[Federal Register Volume 76, Number 159 (Wednesday, August 17, 2011)]
[Proposed Rules]
[Pages 50969-50971]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-20847]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 54

[WC Docket Nos. 03-109 and 11-42; CC Docket No. 96-45; DA 11-1346]


Further Inquiry Into Four Issues in the Universal Service 
Lifeline/Link Up Reform and Modernization Proceeding

AGENCY: Federal Communications Commission.

ACTION: Proposed rule; solicitation of comments.

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SUMMARY: The Federal Communications Commission (Commission) sought 
public comment on proposed reforms that would assist the Commission in 
assessing strategies to increase broadband adoption, without increasing 
overall program size. Based on the current record in this proceeding, 
four issues in particular merit further inquiry. In this document, the 
Commission seeks further inquiry on four issues: designing and 
implementing a Lifeline/Link Up broadband pilot program to evaluate 
whether and how Lifeline/Link Up can effectively support broadband 
adoption by low-income households; limiting the availability of 
Lifeline support to one discount per residential address; revising the 
definition of Link Up service, as well as the possible reduction of the 
$30 reimbursement amount for Link Up support; and improving methods for 
verifying continued eligibility for the program. The Commission 
believes that this analysis would benefit from further development of 
these issues in the record, and therefore seek further comment focused 
on these areas.

DATES: Comments are due on or before August 26, 2011. Reply comments 
are due on or before September 2, 2011.

ADDRESSES: Interested parties may file comments and reply comments on 
or before the dates indicated above. All comments are to reference WC 
Docket Nos. 11-42, 03-109, and CC Docket No. 96-45 and may be filed 
using: (1) The Commission's Electronic Comment Filing System (ECFS) or 
(2) 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/.
     Paper Filers: Parties who choose to file by paper must 
file an original and one copy of each filing. If more than one docket 
or rulemaking number appears in the caption of this proceeding, filers 
must submit two additional copies for each additional docket or 
rulemaking number.
    Filings can be sent by hand or messenger delivery, by commercial 
overnight courier, or by first-class or overnight U.S. Postal Service 
mail. All filings must be addressed to the Commission's Secretary, 
Office of the Secretary, Federal Communications Commission.
     All hand-delivered or messenger-delivered paper filings 
for the Commission's Secretary must be delivered to FCC Headquarters at 
445 12th St., SW., Room TW-A325, Washington, DC 20554. The filing hours 
are 8 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.

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 [email protected] or call the Consumer & 
Governmental Affairs Bureau at 202-418-0530 (voice), 202-418-0432 
(tty). For detailed instructions for where and how to file comments, 
see the SUPPLEMENTARY INFORMATION section of this document.

FOR FURTHER INFORMATION CONTACT: Jamie Susskind, Attorney Advisor, 
Wireline Competition Bureau, Telecommunications Access Policy Division, 
(202) 418-7400 or TTY (202) 418-0484.

SUPPLEMENTARY INFORMATION: To comprehensively reform and modernize the 
universal service Lifeline and Link Up programs in light of recent 
technological, market, and regulatory changes, on March 4, 2011 the 
Commission released the 2011 Lifeline and Link Up Notice of Proposed 
Rulemaking (NPRM or 2011 Lifeline and Link Up NPRM), 76 FR 16482, March 
23, 2011. The NPRM sought public comment on proposed reforms that would 
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 programs that would assist the Commission in assessing strategies 
to increase broadband adoption, without increasing overall program 
size. Based on the current record in this proceeding, four issues in 
particular merit further inquiry: designing and implementing a 
Lifeline/Link Up broadband pilot program to evaluate whether and how 
Lifeline/Link Up can effectively support broadband adoption by low-
income households; limiting the availability of Lifeline support to one 
discount per residential address; revising the definition of Link Up 
service, as well as the possible reduction of the $30 reimbursement 
amount for Link Up support; and improving methods for verifying 
continued eligibility for the program. We believe that the Commission's 
analysis would benefit from further development of these issues in the 
record, and therefore seek further comment focused on these areas.

