[Federal Register Volume 80, Number 137 (Friday, July 17, 2015)]
[Proposed Rules]
[Pages 42670-42705]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-17289]



[[Page 42669]]

Vol. 80

Friday,

No. 137

July 17, 2015

Part III





Federal Communications Commission





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47 CFR Part 54





Lifeline and Link Up Reform and Modernization, Telecommunications 
Carriers Eligible for Universal Service Support, Connect America Fund; 
Proposed Rule

  Federal Register / Vol. 80 , No. 137 / Friday, July 17, 2015 / 
Proposed Rules  

[[Page 42670]]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 54

[WC Docket Nos. 11-42, 09-197, 10-90; FCC 15-71]


Lifeline and Link Up Reform and Modernization, Telecommunications 
Carriers Eligible for Universal Service Support, Connect America Fund

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: In this document, the Federal Communications Commission (the 
Commission) seeks to rebuild the current framework of the Lifeline 
program and continue its efforts to modernize the Lifeline program so 
that all consumers can utilize advanced networks.

DATES: Comments are due August 17, 2015. Reply comments are due 
September 15, 2015.

ADDRESSES: You may submit comments, identified by [docket number and/or 
rulemaking number], by any of the following methods:
    [ssquf] Federal Communications Commission's Web site: http://apps.fcc.gov/ecfs/. Follow the instructions for submitting comments.
    [ssquf] Mail: [Optional: Include the mailing address for paper, 
disk, or CD-ROM submissions needed/requested by your Bureau or Office. 
Do not include the Office of the Secretary's mailing address here.]
    [ssquf] People with Disabilities: Contact the FCC to request 
reasonable accommodations (accessible format documents, sign language 
interpreters, CART, etc.) by email: [email protected] or phone: 202-418-
0530 or TTY: 202-418-0432.

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: Jonathan Lechter, Wireline Competition 
Bureau, (202) 418-7400 or TTY: (202) 418-0484.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Second 
Further Notice of Proposed Rulemaking (Second FNPRM) in WC Docket Nos. 
11-42, 09-197, 10-90; FCC 15-71, adopted on June 18, 2015 and released 
on June 22, 2015. The full text of this document is available for 
public inspection during regular business hours in the FCC Reference 
Center, Room CY-A257, 445 12th Street SW., Washington, DC 20554 or at 
the following Internet address: https://www.fcc.gov/document/fcc-releases-lifeline-reform-and-modernization-item.
    Pursuant to Sec. Sec.  1.415 and 1.419 of the Commission's rules, 
47 CFR 1.415 and 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 the Commission's Electronic 
Comment Filing System (ECFS). See Electronic Filing of Documents in 
Rulemaking Proceedings, 63 FR 24121 (May 1, 1998).
    [ssquf] Electronic Filers: Comments may be filed electronically 
using the Internet by accessing the ECFS: http://apps.fcc.gov/ecfs/.
    [ssquf] 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.
    [ssquf] 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 and boxes must be disposed of before 
entering the building.
    [ssquf] 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.
    [ssquf] 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 email to [email protected] or call the 
Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-
418-0432 (tty).

I. Introduction

    1. For nearly 30 years, the Lifeline program has ensured that 
qualifying low-income Americans have the opportunities and security 
that voice service brings, including being able to find jobs, access 
health care, and connect with family. As the Commission explained at 
the program's inception, ``[i]n many cases, particularly for the 
elderly, poor, and disabled, the telephone [has] truly [been] a 
lifeline to the outside world.'' Thus, ``[a]ccess to telephone service 
has [been] crucial to full participation in our society and economy 
which are increasingly dependent upon the rapid exchange of 
information.'' In 1996, Congress recognized the importance and success 
of the program and enshrined its mission into the Telecommunications 
Act of 1996 (1996 Act). Over time, the Lifeline program has evolved 
from a wireline-only program, to one that supports both wireless and 
wireline voice communications. Consistent with the Commission's 
statutory mandate to provide consumers in all regions of the nation, 
including low-income consumers, with access to telecommunications and 
information services, the program must continue to evolve to reflect 
the realities of the 21st Century communications marketplace in a way 
that ensures both the beneficiaries of the program, as well as those 
who pay into the universal service fund (USF or Fund), are receiving 
good value for the dollars invested. The purpose of the Lifeline 
program is to provide a hand up, not a hand out, to those low-income 
consumers who truly need assistance connecting to and remaining 
connected to telecommunications and information services. The program's 
real success will be evident by the stories of Lifeline beneficiaries 
who move off of Lifeline because they have used the program as a 
stepping stone to improve their economic stability.
    2. Over the past few years, the Lifeline program has become more 
efficient and effective through the combined efforts of the Commission 
and the states. The Lifeline program is heavily dependent on effective 
oversight at both the Federal and the state level and the Commission 
has partnered successfully with the states through the Federal-State 
Joint Board on Universal Service (Joint Board) to ensure that low-
income Americans have affordable access to voice telephony service in 
every state and territory. In addition to working with the Commission 
on universal service policy initiatives on the Joint Board, many states 
administer their own low-income programs designed to ensure that their 
residents have affordable access to telephone service and connections. 
These activities provide the states the opportunity and

[[Page 42671]]

