outreach; clarify the 

role of the states in performing lowincome outreach, including working 

with ETCs to formulate methods to 

reach households that do not currently 

have telephone and/or broadband 

service; and monitor ETCs’ outreach 

efforts. With respect to marketing, the 

Joint Board encouraged the Commission 

to provide ETCs with the flexibility to 

market their service offerings to eligible 

consumers in accordance with their 

respective business models, and 

recommended that the Commission seek 

comment on whether ETCs should be 

required to submit a marketing plan to 

the state or Commission describing 

outreach efforts. 

180. Outreach to Households Without 

Telephone Service. In 2004, the 

Commission adopted an outreach 

guideline recommended by the Joint 

Board that states and carriers utilize 

materials and methods designed to 

reach low-income households that do 

not currently have telephone service. In 

its 2010 Recommended Decision, the 

Joint Board recommended that states 

should assist ETCs in two primary ways 


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in formulating methods to reach 

households that do not currently have 

telephone and/or broadband service. 

First, states can identify appropriate 

community institutions to participate in 

public-private partnerships. Second, 

states can assist ETC outreach efforts by 

identifying unserved and underserved 

populations for whom outreach would 

be beneficial. 

181. We seek comment on the efficacy 

of current efforts by states and ETCs to 

reach low-income consumers without 

phone service, and what more can be 

done to improve outreach, particularly 

in states where adoption of phone 

service is below the national average. 

We seek examples of public-private 

partnerships that have been effective in 

reaching low-income households 

without phone service. In addition, we 

would like to better understand how 

state social service agencies or public 

utility commissions identify unserved 

populations in their states, and whether 

and how they could share such 

information with ETCs operating within 

their states. We also seek comment on 

the role of Tribal governments and 

organizations in identifying and 

reaching out to members of their 

communities who lack telephone 

service and could benefit from Lifeline 

and Link Up. Moreover, we are 

interested in any data regarding whether 

outreach to low-income households 

results in increased telephone 

penetration rates. 

182. Outreach to Non-English 

Speaking Populations. The Commission 

has encouraged states and carriers to use 

advertising that can be read or accessed 

by any sizable non-English speaking 

populations within the ETC’s service 

area. The Joint Board also emphasized 

the importance of outreach to nonEnglish speaking communities in its 

2010 Recommended Decision. We seek 

comment on whether current outreach 

efforts to non-English speaking 

communities by states and ETCs are 

effective, or whether more should be 

done in this area. As discussed in more 

detail below, we seek information on 

community-based partnerships or 

initiatives that have been effective in 

educating non-English speaking 

populations about the Lifeline/Link Up 

program. 

183. Role of the States and Outreach 

with Government Assistance Programs. 

Since 2004, the Commission has urged 

states and carriers to coordinate their 

outreach efforts with governmental 

agencies that administer any of the 

relevant government assistance 

programs. The Commission’s 2004 

outreach guidelines make clear that 

states play an important role in working 

with ETCs to advertise the availability 

of Lifeline supported services. Recently, 

the National Broadband Plan noted that 

requiring ETCs to conduct Lifeline 

outreach may not be the most effective 

way to reach underserved, low-income 

populations. Rather, the Broadband Plan 

suggested that state social service 

agencies should take a more active role 

in consumer outreach by making 

Lifeline and Link-Up applications 

routinely available when the agencies 

discuss other assistance programs with 

consumers. A few ETCs have pointed 

out that social service agencies are in a 

much better position than ETCs to 

approach potential consumers with 

information about Lifeline-assisted 

programs. 

184. We seek comment on what steps 

this Commission could take to 

encourage state and Tribal social service 

agencies to take a more active role in 

reaching potential Lifeline-eligible 

consumers going forward. For example, 

should we encourage the states to 

distribute to low income consumers 

comparative guides detailing the 

competitive Lifeline offerings available 

in their states? We seek comment on 

who should bear the cost associated 

with state outreach efforts, and whether 

outreach costs should come out of the 

Universal Service Fund. And we ask 

commenters to identify any best 

practices in the area of state outreach. 

We also inquire whether coordinating 

outreach with government assistance 

programs should be the preferred 

method of outreach, as opposed to 

imposing mandatory outreach 

requirements on ETCs. 

185. Outreach by ETCs. As noted 

above, the Commission has not imposed 

mandatory outreach obligations on 

ETCs, but rather adopted outreach 

guidelines in 2004 designed to 

encourage states and carriers to work 

together to educate consumers about 

Lifeline-assisted programs. The Joint 

Board’s 2010 Recommended Decision 

recommended that the Commission 

adopt mandatory outreach requirements 

for all ETCs that receive low-income 

support from the Universal Service 

Fund. Looking at the current Lifeline 

participation rate, the Joint Board 

expressed concern that ETCs may not be 

doing enough to promote their Lifeline 

offerings to low-income households. 

The Joint Board also recommended that 

the Commission seek comment on 

whether ETCs should be required to 

submit a marketing plan to the state or 

Commission outlining their outreach 

efforts. 

186. We seek comment on whether we 

should impose specific outreach 

requirements on ETCs, as recommended 

by the Joint Board. If the Commission 

were to adopt mandatory requirements, 

what should those requirements be? 

Would a uniform national rule be 

effective in achieving program goals, 

and what burdens would such a rule 

place on ETCs? In response to the 

Recommended Decision, Qwest argues 

that ETC advertisements do not 

necessarily result in more customers 

enrolling in the program, and that the 

better approach is for the state or social 

services agencies to promote the 

program. TracFone notes that it spent 

$41 million on advertising in 2010 to 

promote its Lifeline-supported SafeLink 

product, which included targeted 

marketing and advertisements in 

community newspapers. We seek to 

develop a fuller record on this issue, as 

suggested by the Joint Board. We are 

interested in understanding what are the 

most effective outreach methods to 

reach consumers, and how the 

Commission could evaluate the impact 

of outreach methods over time. 

187. Community-Based Outreach. In 

its 2010 Recommended Decision, the 

Joint Board noted that community-based 

outreach may be an effective means to 

reach low-income households and 

encouraged the Commission to collect 

data on best practices in this area. We 

ask ETCs, community-based 

organizations, and other interested 

parties to highlight community-based 

outreach that has been successful in 

educating low-income households about 

the Lifeline program. For example, we 

seek comment on the role of Tribal 

governments and other Tribal 

organizations in reaching low-income 

households on Tribal lands. 

188. Marketing and Uniform 

Language to Describe Lifeline. Some 

ETCs market their Lifeline-supported 

products under a trade name. For 

example, TracFone offers Lifelinesupported service under the name 

SAFELINK WIRELESS®, while Virgin 

Mobile’s competing offering is 

Assurance Wireless. Some eligible 

consumers may not understand that 

these products are Lifeline-supported 

offerings, and therefore may not realize 

they are violating our prohibition 

against having more than one Lifelinesupported service per household. To 

prevent consumer confusion and reduce 

the number of consumers receiving 

duplicate support, we seek comment on 

whether we should require all ETCs to 

include language in the name of their 

service offering or in description of the 

service to make clear that the offering is 

supported by Lifeline. Should ETCs be 

required to expressly identify the 

service as a Lifeline-supported product 

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consumers? Would it inhibit effective 

marketing by ETCs to require such 

language on the product name, 

potentially reducing competition for 

Lifeline-supported services? We seek 

comment on whether the other actions 

we propose in this NPRM to eliminate 

waste, fraud, and abuse alleviate the 

need to set policies related to the 

marketing of Lifeline services to 

consumers. 

189. We also seek comment on 

whether ETCs should be required to 

include in all marketing and advertising 

materials for Lifeline-supported 

offerings clear and prominent language 

explaining that consumers are entitled 

to only one Lifeline subsidy per 

household. Should the Commission 

develop model language that would be 

required for ETCs to use, or that would 

be a safe harbor for ETCs to use? If so, 

what should that language be? We 

request that ETCs provide us with the 

language they currently use to describe 

their Lifeline and Link Up service 

offerings. 

VIII. Modernizing the Low Income 

Program To Align With Changes in 

Technology and Market Dynamics 

A. The Current Lifeline Program 

1. Voice Services Eligible for Discounts 

190. In light of the marketplace 

changes noted above, it is also an 

appropriate time to evaluate the 

definition of ‘‘Lifeline’’ to ensure it is 

keeping pace with the basic 

connectivity needs of low-income 

consumers. We question whether 

Lifeline should continue to be defined 

as ‘‘basic local service.’’ As noted above, 

distinctions between local and long 

distance calling are becoming irrelevant 

in light of flat rate service offerings that 

do not distinguish between local and 

toll calls. Is the ‘‘local’’ qualifier 

outdated in light of marketplace 

changes? How should we define ‘‘basic’’ 

voice telephony for purposes of the 

Lifeline and Link Up programs? 

191. We propose, consistent with the 

USF/ICC Transformation NPRM, 76 FR 

11632, March 2, 2011, to amend the 

definition of ‘‘Lifeline’’ in section 54.401 

to provide support for a set of defined 

functionalities known as ‘‘voice 

telephony service.’’ This amended 

definition may provide simplicity for 

ETCs who provide and advertise 

Lifeline services, and will ensure 

consistency across universal service 

support mechanisms. 

192. We seek comment on this 

proposal. Should this definition of voice 

telephony service encompass the nine 

functionalities currently specified in 

section 54.401? Is there any reason to 

modify the functionalities to be 

provided to ensure quality service for 

low-income customers? As noted by the 

Commission in the USF/ICC 

Transformation NPRM, with respect to 

the performance characteristics for voice 

telephony service, ‘‘voice grade access’’ 

to the public switched network is 

defined in section 54.101 of the 

Commission’s rules as ‘‘a functionality 

that enables a user of 

telecommunications services to transmit 

voice communications, including 

signaling the network that the caller 

wishes to place a call, and to receive 

voice communications, including 

receiving a signal indicating there is an 

incoming call. For the purposes of this 

part, bandwidth for voice grade access 

should be, at a minimum, 300 to 3,000 

Hertz.’’ Is this definition appropriate for 

Lifeline households? How should we 

define services supported by Lifeline in 

a way that is technologically neutral and 

can evolve over time as technologies 

used to deliver voice service change in 

the years ahead? 

2. Support Amounts for Voice Service 

193. We seek comment on whether 

there is a more appropriate 

reimbursement framework than the 

current four-tier system for determining 

Federal support amounts for the 

program that will provide support for 

low-income households that is 

sufficient, but not excessive, consistent 

with section 254. Should the lowincome tiers of support be modified in 

light of the marketplace changes that 

have occurred since the Universal 

Service First Report and Order, 62 FR 

32862, June 17, 1997? Such a change 

could be an important step toward 

reducing waste in the Lifeline program. 

How can the Commission ensure that 

low-income households can continue to 

benefit from the expanded array of 

service offerings, including pre-paid 

wireless service, while ensuring that 

universal service funds are primarily 

benefiting consumers, rather than the 

carriers that serve those consumers? 

194. Given the growth of the program 

in recent years, it is vital that the 

Commission ensure that funds are 

distributed in a targeted and meaningful 

way. In particular, we seek comment on 

whether it makes sense to continue to 

tie Lifeline support amounts to the 

Federal subscriber line charge, which 

may not be the appropriate metric of 

whether service is affordable to a lowincome household. Should we adopt a 

different framework for carriers that do 

not charge a subscriber line charge, or 

that do not allocate their costs between 

the intrastate and interstate 

jurisdictions? Is there an amount that 

would better ensure affordable service 

for eligible households? What might be 

the appropriate reimbursement structure 

be in the future, when voice service is 

provided as an application over 

broadband networks, potentially at no 

additional cost to the consumers? 

195. We also seek comment on 

whether to maintain Tiers 2 and 3 of 

Lifeline support as currently set forth in 

the Commission’s rules. Should 

consumers be entitled to a higher or 

lower baseline Federal support amount, 

justifying a change in the amount of 

available Tier 2 support? Similarly, 

should the Commission raise or lower 

the amount of Federal matching support 

that is available under Tier 3? Finally, 

does $25 remain a reasonable additional 

reimbursement rate for consumers 

receiving enhanced Tribal support 

pursuant to Tier 4? Does providing such 

a flat amount effectively create a price 

floor for carriers serving Tribal lands, 

even though it may be possible in some 

instances to serve eligible households at 

a lower cost (i.e., for less than $25 per 

month)? We emphasize that in asking 

this question we are not seeking to limit 

benefits for low-income households, but 

rather looking at ways to restructure 

support levels to create incentives for 

carrier efficiency. 

