Federal-State Joint Board on Universal Service Review of Lifeline and Link Up

Date: 11/04/2010

Summary

On November 4, 2010, the Federal-State Board on Universal Service released a package of recommend reforms to improve participation in the Lifeline and Link Up programs. All of the Joint Board’s recommendations will be evaluated by the FCC as it works to improve Lifeline and Link Up and reviews recommendations in the National Broadband Plan to use universal service to help advance broadband to all Americans.

The recommendations include the following.

I. CONSUMER ELIGIBILITY

  • The Joint Board recommends that the FCC seek comment to identify and quantify the potential impact, costs, and benefits of minimum uniform eligibility requirements and where such burdens and benefits will occur.
  • The Joint Board supports the concept of minimum uniform eligibility requirements, but acknowledges that there are potential difficulties in terms of cost and administration that must be explored before the Joint Board can conclude that such requirements should be adopted.
  • The Joint Board's support presumes that states would be able to set eligibility criteria in addition to the minimum requirements.
  • The Joint Board recommends that the FCC adopt minimum uniform eligibility requirements only if the impacts on the states are not unreasonable.
  • The Joint Board recommends that the FCC seek comment to determine whether the current eligibility requirement of household income at or below 135 percent of the federal poverty guidelines should be raised to 150 percent for the existing Lifeline and Link Up programs in states that include an eligibility option based only on household income. (This recommendation to seek comment on raising the income eligibility to 150 percent of the FPG does not apply to broadband Lifeline and Link Up support should broadband be included as a supported service. This is a separate issue discussed later in this recommendation. The Joint Board cannot, at this time, conclude that this eligibility requirement should apply if the FCC ultimately expands universal service and the Lifeline and Link Up programs to encompass broadband. )
  • The Joint Board recommends that the FCC seek comment on how to increase participation in the low-income programs among homeless shelter residents (and possibly other segments of the low-income community) while maintaining a commitment to prevent waste, fraud, and abuse.
  • The FCC should seek comment not only on when and how eligibility should be awarded to residents of homeless shelters, but also on when and how eligibility may be withdrawn should the consumer no longer be homeless.
  • The Joint Board recommends that the FCC seek comment on the feasibility of making Lifeline funding available to agencies or non-profit organizations that are able to provide communications services to homeless populations.
  • The Joint Board recommends that the FCC only seek comment on this issue if the FCC believes it could have the legal authority to extend universal service low-income support to non-ETCs.

II. AUTOMATIC ENROLLMENT

  • The Joint Board recommends that automatic enrollment should be encouraged as a best practice by the states, but believes that there are issues that must be more fully understood prior to imposing mandatory requirements on all states.
  • The Joint Board recommends that the FCC further develop the record with regard to the administrative, technological, and funding issues of automatic enrollment.