flexibility to develop new and innovative ways to make the Lifeline 
program more effective and efficient, and ultimately bring 
recommendations to the Commission for the implementation of 
improvements on a national scale. As the Commission continues to 
modernize the Lifeline program, it deeply values the input of the 
states as it, among other reforms, seeks to streamline the Lifeline 
administrative process and enhance the program.
    3. The Commission's 2012 Lifeline Reform Order, 77 FR 12951, March 
2, 2012, substantially strengthened protections against waste, fraud, 
and abuse; improved program administration and accountability; improved 
enrollment and consumer disclosures; and took some preliminary steps to 
modernize the program for the 21st Century. These reforms provided a 
much needed boost of confidence in the Lifeline program among the 
public and interested parties, increased accountability, and set the 
Lifeline program on an improved path to more effectively and 
efficiently provide vital services to the Nation's low-income 
consumers. In particular, the reforms have resulted in approximately 
$2.75 billion in savings from 2012 to 2014 against what would have been 
spent in the absence of reform. Moreover, in the time since the reforms 
were adopted, the size of the Lifeline program has declined steadily. 
In 2012, the Universal Service Administrative Company (USAC), the 
Administrator of the Fund, disbursed approximately $2.2 billion in 
Lifeline support payments compared to approximately $1.6 billion in 
Lifeline support payments in 2014. These reforms have been 
transformational in minimizing the opportunity for Lifeline funds to be 
used by anyone other than eligible low-income consumers.
    4. The Commission is pleased that its previous reforms have taken 
hold and sustained the integrity of the Fund. However, the Commission's 
work is not complete. In light of the realities of the 21st Century 
communications marketplace, the Commission must overhaul the Lifeline 
program to ensure that it advances the statutory directive for 
universal service. At the same time, it must ensure that adequate 
controls are in place as it implements any further changes to the 
Lifeline program to guard against waste, fraud, and abuse. The 
Commission therefore, among other things, seeks to revise its 
documentation retention requirements and establish minimum service 
standards for any provider that receives a Lifeline subsidy. It also 
seeks to focus its efforts on targeting funding to those low-income 
consumers who really need it while at the same time shifting the burden 
of determining consumer eligibility for Lifeline support from the 
provider. The Commission further seeks to leverage efficiencies from 
other existing federal programs and expand its outreach efforts. By 
rebuilding the existing Lifeline framework, the Commission hopes to 
more efficiently and effectively address the needs of low-income 
consumers. It ultimately seeks to equip low-income consumers with the 
necessary tools and support system to realize the benefits of broadband 
independent of Lifeline support.
    5. Three years ago, the Commission took important steps to reform 
the Lifeline program. The reforms, adopted in the 2012 Lifeline Reform 
Order, focused on changes to eliminate waste, fraud, and abuse in the 
Lifeline program by, among other things: Setting a savings target; 
creating a National Lifeline Accountability Database (NLAD) to prevent 
multiple carriers from receiving support for the same household; and 
confirming a one-per-household rule applicable to all consumers and 
Lifeline providers in the program. It also took preliminary steps to 
modernize the Lifeline program by, among other things: Adopting express 
goals for the program; establishing a Broadband Adoption Pilot Program; 
and allowing Lifeline support for bundled service plans combining voice 
and broadband or packages including optional calling features. Now, 30 
years after the Lifeline program was founded, the Commission believes 
it is past time for a fundamental, comprehensive restructuring of the 
program.
    6. In the Second FNPRM, the Commission seeks to rebuild the current 
framework of the Lifeline program and continue its efforts to modernize 
the Lifeline program so that all consumers can utilize advanced 
networks. The Commission is joined in this effort by the many 
stakeholders who have suggested that further programmatic changes are 
necessary. The Commission also takes steps to promote accountability 
and transparency for both low-income consumers and the public at-large, 
and modernize the program. The Commission's efforts in the Second FNPRM 
are consistent with the Commission's ongoing commitment to monitor, re-
examine, reform, and modernize all components of the Fund to increase 
accountability and efficiency, while supporting broadband deployment 
and adoption across the Nation.
    7. In the Second FNPRM, the Commission proposes and seeks public 
input on new and additional solutions for the Lifeline program, 
including reforms that would bring the program closer to its core 
purpose and promote the availability of modern services for low-income 
families. The Second FNPRM is organized into five sections and, within 
those sections, the Commission addresses various issues:
     In Section A, the Commission proposes to modernize the 
Lifeline program to extract the most value for consumers and the USF. 
First, it seeks comment on establishing minimum service levels for both 
broadband and voice service under the Lifeline program to ensure low-
income consumers receive ``reasonably comparable'' service per 
Congress's directive in section 254(b) and proposes to retain the 
current subsidy to do so. Second, the Commission seeks comment on 
whether to set a budget for the program. Third, it seeks comment on a 
transition period to implement these reforms. Fourth, it seeks comment 
on the legal authority to support the inclusion of broadband into the 
Lifeline program.
     In Section B, the Commission proposes various ways to 
further reduce any incentive for waste, fraud, and abuse by having a 
third-party determine whether a consumer is eligible for Lifeline, and, 
in doing so, also streamline the eligibility process. First, it seeks 
comment on establishing a national verifier to make eligibility 
determinations and perform other functions related to the Lifeline 
program. Second, it seeks comment on leveraging efficiencies from other 
federal benefit programs and state agencies that determine eligibility, 
and work with such programs and agencies to educate consumers and 
potentially enroll them in the Lifeline program. Third, it seeks 
comment on whether a third-party entity can directly transfer Lifeline 
benefits to individual consumers. Fourth, it seeks comment on changing 
the programs through which consumers qualify for Lifeline to ensure 
that those consumers most in need can receive support. Fifth, it seeks 
comment on putting in place standards for eligibility documentation and 
state eligibility databases.
     In Section C, the Commission proposes ways to increase 
competition and innovation in the Lifeline marketplace. First, it seeks 
comment on ways to promote competition among Lifeline providers by 
streamlining the eligible telecommunications carrier (ETC) designation 
process. Second, it seeks comment on whether to permit Lifeline 
providers to opt-out of providing Lifeline supported service in certain 
circumstances. Third, it seeks

[[Page 42672]]

comment on other ways to increase participation in the Lifeline 
program. Fourth, it seeks comment on ways to encourage states to 
increase state Lifeline contributions. Fifth, it seeks comment on how 
to best utilize licensed and unlicensed spectrum bands to provide 
broadband service to low-income consumers. Sixth, as an alternative to 
streamlining the Commission's current ETC designation process, it seeks 
comment on creating a new designation process for participation in 
Lifeline.
     In Section D, the Commission proposes measures to enhance 
Lifeline service and update the Lifeline rules to enhance consumer 
protections and reflect the manner in which consumers currently use 
Lifeline service. First, it seeks comment on amending its rules to 
treat the sending of text messages as usage of Lifeline service and, 
thus, grants in part a petition filed by TracFone Wireless, Inc. 
(TracFone). Second, it proposes to adopt procedures to allow 
subscribers to de-enroll from Lifeline upon request. Third, it seeks 
comment on ways to increase Lifeline provider participation in Wireless 
Emergency Alerts (WEA).
     In Section E, the Commission proposes a number of ways to 
increase the efficient administration of the Lifeline program by, among 
other things, seeking comment on: Changing Tribal enhanced support; 
enhancing the requirements for electronic signatures; using subscriber 
data in the NLAD to calculate Lifeline provider support; and rules to 
minimize disruption to Lifeline subscribers upon the transfer of 
control of Lifeline providers.

II. Second Further Notice of Proposed Rulemaking

    8. In the Second FNRPM, the Commission proposes to modernize and 
restructure the Lifeline program. First, it proposes to establish 
minimum service levels for voice and broadband Lifeline service to 
ensure value for our USF dollars and more robust services for low-
income Americans consistent with the Commission's obligations in 
section 254. Second, it seeks to reset the Lifeline eligibility rules. 
Third, to encourage increased competition and innovation in the 
Lifeline market, it seeks comment on ensuring the effectiveness of its 
administrative rules while also ensuring that they are not 
unnecessarily burdensome. Fourth, the Commission examines ways to 
enhance consumer protection. Finally, it seeks comment on other ways to 
improve administration and ensure efficiency and accountability in the 
program.

A. The Establishment of Minimum Service Standards

    9. The 2012 Lifeline Reform Order established clear goals to enable 
the Commission to determine whether Lifeline is being used for its 
intended purpose. Specifically the Commission committed itself to: (1) 
Ensuring the availability of voice service for low-income Americans; 
(2) ensuring the availability of broadband service for low-income 
Americans; and (3) minimizing the contribution burden on consumers and 
businesses. In an effort to further these goals and extract the most 
value possible from the Lifeline subsidy, the Commission proposes to 
establish minimum service levels for all Lifeline service offerings to 
ensure the availability of robust services for low-income consumers. 
The service standards the Commission proposes to adopt may require low-
income consumers to contribute personal funds for such robust service. 
The Commission seeks comment on these proposals.
1. Minimum Service Standards for Voice
    10. While consumers increasingly are migrating to data, voice 
communications remain essential to daily living and may literally 
provide a lifeline to 911 and health care providers. Despite years of 
participation by multiple providers offering voice service in 
competition with one another, we do not see meaningful improvements in 
the available offerings. It has been over three years since the 2012 
Lifeline Reform Order and the standard Lifeline market offering for 
prepaid wireless service has remained largely unchanged at 250 minutes 
at no cost to the recipient. Unlike competitive offerings for non-
Lifeline customers, minutes and service plans for Lifeline customers 
have largely been stagnant. The fact that service levels have not 
increased over time may also suggest that the current program is not 
structured to drive sufficient competition. The Commission therefore 
believes it is necessary to establish minimum voice standards to ensure 
maximum value for each dollar of universal service and that consumers 
receive reasonable comparable service, and seeks comment on this 
analysis.
2. Minimum Service Standards for Broadband
    11. The ability to use and participate in the economy increasingly 
requires broadband for education, health care, public safety, and for 
persons with disabilities to communicate on par with their peers. As 
the Commission ensures that Lifeline is restructured for the 21st 
Century, it wants to ensure that any Lifeline offering is sufficient 
for consumers to participate in the economy.
    12. Education. As the Commission recognized in the E-rate (more 
formally known as the schools and libraries universal service support 
program) modernization proceeding, ``schools and libraries require 
high-capacity broadband connections to take advantage of digital 
learning technologies that hold the promise of substantially improving 
educational experiences and expanding opportunity for students, 
teachers, parents and whole communities.'' Within schools, ``high-
capacity broadband connectivity . . . is transforming learning by 
providing customized teaching opportunities, giving students and 
teachers access to interactive content, and offering assessments and 
analytics that provide students, their teachers, and their parents, 
real-time information about student performance.'' Modernizing the E-
rate Program for Schools and Libraries, WC Docket No. 13-184, Notice of 
Proposed Rulemaking, 28 FCC Rcd 11304, 11305, para. 1 (2013). However, 
the need for connectivity for educational purposes does not necessarily 
stop at the end of the school day. Teachers often assign work to their 
students that requires broadband connectivity outside of school hours 
to more efficiently and effectively complete the assignment or project. 
Homework assignments requiring access to the Internet allow teachers 
and students to work outside the bounds of paper and pencil--students 
can be assigned additional and individualized problems and concepts to 
practice specific skills through interactive learning environments that 
provide students instant feedback. Many homework assignments also 
require students to integrate technology when creating their own 
content, such as developing reports, designing PowerPoint 
presentations, or manipulating data. Online assignments and assessments 
also provide for immediate feedback from instructors, thus allowing 
teachers to better direct their focus when teaching and assessing 
individual student needs. Students who lack broadband access outside of 
the classroom find it difficult and sometimes impossible to complete 
their homework assignments and to broadly explore the subjects they are 
learning in school. As a result, lack of Internet access can lead to 
reduced academic preparedness and decreased academic performance and 
classroom engagement