196. If the Commission were to create 

a new reimbursement structure for 

carriers providing Lifeline service to 

low-income households, should the 

reimbursement mechanism be different 

for wireless and wireline ETCs, based 

on their potentially divergent costs for 

providing service? Would there be any 

reason to adopt a different framework 

for pre-paid wireless providers as 

opposed to post-paid? Should the 

Commission maintain a tiered 

reimbursement structure? If so, what 

costs should be used as the basis for 

setting a support amount? Would 

adoption of a single, uniform flat 

discount amount without tiers be 

appropriate? Would a percentage 

discount rate, subject to an overall 

dollar cap, better assist low-income 

households in securing the best retail 

rates offered by their chosen ETC? In the 

alternative, should we establish national 

parameters of a basic Lifeline service, 

and require ETCs to specify the 

minimum price per household they 

would accept to provide such service? 

We seek comment on these alternatives. 

3. Minimum Service Requirements for 

Voice Service 

197. We seek comment on the 

advantages and disadvantages of 

adopting minimum standards for all 

ETCs offering Lifeline service. In the 

section above, we asked whether we 


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should establish national parameters for 

a basic Lifeline service. Accordingly, if 

we were to adopt minimum service 

requirements for Lifeline-only ETCs, 

what should those requirements be? 

Should we establish a set minimum 

number of monthly minutes to be 

included in ETCs’ Lifeline service 

offerings, and if so, what would be an 

appropriate number of minutes? Should 

we establish a minimum number of free 

long-distance calls? Is there a need for 

service quality standards when 

consumers often have the choice of 

several Lifeline providers? We seek 

comment on whether the Commission 

should impose minimum service 

requirements on all ETCs, as opposed to 

just wireless ETCs, and how we could 

impose standards that are 

technologically neutral. We note that 

wireless providers offer the benefits of 

mobility and often additional features 

and functionality, such as voicemail, 

caller ID, and call waiting, at no extra 

charge. Similarly, low-income 

households that select Lifeline offerings 

from wireless providers may have the 

ability to call distant family members 

and friends without incurring toll 

charges. Can uniform minimum 

standards be developed for all 

technologies, or is there a benefit to 

having standards tailored to different 

technologies? What are the relevant 

attributes or features that should be 

standardized across Lifeline offerings? 

198. We also seek comment on the 

relevant costs and benefits associated 

with setting minimum standards of 

service. We note that minimum 

standards of service could increase the 

costs of Lifeline service to ETCs and 

could thus provide a disincentive for 

additional carriers to seek ETC status for 

the program. Would minimum 

standards deter companies from seeking 

ETC designation? Would high minimum 

standards make Lifeline offerings more 

attractive to low-income households, 

and thereby increase demand for the 

program? 

4. Support for Bundled Services 

199. We seek comment on amending 

the Commission’s rules to adopt a 

uniform Federal requirement that 

Lifeline and Link Up discounts may be 

used on any Lifeline calling plan offered 

by an ETC with a voice component, 

including bundled service packages 

combining voice and broadband, or 

packages containing optional calling 

features. We note that section 254(f) of 

the Act bars states from adopting 

regulations that are inconsistent with 

the rules established by the Commission 

to preserve and advance universal 

service. 

200. In a number of states where ETCs 

are not precluded by state requirements 

from allowing consumers to apply their 

Lifeline discounts to the purchase of 

bundled packages or optional services, 

many carriers—including large carriers 

like Sprint Nextel, Verizon Wireless, 

and AT&T Mobility—limit Lifeline 

offerings to basic voice service. We seek 

comment on whether to adopt a national 

rule that would require all ETCs to offer 

Lifeline and Link Up discounts on all of 

their service plans with a voice 

component. Under such a rule, ETCs 

could be required to apply Federal 

Lifeline support to reduce the cost of 

any calling plan or package selected by 

an eligible low-income household that 

allows local calling, rather than offering 

a discount only on the carrier’s lowest 

tariffed or otherwise generally available 

residential rate plan. However, each 

eligible household’s Lifeline discount 

would be capped at the amount the 

subscriber would have received if it had 

selected a basic voice plan. 

Additionally, we seek comment on 

requiring all ETCs to permit eligible 

households to apply the Link Up 

discount amounts set forth in section 

54.411(a) of the Commission’s rules to 

any service plan with a voice 

component. As with the Lifeline 

program, each eligible household’s Link 

Up discount could be capped at the 

amount the household would have 

received pursuant to the Commission’s 

rules if it had selected a basic voice 

plan. 

201. We seek comment on whether 

amending our rules in this way would 

further the statutory principle that 

consumers have access to quality 

services at ‘‘just, reasonable, and 

affordable rates.’’ Restrictions on use of 

Lifeline discounts, whether imposed 

under state law or by an ETC, may 

preclude a significant number of eligible 

low-income households from the 

expanded service options available in 

the marketplace, such as packages that 

include broadband or data service. 

Further, as compared to carriers’ basic 

plans, bundled packages of services may 

offer better value for Lifeline and Link 

Up consumers. 

202. We seek to develop a fuller 

record on current ETC practices 

regarding the provision of Lifeline 

discounts on bundled offerings. To what 

extent do ETCs currently offer Lifeline 

and/or Link Up discounts on plans that 

include bundles of services or optional 

calling features? If so, what services are 

Lifeline and Link Up consumers 

permitted to purchase? We also seek 

comment on the extent to which 

specific states mandate that ETCs allow 

the application of Lifeline and/or Link 

Up discounts to expanded service plans. 

Is there any evidence that Lifeline and 

Link Up participation rates have been 

positively affected by policies requiring 

the extension of program discounts to 

the purchase of bundled packages and 

optional services? Where available, 

commenters are encouraged to submit 

supporting documentation of ETC or 

state practices along with any written 

submissions. 

203. We seek comment on the 

potential administrative and practical 

consequences of amending our rules in 

this fashion. What changes to internal 

back office systems (e.g., for ordering 

service and billing) would be required 

to implement such a rule, and what 

costs would that impose on ETCs? How 

long would it take to implement such a 

change? If we were to adopt such a rule, 

should ETCs be obligated to offer a 

Lifeline discount on all of their service 

plans, including premium plans and 

packages? Conversely, are there certain 

service plans or packages that ETCs 

should not be required to make 

available to consumers seeking to apply 

Lifeline discounts? Should consumers 

be prohibited from applying a Lifeline 

discount to bundled offerings that 

contain a video component? 

204. Would allowing consumers to 

choose from an array of expanded 

packages create a greater likelihood that 

Lifeline and Link Up consumers may be 

unable to pay for the remaining portion 

of their chosen calling plan and 

therefore risk termination of voice 

service? What are the options for 

reducing that risk? If we were to adopt 

such a rule, one option would be to 

require ETCs to offer methods of 

managing usage (whether minutes of use 

or data) that otherwise would yield 

higher monthly charges beyond the 

monthly fee. For instance, Lifeline 

consumers could elect to set maximum 

usage amounts for themselves that may 

not be exceeded per billing cycle. We 

seek comment on the feasibility of this 

proposal. What capabilities exist today, 

or are anticipated in the near term, for 

carriers to assist Lifeline consumers in 

managing their service usage? What 

would be the administrative burdens 

and costs for a carrier if it were required 

to offer this to Lifeline subscribers? 

205. We seek comment on how we 

can identify and measure the potential 

benefits of this proposal. As residential 

broadband usage becomes more 

common, many companies have begun 

offering consumers the option to 

purchase broadband as part of a 

‘‘bundled package’’ that provides a 

combination of voice, data, and video 

services to the customer, delivered over 

a shared infrastructure. As noted above, 


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compared to carriers’ basic plans, 

bundled packages of services may offer 

better value for consumers. Would this 

proposal, if adopted, be likely to make 

broadband more affordable for lowincome households and stimulate 

broadband adoption by low-income 

households? 

206. We also seek comment on how 

we can identify and measure the 

potential costs of this proposal. For 

example, would this proposed rule 

change be likely to have an impact on 

the size of the universal service fund? 

What are the potential costs to carriers 

(e.g., administrative costs) in complying 

with the proposed rule? Finally, are 

there any potential costs to consumers 

associated with the proposed rule? To 

the extent that it is available, 

commenters are encouraged to submit 

supporting data along with any written 

submissions. 

B. The Transition to Broadband 

1. Support for Broadband 

207. The Commission seeks comment 

on revising the definition of ‘‘Lifeline’’ to 

ensure it is keeping pace with the needs 

of low-income households, consistent 

with the statutory principle that 

‘‘consumers in all regions of the country, 

including low-income consumers * * * 

should have access to 

telecommunications and information 

services.’’ Lifeline/Link Up does not 

currently support broadband. We seek 

comment on whether the Commission 

should amend the definition of Lifeline 

to explicitly allow support for 

broadband. 

208. As noted above, the Commission 

has sought comment in the USF/ICC 

Transformation NPRM on whether to 

make broadband a supported service 

and has sought comment on extending 

universal service support to broadband. 

If the Commission does not make 

broadband a supported service, what 

would be the legal basis for our 

authority to support broadband in the 

Lifeline and Link Up program? If the 

Commission makes broadband a 

supported service, what are the 

associated practical and operational 

challenges that we would need to 

address when expanding Lifeline 

support to broadband? For example, 

how should a broadband Lifeline 

service be defined and measured? 

Should Lifeline support be available on 

services that do not meet whatever 

speed threshold the Commission 

ultimately adopts for purposes of setting 

infrastructure deployment requirements 

under the Connect America Fund? For 

instance, some parties have suggested 

that for purposes of Lifeline, consumers 

should be free to choose to use 

discounts on services that provide 768 

kbps or 1.5 Mbps downstream, rather 

than being forced to use the discount 

only on higher-speed offerings. Should 

there be any minimum performance 

requirements for Lifeline broadband 

offerings? 

209. What would be the appropriate 

framework for determining support 

levels for broadband services, given that 

the price of the retail service is not 

regulated at either the Federal or state 

level? We are mindful of the need to 

ensure that contributions to our 

universal service support mechanisms 

do not jeopardize our ability to promote 

quality services at affordable rates for all 

consumers. How should we balance 

these competing goals as we consider 

modernizing Lifeline and Linkup to 

support broadband? 

210. If broadband is made a supported 

service, should we impose any terms 

and conditions on the Lifeline support 

that is available for broadband? For 

example, should there be any 

limitations on the types of services that 

are offered as part of a Lifeline plan? We 

sought comment above on whether lowincome households should be able to 

use their Lifeline discounts on any plan 

with a voice component; should ETCs 

similarly be required to offer Lifeline 

discounts on all broadband plans, or 

just some? We note that several wireless 

ETCs currently offer text messaging 

services as part of their Lifeline calling 

plans. Should consumers be permitted 

to select ‘‘data only’’ Lifeline plans? Is 

there a risk that low-income households 

might incur excessive charges for data 

plans, absent some form of data or usage 

cap? We note that some Lifeline 

consumers already subscribe to 

broadband services. We ask that ETCs 

provide any data they may have 

regarding broadband subscribership 

among current Lifeline recipients. We 

also recognize that our analysis of these 

questions may depend, in part, on what 

we learn from the broadband pilots 

described below. 

2. Broadband Pilot 

211. We propose to set aside a 

discrete amount of universal service 

funds reclaimed from eliminating 

inefficiencies and/or waste, fraud, and 

abuse to create a pilot program to 

evaluate whether and how Lifeline/ 

LinkUp can effectively support 

broadband adoption by low-income 

households. A broadband pilot program 

could help us gather comprehensive and 

statistically significant data about the 

effectiveness of different approaches in 

making broadband more affordable for 

low-income Americans and providing 

support that is sufficient but not 

excessive. This data could assist the 

Commission in considering the costs 

and benefits of various approaches prior 

to using Lifeline to support broadband 

on a permanent basis. We recognize that 

the ultimate success of using Lifeline 

funds to support broadband may hinge 

on the sufficiency and effectiveness of 

preliminary testing conducted through a 

pilot program. As identified by the 

GAO, the Commission has recognized 

the importance of developing an 

assessment of the telecommunications 

needs of low-income households to 

inform the design and implementation 

of broadband pilot programs. 