III. VERIFICATION

  • The Joint Board recommends that the FCC adopt uniform minimum verification procedures and sampling criteria that would apply to all ETCs in all states.
  • The Joint Board recommends that all ETCs in all states be required to submit the data results of their verification sampling to USAC, the FCC, and their respective state(s), and that the results for each ETC be publicly available.
  • The Joint Board agrees with commenters that a uniform floor of minimum verification requirements across states could help improve low-income service and utilization across the states by reducing confusion, streamlining administration, and allowing consumers and ETCs to be treated more equally across states.
  • The Joint Board agrees that requiring all ETCs across all states to submit their verification sampling data to USAC, the FCC, and their state would provide a more complete data set and allow for more accurate nation-wide program analysis.
  • The Joint Board agrees that, while adopting uniform reporting and a set of uniform procedures and sampling criteria has definite advantages, those procedures should not be so constrained as to prohibit the use of mechanisms by individual states that would be more effective in reducing waste, fraud, and abuse.
  • The Joint Board recommends that the FCC seek further comment on what should comprise the uniform minimum verification procedures, including required minimum sample size, sampling methodology, sampling criteria, and regularity of verification.
  • The FCC should seek further comment on what would be the costs for state and third party verification, and whether the verification sampling results and data should be made public and available to all states.
  • The Joint Board agrees that the increase in the number of Lifeline subscribers and the addition of new wireless technologies have created new challenges for effectively completing verification sampling under the current rules
  • In developing uniform minimum verification procedures, the Joint Board recommends that the FCC first reconsider both the required sampling size, and whether the previous statistically valid random sampling equation is still relevant. A uniform minimum method of 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.
  • The Joint Board’s proposal would allow states to continue to verify 100 percent of their Lifeline customers’ eligibility or to adopt such uniform minimum verification procedures.
  • Minimum standards for determining sampling would be required for other states.
  • For purposes of determining the minimum, acceptable verification requirements, the Joint Board recommends that the FCC gather further data regarding the typical margin of error and confidence levels in verifying Lifeline subscribers and what are acceptable.
  • The FCC should determine what minimum confidence levels and what maximum levels of sampling error and non-responsiveness, if any, are acceptable. Although the Joint Board received some comments on verification procedures in California, Florida, and Ohio, the record does not provide a sufficiently representative sample to advise on state best practices or to determine what method should be adopted as a minimum standard.
  • The FCC should gather further information on the best practice methodology for conducting random sampling. A few states have reported that they conduct random sampling.
  • The FCC should reach out to those states for more information on their processes.
  • The FCC should then consider whether to revise the statistically valid random sample equation and adopt a precise method of random sampling that can be uniform across all ETCs in all states.
  • The Joint Board recommends that the FCC should also gather further information on whether the uniform minimum procedures should require ETCs to conduct verification directly with the consumer, or whether the state or the qualifying program administrator should conduct the verification.
  • The FCC should also seek further comment on whether, alternatively, verification should be conducted by a neutral third-party.
  • The FCC should specifically seek comment on the costs associated with implementing state or third-party verification procedures.
  • Certain states [Arizona, Florida, Idaho, Kentucky, Mississippi, Missouri, New Mexico, North Carolina, Ohio, Vermont, Virginia, and Wyoming have reported that they require periodic submission of documentation from Lifeline recipients to provide their continued eligibility] have reported that they periodically require submission of verification documents from their Lifeline recipients. The FCC should seek out further information from these states on their processes and the reliability of their processes
  • The Joint Board recommends that the FCCseek further cost information for implementing each option before evaluating which procedure should be adopted as the uniform minimum standard.
  • The Joint Board recommends that the FCC seek further comment on whether verification should be conducted uniformly on an annual basis or at some other interval by all ETCs in all states.
  • The FCC should seek further comment on the benefits of varying methods, the costs, and the overall best practices for how often verification should be conducted before adopting a uniform minimum standard.
  • The Joint Board recommends that the FCC seek further comment on what consumer information should be uniformly verified and collected.
  • In addition to verifying continued eligibility, the FCC should inquire whether it is useful and feasible for the uniform minimum verification sampling procedures to require information regarding initial enrollment eligibility, the consumer's selected service (i.e., wireline or wireless), and whether a consumer is receiving Lifeline support for only one line per household.
  • The Joint Board recommends that the FCC seek further comment on whether the uniform minimum verification standards should require ETCs to request information regarding initial eligibility, the service selected, and more specific household information regarding how many lines are received per household.
  • The FCC should also seek further comment on whether there are better or different eligibility criteria that should be verified during the process.

IV. DATABASE

The FCC asked the Joint Board to review online mechanisms that would allow carriers to automate their interactions with states and the federal government to certify a customer's initial and ongoing eligibility for program discounts. The National Broadband Plan suggests that the FCC should consider a centralized database for online certification and verification, based on numerous such proposals in the record. The FCC asked the Joint Board to address how any national or state databases might streamline certification and verification of low-income consumers' eligibility for the Lifeline and Link Up programs. The FCC further asked the Joint Board to review alternatives to a database, and to recommend mechanisms that are reasonably practical, efficient, accurate, secure, and respectful of customer privacy.

  • The Joint Board recommends that the FCC seek further comment and information necessary to determine whether the FCC should adopt a national database, potentially requiring interaction with state and/or regional databases and resources.
  • The Joint Board recommends that the FCC seek further comment as to specifically what information would be contained in the database and the feasibility of collecting this information.
  • The Joint Board recommends that the FCC develop the record regarding the feasibility and potential advantages and/or disadvantages of regional and/or state databases as opposed to, or in addition to, a national database.
  • The Joint Board recommends that the FCC seek comment on several key factors, including potential costs of building and maintaining a database, funding sources, administration, and security and privacy issues. Significant questions remain as to which entities would be responsible for the administrative function, whether those entities have the capability and willingness to perform the duties, and whether the FCC has the legal authority to require compliance. Further, data inter-operability, privacy, and security should also be taken into serious consideration when constructing the electronic database.
  • The Joint Board recommends that the FCC seek further comment as to what information should be contained in the database and the feasibility of collecting the information.