[[Page 42673]]

in school. Lack of Internet access also puts some students at a 
competitive disadvantage with respect to their peers, and limits their 
educational horizons. As a result, student access to the Internet has 
become a necessity, not a luxury.
    13. Unfortunately, many low-income students do not have access to 
the Internet at home. Computer ownership and Internet use strongly 
correlate with a household's income. The higher a household's income, 
the more likely it is for that household to subscribe to broadband 
service. In 2013, about 95 percent of the households with incomes of 
$150,000 or more reported connecting to the Internet, compared to about 
48 percent of the households making less than $25,000. There are 
approximately 29 million American households with school-age children 
(ages 6 to 17). Approximately 31 percent of those American households 
with incomes below $50,000 do not have a high-speed connection at home. 
Thus, while low-income students may be connected to the Internet while 
at school, they become digitally disconnected immediately upon exiting 
the school building. As noted in the National Broadband Plan, 
``[o]nline educational systems are rapidly taking learning outside the 
classroom, creating a potential situation where students with access to 
broadband at home will have an even greater advantage over those 
students who can only access these resources at their public schools 
and libraries.'' This lack of access to technology and broadband in 
low-income households has created a ``homework gap'' between low-income 
students and the rest of the student population.
    14. The ``homework gap'' puts low-income students at a 
disadvantage. ``If you are a student in a household without broadband, 
just getting homework done is hard, and applying for a scholarship is 
challenging.'' Many students who do not have access to the Internet at 
home head to the library after school and on weekends in order to 
utilize the library's broadband service to complete assigned homework. 
However, library hours are limited and even when they are open, they 
may not be able to fully accommodate the needs of their users. Thus, in 
many communities, after the library and the computer labs close for the 
night, there is often only one place for students to go without 
Internet access at home--the local McDonald's. Some schools have 
attempted to extend the school day to help students with their homework 
or partner with after-school programs to ensure that students have the 
ability and resources needed to complete their assignments, but not all 
can do so. Moreover, after school programs cannot provide students with 
the same kind of flexibility and opportunity to access the Internet as 
those students who do have home access. As technology continues to 
evolve and teachers continue to integrate technology into their 
teaching by supplementing their in-class projects and instruction with 
projects and assignments necessitating Internet access, the ``homework 
gap'' presumably will widen as many students in low-income households, 
with a lack of home Internet access, struggle to complete assigned 
homework and projects.
    15. Various successful initiatives have been improving broadband 
access to underserved groups, some of which contain low-income student 
populations. For example, Mobile Beacon's Internet Inclusion 
Initiative, in partnership with EveryoneOn, provides students who do 
not have Internet access at home with unlimited 4G access and low-cost 
computers in order to put them on the path to digital opportunity and 
learning. Comcast's Internet Essentials program provides qualifying 
low-income households with affordable access to high-speed service from 
their homes. Additionally, in conjunction with the Knight Foundation, 
The New York Public Library (NYPL) has implemented a pilot program to 
expand its efforts to bridge the digital divide by allowing the public 
to borrow portable Wi-Fi hotspot devices for up to one year (students 
can borrow the devices for the school year). The NYPL hopes to 
eventually provide 10,000 hotspots to people involved in their 
education programs. The Chicago Public Library (CPL) also has 
implemented a pilot program to provide members of underserved 
communities in three locations access to both portable WiFi and laptop 
computers. During the course of the two year pilot program, CPL plans 
to make 300-500 MiFi hotspots available in several library locations in 
areas with less than 50 percent broadband adoption rates. While these 
initiatives are working toward closing the ``digital divide'' and 
expanding broadband access to underserved populations, including low-
income students, none of these initiatives provide for a comprehensive, 
nationwide solution addressing the ``homework gap'' issue.
    16. Building upon the Commission's recent modernization of the E-
rate program, where the Commission, among other things, took major 
steps to close the WiFi gap within schools and libraries, the 
Commission recognizes the valuable role that the Lifeline program can 
play beyond the school day in the lives of elementary and secondary-
school students living in low-income households. Lifeline can help to 
extend broadband access beyond the school walls and the school day to 
ensure that low-income students do not become digitally disconnected 
once they leave the school building. Lifeline can help to ensure that 
low-income students have access to the resources needed to complete 
their research and homework assignments, and compete in the digital 
age. The Commission thus seeks comments on how the Lifeline program can 
address the ``homework gap'' issue--the gap between those households 
with school-age children with home broadband access to complete their 
school assignments and those low-income households with school-age 
children without home broadband access. The Commission recognizes that 
no one program or entity can solve this problem on its own and what is 
needed is many different organizations, vendors, and communities 
working together to address this problem. The Commission therefore 
seeks creative solutions to addressing this gap so that eligible low-
income students are provided with affordable, reliable, and quality 
broadband services in order to effectively complete their homework, and 
have the same opportunity as their classmates to reach their full 
potential and feel like they are part of the academic conversation.
    17. Participation in Lifeline by eligible households with school 
children. Recognizing that when the Lifeline program provides support 
for broadband services, it will play an important role in closing the 
``homework gap'' by helping children in low income families obtain the 
educational advantage associated with having home broadband service, 
the Commission seeks comment on how best to ensure that low income 
households that include school children are aware of and have the 
opportunity to participate in a broadband-focused Lifeline program. As 
an initial matter, the Commission seeks comments on how best to 
identify such households.
    18. The Commission first seeks comments on data it can use from the 
schools and libraries universal service support program (the E-rate 
program) to assist its efforts. Currently, school districts use student 
eligibility for free and reduced school lunches through the National 
School Lunch Program (NSLP) or an alternative discount mechanism as a 
proxy for poverty when calculating discounts on eligible services 
received under the E-rate program. Thus, when