212. Scope of the Pilot Program. We 

propose using the pilot program to fund 

a series of projects that would test 

different approaches to providing 

support for broadband to low-income 

consumers across different geographic 

areas. The projects could also try to take 

into account unique barriers faced by 

certain groups of low-income nonadopters such as Tribal communities or 

Americans for whom English may be a 

second language. While individual 

projects might involve only one type of 

provider or technology, the overall 

objective would be to design a pilot 

program that would be competitively 

and technologically neutral. 

213. We propose structuring the pilot 

program as a joint effort among the 

Commission, one or more broadband 

providers, and/or one or more nonprofit institutions or independent 

researchers with experience in program 

design and evaluation. The pilot also 

could include participation from other 

stakeholders such as private 

foundations; non-profits experienced in 

outreach and digital literacy training; 

desktop computer, laptop, or mobile 

device manufactures or retailers; and 

state social service or economic 

development agencies. We seek 

comment on these proposals to structure 

the pilot program as a joint effort among 

a variety of stakeholders focused on 

conducting a series of projects to test 

different approaches to providing 

support. We expect that the projects 

would test several variations on 

program design, including 

experimenting with different techniques 

to combine discounts on service and/or 

hardware with efforts to address other 

barriers to broadband adoption such as 

digital literacy. 

214. Consistent with our historic role 

in providing support for services and 

not equipment, we seek comment on 

funding projects that would test 

variations in the monthly discount for 

broadband services, including variations 

on the discount amount, the duration of 


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the discount (limited or unlimited, 

phased-down over time or constant), 

and the treatment of bundled services. 

We also propose to test variations in 

Linkup-like discounts to reduce or 

eliminate installation fees, activation 

fees, or similar upfront charges 

associated with the initiation of service. 

We seek comment on these proposals. 

215. We propose to require at least 

some pilot participants to either offer 

hardware directly or partner with other 

entities to provide the necessary devices 

as a condition of participating in the 

pilot program. The cost of customer 

equipment necessary to access the 

Internet (including computers or other 

devices) has been shown to be a major 

barrier to adoption, particularly for lowincome households. Some stakeholders 

have suggested that the cost of Internetenabled devices poses a significant 

burden on an ETC’s ability to provide 

affordable broadband to low-income 

consumers. It would be valuable for 

pilot projects to test variations in 

discounts to reduce the cost of 

hardware, including discounts for air 

cards or modems. Because we intend to 

evaluate the impact of ETCs’ providing 

different types of discounts on hardware 

versus not providing any discount, some 

consumers would not be offered 

discounted hardware. If we require 

some applicants for pilot program 

funding to offer discounted hardware, 

should all applicants be required to 

agree to do so even though we do not 

expect all consumers to receive 

discounts? We seek comment on these 

proposals. 

216. We propose that applicants for 

pilot program funding should be 

prepared to experiment with different 

approaches to overcoming digital 

literacy barriers, other non-cost barriers 

to adoption, and variations in other 

program design elements that may help 

the Commission implement a 

permanent support mechanism. The 

National Broadband Plan and 

subsequent research identified the lack 

of digital literacy among low-income 

Americans as a major barrier to 

broadband adoption. Skills such as 

being able to use a computer or other 

Internet-enabled device to retrieve and 

interpret information or to communicate 

and collaborate with other users, and 

even such fundamental steps as 

navigating a Web site and creating a 

username and password, may pose 

significant difficulties for many 

consumers. Any program seeking to 

effectively increase adoption of 

broadband may need to address this 

barrier. We specifically seek comment 

on what subset of the following 

additional program design elements 

should be tested: 

• Training methods; 

• Outreach methods; 

• Contract terms; 

• Product offerings/service 

restrictions or requirements (such as 

establishing minimum or maximum 

speed offerings for consumers 

participating in the pilot); and/or 

• Administration/enrollment 

methods such as automated enrollment 

through low-income housing facilities 

or other social service entities. 

We also seek comment on how the 

Commission should take into account 

elements beyond its control, such as 

programs or services provided by the 

private sector, other governmental 

agencies, or non-profits in conjunction 

with support provided as part of a 

broadband Lifeline and Link Up 

program. 

217. We intend for the pilot program 

as a whole to test the impact of these 

varying factors; we are not suggesting 

that each project funded through the 

pilot test every variable of interest to the 

Commission. We seek comment on this 

proposal. We also ask commenters to 

consider how many settings of key 

variables should be tested for each 

program design element (e.g. discount 

amount, duration of the discount). How 

many households should participate to 

test each element and variation in a way 

suitable for generalizing to a large scale 

program? Should all elements be tested 

simultaneously, or should they be 

sequenced in some manner? 

218. We note that the goal of the pilot 

program is to conduct experiments to 

collect information that would help 

inform future policy decisions. The 

pilot is not intended to have an 

immediate impact on low-income 

consumers on a large-scale. Similarly, 

the structure and rules governing pilot 

projects may differ in important ways 

from rules that the Commission may 

ultimately adopt to expand Lifeline to 

support broadband. 

219. Pilot Program Funding. We seek 

comment on how much money should 

be allocated to support discounts on 

broadband and administrative costs 

associated with the pilot projects. 

Because the goal of the pilot program is 

to conduct test projects that would 

produce meaningful data by 

experimenting with different program 

design elements, we believe that only a 

relatively small sample size is needed to 

develop statistically valid results. 

Depending on the parameters assessed 

by different pilot programs, the program 

may be able to gather statistically valid 

data from a smaller number of 

participating households. 

220. Consistent with our over-arching 

objective of ensuring fiscal 

responsibility, we propose to fund the 

pilot projects by utilizing at least some 

of the savings from the proposal to 

eliminate reimbursement for Toll 

Limitation Services, as well as some of 

the savings realized by eliminating 

waste, fraud, and abuse from the 

program. USAC’s most recent 

projections forecast total annual 2011 

TLS support of approximately $23 

million. Are there other funding sources 

available that we should consider in 

implementing these pilot programs? 

Should we require entities applying for 

pilot program funding to contribute 

some sort of matching funds or in-kind 

contribution? 

221. Duration of Pilot Program. 

Commenters have recommended pilot 

programs ranging from six months to 

multiple years. USTelecom suggested, 

for instance, that a period of 18 to 24 

months would be needed to produce 

‘‘meaningful data that would permit the 

Commission to thoughtfully design a 

permanent program.’’ We seek comment 

on the appropriate duration of a pilot 

program. Commenters who suggest 

schedules should explain the relative 

advantages and disadvantages of 

specific lengths of time. 

222. At the Commission’s broadband 

pilot roundtable, several parties 

suggested that it might be appropriate to 

provide subsidies only for a limited 

period of time to address the initial 

adoption hurdle of realizing the benefit 

of broadband. If some of the variables 

tested include variations on the length 

of time that a subsidy is available or a 

reduction in the amount of subsidy over 

time, for how long would researchers 

need to follow subscribers after the 

reduction to test whether adoption 

outcomes stay the same, or whether 

consumers drop service when the 

subsidy is eliminated or reduced? 

223. Role of the States. We seek 

comment on the role that states should 

play in any pilot program integrating 

broadband service into the low-income 

program. For instance, could states 

assist in identifying target populations 

or assist in administration? Are there 

services or funding support that states 

are uniquely situated to provide in a 

broadband pilot program? How should 

low-income universal service support 

for broadband be integrated into other 

Federal, state, regional, private, or nonprofit programs that help address 

barriers to broadband adoption? 

224. Consumer Eligibility To 

Participate in Pilot Projects. We propose 

using the Lifeline eligibility rules 

currently in effect in Federal default 

states as a uniform set of consumer 


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eligibility requirements to be used in all 

pilot projects. We believe uniform 

eligibility rules will lower 

administrative costs associated with the 

pilots and help the Commission more 

easily compare results from different 

pilot projects. Is there any reason to 

allow some pilot projects to deviate 

from the Federal default rules? For 

example, should the Commission 

consider funding a pilot project that 

tested the impact of more stringent or 

more lenient eligibility requirements to 

help assess the potential impact such 

requirements might have? Alternatively, 

are there reasons that the Commission 

should consider pilot projects that limit 

eligibility to a more narrowly defined 

group of households currently eligible 

under the Federal default rules, such as 

households with children participating 

in the National School Lunch Program? 

225. Eligibility To Apply for Funding 

for Proposed Pilot Projects. We seek 

comment on whether funding for the 

pilot program should be limited to ETCs 

or whether non-ETCs could be eligible 

to receive funding during the pilot. 

Several commenters have suggested 

eligibility for funding for broadband 

pilots, or any broadband Lifeline 

support, should be independent from 

the traditional ETC requirements 

established under section 214 of the 

Act. Could we forbear from our current 

ETC requirements to allow non-ETCs 

(e.g, broadband providers who are not 

ETCs or non-providers) to participate in 

the pilot? Forbearance from our ETC 

requirements may encourage 

participation by a greater number of 

broadband providers. What are the 

advantages and disadvantages of having 

a larger number of providers seek 

funding for pilot projects? 

226. We propose to allow non-ETCs 

(e.g., non-providers) to submit 

applications for pilot funding provided 

they have identified ETCs, which would 

receive the support disbursements, as 

partners. We believe allowing non-ETCs 

to apply for funding may increase 

participation by allowing ETCs to rely 

on other entities to help with pilot 

program administration. This approach 

may also encourage more multistakeholder partnerships designed to 

simultaneously address multiple 

barriers to adoption. We seek comment 

on this proposal. 

227. We also seek comment on 

limiting program participation to ETCs 

that partner with entities approved by 

the NTIA’s State Broadband Data & 

Development (SBDD) Program. The 

SBDD program, led by state entities or 

non-profit organizations working at 

their direction, facilitates the integration 

of broadband and information 

technology into state and local 

economies. The program awarded a total 

of $293 million to 56 grantees or their 

designees and the grantees use this 

funding to support the use of broadband 

technology. Among other objectives, 

these state-created projects use the 

grants to research and investigate 

barriers to broadband adoption and 

created state and local task forces to 

expand broadband access and adoption. 

ETCs could work with the SBDD 

grantees and other stakeholders to 

develop pilot projects that integrate 

Federal universal service support into a 

state’s existing or planned adoption 

efforts. The potential benefits of 

encouraging ETCs to partner with these 

SBDD grantees to participate in this 

pilot program are numerous: Each of the 

grantees was selected by a state 

government that may be well positioned 

to develop targeted, state-specific 

adoption approaches; many of the 

grantees have experience with training, 

outreach, and surmounting barriers to 

adoption; and such a pilot could 

leverage the work already conducted by 

NTIA, such as the due diligence it 

performed on the grantees and ongoing 

program oversight over those grantees. 

We seek comment on limiting eligibility 

in the pilot program only to ETCs that 

are partnering with SBDD grantees. Is 

there another group of Federal or state 

program grantees that we should 

consider including in the pilot? 

228. Proposals. We propose to require 

entities interested in applying for pilot 

program funding to submit specific 

information about the proposed project, 

such as applicant information, 

including any and all private or 

corporate partners or investors; a 

detailed description of the program, 

including length of operation; product 

offerings and service restrictions; 

discount or discounts provided, the 

duration of the discounts; treatment of 

bundled services; whether discounts 

would reduce or eliminate installation 

fees, activation fees, or other upfront 

costs; how to address (if at all) the cost 

of hardware, including aircards, 

modems, laptops, desktops, or other 

mobile devices; training and outreach; 

testing; identification of costs associated 

with implementing the program, 

including equipment and training costs; 

how the project complies with relevant 

program rules, adequately protects 

against waste, fraud, and abuse, and 

achieves the goals of the program 

discussed above. We also propose to 

require applicants to provide a brief 

description of how their program would 

help inform the Commission’s future 

decision-making related to providing 

low-income support to broadband on a 

nationwide basis. We seek comment on 

this process for submission of pilot 

proposals. 

229. Pilot Evaluation. We seek 

comment on how to evaluate the results 

of pilot projects and what reporting 

requirements should be adopted for 

pilot participants. How could the 

Commission evaluate whether 

approaches tested during the pilot 

program further the proposed goal of 

providing affordable broadband service? 