V. OUTREACH

  • The Joint Board recommends that the FCC adopt mandatory outreach requirements for all ETCs that receive low-income support from the Universal Service Fund. These requirements would constitute a minimum floor for outreach requirements that must be undertaken by ETCs in both federal default and non-default states. If desired, states could supplement the federal requirements with additional outreach rules designed to better target their respective populations. However, it is imperative that a baseline level of Lifeline and Link Up information be available to low-income consumers in all states.
  • The Joint Board recommends that the FCC seek comment on whether carriers, when seeking ETC designation, should be required to submit a marketing plan to the state or the FCC that outlines outreach efforts the carrier will use to reach eligible low-income consumers.
  • The FCC should also seek comment on how ETCs that have already been designated by states or the FCC could comply with any potential marketing plan requirement.
  • The Joint Board recommends that the FCC seek comment on the issues to be addressed by a carrier's marketing plan. Responses to this question may draw on current carrier best practices. For example, the Commission should request comment on whether carriers seeking designation as low-income ETCs should address the following items:
    • Publication on Internet home page: The carrier will have Lifeline and Link Up information clearly visible on its Internet home page, along with other available service offerings.
    • Multiple outreach methods: The carrier will use multiple forms of outreach to reach eligible consumers. This could include (but would not be limited to) any combination of print media, broadcast media, Internet advertising, and marketing materials distributed at community centers and other community-based organizations.
    • Outreach frequency: The carrier will perform outreach at a set frequency, in order to maximize the opportunities for eligible consumers to view and process the carrier's advertisements.
    • Providing outreach materials to community institutions: The carrier will provide outreach materials to appropriate community institutions and educate those institutions, as needed, on the carrier's Lifeline and Link Up programs.
    • Advertising in multiple languages: If the carrier serves a locality where a second language is predominant, the carrier must provide Lifeline and Link Up advertisements in that language, in addition to English.
    • Clear and plain language: The carrier will use clear and plain language in its Lifeline and Link Up advertising.
    • Annual certification: The carrier will file a notice once per year with the Commission stating what it has done in terms of Lifeline and Link Up outreach.
    • Cooperative production and exposure: The extent to which literature and other advertising tools can be produced, used, and placed jointly by multiple ETCs.
  • The Joint Board believes that more data is needed before it can recommend that the Commission mandate specific community-based outreach methods. For example, the FCC may wish to inquire about carrier best practices in this area. Accordingly, the Joint Board recommends that the FCC seek comment on additional community-based outreach methods that ETCs and states can use to reach eligible low-income consumers.
  • The Joint Board recommends that the FCC maintain advisory guidelines for states with respect to performing low-income outreach.
  • The Joint Board recommends that the FCC tailor the existing outreach guidelines to better clarify the role of states in performing low-income outreach.
  • The Joint Board recommends that these revised guidelines apply only to states, not to ETCs.
  • Specifically, the Joint Board suggests that the FCC modify the existing outreach guidelines to contain the following recommendations
    • states should assist ETCs in formulating methods to reach households that do not currently have telephone and/or broadband service (states can identify appropriate community institutions to participate in public-private partnerships, and they can assist ETCs in coordinating with those institutions to maximize outreach opportunities; states can also assist ETC outreach efforts by identifying unserved and underserved populations for whom outreach would be beneficial)
  • The Joint Board recommends that the FCC adopt a guideline encouraging states to assist ETCs in designing outreach materials to reach unserved and underserved populations.
  • The Joint Board recommends that the FCC identify specific ways in which states could assist with the creation of ETC outreach materials.
  • The Joint Board recommends that the FCC adopt a guideline encouraging states to review the outreach efforts of ETCs in their geographic area to ensure that the promotion of Lifeline and Link Up service offerings is both effective and timely.

VI. Broadband

The Joint Board recommends that the FCC adopt a adopt an additional universal service principle, specifically finding that universal service support should be directed where possible to networks that provide both advanced and voice services.

The Joint Board identifies specific issues the FCC should fully consider and resolve prior to reforming the Universal Service Fund:

  • Conceptually, how should "broadband" eligible for federal USF Lifeline support be defined and measured, including consideration of typical (actual) versus advertised upload and download speeds;
  • Technology type and technology neutral funding mechanisms;
  • Price, affordability, subscribership, and penetration;
  • Broadband usage, when that usage is subject to some sort of data or usage cap;
  • How best to ensure availability of broadband service in unserved and/or underserved areas;
  • Terms and conditions for data plans that include some form of broadband Internet access or other broadband service; and
  • Once broadband is defined and a determination is made as to what to support and how to provide that support, it would still be necessary to determine whether the Lifeline discount would be applied as a percentage or a fixed dollar discount off of some currently undefined price, or some other measure.