[[Page 42674]]

requesting services under the E-rate program, a school district 
provides the total number of students in the school district eligible 
for NSLP and the calculated discount rate. How might the Commission use 
this information to ensure that Lifeline eligible households with 
school children are aware of the opportunity provided by the Lifeline 
program? How does the fact that E-rate discount levels are based on the 
percentage of children eligible for both free and reduced school 
lunches impact the usefulness of E-rate data for identifying households 
that are eligible for Lifeline support which is limited to lower-income 
households?
    19. The Commission seeks comments on sources of data that would be 
useful for identifying Lifeline eligible households with school-age 
children. Eligibility for free school lunches through the NSLP is 
already one way to demonstrate eligibility for the Lifeline program. 
Schools and school districts collect NSLP eligibility information, but 
they are already burdened with numerous administrative responsibilities 
and the introduction of other tasks may cause additional administrative 
burdens. In addition, more and more school districts have moved towards 
the community eligibility option in the NSLP program, which saves them 
from collecting individual NSLP eligibility data. How will the movement 
away from individual NSLP data collection affect the Commission's 
ability to identify Lifeline eligible households with school children? 
Are the state databases that directly certify some students' 
eligibility to participate in NSLP a possible source of information 
that could help the Commission identify Lifeline eligible households 
with school children? Are there other non-burdensome methods to 
identify Lifeline eligible households with students and make sure that 
those households with school children are aware of the opportunity to 
receive Lifeline support?
    20. The Commission also seeks comments on how it can incentivize 
Lifeline providers to reach out to those households with school 
children to provide Lifeline supported services. Commenters should 
indicate what, if any, practical or administrative implications there 
may be to utilizing existing data provided to USAC under the E-rate 
program for this purpose. Are there other ways to use the E-rate 
program and the data the Commission already collects to address the 
``homework gap''?
    21. Health Care. Congress directed the Commission to consider the 
extent to which ``supported'' services are ``essential to . . . public 
health.'' Health care is a necessity that can represent a considerable 
barrier to low-income consumers due to the time and resource burdens it 
often presents to patients. However, when patients utilize broadband in 
the interest of their personal health, it not only improves their own 
lifestyles, but also reduces health care-related costs for both the 
patient and the health care providers. Reduction in health care related 
costs represents a significant benefit for all consumers, but 
particularly for low-income consumers, who too often must make 
difficult decisions when deciding how and where to spend the limited 
money they have. For example, telehealth, the ability to connect with 
health care professionals remotely via broadband, has significant 
potential to enrich a patient's life by reducing the need for frequent 
visits to the doctor and by utilizing e-visits and remote telemetry 
monitoring. The Veterans Administration conducted a study of over 
17,000 patients with chronic conditions, and found that by using 
telehealth applications, bed days of care were reduced by 25 percent 
and hospital admissions were reduced by 19 percent. Even when a patient 
does not directly interact with a health care professional, health care 
software accessed through broadband can also provide significant 
benefits to patients. Research has shown that those with a lower 
socioeconomic status are more prone to develop type 2 diabetes. But a 
study of type 2 diabetes patients concluded that utilization of 
software loaded onto broadband-capable mobile phones that provided 
mobile coaching in combination with blood glucose data, changes in 
lifestyle behaviors, and patient self-management substantially reduced 
negative symptoms of type 2 diabetes. Access to broadband can lead to 
better health care outcomes. The Commission seeks comment on additional 
broadband health care related initiatives that can significantly 
improve the health outcomes for low-income consumers.
    22. Individuals with Disabilities. Broadband adds significant 
benefit to the daily lives of those with disabilities through ``access 
to a . . . universe of products, applications, and services that 
enhance lives, save money, facilitate innovation, and bolster health 
and well-being.'' See Letter from Douglas Orvis II, Counsel, 
Telecommunications for the Deaf and Hard of Hearing, Inc., to Marlene 
H. Dortch, Secretary, FCC, WC Docket No. 11-42, at 1-2 (filed June 10, 
2015) (TDI June 10, 2015 Letter). U.S. Chamber of Commerce, The Impact 
of Broadband on People with Disabilities at 2 (Dec. 2009). http://www.onecommunity.org/wp-content/uploads/2010/01/BroadbandandPeoplewithDisabilities.pdf (last visited May 26, 2015) (The 
Impact of Broadband on People with Disabilities). For example, 
broadband provides the ability to facilitate societal interaction and 
communications through email, instant messaging, and real-time video 
conferencing through services like Skype. In fact, individuals who are 
deaf or hard of hearing rely on video relay service (VRS) to the same 
extent that other consumers rely on voice service; therefore, broadband 
must be sufficiently robust to meet this need. Living with a disability 
often coincides with a lower socioeconomic status because of the 
limited ability to work, but broadband ``provides employment 
opportunities by enabling telecommuting and encourages entrepreneurship 
by providing a robust platform for conveniently launching and managing 
a home business[.]'' See The Impact of Broadband on People with 
Disabilities at 2. In addition, broadband significantly ``[e]nhances 
the number and types of educational opportunities available to people 
with disabilities by enabling a [significant] universe of distance 
learning applications.'' See id. The benefits of broadband to 
individuals with disabilities are countless, as broadband is a 
``flexible and adaptable tool'' that can be used ``to deliver 
affordable, convenient, and effective services,'' and enable a ``range 
of social, economic, and health-related benefits.'' See id. at 1; See 
TDI June 10, 2015 Letter at 1-3. Due to the limiting nature of many 
physical and intellectual disabilities, broadband may be further out of 
reach for individuals with disabilities than the average consumer. The 
Commission seeks comment on how to ensure the benefits of broadband 
reach low-income individuals with disabilities. For example, are there 
unique outreach efforts or eligibility initiatives targeted towards 
individuals with disabilities that ensure the benefits of broadband are 
utilized by this community? Additionally, the Commission seeks comment 
on any data showing the use, benefits, and penetration of broadband for 
individuals with disabilities so that the Commission may identify 
trends across different types of communities and regions, particularly 
those that serve individuals with disabilities.
    23. Public Safety. Congress directs the Commission to consider the 
extent to which ``supported'' services are ``essential to . . . public 
safety,'' and the

[[Page 42675]]