Should one goal of the pilot be to test 

the impact of the project’s approach on 

increasing adoption? For instance, 

should we assess the total number of 

new adopters; new adopters as a 

percentage of eligible program 

participants; the number of program 

participants as a percentage of eligible 

participants; average percentage of 

participants’ discretionary income spent 

on discounted broadband service 

through the pilot relative to the national 

average percentage of household 

discretionary income spent on 

broadband? How could we evaluate the 

relative impact of the service discount 

compared to other potential factors that 

may be tested, such as the provision of 

training or equipment? We propose that 

the Commission also seek to develop 

information about the cost per 

participant and cost per new adopter 

through the pilot program. This 

information could assist the 

Commission in assessing the costs and 

benefits of particular approaches to 

whether broadband should be 

supported, and if so, how. We seek 

comment on this proposal and whether 

there are other types of data that the 

Commission should review to evaluate 

whether a given approach would 

provide support that is sufficient but not 

excessive. 

230. We seek comment on other types 

of information the Commission should 

consider when assessing projects 

funded through the pilot program. For 

instance, how best can the Commission 

evaluate program administration costs 

and the feasibility of expanding any 

given test project to a national scale? 

231. Delegation of Authority. We 

propose to delegate authority to the 

Wireline Competition Bureau to select 

pilot participants and take other 

necessary steps to implement the 

proposed program. We seek comment 

on this proposal. 

232. Previously Submitted Proposals. 

A number of entities have developed 

and submitted ideas for different types 

of broadband low-income pilots. For 

instance, US Telecom explains that an 

efficient broadband pilot program 

design should include three 


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components: research; program design 

and implementation; and evaluation. 

Nexus Communications proposes that a 

broadband pilot be conducted in four 

different cities using ‘‘smart phones’’ 

that would enable the Commission to 

obtain real-word data with regard to 

community response to four different 

pricing and service arrangements. One 

Economy proposes two distinct pilot 

programs, one involving a 4G public 

private partnership and another one 

involving a reverse auction design. 

233. We seek comment on these 

proposals. We ask commenters to 

identify how these proposals could be 

improved or altered and to explain how 

any measures that they suggest are 

consistent with our proposed goals of 

ensuring just, reasonable, and affordable 

service and providing support that is 

sufficient but not excessive. 

234. Finally, as discussed above, a 

number of other broadband adoption 

programs are currently underway, and 

other stakeholders have suggested that 

they may conduct their own projects on 

these issues. We are interested in 

learning more about the status of these 

projects and what data we can gather 

from those efforts. Is there information 

or data that the Commission is uniquely 

positioned to gather? What data can the 

Commission rely on outside sources to 

collect, and how could it design pilots 

to complement any private sector 

research efforts? Can the Commission 

gather sufficient information from 

existing adoption programs to inform its 

policies sufficiently to implement a 

long-term low-income support for 

broadband program without launching 

Lifeline and Link Up pilots? We 

welcome information from industry, 

academic institutions, governmental 

agencies, and other stakeholders that 

could assist in our evaluation of 

strategies to extend Lifeline to 

broadband. 

C. Eligible Telecommunications Carrier 

Requirements 

235. We seek comment on whether 

the Commission should forbear from 

applying the Act’s facilities requirement 

to all carriers that seek limited ETC 

designation to participate in the Lifeline 

program. Should every wireless reseller 

be eligible to become an ETC so long as 

it fulfills the conditions we have 

previously imposed as conditions of 

forbearance? If so, should the 

Commission adopt rules codifying the 

conditions rather than imposing them 

on a case-by-case basis? 

236. Some of those conditions 

previously imposed on resellers may 

have some benefit even if applied to 

facilities-based carriers that participate 

in the Lifeline program, such as the 

condition that carriers directly deal with 

their customers (rather than use a thirdparty intermediary, like a retailer). 

Should the Commission adopt any of 

these conditions as rules that would 

apply to all ETCs that participate in the 

Lifeline program? Other conditions— 

such as the requirement to provide 

appropriate access to 911 and E911— 

may be applicable to facilities-based 

carriers that use their own facilities only 

in part. Should the Commission adopt 

such conditions as rules that would 

apply to ETCs that use other carriers’ 

facilities to offer access to emergency 

services? In short, what rules should the 

Commission adopt if it forbears from the 

facilities requirement for a class of 

carriers? 

237. More broadly, should the 

Commission consider issuing blanket 

forbearance for other purposes? For 

example, several carriers have requested 

forbearance from the facilities 

requirement for purposes of 

participating in the Commission’s Link 

Up program, but the Commission has 

thus far found that no carrier has shown 

that such forbearance would be in the 

public interest. Would blanket 

forbearance from the facilities 

requirement for this purpose, taking into 

account the differences between the 

Lifeline and Link Up programs, be in 

the public interest? What rules would be 

necessary to ensure that any such 

forbearance protects consumers, is in 

the public interest, and would not 

encourage waste, fraud, and abuse of 

universal service funds? 

238. Other carriers have requested 

forbearance from the Act’s redefinition 

process as applied to low-income-only 

ETCs. Should the Commission consider 

forbearing from this process for a class 

of carriers, and if so, what rules and 

conditions would be necessary to 

protect the public interest? 

239. AT&T has proposed that the 

Commission adopt an entirely new ETC 

regulatory framework. Specifically, 

AT&T argues that we should allow all 

providers of voice and broadband 

services to provide Lifeline discounts on 

a competitively neutral basis where they 

offer service. Under this proposal, we 

would establish a ‘‘Lifeline Provider’’ 

registration process whereby provider 

participation is not tied to the existing 

section 214 requirements or ETC 

designations, and not necessarily 

mandatory. Under this framework, each 

provider of eligible voice and broadband 

Internet access service, including 

resellers and wireless providers, would 

be eligible to provide Lifeline discounts 

to qualifying households in the areas 

where the provider offers the service. 

240. Consistent with this alternative 

approach, AT&T proposes that the 

Commission abolish the current Lifeline 

tier support structure set forth in section 

54.403 of our rules and replace it with 

a flat, fixed-dollar discount amount that 

could be applied to the retail price of 

one eligible voice service and one 

eligible broadband service. Similarly, 

AT&T proposes a flat discount approach 

to Link-Up. AT&T’s ETC proposal also 

includes a recommendation that we 

automate program eligibility and 

verification processes and procedures, 

which is discussed in more detail above 

in the Database section of this NPRM. 

241. We seek comment on AT&T’s 

proposal, which would enable all 

providers of voice and broadband 

services to offer Lifeline discounts to 

eligible low-income households. In 

particular, we ask commenters to 

address: (1) Whether the current ETC 

designation process should be revised 

for Lifeline providers and, if so, how; (2) 

whether current ETCs should be able to 

opt out of providing Lifeline services; 

(3) whether it should be mandatory or 

optional for ETCs to participate in the 

Lifeline program; (4) whether 

consumers should be entitled to a single 

discount off of a single service or 

whether consumers should be allowed 

to receive multiple Lifeline discounts on 

multiple services, (e.g. voice and 

broadband); (5) how this new regulatory 

framework would be administered; (6) 

what processes and procedures would 

be necessary to support this new 

framework; (7) what additional steps the 

Commission should take to guard 

against waste, fraud, and abuse in the 

program if additional providers offering 

multiple services were to participate in 

the program; (8) the legal basis for 

adopting such a proposal; (9) whether 

there are any issues we would need to 

account for in terms of transition to this 

type of model, such as service contracts; 

and (10) how this proposal would 

impact the states, including their 

current roles associated with granting 

ETCs authority to operate in their states 

and overseeing their performance. 

IX. Other Matters 

242. We propose to eliminate section 

54.418 of our rules, which required 

ETCs to notify low-income consumers of 

the DTV transition. This rule is now 

obsolete given the completion of the 

DTV transition. We seek comment on 

this proposal. 

X. Procedural Matters 

243. The proposed rules are attached. 

In addition to the changes discussed 

above, the proposed rules include nonsubstantive changes to the rules 


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applicable to the program. We seek 

comment on such changes. 

A. Paperwork Reduction Act Analysis 

244. This document contains 

proposed new 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. In addition, pursuant to the Small 

Business Paperwork Relief Act of 2002, 

we seek specific comment on how we 

might ‘‘further reduce the information 

collection burden for small business 

concerns with fewer than 25 

employees.’’ 

B. Initial Regulatory Flexibility Analysis 

245. Pursuant to the Regulatory 

Flexibility Act (RFA), the Commission 

has prepared this Initial Regulatory 

Flexibility Analysis (IRFA) of the 

possible significant economic impact on 

small entities by the policies and rules 

proposed in this Notice of Proposed 

Rulemaking. Written public comments 

are requested on this IRFA. Comments 

must be identified as responses to the 

IRFA and must be filed on or before the 

dates indicated on the first page of this 

NPRM. The Commission will send a 

copy of the NPRM, including the IRFA, 

to the Chief Counsel for Advocacy of the 

Small Business Administration. In 

addition, the NPRM and IRFA (or 

summaries thereof) will be published in 

the Federal Register. 

C. Need for, and Objectives of, the 

Notice of Proposed Rulemaking 

246. The Commission is required by 

section 254 of the Act to promulgate 

rules to implement the universal service 

provisions of section 254. On May 8, 

1997, the Commission adopted rules 

that reformed its system of universal 

service support mechanisms so that 

universal service is preserved and 

advanced as markets move toward 

competition. Among other programs, the 

Commission adopted a program to 

provide discounts that make basic, local 

telephone service affordable for lowincome consumers. 

247. This NPRM is one in a series of 

rulemaking proceedings designed to 

implement the National Broadband 

Plan’s (NBP) vision of improving and 

modernizing the universal service 

programs. In this NPRM, we propose 

and seek comment on comprehensive 

reforms to the universal service lowincome support mechanism. We 

propose and seek comment on a package 

of reforms that address each of the major 

recommendations by the Universal 

Service Joint Board regarding the lowincome program. We also propose a 

series of recommendations in 

accordance with a report on the program 

by the Government Accountability 

Office (GAO). 

248. Specifically, we propose and 

seek comment on the following reforms 

and modernizations that may be 

implemented in funding year 2011 

(January 1, 2011 to December 31, 2011): 

(1) Strengthening the Commission’s 

rules to ensure that the low-income 

program subsidizes no more than one 

service per eligible residential address; 

(2) reducing waste, fraud, and abuse by 

addressing duplicate claims, subscriber 

reporting, and de-enrollment 

procedures; (3) streamlining and 

improving program administration 

through the establishment of uniform 

eligibility, verification, and certification 

requirements; and (4) establishing a 

centralized database for reporting. 

D. Legal Basis 

249. This NPRM, including 

publication of proposed rules, is 

authorized under sections 1, 2, 4(i)–(j), 

201(b), 254, 257, 303(r), and 503 of the 

Communications Act of 1934, as 

amended, and section 706 of the 

Telecommunications Act of 1996, as 

amended, 47 U.S.C. 151, 152, 154(i)–(j), 

201(b), 254, 257, 303(r), 503, 1302. 

E. Description and Estimate of the 

Number of Small Entities To Which the 

Proposed Rules Will Apply 

250. The RFA directs agencies to 

provide a description of and, where 

feasible, an estimate of the number of 

small entities that may be affected by 

the proposed rules, if adopted. The RFA 

generally defines the term ‘‘small entity’’ 

as having the same meaning as the terms 

‘‘small business,’’ ‘‘small organization,’’ 

and ‘‘small governmental jurisdiction.’’ 

In addition, the term ‘‘small business’’ 

has the same meaning as the term ‘‘small 

business concern’’ under the Small 

Business Act. A small business concern 

is one that: (1) Is independently owned 

and operated; (2) is not dominant in its 

field of operation; and (3) satisfies any 

additional criteria established by the 

Small Business Administration (SBA). 

Nationwide, there are a total of 

approximately 29.6 million small 

businesses, according to the SBA. A 

‘‘small organization’’ is generally ‘‘any 

not-for-profit enterprise which is 

independently owned and operated and 

is not dominant in its field.’’ 