VII Prepaid Wireless

  • The Joint Board supports the further examination of those Lifeline offerings that are offered at no cost to the subscriber. The FCC should develop a record, and determine whether the requirement for a minimum monthly rate should be made applicable to all Lifeline subscribers and not just to eligible Tribal members.
  • The FCC should take very detailed look at the pre-paid wireless Lifeline product and adopt basic minimum standards to ensure adequate value to the Lifeline consumers and to the ratepayers who subsidize the Universal Service Fund as well as current issues relating to certification and verification of eligibility by prepaid wireless Lifeline providers.

VIII Size of Fund

The low-income fund grew by more than $500 million over just the last two years -- from a level of $822 million in 2008 to an estimated $1.4 billion in 2010.

Modifying the definition of supported services to include broadband could, depending on the details of implementation, have significant implications on the potential overall federal USF fund size as well as the affordability of all services -- both issues having considerable impact on consumers in general and low-income consumers in particular.

If any single body has direct responsibility for properly presenting to the Commission needed changes in Lifeline programs to achieve the proper balance with the goals of universal service and the Telecommunications Act of 1996, then it must be the Federal-State Joint Board for Universal Service that includes appropriate representation for federal, state, and consumer stakeholders.

The Joint Board asks the FCC to develop a complete record on, and act upon, all of these issues as it moves forward in the future reform of the federal universal service funding mechanisms:

  • The requirement for carriers to offer discounted basic service while permitting Lifeline customers to purchase packages and bundles, and requiring carriers to apply the full federal Lifeline discount and any applicable state Lifeline discount to basic local service and to the price of any service package containing basic local service that they offer;
  • Ensuring that Lifeline customers with packages are not disconnected at a significantly greater frequency than Lifeline customers without packages;
  • Requiring any forbearance petition or petition for low-income ETC designation to include a complete description of the service to be offered;
  • Considering establishing minimum standards of service for prepaid wireless Lifeline service that would apply to all prepaid wireless Lifeline services, facilities-based or not, and satisfy the public interest by providing adequate value for Lifeline recipients and comply with the universal service mandates of the Act;
  • Adopting a minimum standard to ensure adequate value to prepaid Lifeline wireless customers from the service (i.e., minimum number of monthly minutes, maximum price for additional minutes and maximum price for text messages, etc.);
  • A continued evaluation of appropriate federal default rules for ongoing support when there is no monthly billing, carrier contributions to state funds, quality of service obligations, double billing, protection from fraud, recertification, and audits; and
  • Investigating whether the Lifeline discount should no longer be taken off the retail rate, but off some measure of wholesale or forward-looking cost, especially where the carrier's services are not price-regulated.

Status: Order adopted

Docket Number

WC Docket No. 03-109

Description

On June 15, 2010, the Federal-State Joint Board on Universal Service invited comments on a review of the Federal Communications Commission's eligibility, verification, and outreach rules for the Lifeline and Link Up universal service programs, which currently provide discounts on telephone service for low-income customers.

On May 4, the FCC asked the Joint Board to recommend any changes to these aspects of the Lifeline and Link Up programs that may be necessary, given significant technological and marketplace changes since the current rules were adopted, based on consideration of:

1) the combination of federal and state rules that govern which customers are eligible to receive discounts through the Lifeline and Link Up programs;

2) best practices among states for effective and efficient verification of customer eligibility, both at initial customer sign-up and periodically thereafter;

3) appropriateness of various outreach and enrollment programs; and

4) the potential expansion of the low-income program to broadband, as recommended in the National Broadband Plan.

The FCC requested that the Joint Board prepare a recommended decision regarding these issues and submit its decision to the Commission within six months of the release of this order. (approximately November 4, 2010)

Issues

A. Consumer Eligibility
i. Eligibility requirements
ii. Best practices
iii. Automatic enrollment
iv. Electronic certification and verification of consumer eligibility
v. Duplicate claims for Lifeline support
vi. Carrier documentation retention requirements
vii. Potential application to broadband

B. Verification

C. Outreach

Comment due date: 07/15/2010

Comments