National Broadband Plan enumerated several benefits that broadband 
technologies provide to a cutting-edge public safety communications 
network. As the Plan observed, broadband ``can help public safety 
personnel prevent emergencies and respond swiftly when they occur,'' 
and ``can also provide the public with new ways of calling for help and 
receiving emergency information.'' The transition to Next Generation 
911 (NG911) networks based on broadband technology holds the potential 
to improve access to 911 through services such as text-to-911, while 
providing public safety answering points (PSAPs) with more flexible and 
resilient options for routing 911 calls. In an NG911 environment, IP-
based devices and applications will provide consumers with the ability 
to transmit and receive photos, video, text messages, and real-time 
telemetry information with first responders and other public-safety 
professionals. Broadband also ensures that consumers are notified of 
emergencies and disasters through advanced emergency alerts on a 
variety of platforms, including geographically-targeted Wireless 
Emergency Alerts warning wireless subscribers of imminent threats to 
safety in their area. Yet, for these services to be available when they 
are needed most, they must also be reliable and resilient, and must 
provide sufficient privacy and security for consumers to have 
confidence in their everyday use. Therefore, it is essential that all 
consumers, including low-income consumers, have access to broadband-
capable devices that provide the ability to send and receive critical 
information, as well as broadband service with sufficient capacity, 
security, and reliability to be dependable in times of need. Through 
the Lifeline program, the Commission seeks to ensure that low-income 
consumers have access to critical broadband public safety 
communications during an emergency, and service levels comparable to 
those offered to other residential subscribers. The Commission 
emphasizes that providers must ensure that all Lifeline service 
offerings continue to be compliant with all applicable 911 
requirements. The Commission seeks comments on the utilization of 
broadband by low-income consumers to receive public safety alerts and 
connect with public safety professionals.
    24. Low-Income Broadband Pilot Program. In 2012, the Commission 
launched a pilot program to collect data on what policies might 
overcome the key broadband adoption barriers--cost, relevance, and 
digital literacy--for low-income consumers and how the Lifeline program 
could best be structured to provide support for broadband. Each pilot 
project provided support for broadband service to qualifying low-income 
consumers for 12 months. In selecting the pilot projects, Commission 
staff struck a balance between allowing providers enough flexibility in 
the design of the pilots and ensuring the structure of each project 
would result in data that would be statistically and economically 
relevant. On the one hand, the 14 pilot projects shared a set of common 
elements that reflect the current model of the Lifeline program--e.g., 
all relied on existing ETCs to provide service, and the ETCs had to 
confirm that individuals participating in the pilot were eligible and 
qualified to receive Lifeline benefits. On the other hand, each project 
tested different subsidy amounts, conditions to receiving service, and 
different outreach and marketing strategies. The result was a highly 
diverse set of 14 funded pilot projects that implemented different 
strategies and provided a range of services across varying geographies.
    25. The Wireline Competition Bureau (Bureau) prepared a report to 
assist the Commission in considering reforms to the Lifeline Program 
and released for public review and consumption all of the data reported 
by the participating carriers. The Broadband Pilot Report summarizes 
each of the 14 pilot projects and the data collected during the course 
of the projects. As shown from the data summarized in the Broadband 
Pilot Report, the pilot projects provide an informative perspective on 
how various policy tools can impact broadband adoption by low-income 
consumers. For example, patterns within the data indicate that cost to 
consumers does have an effect on adoption and which service plans they 
choose. Given the condition in the Pilot Program that participation was 
limited to consumers that had not subscribed to broadband within the 
last 60 days, Commission staff recognized that there was a risk of low 
enrollment in each of the projects relative to the initial provider 
projections. As a result of this limitation, providers had to market 
the limited-time project offerings to consumers that either could not 
afford broadband service or, until that time, did not understand the 
relevance of broadband. The Commission seeks comment on how this report 
and the underlying data will provide guidance to the Commission as it 
considers reforms to the Lifeline program.
    26. Current Offerings. In the wireline market, some offerings 
specifically target low-income consumers and typically include a $10 
per month broadband product. Participation often is limited to 
consumers who have not had wireline broadband service from the provider 
within a certain time period, have no past due bills, and meet certain 
income and other eligibility restrictions.
    27. In the wireless market, direct-to-consumer broadband wireless 
plans are limited for low-income consumers, and generally require 
pricey top-ups for minimal broadband. However, low-income consumers are 
able to receive discounted service on either a smartphone plan or a 
mobile hotspot plan through some innovative plans. For about $10 per 
month, Mobile Beacon, a nonprofit licensee of EBS, provides mobile 
Internet to other nonprofit institutions. The Commission notes Mobile 
Beacon is not itself a direct-to-consumer wireless provider and 
consumers must have a relationship with a Mobile Beacon partner 
institution to receive service. Kajeet offers a similar service to 
schools, where the school pays a single low monthly fee for a hotspot, 
CIPA-compliant filtering software and network management, and 4G 
wireless service. Schools provide the devices to those students which 
they identify as most in need of connectivity at home.
3. Service Levels
    28. The Commission proposes to establish minimum service levels for 
fixed and mobile voice and broadband service that Lifeline providers 
must offer to all Lifeline customers in order to be eligible to receive 
Lifeline reimbursement. The Commission also seeks comment on minimum 
standards for Tribal Lifeline, recognizing the additional support may 
allow for greater service offerings. The Commission believes taking 
such action will extract the maximum value for the program, benefitting 
both the recipients as well as the ratepayers who contribute to the 
USF. It also removes the incentive for providers to offer minimal, un-
innovative services that benefit providers, who continue to receive USF 
support above their costs, more than consumers. The Commission also 
believes it is consistent with its statutory directives. The Commission 
seeks comment on this proposal.
a. Standard for Setting Minimum Service Levels
    29. The Commission seeks comments on how to establish minimum 
service levels. The Commission looks first to the statute for guidance. 
Congress indicated that ``[q]uality services should be available at 
just, reasonable, and affordable rates.'' Specifically with

[[Page 42676]]

regard to low-income Americans, Congress directed that they should have 
``access to telecommunications and information services, including 
interexchange services and advanced telecommunications and information 
services that are reasonably comparable to those services provided in 
urban areas.'' Congress also stated that, in defining supported 
services, the Commission should consider the extent to which such 
services ``are essential to education, public health, or public 
safety''; are ``subscribed to by a substantial majority of residential 
customers''; and are ``consistent with the public interest, 
convenience, and necessity.'' The Commission seeks comment on how to 
develop minimum standards based on these principles. In particular, 
would it be appropriate to develop an objective, data-based methodology 
for establishing such levels? Could the Commission establish an 
objective standard that could be updated on a regular basis? The 
Commission also seeks comment on minimum service levels for Tribal 
Lifeline. Given the higher monthly subsidy, the Commission expects more 
robust service and seeks comment on how to do so. The Commission seeks 
comment on these or other approaches.
    30. Given that the Lifeline program is specifically targeted at 
affordability, the Commission seeks comment on how to ensure that the 
minimum service levels it proposes to adopt result in services that are 
affordable to low-income Americans. How should the Commission establish 
minimum service levels that result in affordable but ``reasonably 
comparable'' offerings?
b. Ensuring ``Reasonably Comparable'' Service for Voice and Broadband
    31. The Commission next seeks comment on how minimum service 
standards based on statutory universal service principles could be 
applied to various Lifeline offerings to produce different service 
levels. The Commission seeks comments on whether and how service levels 
would vary between fixed and mobile broadband service. In addition, the 
Commission proposes to require providers to offer data-only broadband 
to Lifeline customers to ensure affordability of the service. In 
addition to the comment the Commission solicits below, the Commission 
seeks explicit comment from the states on its proposed course of 
action. As the Commission's partners in implementation and 
administration of the Lifeline program, any views or quantifiable data 
specifically from a state perspective would be invaluable to the 
Commission as it moves forward with these reforms.
    32. Voice-Only Service. Some consumers may prefer to use their 
Lifeline discount for a voice-only service, and the Commission seeks 
comment on how to require providers to continue offering affordable 
stand-alone voice service to provide consumers' access to critical 
employment, health care, public safety, or educational opportunities. 
The Commission seeks comments on how requiring providers to offer 
stand-alone voice service affects providers' business models and 
affordability to the consumer.
    33. In the 2012 Lifeline Reform Order, the Commission established 
the program goal of ensuring the availability of quality voice service 
for low-income consumers. Given the relatively stagnant Lifeline market 
offerings, the Commission believes that it is appropriate to establish 
minimum service levels for voice-only service. The Commission seeks 
comment on whether to establish a standard for mobile and/or fixed 
voice-only service based on objective data. What usage levels would 
result from these options? Since the cost of providing voice service 
has declined drastically, should the Commission require mobile 
providers to offer unlimited talk and text to Lifeline consumers to 
maximize the benefit of the Lifeline subsidy? What other approaches 
should the Commission consider?
    34. The 17th Mobile Competition Report, (DA 14-1862, released 
December 18, 2014) found that consumers average between 690 and 746 
minutes per month, depending on the type of device they use. And 
according to Nielsen, the average monthly minutes-of-use for a postpaid 
consumer is 644. These figures suggest that a typical wireless voice 
consumer uses two-to-three times the amount of voice service offered on 
a standard plan by typical Lifeline wireless resellers and suggests 
that low-income consumers do not have comparable offerings. However, in 
California, where Lifeline consumers and providers benefit from an 
additional state subsidy, consumers may elect plans in progressively 
increasing tiers of minutes in exchange for providers receiving 
progressively larger combined state and federal subsidies. The 
Commission seeks comments on whether the Commission should adopt a 
similar framework The Commission also seeks comment on voice and text 
plans and whether it should use average usage as a baseline for minimum 
service. The Commission seeks comments on whether it should require 
unlimited talk and text for voice service.
    35. The Commission seeks comments on how to ensure fixed voice 
service provides ``reasonably comparable'' service that is affordable 
for low-income consumers. Is there a price to the low-income consumer 
above which voice telephony service is no longer affordable?
    36. A key component of ensuring service remains affordable to the 
end-user is ensuring Lifeline providers utilize universal service funds 
consistent with their intended purpose. The Commission seeks comment on 
whether Lifeline providers are currently passing on reductions in their 
costs to end-users. Specifically with respect to mobile voice service, 
the level of Lifeline service has not appreciably increased recently, 
while the cost per minute to wireless resellers has declined to less 
than two cents on the wholesale market. The per-minute cost for 
facilities-based providers is likely lower still. When the declines in 
costs are coupled with the average minutes of use and stagnant Lifeline 
service levels, it appears that Lifeline ETCs are not offering 
consumers ``innovative and sufficient service plans'' or passing on 
their greater efficiencies to consumers. The Commission seeks comment 
on these conclusions. Further, it notes that the Commission's rules 
state that federal universal service support should be used only for 
the provision, maintenance, and upgrading of facilities and services 
for which the support is intended.
    37. Fixed Broadband Service. Next, the Commission seeks comments on 
the application of minimum service standards to fixed broadband 
offerings. Unlike mobile technologies, the prevailing benchmark for 
fixed broadband is the speed of the service. In addition to speed, the 
Commission needs to ensure that capacity is sufficient. The Commission 
seeks comments on whether the Commission should define an objective 
standard for fixed service by looking at what kinds of services are 
typically offered or subscribed to ``in urban areas'' or by a 
substantial majority of Americans. Could the Commission establish an 
objective standard that could be updated on a regular basis simply by 
examining new data about fixed broadband service? In the alternative, 
should the Commission look to the standard, as well as capacity and 
latency requirements, adopted in the Connect America Fund proceeding to 
determine the appropriate level of service? The Commission seeks 
comments on how to address data caps