Nationwide, as of 2002, there were 

approximately 1.6 million small 

organizations. The term ‘‘small 

governmental jurisdiction’’ is defined 

generally as ‘‘governments of cities, 

towns, townships, villages, school 

districts, or special districts, with a 

population of less than fifty thousand.’’ 

Census Bureau data for 2002 indicate 

that there were 87,525 local 

governmental jurisdictions in the 

United States. We estimate that, of this 

total, 84,377 entities were ‘‘small 

governmental jurisdictions.’’ Thus, we 

estimate that most governmental 

jurisdictions are small. 

1. Wireline Providers 

251. Incumbent Local Exchange 

Carriers (Incumbent LECs). Neither the 

Commission nor the SBA has developed 

a small business size standard 

specifically for incumbent local 

exchange services. The appropriate size 

standard under SBA rules is for the 

category Wired Telecommunications 

Carriers. Under that size standard, such 

a business is small if it has 1,500 or 

fewer employees. Census Bureau data 

for 2007, which now supersede data 

from the 2002 Census, show that there 

were 3,188 firms in this category that 

operated for the entire year. Of this 

total, 3,144 had employment of 999 or 

fewer and 44 firms had had employment 

of 1000 or more. According to 

Commission data, 1,307 carriers 

reported that they were incumbent local 

exchange service providers. Of these 

1,307 carriers, an estimated 1,006 have 

1,500 or fewer employees and 301 have 

more than 1,500 employees. 

Consequently, the Commission 

estimates that most providers of local 

exchange service are small entities that 

may be affected by the rules and 

policies proposed in the NPRM. Thus 

under this category and the associated 

small business size standard, the 

majority of these incumbent local 

exchange service providers can be 

considered small providers. 

252. Competitive Local Exchange 

Carriers (Competitive LECs), 

Competitive Access Providers (CAPs), 

Shared-Tenant Service Providers, and 

Other Local Service Providers. Neither 

the Commission nor the SBA has 

developed a small business size 

standard specifically for these service 

providers. The appropriate size standard 

under SBA rules is for the category 

Wired Telecommunications Carriers. 

Under that size standard, such a 

business is small if it has 1,500 or fewer 

employees. Census Bureau data for 

2007, which now supersede data from 

the 2002 Census, show that there were 

3,188 firms in this category that 

operated for the entire year. Of this 

total, 3,144 had employment of 999 or 

fewer and 44 firms had had employment 


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of 1,000 employees or more. Thus under 

this category and the associated small 

business size standard, the majority of 

these Competitive LECs, CAPs, SharedTenant Service Providers, and Other 

Local Service Providers can be 

considered small entities. According to 

Commission data, 1,442 carriers 

reported that they were engaged in the 

provision of either competitive local 

exchange services or competitive access 

provider services. Of these 1,442 

carriers, an estimated 1,256 have 1,500 

or fewer employees and 186 have more 

than 1,500 employees. In addition, 17 

carriers have reported that they are 

Shared-Tenant Service Providers, and 

all 17 are estimated to have 1,500 or 

fewer employees. In addition, 72 

carriers have reported that they are 

Other Local Service Providers. Seventy 

of which have 1,500 or fewer employees 

and two have more than 1,500 

employees. Consequently, the 

Commission estimates that most 

providers of competitive local exchange 

service, competitive access providers, 

Shared-Tenant Service Providers, and 

Other Local Service Providers are small 

entities that may be affected by rules 

adopted pursuant to the NPRM. 

253. Interexchange Carriers. Neither 

the Commission nor the SBA has 

developed a small business size 

standard specifically for providers of 

interexchange services. The appropriate 

size standard under SBA rules is for the 

category Wired Telecommunications 

Carriers. Under that size standard, such 

a business is small if it has 1,500 or 

fewer employees. Census Bureau data 

for 2007, which now supersede data 

from the 2002 Census, show that there 

were 3,188 firms in this category that 

operated for the entire year. Of this 

total, 3,144 had employment of 999 or 

fewer, and 44 firms had had 

employment of 1,000 employees or 

more. Thus under this category and the 

associated small business size standard, 

the majority of these Interexchange 

carriers can be considered small 

entities. According to Commission data, 

359 companies reported that their 

primary telecommunications service 

activity was the provision of 

interexchange services. Of these 359 

companies, an estimated 317 have 1,500 

or fewer employees and 42 have more 

than 1,500 employees. Consequently, 

the Commission estimates that the 

majority of interexchange service 

providers are small entities that may be 

affected by rules adopted pursuant to 

the NPRM. 

254. Operator Service Providers 

(OSPs). Neither the Commission nor the 

SBA has developed a small business 

size standard specifically for operator 

service providers. The appropriate size 

standard under SBA rules is the 

category Wired Telecommunications 

Carriers. Under that size standard, such 

a business is small if it has 1,500 or 

fewer employees. Under that size 

standard, such a business is small if it 

has 1,500 or fewer employees. Census 

Bureau data for 2007, which now 

supersede 2002 Census data, show that 

there were 3,188 firms in this category 

that operated for the entire year. Of the 

total, 3,144 had employment of 999 or 

fewer, and 44 firms had had 

employment of 1,000 employees or 

more. Thus under this category and the 

associated small business size standard, 

the majority of these interexchange 

carriers can be considered small 

entities. According to Commission data, 

33 carriers have reported that they are 

engaged in the provision of operator 

services. Of these, an estimated 31 have 

1,500 or fewer employees and 2 have 

more than 1,500 employees. 

Consequently, the Commission 

estimates that the majority of OSPs are 

small entities that may be affected by 

our proposed action. 

255. Local Resellers. The SBA has 

developed a small business size 

standard for the category of 

Telecommunications Resellers. Under 

that size standard, such a business is 

small if it has 1,500 or fewer employees. 

Census data for 2007 show that 1,523 

firms provided resale services during 

that year. Of that number, 1,522 

operated with fewer than 1000 

employees and one operated with more 

than 1,000. Thus under this category 

and the associated small business size 

standard, the majority of these local 

resellers can be considered small 

entities. According to Commission data, 

213 carriers have reported that they are 

engaged in the provision of local resale 

services. Of these, an estimated 211 

have 1,500 or fewer employees and two 

have more than 1,500 employees. 

Consequently, the Commission 

estimates that the majority of local 

resellers are small entities that may be 

affected by rules adopted pursuant to 

the NPRM. 

256. Toll Resellers. The SBA has 

developed a small business size 

standard for the category of 

Telecommunications Resellers. Under 

that size standard, such a business is 

small if it has 1,500 or fewer employees. 

Census data for 2007 show that 1,523 

firms provided resale services during 

that year. Of that number, 1,522 

operated with fewer than 1,000 

employees and one operated with more 

than 1,000. Thus under this category 

and the associated small business size 

standard, the majority of these resellers 

can be considered small entities. 

According to Commission data, 881 

carriers have reported that they are 

engaged in the provision of toll resale 

services. Of these, an estimated 857 

have 1,500 or fewer employees and 24 

have more than 1,500 employees. 

Consequently, the Commission 

estimates that the majority of toll 

resellers are small entities that may be 

affected by our action. 

257. Pre-paid Calling Card Providers. 

Neither the Commission nor the SBA 

has developed a small business size 

standard specifically for pre-paid calling 

card providers. The appropriate size 

standard under SBA rules is for the 

category Telecommunications Resellers. 

Under that size standard, such a 

business is small if it has 1,500 or fewer 

employees. Census data for 2007 show 

that 1,523 firms provided resale services 

during that year. Of that number, 1,522 

operated with fewer than 1,000 

employees and one operated with more 

than 1,000. Thus under this category 

and the associated small business size 

standard, the majority of these pre-paid 

calling card providers can be considered 

small entities. According to Commission 

data, 193 carriers have reported that 

they are engaged in the provision of prepaid calling cards. Of these, an 

estimated all 193 have 1,500 or fewer 

employees and none have more than 

1,500 employees. Consequently, the 

Commission estimates that the majority 

of pre-paid calling card providers are 

small entities that may be affected by 

rules adopted pursuant to the NPRM. 

258. 800 and 800-Like Service 

Subscribers. Neither the Commission 

nor the SBA has developed a small 

business size standard specifically for 

800 and 800-like service (‘‘toll free’’) 

subscribers. The appropriate size 

standard under SBA rules is for the 

category Telecommunications Resellers. 

Under that size standard, such a 

business is small if it has 1,500 or fewer 

employees. Census data for 2007 show 

that 1,523 firms provided resale services 

during that year. Of that number, 1,522 

operated with fewer than 1000 

employees and one operated with more 

than 1,000. Thus under this category 

and the associated small business size 

standard, the majority of resellers in this 

classification can be considered small 

entities. To focus specifically on the 

number of subscribers than on those 

firms which make subscription service 

available, the most reliable source of 

information regarding the number of 

these service subscribers appears to be 

data the Commission collects on the 

800, 888, 877, and 866 numbers in use. 

According to our data, at of September 

2009, the number of 800 numbers 


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assigned was 7,860,000; the number of 

888 numbers assigned was 5,888,687; 

the number of 877 numbers assigned 

was 4,721,866; and the number of 866 

numbers assigned was 7,867,736. The 

Commission does not have data 

specifying the number of these 

subscribers that are not independently 

owned and operated or have more than 

1,500 employees, and thus are unable at 

this time to estimate with greater 

precision the number of toll free 

subscribers that would qualify as small 

businesses under the SBA size standard. 

Consequently, the Commission 

estimates that there are 7,860,000 or 

fewer small entity 800 subscribers; 

5,888,687 or fewer small entity 888 

subscribers; 4,721,866 or fewer small 

entity 877 subscribers; and 7,867,736 or 

fewer small entity 866 subscribers. We 

do not believe 800 and 800-Like Service 

Subscribers will be effected by our 

proposed rules, however we choose to 

include this category and seek comment 

on whether there will be an effect on 

small entities within this category. 

2. Wireless Carriers and Service 

Providers 

259. Below, for those services subject 

to auctions, the Commission notes that, 

as a general matter, the number of 

winning bidders that qualify as small 

businesses at the close of an auction 

does not necessarily represent the 

number of small businesses currently in 

service. Also, the Commission does not 

generally track subsequent business size 

unless, in the context of assignments or 

transfers, unjust enrichment issues are 

implicated. 

260. Wireless Telecommunications 

Carriers (except Satellite). Since 2007, 

the Census Bureau has placed wireless 

firms within this new, broad, economic 

census category. Prior to that time, such 

firms were within the now-superseded 

categories of Paging and Cellular and 

Other Wireless Telecommunications. 

Under the present and prior categories, 

the SBA has deemed a wireless business 

to be small if it has 1,500 or fewer 

employees. For the category of Wireless 

Telecommunications Carriers (except 

Satellite), Census data for 2007, which 

supersede data contained in the 2002 

Census, show that there were 1,383 

firms that operated that year. Of those 

1,383, 1,368 had fewer than 100 

employees, and 15 firms had more than 

100 employees. Thus under this 

category and the associated small 

business size standard, the majority of 

firms can be considered small. 

Similarly, according to Commission 

data, 413 carriers reported that they 

were engaged in the provision of 

wireless telephony, including cellular 

service, Personal Communications 

Service, and Specialized Mobile Radio 

Telephony services. Of these, an 

estimated 261 have 1,500 or fewer 

employees and 152 have more than 

1,500 employees. Consequently, the 

Commission estimates that 

approximately half or more of these 

firms can be considered small. Thus, 

using available data, we estimate that 

the majority of wireless firms can be 

considered small. 

261. Wireless Communications 

Services. This service can be used for 

fixed, mobile, radiolocation, and digital 

audio broadcasting satellite uses. The 

Commission defined ‘‘small business’’ 

for the wireless communications 

services (WCS) auction as an entity with 

average gross revenues of $40 million 

for each of the three preceding years, 

and a ‘‘very small business’’ as an entity 

with average gross revenues of $15 

million for each of the three preceding 

years. The SBA has approved these 

definitions. The Commission auctioned 

geographic area licenses in the WCS 

service. In the auction, which 

commenced on April 15, 1997 and 

closed on April 25, 1997, seven bidders 

won 31 licenses that qualified as very 

small business entities, and one bidder 

won one license that qualified as a small 

business entity. 

262. Satellite Telecommunications 

Providers. Two economic census 

categories address the satellite industry. 