1. Broadband Pilot Program

    a. Scope of Permissible Funding. We seek comment on the 
Commission's statutory authority to permit universal service funds to 
be used for such purposes, directly or indirectly, and what other legal 
considerations must be addressed before the Commission proceeds with a 
broadband pilot program.
    b. Consumer Eligibility for Pilot Program. We seek additional 
focused comment specifically on whether to maintain the current 
eligibility requirements for consumers participating in the pilot 
program that are currently used in the low-income program, or whether 
to adopt stricter or more permissive eligibility requirements for those 
consumers. How might adjusting the eligibility criteria affect our 
ability to maximize broadband adoption while providing support that is 
sufficient, but not excessive? How would it affect the reliability and 
statistical significance of the results of the pilot program? How would 
it help the pilot programs yield better data on how to accomplish our 
goals of maximizing adoption in low-income communities?
    c. Barriers to Consumer Participation in Pilots. The National 
Association of Regulatory Utility Commissioners supports a Lifeline/
Link Up broadband

[[Page 50970]]

pilot program and urges the Commission not to require Lifeline/Link Up 
broadband service pilot program participants to change local telephone 
service providers, purchase bundled broadband and voice services, or 
otherwise be penalized when they purchase Lifeline and Link Up 
broadband services and enabling access devices. Commenters should 
address whether and how the Commission could implement those 
recommendations. Commenters are encouraged to provide a legal analysis 
to support their positions.
    d. Pilot Evaluation. We invite further comment on the structure of 
the pilot projects, how to evaluate the results of pilot projects, and 
what reporting requirements should be adopted for pilot participants.
    i. Should the Commission structure the pilot program so that each 
individual participant tests multiple design elements (e.g,, price of 
the service, length of the offer, service type, kind of device 
connected to the broadband, etc.), or should each participant test a 
single variable for comparison against pilots operated by other 
participants?
    ii. The NPRM recognized that the cost of equipment is a major 
barrier to broadband adoption, and proposed to require at least some 
participants to provide the necessary hardware. It also proposed to 
test the impact of variations in equipment discounts. Should we also 
test the impact on adoption and broadband retention when equipment is 
leased, as opposed to purchased?
    iii. What quantitative metrics could the Commission use to evaluate 
whether approaches tested during the pilot program further the proposed 
goals of supporting broadband adoption for low-income households and 
making broadband affordable while providing support that is sufficient, 
but not excessive? For instance, should we assess the total number of 
new adopters; new adopters as a percentage of eligible program 
participants; cost of support for each new adopter; 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; and/or some other 
metric(s)?
    iv. How could we evaluate the relative impact of the service 
discount compared to other potential factors that could be part of a 
comprehensive strategy to increase broadband adoption, such as the 
provision of training or equipment? The Commission proposed 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 further 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.