[[Page 42677]]

and if it needs to set a minimum level of capacity for fixed broadband 
service. Should the Commission consider setting any minimum standards 
based on the FCC Form 477 data, which is based on what most residential 
consumers subscribe to? What other criteria should the Commission use? 
Should providers be required to make available any offering that is at 
or above a minimum speed to eligible low-income consumers?
    38. Mobile Broadband Service. The Commission seeks comments on how 
to apply minimum service standards to mobile broadband offerings. It 
also seeks comment on whether the Commission should define an objective 
standard for mobile broadband service by looking at what kinds of 
services are typically offered or subscribed to ``in urban areas'' or 
by a substantial majority of Americans. For example, in December 2014, 
an average American consumer utilized roughly 1.8 GB of data across 
both 3G and 4G networks. Should a mobile minimum service standard be 
tied to this average, or a similar metric? Would it be more appropriate 
to set a standard tied to a different level of consumer usage? Should 
the Commission consider setting any minimum standards on criteria other 
than data usage? Today, mobile Lifeline providers may offer a specific 
service just for Lifeline but providers do not allow such customers to 
apply the Lifeline discount to other service offerings. Should 
providers be required to make available any offering that is at or 
above a minimum speed to eligible low-income consumers?
    39. The Commission notes that low-income consumers that are more 
likely to only have mobile broadband service, likely due to 
affordability issues, may rely on that service more heavily than the 
majority of consumers who can offload some of their usage onto their 
residential fixed connection. The Commission seeks comments on how, if 
at all, this dynamic should affect its choice of minimum service 
levels.
    40. The Commission seeks comments on how to ensure that this 
approach results in services that are affordable to low-income 
consumers. For example, the Commission understands that providers in 
the Lifeline market have developed their businesses based on the 
premise that Lifeline was a voice-only market, including the 
distribution of primarily voice-only handsets at a low price point. 
Therefore, the Commission seeks comment on whether it should take into 
account the cost of wireless Consumer Premises Equipment (CPE) passed 
on to consumers by Lifeline providers in determining whether a 
particular level of service is affordable. The Commission seeks 
comments on how these costs would influence affordability of mobile 
broadband service to low-income consumers.
    41. Minimum Service for Tribal Lifeline. Low-income consumers 
living on Tribal lands may receive up to $34.25 per month in a Lifeline 
discount. Given the additional support, we expect that more robust 
service will be offered to consumers. The Commission seeks comments on 
establishing minimum levels of service for voice and broadband for low-
income residents living on Tribal lands. The Commission seeks comment 
on the appropriate standards for mobile data as well as a fixed 
broadband service. What metric should be used and how should it evolve 
over time? The Commission notes that the Oklahoma Corporation 
Commission (OCC) requires wireless ETCs to provide a large number of 
minutes each month to Lifeline subscribers on Tribal lands, which is 
significantly higher than what ETCs typically offer to non-Tribal 
Lifeline consumers. Are other states considering similar minimum 
service levels on Tribal lands? More generally, what is the level of 
service provided to residents of Tribal lands, and how does it compare 
to consumers nationwide?
c. Updating Standards and Compliance
    42. The Commission seeks comment on how to set appropriate minimum 
service levels that evolve with technology and innovation, and how to 
ensure compliance with those levels. A comparison of subscription rates 
from 2011 to 2013 show a steady increase in adoption for fixed wireline 
at 10/1 Mbps level of service. The Commission expects these increases 
in adoption will continue because carriers will continue to build out 
networks offering at least 10/1 Mbps service. At the same time, the 
Commission has not seen a decline in the utilization of wireline voice 
service, but an increase in wireless voice service. In light of this 
dynamic, the Commission believes it needs a mechanism to ensure that 
the minimum service levels it proposes to adopt stay relevant over 
time.
    43. The Commission proposes to delegate to the Wireline Competition 
Bureau (Bureau) the responsibility for establishing and regularly 
updating a mechanism setting the minimum service levels that are tied 
to objective, publicly available data. The Commission seeks comment on 
this proposal. It also seeks comment on how best to regularly update 
service levels for both fixed and wireless voice and broadband services 
to ensure that Lifeline supports an ``evolving level'' of 
telecommunications service.
    44. Alternatively, it may be appropriate to establish explicit 
procedures by which to ensure those minimum service levels are met and 
maintained. In the high-cost program, the Commission defined strict 
broadband performance metrics, and the Bureau recently sought comment 
on the best mechanism to measure these performance metrics. The 
Commission seeks comment on whether it would be reasonable to subject 
Lifeline providers to similar broadband measurement mechanisms.
    45. The Commission also seeks comments on how to monitor and ensure 
compliance with any voice and broadband minimum service levels. Should 
this be part of an annual certification by Lifeline providers? Should 
offerings be part of any application to become a Lifeline provider? 
What information and records should be retained for an audit or review? 
Should consumer or other credible complaints result in an audit or 
review of a Lifeline provider provisioning Lifeline service? Should 
complaints to state/local regulatory agencies, the Commission, and/or 
public watchdog organizations trigger audits? Are there other events 
that should trigger an audit? Proposed audit triggers should address 
both ensuring that performance standards are met and minimizing 
administrative costs.
d. Support Level
    46. The Commission proposes to retain the current, interim non-
Tribal Lifeline support amount that the Commission adopted in the 2012 
Lifeline Reform Order, but the Commission seeks to extract more value 
for low-income consumers from the subsidy. When it set the interim 
rate, the Commission sought comment on a permanent support amount that 
would best meet the Commission's goals. The Commission sought comment 
on a number of issues associated with establishing a permanent support 
amount, but received limited comments. Recently, GAO noted that the 
Commission has not established a permanent support amount. The 
Commission tentatively concludes that it should set a permanent support 
amount of $9.25, and seeks comment on this tentative conclusion. If the 
Commission sets a minimum service level where $9.25 is insufficient to 
cover broadband service, would an end-user charge be necessary? Since a 
central goal of the Lifeline program is affordability, how can the 
Commission assure both a sufficient level of