The first category has a small business 

size standard of $15 million or less in 

average annual receipts, under SBA 

rules. The second has a size standard of 

$25 million or less in annual receipts. 

263. The category of Satellite 

Telecommunications ‘‘comprises 

establishments primarily engaged in 

providing telecommunications services 

to other establishments in the 

telecommunications and broadcasting 

industries by forwarding and receiving 

communications signals via a system of 

satellites or reselling satellite 

telecommunications.’’ Census Bureau 

data for 2007 show that 512 Satellite 

Telecommunications firms that operated 

for that entire year. Of this total, 464 

firms had annual receipts of under $10 

million, and 18 firms had receipts of 

$10 million to $24,999,999. 

Consequently, the Commission 

estimates that the majority of Satellite 

Telecommunications firms are small 

entities that might be affected by our 

action. 

264. The second category, i.e., All 

Other Telecommunications, comprises 

‘‘establishments primarily engaged in 

providing specialized 

telecommunications services, such as 

satellite tracking, communications 

telemetry, and radar station operation. 

This industry also includes 

establishments primarily engaged in 

providing satellite terminal stations and 

associated facilities connected with one 

or more terrestrial systems and capable 

of transmitting telecommunications to, 

and receiving telecommunications from, 

satellite systems. Establishments 

providing Internet services or voice over 

Internet protocol (VoIP) services via 

client-supplied telecommunications 

connections are also included in this 

industry.’’ For this category, Census 

Bureau data for 2007 show that there 

were a total of 2,383 firms that operated 

for the entire year. Of this total, 2,347 

firms had annual receipts of under $25 

million and 12 firms had annual 

receipts of $25 million to $49,999,999. 

Consequently, the Commission 

estimates that the majority of All Other 

Telecommunications firms are small 

entities that might be affected by our 

action. 

265. Common Carrier Paging. The 

SBA considers paging to be a wireless 

telecommunications service and 

classifies it under the industry 

classification Wireless 

Telecommunications Carriers (except 

satellite). Under that classification, the 

applicable size standard is that a 

business is small if it has 1,500 or fewer 

employees. For the general category of 

Wireless Telecommunications Carriers 

(except Satellite), Census data for 2007, 

which supersede data contained in the 

2002 Census, show that there were 

1,383 firms that operated that year. Of 

those 1,383, 1,368 had fewer than 100 

employees, and 15 firms had more than 

100 employees. Thus under this 

category and the associated small 

business size standard, the majority of 

firms can be considered small. The 2007 

census also contains data for the 

specific category of Paging ‘‘that is 

classified under the seven-number 

North American Industry Classification 

System (NAICS) code 5172101. 

According to Commission data, 291 

carriers have reported that they are 

engaged in paging or messaging service. 

Of these, an estimated 289 have 1,500 or 

fewer employees, and 2 have more than 

1,500 employees. Consequently, the 

Commission estimates that the majority 

of paging providers are small entities 

that may be affected by our action. In 

addition, in the Paging Third Report and 

Order, the Commission developed a 

small business size standard for ‘‘small 

businesses’’ and ‘‘very small businesses’’ 

for purposes of determining their 

eligibility for special provisions such as 

bidding credits and installment 

payments. A ‘‘small business’’ is an 


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entity that, together with its affiliates 

and controlling principals, has average 

gross revenues not exceeding $15 

million for the preceding three years. 

Additionally, a ‘‘very small business’’ is 

an entity that, together with its affiliates 

and controlling principals, has average 

gross revenues that are not more than $3 

million for the preceding three years. 

The SBA has approved these small 

business size standards. An auction of 

Metropolitan Economic Area licenses 

commenced on February 24, 2000, and 

closed on March 2, 2000. Of the 985 

licenses auctioned, 440 were sold. Fiftyseven companies claiming small 

business status won. 

266. Wireless Telephony. Wireless 

telephony includes cellular, personal 

communications services, and 

specialized mobile radio telephony 

carriers. As noted, the SBA has 

developed a small business size 

standard for Wireless 

Telecommunications Carriers (except 

Satellite). Under the SBA small business 

size standard, a business is small if it 

has 1,500 or fewer employees. 

According to the 2008 Trends Report, 

434 carriers reported that they were 

engaged in wireless telephony. Of these, 

an estimated 222 have 1,500 or fewer 

employees and 212 have more than 

1,500 employees. We have estimated 

that 222 of these are small under the 

SBA small business size standard. 

3. Internet Service Providers 

267. The 2007 Economic Census 

places these firms, whose services might 

include voice over Internet protocol 

(VoIP), in either of two categories, 

depending on whether the service is 

provided over the provider’s own 

telecommunications facilities (e.g., cable 

and DSL ISPs), or over client-supplied 

telecommunications connections (e.g., 

dial-up ISPs). The former are within the 

category of Wired Telecommunications 

Carriers, which has an SBA small 

business size standard of 1,500 or fewer 

employees. The latter are within the 

category of All Other 

Telecommunications, which has a size 

standard of annual receipts of $25 

million or less. The most current Census 

Bureau data for all such firms, however, 

are the 2002 data for the previous 

census category called Internet Service 

Providers. That category had a small 

business size standard of $21 million or 

less in annual receipts, which was 

revised in late 2005 to $23 million. The 

2002 data show that there were 2,529 

such firms that operated for the entire 

year. Of those, 2,437 firms had annual 

receipts of under $10 million, and an 

additional 47 firms had receipts of 

between $10 million and $24,999,999. 

Consequently, we estimate that the 

majority of ISP firms are small entities. 

F. Description of Projected Reporting, 

Recordkeeping, and Other Compliance 

Requirements 

268. The reporting and recordkeeping 

requirements in this NPRM could have 

an impact on both small and large 

entities. Though the impact may be 

more financially burdensome for 

smaller entities, we believe the impact 

of such requirements is outweighed by 

their corresponding benefits to entities 

and consumers. Further, these 

requirements are necessary to ensure 

that the statutory goals of section 254 of 

the Telecommunications Act of 1996 are 

met without waste, fraud, or abuse. 

269. The Commission proposes 

several reporting, recordkeeping, and 

compliance requirements for the lowincome program. We propose that 

Eligible Telecommunications Carriers 

(ETCs) seeking support would extend 

their reporting to the Universal Service 

Administrative Company (USAC) to 

include reporting of subscribers’ partial 

participation. Further, we propose deenrollment procedures to reduce waste 

in the program. We also propose to 

retain the existing verification 

requirements for Federal default states 

and extend these requirements to the 

remainder of states. 

270. Duplicate Claims and One-PerResidential Address. The Commission 

proposes several reporting and 

recordkeeping requirements to reduce 

the likelihood that a residential address 

will receive more than one subsidized 

service through the low-income 

program. Specifically, we propose an 

information solicitation and submission 

process to enable USAC to identify 

duplicate claims of support and 

violations of the proposed rules, which, 

if adopted, will help USAC determine 

whether two or more ETCs are 

providing Lifeline-supported service to 

the same residential address. ETCs 

would be required to solicit identifying 

residential address information and 

certification from Lifeline subscribers. 

ETCs would then submit this data to 

USAC. Under the proposal, USAC 

would then notify ETCs of any duplicate 

claims of support. ETCs would also be 

required to notify customers with 

duplicate Lifeline service by phone and 

in writing when possible that the 

subscriber must select one Lifeline 

provider or face termination from the 

program. The selected ETC would then 

notify USAC as well as any other ETC 

providing Lifeline service to the 

customer. 

271. Line 9 Reporting. To help ensure 

that ETCs seek reimbursement only for 

active Lifeline subscribers, the 

Commission proposes to require ETCs to 

report partial or pro rata dollars when 

claiming reimbursement on Form 497. 

Compliance with the proposed rule 

would require ETCs to report the 

number of subscribers beginning or 

terminating Lifeline service mid-month 

as well as the length of service provided 

during that month to each partial-month 

subscriber, which is similar to ETCs’ 

billing of partial-month service to nonLifeline consumers. 

272. De-Enrollment Procedures and 

Customer Usage Requirements. As part 

of the effort to reduce waste in the 

program, and in accordance with the 

proposed one-per-residential address 

codification, the Commission proposes 

to require ETCs to de-enroll their 

Lifeline subscribers who: (1) Select 

another ETC after being notified of a 

duplicate claim; and (2) subscribers who 

do not use their phone for 60 days. 

Compliance with the proposed deenrollment procedures would require 

ETCs to monitor whether a Lifeline 

phone was used during any 60-day 

period. After de-enrollment, the ETC 

would need to notify USAC of the deenrollment. USAC could then pursue 

recovery actions against the ETC for past 

inappropriate support. 

273. Verification. The Commission’s 

rules currently require ETCs in Federal 

default states to implement procedures 

to verify annually the continued 

eligibility of a statistically-valid random 

sample of Lifeline subscribers and to 

provide the results to USAC. We 

propose to extend these standards to all 

states. Furthermore, in accordance with 

the proposed one-per-residential 

address requirement, we propose to 

require ETCs to verify consumer 

certifications upon enrollment and 

annually thereafter. 

274. Service Deposit or Minimum 

Service Fee. Though we do not propose 

any rules on a service deposit for 

commencing Lifeline service or a 

minimum service fee for maintaining 

service, we seek comment on whether 

such rules would balance the competing 

needs of program efficacy with program 

efficiency. Specifically, we seek 

comment as to whether requiring ETCs 

to bill consumers would pose a 

disproportionate burden upon small 

entities, especially those, like pre-paid 

wireless resellers, that do not currently 

bill their consumers on a monthly basis. 

275. Database. We propose a 

comprehensive reform to the lowincome program: we recommend the 

creation of a centralized database for 

online certification and verification of 

low-income subscribers. In the NPRM, 

we seek comment on which entity or 


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entities would be best suited to create 

and maintain such a database. 

Compliance with requirements 

associated with a centralized database 

would include reporting of information 

solicited from Lifeline subscribers for 

the purposes of certifying and verifying 

their eligibility. 

G. Steps Taken to Minimize Significant 

Economic Impact on Small Entities, and 

Significant Alternatives Considered 

276. The RFA requires an agency to 

describe any significant alternatives that 

it has considered in reaching its 

approach, which may include the 

following four alternatives, among 

others: (1) The establishment of 

differing compliance or reporting 

requirements or timetables that take into 

account the resources available to small 

entities; (2) the clarification, 

consolidation, or simplification of 

compliance or reporting requirements 

under the rule for small entities; (3) the 

use of performance, rather than design, 

standards; and (4) an exemption from 

coverage of the rule, or any part thereof, 

for small entities. 

277. In this NPRM, we make a number 

of proposals that may have an economic 

impact on small entities that participate 

in the universal service low-income 

support mechanism. Specifically, as 

addressed above, we seek comment on: 

(1) Mitigating duplicate claims of 

service through increased reporting to 

USAC, in accordance with the proposed 

one-per-residential address rule; (2) 

requiring the reporting of consumers’ 

partial-month Lifeline participation; (3) 

establishing clear de-enrollment 

procedures; and (4) establishing a 

uniform verification regime. If adopted, 

these proposals will help USAC and 

ETCs reduce waste, fraud, and abuse in 

the low-income support mechanism. 

278. In seeking to minimize the 

burdens imposed on small entities 

where doing so does not compromise 

the goals of the universal service 

mechanism, we have invited comment 

on how these proposals might be made 

less burdensome for small entities. We 

again invite commenters to discuss the 

benefits of such changes on small 

entities and whether these benefits are 

outweighed by resulting costs to ETCs 

that might also be small entities. We 

anticipate that the record will reflect 

whether the overall benefits of such 

programmatic changes would outweigh 

the burdens on small entities, and if so, 

commenters will suggest alternative 

ways in which the Commission could 

lessen the overall burdens on small 

entities. We encourage small entities to 

comment. 

279. We have taken the following 

steps to minimize the impact on small 

entities. First, to ease the administrative 

burden on applicants, we propose an 

approach that minimizes reporting 

requirements by appropriating Form 497 

for further information collection rather 

than creating an additional form. In 

accordance with the E-Sign Act, we 

propose to allow consumers to sign their 

certifications electronically, eliminating 

significant reporting and mailing 

burdens currently placed on all entities. 