2. One-Per-Residence Limitation

    In the 2011 Lifeline and Link Up NPRM, the Commission proposed to 
codify a rule that would allow eligible low-income consumers to receive 
only one Lifeline and Link Up discount per residential address, and 
sought comment on related issues.
    a. Defining ``Household'' or ``Residence''. We seek focused comment 
on whether a one-per-household or one-per-family rule would provide an 
administratively feasible approach to providing Lifeline/Link Up 
support, and how the Commission could implement such a rule.
    i. Commenters recommend that the Commission adopt a definition of 
``household'' that mirrors the definitions used to establish 
eligibility for other Federal benefit programs or used by other Federal 
agencies. We seek comment on whether any of these definitions, such as 
the definition of ``household'' used to establish eligibility for the 
Low Income Home Energy Assistance Program (LIHEAP) or the definition 
used by the U.S. Census Bureau for surveying purposes, would provide an 
administratively feasible option for the Commission to employ to define 
who is eligible for Lifeline/Link Up support.
    ii. We seek comment on whether, if the Commission ultimately adopts 
a one-per-household rule (or a one-per-residential-address rule), 
requiring all ETCs to utilize similar procedures when signing up 
applicants in unique living situations would be an effective means of 
ensuring compliance with such a rule.
    iii. MFY Legal Services recommends that the Commission use room 
numbers and, if applicable, bed numbers to serve as potentially unique 
address identifiers for residents of group living facilities. We seek 
comment on this recommendation. If implemented, what types of 
information could constitute unique address identifiers? Who should be 
responsible for providing such information to the ETC--the consumer or 
the group living facility? Are there group living situations where a 
unique identifier would not be available, for example a shelter that 
houses all of its residents in a single room?
    b. Exceptions or Waivers from the ``One-Per-Household'' or ``One-
Per-Residential-Address'' Rule. On May 25, 2011, MFY Legal Services 
filed an ex parte presentation that included a copy of the National 
Telecommunications and Information Administration's (NTIA) rule 
providing a limited waiver of the household-based eligibility process 
for the Digital-to-Analog Converter Box Coupon Program to allow 
applications from individuals residing in nursing homes, intermediate 
care facilities, and assisted living facilities. The NTIA rule waived 
the one-per-residence requirement for individuals residing in nursing 
homes, intermediate care facilities, and assisted living facilities 
licensed by a state, as well as individuals using post office boxes for 
mail receipt. Third party designees, such as facility administrators 
and family members, were also allowed to apply on behalf of residents. 
We seek comment on whether that rule could serve as a model for how to 
address such situations in the context of the low-income program. If 
the Commission were to adopt a similar rule, what information should 
applicants be required to provide to demonstrate they reside in such a 
facility?
    c. One-per-person for Tribal Residents. Smith Bagley provides 
further calculations in its comments as to the costs associated with 
providing enhanced Lifeline service to one additional adult per 
household on Tribal lands. Smith Bagley projected that, assuming a 100% 
take rate, the cost of providing this additional funding would be $77.7 
million per year, or just under one percent of the current size of the 
overall universal service fund. We seek comment on the analysis 
provided by Smith Bagley.

3. Link Up

    The NPRM addressed a number of issues regarding Link Up 
reimbursement for voice services.
    a. Sprint states that the costs associated with initiating phone 
service have fallen, noting that ``the ever-increasing level of 
automation has reduced the cost of initiating service,'' and proposes 
that Link Up support be limited or eliminated. We seek comment on this 
proposal.
    b. We seek further focused comment on whether the Commission should 
provide reimbursement for Link Up only for service initiations that 
involve the physical installation of facilities by the provider at the 
consumer's residence.

[[Page 50971]]

4. Verification of Consumer Eligibility for Lifeline--Sampling 
Methodology

    In the 2011 Lifeline and Link Up NPRM, the Commission proposed to 
amend Sec.  54.410 of its rules to establish a uniform methodology for 
conducting verification sampling that would apply to all ETCs in all 
states. The NPRM also asked commenters to consider two proposals for 
modifying the existing sampling methodology to more effectively balance 
the need for an administratively feasible sampling methodology with the 
Commission's obligation to ensure that ineligible consumers do not 
receive Lifeline/Link Up benefits. We invite additional comment on this 
issue.
    a. With respect to the Commission's sample-and-census proposal, 
could the Commission implement it in a way that would be more easily 
administrable for ETCs, particularly ETCs with a small number of 
Lifeline subscribers?
    b. TCA proposes that, if the Commission adopts a sample-and-census 
rule, carriers with a small number of Lifeline subscribers should be 
required to sample fewer consumers than ETCs with a larger number of 
Lifeline subscribers. We seek comment on this proposal. Should the 
Commission consider a smaller sample size for ETCs with a small number 
of Lifeline customers in a given state? What number of respondents 
could ETCs with a smaller number of Lifeline customers feasibly sample 
in a given year, keeping in mind that reducing the required number of 
respondents could result in larger margins of error?
    c. Alternatively, should carriers with a small number of Lifeline 
subscribers be required to sample only a specified percentage of their 
customer base? What would be a reasonable percentage in such cases?
    This matter shall be treated as a ``permit-but-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 presentation and not merely a listing of the subjects discussed. 
More than a one or two sentence description of the views and arguments 
presented generally is required. Other rules pertaining to oral and 
written ex parte presentations in permit-but-disclose proceedings are 
set forth in Sec.  1.1206(b) of the Commission's rules.

Federal Communications Commission.
Trent Harkrader,
Division Chief, Wireline Competition Bureau.
[FR Doc. 2011-20847 Filed 8-16-11; 8:45 am]
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