[[Page 42678]]

broadband service while also ensuring the service is affordable to the 
consumer? The Commission seeks comment on if or how bundles should 
affect the support level.
    47. The Commission also seeks comment on whether the support amount 
should be reduced for Lifeline supported mobile voice-only service. The 
cost of provisioning wireless voice service has decreased significantly 
since the 2012 Lifeline Reform Order. Therefore, the Commission 
questions whether it is necessary to support mobile voice-only Lifeline 
service with a $9.25 subsidy, and the Commission seeks comments on the 
level of support needed for mobile voice-only service. The Commission 
also seeks comments on whether a different level of support would be 
appropriate for a voice and broadband bundle. If so, what would be 
appropriate?
    48. Broadband Connection Charge Reimbursement. The Commission seeks 
comments on whether to provide a one-time reimbursement to Lifeline 
consumers to cover any up-front broadband connection charges for fixed 
residential service. The costs associated with connecting a low-income 
consumer to fixed broadband exceed the costs of connecting that same 
consumer to mobile broadband service. For example, the Commission finds 
that it is more likely that a technician would need to visit a location 
to connect the consumer to broadband than would be the case for mobile 
service, resulting in an up-front charge. Such fees may serve as a 
barrier for low-income consumers to adopt broadband, particularly if 
consumers pay an ongoing charge for robust Lifeline supported broadband 
service. The Commission also seeks comments on how best to protect the 
Fund from any waste, fraud, and abuse if the Commission implements a 
one-time reimbursement for connection charges. Additionally, the 
Commission seeks comments on how to appropriately set the level of the 
broadband connection charge subsidy.
e. Managing Program Finances
    49. In the 2012 Lifeline Reform Order, the Commission adopted a 
number of reforms designed to combat waste, fraud, and abuse in the 
program. These reforms have taken significant strides to address 
concerns with the program, including through the elimination of 
duplicate support. In 2012, USAC disbursed approximately $2.2 billion 
in Lifeline support payments compared to approximately $1.6 billion in 
Lifeline support payments in 2014. The Commission, in the 2012 Lifeline 
Reform Order, also indicated that the reforms would put the Commission 
``in a position to determine the appropriate budget for Lifeline'' 
after evaluating the impact of the reforms.
    50. Accordingly, in light of progress made on these reforms, and 
consistent with steps the Commission has taken to control spending in 
other universal service programs, the Commission seeks comments on a 
budget for the Lifeline program. The purpose of a budget is to ensure 
that all of the Commission's goals are met as the Lifeline program 
transitions to broadband, including minimizing the contribution burden 
on ratepayers, while allowing the Commission to take account of the 
unique nature and goals of the Lifeline program. The Commission seeks 
comment on this approach.
    51. Adopting a budget for the Lifeline program raises a number of 
important implementation questions. For example, what should the budget 
be? The Commission expects that efforts to reduce fraud, waste and 
abuse should limit any increase in program expenditures that may be 
associated with the reforms to modernize the program. What data would 
help ensure Lifeline-supported voice and broadband services are 
available to qualifying low-income households and that also minimizes 
the financial burden on all consumers? Today, not every eligible 
household participates in the Lifeline program. Thus, if the Commission 
were to adopt the current size of the Lifeline program as a budget, it 
could foreclose some eligible households from participating in the 
program. And, there is no data to suggest that the particular size of 
Lifeline in a given year is the right approach. Ultimately, the size of 
the Lifeline program is limited by the number of households living in 
poverty and, as the Commission does better as a society to bring 
households out of poverty, the program should naturally reduce in size.
    52. Additionally, the Lifeline program is a month-to-month program. 
The Commission wants to avoid a situation where the Commission would be 
forced to suddenly halt support for individuals that otherwise meet the 
eligibility requirements. How can the Commission monitor and forecast 
demand for the program so that the Commission would be in a position to 
address any possible increases in advance of reaching the budget, 
should that necessity arise? The Commission seeks comment on these and 
other implementation questions that would be raised by a budget.
f. Transition
    53. The Commission seeks comments on whether any transition is 
necessary to implement the reforms described in this section. If the 
Commission adopts the proposal to eliminate the provider from 
determining whether a consumer is eligible for Lifeline, as discussed, 
the Commission seeks comments in particular on the appropriate 
transition to ensure that the Lifeline program has sufficient 
protections against waste, fraud and abuse. For example, should the 
Commission have a transition where the providers continue determining 
eligibility while the third-party process is being established and, if 
so, how long should there be an overlap to ensure that the third-party 
process is working as intended? For each of the possible program 
changes discussed in this document, the Commission seeks comments on 
whether a transition is necessary and, if so, how to structure any such 
transition to minimize fraud and protect the integrity of the program 
while maximizing the value and benefits to consumers.
    54. The Commission also seeks to minimize any hardships on 
consumers affected by the proposed changes and we also seek to 
alleviate complications resulting from a transition on Lifeline 
providers. The Commission seeks comments on specific paths to 
transition that would minimize the impact on both consumers and 
Lifeline providers.
g. Legal Authority To Support Lifeline Broadband Service
    55. In order to establish minimum service levels for both voice and 
broadband service, the Commission proposes to amend the Commission's 
rules to include broadband Internet access service, defined consistent 
with the Open Internet Order, 80 FR 19737, April 13, 2015, as a 
supported service in the Lifeline program. Section 254(c) defines 
universal service as ``an evolving level of telecommunications 
service.'' Broadband Internet access service is a ``telecommunications 
service,'' therefore, including broadband Internet access service as a 
supported service for Lifeline purposes is consistent with Congress's 
principles for universal service. Moreover, defining broadband Internet 
access service as a supported service is also consistent with the 
criteria in section 254(c)(1)(A) through (D). Should the Commission 
amend Sec. Sec.  54.101, 54.400, and 54.401 of the Commission's rules 
to include broadband as a supported service? The Commission seeks 
comments on these views.
    56. The Commission also seeks comment on other ways to support 
broadband within the Lifeline program. For example, should the 
Commission condition a Lifeline provider's receipt of

[[Page 42679]]

Lifeline support for voice service (a supported telecommunications 
service) on its offering of broadband Internet access service? Could 
the Commission provide the support for broadband-capable networks, 
similar to what the Commission did in the USF/ICC Transformation Order, 
76 FR 78384, December 8, 2011. For example, could the Commission use a 
similar analysis to conclude that providing Lifeline support to 
facilities-based Lifeline providers encourages the deployment of 
broadband-capable networks, as does stimulating the demand for 
wholesale broadband services by providing Lifeline support to non-
facilities-based Lifeline providers? Are there other sources of 
authority that could allow the Commission to adopt rules to provide 
support for broadband Internet access service in the Lifeline program? 
How should the Commission view section 706 of the 1996 Act? The 
Commission asks commenters to take federal appropriations laws into 
account as they offer their responses to these questions.