In order to minimize the impact on 

ETCs, including small entities, we have 

placed the burden of checking addresses 

for duplicate claims upon USAC, rather 

than ETCs. Furthermore, in an effort to 

make verification simpler for all ETCs, 

we have proposed uniform rules of 

eligibility and verification. Most 

significantly, however, we contemplate 

a phased structure for reporting to a 

centralized database: Large entities 

would begin populating the proposed 

database initially, with small entities 

following suit after a period of time 

during which the process will be made 

less burdensome when possible. 

H. Federal Rules That May Duplicate, or 

Conflict With Proposed Rules 

280. None. 

I. Ex Parte Presentations 

281. The rulemaking this NPRM 

initiates shall be treated as a ‘‘permitbut-disclose’’ proceeding in accordance 

with the Commission’s ex parte rules. 

Persons making oral ex parte 

presentations are reminded that 

memoranda summarizing the 

presentations must contain summaries 

of the substance of the presentations 

and not merely a listing of the subjects 

discussed. More than a one- or twosentence description of the views and 

arguments presented generally is 

required. Other requirements pertaining 

to oral and written presentations are set 

forth in section 1.1206(b) of the 

Commission’s rules. 

J. Comment Filing Procedures 

282. Pursuant to §§ 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: (1) The Commission’s 

Electronic Comment Filing System 

(ECFS), (2) the Federal Government’s 

eRulemaking Portal, or (3) by filing 

paper copies. See Electronic Filing of 

Documents in Rulemaking Proceedings, 

63 FR 24121, May 1, 1998. 

• Electronic Filers: Comments may be 

filed electronically using the Internet by 

accessing the ECFS: http:// 

fjallfoss.fcc.gov/ecfs2/ or the Federal 

eRulemaking Portal: http:// 

www.regulations.gov. 

• Paper Filers: Parties who choose to 

file by paper must file an original and 

four copies of each filing. If more than 

one docket or rulemaking number 

appears in the caption of this 

proceeding, filers must submit two 

additional copies for each additional 

docket or rulemaking number. Filings 

can be sent by hand or messenger 

delivery, by commercial overnight 

courier, or by first-class or overnight 

U.S. Postal Service mail. All filings 

must be addressed to the Commission’s 

Secretary, Office of the Secretary, 

Federal Communications Commission. 

• All hand-delivered or messengerdelivered 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 a.m. to 7 p.m. All hand deliveries 

must be held together with rubber bands 

or fasteners. Any envelopes must be 

disposed of before entering the building. 

• Commercial overnight mail (other 

than U.S. Postal Service Express Mail 

and Priority Mail) must be sent to 9300 

East Hampton Drive, Capitol Heights, 

MD 20743. 

• U.S. Postal Service first-class, 

Express, and Priority mail must be 

addressed to 445 12th Street, SW., 

Washington, DC 20554. 

283. In addition, one copy of each 

paper filing must be sent to each of the 

following: (i) The Commission’s 

duplicating contractor, Best Copy and 

Printing, Inc., 445 12th Street, SW., 

Room CY–B402, Washington, DC 20554; 

Web site: http://www.bcpiweb.com; 

phone: 1–800–378–3160; (ii) Kimberly 

Scardino, Telecommunications Access 

Policy Division, Wireline Competition 

Bureau, 445 12th Street, SW., Room 5– 

B448, Washington, DC 20554; e-mail: 

Kimberly.Scardino@fcc.gov; and (iii) 

Charles Tyler, Telecommunications, 

Access Policy Division, Wireline 

Competition Bureau, 445 12th Street, 

SW., Room 5–A452, Washington, DC 

20554, e-mail: Charles.Tyler@fcc.gov. 

284. 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). 

285. Filings and comments are also 

available for public inspection and 

copying during regular business hours 

at the FCC Reference Information 

Center, Portals II, 445 12th Street, SW., 


jlentini on DSKJ8SOYB1PROD with PROPOSALS2
16516 Federal Register / Vol. 76, No. 56 / Wednesday, March 23, 2011 / Proposed Rules 

Room CY–A257, Washington, DC, 

20554. Copies may also be purchased 

from the Commission’s duplicating 

contractor, BCPI, 445 12th Street, SW., 

Room CY–B402, Washington, DC 20554. 

Customers may contact BCPI through its 

Web site: http://www.bcpiweb.com, by 

e-mail at fcc@bcpiweb.com, by 

telephone at (202) 488–5300 or (800) 

378–3160, or by facsimile at (202) 488– 

5563. 

286. Comments and reply comments 

must include a short and concise 

summary of the substantive arguments 

raised in the pleading. Comments and 

reply comments must also comply with 

section 1.49 and all other applicable 

sections of the Commission’s rules. We 

direct all interested parties to include 

the name of the filing party and the date 

of the filing on each page of their 

comments and reply comments. All 

parties are encouraged to utilize a table 

of contents, regardless of the length of 

their submission. We also strongly 

encourage parties to track the 

organization set forth in the NPRM in 

order to facilitate our internal review 

process. 

287. For further information, contact 

Kimberly Scardino at (202) 418–1442 in 

the Telecommunications Access Policy 

Division, Wireline Competition Bureau. 

List of Subjects in 47 CFR Part 54 

Communications common carriers, 

Reporting and recordkeeping 

requirements, Telecommunications, 

Telephone. 

Federal Communications Commission. 

Bulah P. Wheeler, 

Deputy Manager. 

Proposed Rules 

For the reasons discussed in the 

preamble, the Federal Communications 

Commission proposes to amend 47 CFR 

part 54 to read as follows: 

PART 54—UNIVERSAL SERVICE 

1. The authority citation for part 54 

continues to read as follows: 

Authority: 47 U.S.C. 1, 4(i), 201, 205, 214, 

and 254 unless otherwise noted. 

§ 54.101 [Amended] 

2. Amend § 54.101 by removing and 

reserving paragraph (a)(9). 

3. Amend § 54.400 by: 

a. Revising paragraphs (a) and (b) 

b. Removing paragraph (c); 

c. redesignating paragraphs (e) and (f) 

as paragraphs (c) and (d), respectively; 

d. Revising newly redesignated 

paragraph (c); and 

e. Adding new paragraph (e). 

The revisions and addition read as 

follows: 

§ 54.400 Terms and definitions. 

(a) Qualifying low-income consumer. 

A ‘‘qualifying low-income consumer’’ is 

a consumer who meets the 

qualifications for Lifeline, as specified 

in § 54.409, and complies with the oneper-residence limitation, as specified in 

§ 54.402. 

(b) Duplicate support. Duplicate 

support exists when two or more ETCs 

are receiving Lifeline or Link Up 

support for the same residential address 

at the same time; or an ETC is receiving 

two or more Lifeline or Link Up support 

reimbursements for the same residence 

at the same time. 

(c) Eligible resident of Tribal lands. 

An ‘‘eligible resident of Tribal lands’’ is 

a ‘‘qualifying low-income consumer,’’ as 

defined in paragraph (a) of this section, 

living on a reservation or on Tribal 

lands designated as such by the 

Commission. A ‘‘reservation’’ is defined 

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), and Indian allotments. ‘‘Tribal 

lands’’ also shall mean any land 

designated as Tribal lands by the 

Commission for purposes of this subpart 

pursuant to the designation process in 

§ 54.402. 

* * * * * 

(e) Customary charge for commencing 

telecommunications service. A 

‘‘customary charge for commencing 

telecommunications service’’ is the 

ordinary charge an ETC routinely 

imposes on all customers within a state 

to initiate service. Such a charge is 

limited to an actual charge assessed on 

all customers to initiate service with 

that ETC. A charge imposed only on 

Lifeline and/or Link Up customers to 

initiate service is not a customary 

charge for commencing 

telecommunications service. Activation 

charges waived, reduced, or eliminated 

with the purchase of additional 

products, services, or minutes are not 

customary charges eligible for universal 

service support. 

4. Amend § 54.401 by revising 

paragraph (a)(3) and removing and 

reserving paragraph (c), to read as 

follows: 

§ 54.401 Lifeline defined. 

(a) * * * 

(3) That provides voice telephony 

service as specified in § 54.101(a). 

* * * * * 

5. Add § 54.402, to read as follows: 

§ 54.402 Tribal lands designation process. 

The Commission may designate 

specific areas as Tribal lands for 

purposes of this subpart for areas or 

communities that fall outside the 

boundaries of a designated reservation, 

but which maintain the same 

characteristics as those defined. A 

request for designation must be formally 

requested by an official of a Federally 

recognized Tribe who has proper 

jurisdiction and must be filed pursuant 

to the Commission’s rules. Good cause 

for the designation may be shown by 

providing evidence of a nexus between 

the area or community and the Tribe, 

such as identifying an area in which the 

Federal government delivers services to 

Tribal citizens; detailing how program 

support to the area would aid the Tribe 

in serving the needs and interests of its 

citizens in that community and further 

the Commission’s goals of providing 

Tribal support. The region or 

community areas associated with the 

Tribe, as outlined and described in a 

grant of designation request, shall be 

considered Tribal lands for the purposes 

of this Subpart. 

6. Amend § 54.403 by revising 

paragraphs (a)(4) introductory text, (b), 

and (c) to read as follows: 

§ 54.403 Lifeline support amount. 

(a) * * * 

(4) Tier Four. Additional Federal 

Lifeline support of up to $25 per month 

will be made available to an eligible 

telecommunications carrier providing 

Lifeline service to an eligible resident of 

Tribal lands, as defined in § 54.400(c), 

to the extent that the eligible 

telecommunications carrier certifies to 

the Administrator that it will pass 

through the full Tier-Four amount to 

qualifying eligible residents of Tribal 

lands and that it has received any nonFederal regulatory approvals necessary 

to implement the required rate 

reduction, to the extent that: 

* * * * * 

(b) Maximum Lifeline Support 

Amount. (1) For a qualifying lowincome consumer who is not an eligible 

resident of Tribal lands, as defined in 

§ 54.400(c), the Federal Lifeline support 

amount shall not exceed $3.50 plus the 

tariffed rate in effect for the primary 

residential End User Common Line 

charge of the incumbent local exchange 

carrier serving the area in which the 

qualifying low-income consumer 

receives service, as determined in 

accordance with § 69.104 or § 69.152(d) 

and (q) of this chapter, whichever is 

applicable. 

(2) For an eligible resident of Tribal 

lands, the Federal Lifeline support 

amount shall not exceed $28.50 plus 


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that same End User Common Line 

charge. 

(3) For a qualifying low-income 

consumer who purchases a bundled 

service package or a service plan that 

includes optional calling features, the 

Federal Lifeline support amount shall 

not exceed the maximum Lifeline 

support amount as determined in 

accordance with § 54.403(b)(1) or (2) of 

this subpart, whichever is applicable. 

(c) Application of Discount Amount. 

Eligible telecommunications carriers 

that charge Federal End User Common 

Line charges or equivalent Federal 

charges shall apply Tier-One Federal 

Lifeline support to waive the Federal 

End-User Common Line charges for 

Lifeline consumers. Such carriers shall 

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 shall apply 

the Tier-One Federal Lifeline support 

amount, plus any additional support 

amount, to reduce the cost of any 

eligible residential Lifeline service plan 

or package selected by a qualified lowincome consumer that provides voice 

telephony service with the performance 

characteristics listed in § 54.101(a), and 

charge Lifeline consumers the resulting 

amount. 

7. Amend § 54.405 by adding a 

heading to the beginning of paragraph 

(c) and adding paragraph (e) to read as 

follows: 

§ 54.405 Carrier obligation to offer Lifeline. 

* * * * * 

(c) Termination for ineligibility. * * * 

* * * * * 

(e) De-enroll for disqualification. 

Notwithstanding § 54.405(c) of this 

section, notify Lifeline subscribers of 

impending termination of Lifeline 

service if the subscriber fails: 

(1) To respond to notifications 

regarding duplicate support; 

(2) To respond to ETC verification 

attempts made pursuant to § 54.410(d); 

or 

(3) To use the supported service 

during a 60-day period. ETCs shall 

provide the subscriber 30 days 

following the date of the impending 

termination letter in which to 

demonstrate that Lifeline service shall 

not be terminated. ETCs shall terminate 

the Lifeline service if the subscriber fails 

to demonstrate that Lifeline service 

shall not be terminated. ETCs shall not 

seek Lifeline reimbursement for the 

subscriber during the 30-day period. 

8. Amend § 54.407 by revising 

paragraph (b) and adding paragraph (d) 

to read as follows: 

§ 54.407 Reimbursement for offering 

Lifeline. 

* * * * * 

(b) The eligible telecommunications 

carrier may receive universal service 

support reimbursement for each 

qualifying low-income consumer who 

has used the supported service to 

initiate or receive a voice call within the 

last 60 days. 

* * * * * 

(d) The eligible telecommunications 

carrier seeking support must report 

partial or pro rata dollars when claiming 

reimbursement for discounted services 

to low-income consumers who receive 

service for less than a month. 

9. Add § 54.408 to read as follows: 

§ 54.408 One-per-residence. 

(a) Lifeline and Link Up support is 

limited to one Lifeline discount and/or 

one Link Up discount per billing 

residential address. 

(1) Billing Residential address. For 

purposes of the Lifeline and Link Up 

programs, a ‘‘billing residential address’’ 

is a unique residential address 

recognized by the U.S. Postal Service 

address. 

(2) Lifeline and Link Up support is 

available only to establish service at the 

qualifying low-income consumer’s 

primary residential address. The 

consumer must initially certify at 

enrollment that the consumer’s billing 

residential address of record is his or 

her primary residential address. 

(b) To be considered an eligible 

consumer for the purposes of Lifeline 

and Link Up support, a consumer must 

meet the criteria set forth in section 

§ 54.409 of this part. 

10. Revise § 54.409 to read as follows: 

§ 54.409 Consumer qualification for 

Lifeline. 

(a) To qualify to receive Lifeline 

service, a consumer’s household 

income, as defined in § 54.400(d), must 

be at or below 135% of the Federal 

Poverty Guidelines, or a consumer must 

participate in one of the following 

Federal assistance programs: Medicaid; 

Supplemental Nutrition Assistance 

Program; Supplemental Security 

Income; Federal Public Housing 

Assistance (Section 8); Low-Income 

Home Energy Assistance Program; 

National School Lunch Program’s free 

lunch program; or Temporary 

Assistance for Needy Families. 

(b) A consumer that is an eligible 

resident of Tribal lands, as defined by 

§ 54.400(c) or § 54.402, shall be a 

‘‘qualifying low-income consumer,’’ as 

defined by 54.400(a), and shall qualify 

to receive Tiers One, Two, and Four 

Lifeline support if the consumer’s 

residence: 

(1) Has income that meets the 

threshold established in paragraph (a) of 

this section or participates in one of the 

Federal assistance programs identified 

in paragraph (a) of this section; or 

(2) Participates in one of the following 

Tribal-specific Federal assistance 

programs: Bureau of Indian Affairs 

general assistance, Tribally 

administered Temporary Assistance for 

Need Families (TANF); Head Start (but 

only those households meeting its 

income qualifying standard); or Food 

Distribution Program on Indian 

Reservations (FDPIR). Such qualifying 

low-income consumer shall also qualify 

for Tier Three Lifeline support if the 

carrier offering the Lifeline service is 

not subject to the regulations of the state 

and provides carrier-matching funds, as 

described in § 54.403(a)(3). 

(c) Each eligible telecommunications 

carrier providing Lifeline service to a 

qualifying low-income consumer 

pursuant to paragraphs (a) or (b) of this 

section must obtain that consumer’s 

signature on a document certifying 

under penalty of perjury that: 

(1) The consumer’s residence receives 

benefits from one of the programs listed 

in paragraph (a) or (b) of this section, 

and that the consumer presented 

documentation of program 

participation, as described in 54.410(b), 

which accurately represents the 

program participation of the consumer’s 

residence; or the consumer’s residence 

meets the income requirement of 

paragraph (a) of this section, and that 

the consumer presented documentation 

of income, as described in §§ 54.400(f), 

54.410(a), which accurately represents 

the consumer’s income; and 

(2) If an eligible resident of Tribal 

lands, that the consumer lives on a 

reservation or Tribal lands, as defined in 

§ 54.400(c) and § 54.402; and 

(3) The consumer will notify the 

carrier within 30 days if that consumer 

ceases to participate in the program or 

programs, if the consumer’s income 

exceeds 135% of the Federal Poverty 

Guidelines, or if the consumer 

otherwise ceases to meet the criteria for 

receiving program support. 

11. Revise § 54.410 to read as follows: 

§ 54.410 Certification and Verification of 

Consumer Qualification for Lifeline. 

(a) Certification of income 

qualification. Prior to enrollment in 

Lifeline, consumers qualifying for 

Lifeline under an income-based 

criterion must present documentation of 


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their income and certify that they will 

be receiving support for only one 

Lifeline discount per residence. By six 

months from the effective date of these 

rules, eligible telecommunications 

carriers in all states must implement 

certification procedures to document 

consumer-income-based eligibility for 

Lifeline prior to a consumer’s 

enrollment if the consumer is qualifying 

under the income-based criterion 

specified in § 54.409(a). Acceptable 

documentation of income eligibility 

includes the prior year’s state or Federal 

tax return, current income statement 

from an employer or paycheck stub, a 

Social Security statement of benefits, a 

Veterans Administration statement of 

benefits, a retirement/pension statement 

of benefits, an Unemployment/Workers’ 

Compensation statement of benefits, 

Federal notice letter of participation in 

General Assistance, a divorce decree, 

child support, or other official 

document. If the consumer presents 

documentation of income that does not 

cover a full year, such as current pay 

stubs, the consumer must present the 

same type of documentation covering 

three consecutive months within that 

calendar year. States that mandate state 

Lifeline support may impose additional 

standards on eligible 

telecommunications carriers operating 

in their states to ensure compliance 

with the state Lifeline program. 

(b) Certification of program 

qualification. Consumers qualifying for 

Lifeline under a program-based criterion 

must present documentation of their 

household participation in a qualifying 

program and certify that they will be 

receiving support for only one Lifeline 

discount per residence prior to 

enrollment in Lifeline. By six months 

from the effective date of these rules, 

eligible telecommunications carriers in 

all states must implement certification 

procedures to document consumerprogram-based eligibility for Lifeline 

prior to a consumer’s enrollment if the 

consumer is qualifying under the 

program-based criterion specified in 

§ 54.409(a) and (b). Acceptable 

documentation of program eligibility 

includes the prior year’s statement of 

benefits from the program, program 

participation documents, Federal notice 

letter of participation in the program, or 

other official document. If the consumer 

presents documentation of program 

participation that does not cover a full 

year, such as current program benefits, 

the consumer must present the same 

type of documentation covering three 

consecutive months within that 

calendar year. States that mandate State 

Lifeline support may impose additional 

standards on eligible 

telecommunications carriers operating 

in their States to ensure compliance 

with the State Lifeline program. 

(c) Self-certifications. After income 

and program based certification 

procedures are implemented, eligible 

telecommunications carriers are 

required to make and obtain certain selfcertifications, under penalty of perjury, 

related to the Lifeline program. Eligible 

telecommunications carriers must retain 

records of all self-certifications. 

(1) An officer of the eligible 

telecommunications carrier must certify 

that the eligible telecommunications 

carrier has procedures in place to 

review income and program 

documentation and that, to the best of 

his or her knowledge, the carrier was 

presented with documentation of the 

consumer’s income qualification or 

program participation. 

(2) Lifeline and Link Up subscribers 

must initially certify at enrollment and 

during continued verification that they 

are receiving support for only one line 

per residence, consistent with the oneper-residence limitation as specified in 

§ 54.408. 

(3) Consumers qualifying for Lifeline 

under an income-based criterion must 

certify the number of individuals in 

their residence on the document 

required in § 54.409(c). 

(d) Verification of continued 

eligibility. Consumers qualifying for 

Lifeline shall be required to verify 

continued eligibility on an annual basis. 

By [DATE 6 MONTHS AFTER 

EFFECTIVE DATE OF FINAL RULE], 

eligible telecommunications carriers in 

all States shall implement procedures to 

verify annually the continued eligibility 

of a statistically valid sample [TBD] of 

their Lifeline subscribers for continued 

eligibility. 

(1) Eligible telecommunications 

carriers shall require each customer to 

certify that they are receiving support 

for only one line per residence. Eligible 

telecommunications carriers may verify 

directly with a State that particular 

customers continue to be eligible by 

virtue of participation in a qualifying 

program or income level. To the extent 

eligible telecommunications carriers 

cannot obtain the necessary information 

from the State, they may verify directly 

with the customers. 

(2) All eligible telecommunications 

carriers will be required to provide the 

results of their verification efforts to the 

Commission and the Administrator on 

the Annual Lifeline Certification and 

Verification Form (currently OMB 

3060–0819) by August 31 each year. 

Eligible telecommunications carriers 

shall submit data to the Commission 

and Administrator regarding consumer 

qualifications for eligibility, including 

program-based and income-based 

eligibility, the number of customers that 

qualify based on income and program 

participation, the number of subscribers 

that qualify for each eligible program, 

the number of non-responders, and the 

number of customers de-enrolled and in 

the process of being terminated or deenrolled. Eligible telecommunications 

carriers shall submit each customer 

name, address, and number of 

individuals in the customer’s residence 

for those customers qualifying based on 

income criterion. 

(e) Preventing and Resolving 

Duplicate Support. ETCs shall provide 

the Administrator with their Lifeline 

and Link Up customer names, 

addresses, social security numbers, and/ 

or other unique residence-identifying 

information as specified in the form and 

format requested on the Form 497 for 

the purpose of preventing and resolving 

situations involving duplicate support. 

12. Amend § 54.413 by revising the 

first sentence in paragraph (b) to read as 

follows: 

§ 54.413 Reimbursement for revenue 

forgone in offering a Link Up program. 

* * * * * 

(b) In order to receive universal 

service support reimbursement for 

providing Link Up, eligible 

telecommunications carriers must keep 

accurate records of the revenues they 

forgo in reducing their customary charge 

for commencing telecommunications 

service, as defined in § 54.400(e), and 

for providing a deferred schedule for 

payment of the charges assessed for 

commencing service for which the 

consumer does not pay interest, in 

conformity with § 54.411. * * * 

13. Revise § 54.415 to read as follows: 

§ 54.415 Consumer qualification for Link 

Up. 

(a) The consumer qualification criteria 

for Link Up shall be the criteria set forth 

in § 54.409(a). 

(b) Notwithstanding paragraph (a) of 

this section, the consumer qualification 

criteria for an eligible resident of Tribal 

lands, as defined in § 54.400(c) and 

§ 54.402, shall qualify to receive Link 

Up support. 

14. Revise § 54.416 to read as follows: 

§ 54.416 Certification of consumer 

qualification for Link Up. 

Consumers qualifying under incomebased or program-based criteria must 

present documentation of their 

qualification prior to enrollment in Link 

Up consistent with the requirements set 

forth in §§ 54.410(a) and (b). 


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15. Amend § 54.417 by revising 

paragraph (a) and the last sentence in 

paragraph (b) to read as follows: 

§ 54.417 Recordkeeping requirements. 

(a) Eligible telecommunications 

carriers must maintain records to 

document compliance with all 

Commission and State requirements 

governing the Lifeline/Link Up 

programs for the three full preceding 

calendar years and provide that 

documentation to the Commission or 

Administrator upon request. 

Notwithstanding the preceding 

sentence, eligible telecommunications 

carriers must maintain the 

documentation required in §§ 54.409(c) 

and 54.410(c) for as long as the 

consumer receives Lifeline service from 

that eligible telecommunications carrier 

or until audited by the Administrator. If 

an eligible telecommunications carrier 

provides Lifeline discounted wholesale 

services to a reseller, it must obtain a 

certification from that reseller that it is 

complying with all Commission 

requirements governing the Lifeline/ 

Link Up programs. 

(b) * * * To the extent such a reseller 

provides discounted services to lowincome consumers, it is obligated to 

comply with the eligible 

telecommunications carrier 

requirements listed in this subpart. 

§ 54.418 [Removed and Reserved] 

16. Remove and reserve § 54.418. 

[FR Doc. 2011–6557 Filed 3–22–11; 8:45 am] 

BILLING CODE 6712–01–P 


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