B. Third-Party Eligibility Determination

    57. The Commission proposes to remove the responsibility of 
conducting the eligibility determination from the Lifeline providers 
and seeks comment on various ways to shift this responsibility to a 
trusted third-party and further reduce waste, fraud, and abuse in the 
Lifeline program, and leverage other programs serving the same 
constituency to extract saving for the Fund. By removing that decision 
from the Lifeline provider, the Commission removes one potential source 
of waste, fraud, and abuse from the program while also creating more 
efficiencies overall in the program administration. Doing so also 
brings much-needed dignity to the program, reduces administrative 
burdens on providers, which should help to facilitate greater provider 
participation and competition for consumers. A number of states have 
been proactive in their efforts to bring further efficiencies into the 
program by establishing state eligibility databases or other means to 
verify Lifeline eligibility. The Commission commends these states for 
working to make the program a prime example of Federal/state 
partnership, and seeks comment below on the best ways to build off of 
these successful efforts and extract benefits for Lifeline. The 
Commission seeks comment on the costs and benefits of each approach for 
third-party eligibility including the costs to providers, the universal 
service fund, and the costs and timeframe to transition to an 
alternative mechanism. In particular, the Commission seeks comment on 
leveraging eligibility and oversight procedures that already exist 
within other benefit programs rather than recreating another mechanism 
just for Lifeline. The Commission also seeks comment on whether to 
provide eligible consumers with a portable benefit, provided by the 
third-party verifying eligibility, which they could use with any 
Lifeline provider. That approach could facilitate consumer choice while 
also reducing administrative burdens on Lifeline providers. The 
Commission seeks comment on these and other options below.
1. National Lifeline Eligibility Verifier
    58. In this section, the Commission seeks comment on whether the 
Commission should establish a national Lifeline eligibility verifier 
(national verifier) to make eligibility determinations and perform 
other functions related to the Lifeline program. A national verifier 
would review consumer eligibility documentation to verify Lifeline 
eligibility, and where feasible, interface with state eligibility 
databases to verify Lifeline eligibility. A national verifier could 
operate in a manner similar to the systems some states have already 
implemented. For example, California has chosen to place the duty of 
verifying Lifeline eligibility in the hands of a third-party 
administrator. In California, the state's third-party administrator 
examines documentary proof of eligibility and verifies that the 
prospective subscriber has executed a proper Lifeline certification. 
The Commission seeks comment on whether such an approach could be 
adopted on a national scale and the costs and timeframe to do so. 
Because a number of states have already implemented Lifeline 
eligibility verification systems, the Commission seeks comment and 
quantifiable data from the states to enrich its understanding of how 
such systems function when implemented. As the Commission's partners in 
administering the Lifeline program, the states can provide a unique 
perspective on these issues that may be overlooked elsewhere. The 
Commission welcomes and solicits comment from the states on the issues 
of Lifeline eligibility verification discussed below.
    59. Core Functions of a National Verifier. The Commission proposes 
that a national verifier would, at a minimum, review consumers' proof 
of eligibility and certification forms, and be responsible for 
determining prospective subscribers' eligibility. The Commission seeks 
comment on the scope of this core function and other potential 
responsibilities associated with determining eligibility that the 
administrator could undertake. Consistent with the responsibilities of 
Lifeline providers to protect Lifeline applicants' personal information 
from misappropriation, breach, and unlawful disclosure, it also seeks 
comment on reasonable data security practices that should be adopted by 
a national verifier and whether a national verifier should notify 
consumers if their information has been compromised.
    60. Interfacing with Subscribers and Providers. The Commission 
seeks comments on whether consumers should be permitted to directly 
interface with a national verifier, or whether only providers should be 
permitted to do so. If consumers are permitted to interface with a 
national verifier, they could compile and submit all required Lifeline 
eligibility documentation and obtain approval for Lifeline prior to 
contacting a provider for service. However, many consumers are likely 
unfamiliar with many of the Lifeline application documents and program 
requirements. Therefore, should interaction with a national verifier be 
limited to providers for reasons of efficiency and expertise? If 
interaction is limited to providers, how could information be collected 
and compiled in a manner that reduces administrative burdens on 
providers and maintains consumer privacy and dignity?
    61. If subscribers are not able to directly interface with a 
national verifier to apply for a Lifeline benefit, are there other ways 
a national verifier could interact with consumers? For example, 
California has established a call center to answer consumers' questions 
about the Lifeline application process. Are there other similar 
customer service functions the national verifier should implement as 
part of its responsibilities? Should the Commission establish a process 
so that a potential subscriber contacts the national verifier to learn 
about the service and the providers that serve the subscriber's area? 
Are there any lessons that providers have learned from the 
implementation of, and their interaction with the NLAD?
    62. Processing Applications. Next, the Commission seeks comment on 
whether a provider should be permitted to provision service to a 
consumer prior to verification of eligibility by a national verifier. 
Currently, providers are required to evaluate and verify a prospective 
subscriber's eligibility prior to activating a Lifeline service. Under 
any implementation of a national verifier, where the verifier must 
review eligibility documentation, there will be a delay between a 
national verifier receiving documentation and the time a

[[Page 42680]]

national verifier makes an eligibility determination. For example, in 
California, several days can pass between the time the Lifeline 
application and supporting documentation is received by the state's 
third-party verifier and when the consumer is approved for Lifeline. 
Would a similar, multi-day approval process on the national level 
negatively impact consumers? If so, does the benefit of reduced waste, 
fraud, and abuse in the program outweigh any harms a delay may cause? 
What additional costs would shortening the review process incur?
    63. The Commission also seeks comment on whether it should 
implement a pre-approval process. To mitigate the effects of the delay 
from the time the consumer submits a Lifeline application and 
supporting documentation and an eligibility determination, California 
put a ``pre-approval'' process in place. It is the Commission's 
understanding that, in California, the pre-approval occurs subsequent 
to a duplicates check and ID verification, but before the third-party 
administrator performs a full review of the consumer's documentation 
for eligibility and occurs in a matter of minutes. The Commission seeks 
comment on whether we should implement a similar pre-approval process 
for the national verifier. Would pre-approval increase the chances for 
waste, fraud, and abuse in the program?
    64. The Commission notes that delay of several hours or even days 
can occur during the period between when the subscriber seeks to obtain 
Lifeline service from a provider and subsequently provides a completed 
application and supporting documentation to the third-party entity. 
What assistance, if any, should providers or a national verifier give 
to the subscriber in completing a Lifeline application and compiling 
supporting eligibility documentation to shorten the eligibility 
verification process? For example, should verifier staff walk 
applicants through the enrollment process? Would permitting the 
national verifier to enroll subscribers directly without the subscriber 
having to apply through the provider shorten this period?
    65. The Commission also seeks comment on how providers and/or 
consumers should transmit and receive Lifeline applications and proof 
documentation with a national verifier. Should consumers be required to 
submit their Lifeline applications and proof documentation through a 
provider who ultimately sends the documentation to a national verifier, 
or could consumers submit their documentation directly to a national 
verifier? For example, should the Commission permit consumers to 
directly submit their Lifeline application and supporting eligibility 
documentation to a national verifier via U.S. Postal Service, fax, 
email, or Internet upload? If consumers are not permitted to submit 
documentation on their own, how should providers submit consumer 
eligibility documentation to a national verifier? Are some forms of 
submission better than others in terms of ensuring an expedited 
response? What are the data privacy and security advantages and 
disadvantages of each approach, and how can any risk of unauthorized 
disclosure of personal information be mitigated? The Commission seeks 
comment on any other submission methods that may benefit consumers, 
providers, and a national verifier.
    66. Interacting with State Databases. In this section the 
Commission seeks comment on the scope of a national verifier's 
operations and how or whether it should interact with states that have 
already put in place state eligibility databases and/or processes to 
check documentary proof of eligibility. The Commission is pleased and 
encouraged with the fact that several states already have in place 
eligibility databases and/or processes to check documentary proof of 
eligibility.
    67. While many states have made significant strides in verifying 
Lifeline eligibility, some states' processes are limited in that they 
only verify eligibility against some, but not all, Lifeline qualifying 
programs. The Commission seeks comment on how these states should 
interact with a national verifier. How would a possible change in the 
number of qualifying programs, as discussed below, affect this 
analysis? The Commission also seeks comment on interim steps that could 
be taken to leverage state databases to confirm eligibility as the 
Commission moves away from providers determining eligibility. Could the 
Commission move faster in states that have existing databases and then 
phase-in the process for other states?
    68. The Commission also seeks comment on ways a national verifier 
could access state eligibility databases to verify subscriber 
eligibility prior to review of consumer eligibility documentation. 
Would this step improve the efficiency of the enrollment process? How 
would requiring a national verifier to utilize a state eligibility 
database for eligibility verification interplay with any standards set 
for state databases, as discussed below? Could the national verifier 
use the NLAD database and have the state databases interface with NLAD? 
If so, how? Alternatively, what are the drawbacks if the duty to check 
such databases remains with the state, its agent, and/or individual 
providers in those states? The Commission encourages interested parties 
to suggest cost-effective ways a national verifier could utilize state 
databases.
    69. Existing State Systems for Verifying Eligibility. In this 
section the Commission seeks comment on the relationship between a 
national verifier and states with existing systems for verifying 
eligibility. The Commission wants to encourage the continued 
development of eligibility databases at the state level. The Commission 
seeks comment on whether states should be required to use a national 
verifier, or whether and how states could ``opt-out'' of a national 
verifier in those cases where the state has developed a process to 
examine subscribers' eligibility and/or a state eligibility database 
and the state wishes to continue to perform the eligibility screening 
function on its own. The Commission currently permits states to opt-out 
of utilizing the NLAD, contingent upon a state's system being at least 
as robust as the processes adopted by the Commission in the 2012 
Lifeline Reform Order. Similarly, it now seeks comment on whether to 
adopt standards that state systems would have to meet in order to opt-
out of a national verifier.
    70. The Commission also seeks comment on standards for any database 
or state-led process used to verify Lifeline program eligibility and 
how the states must meet these requirements as part of their request to 
opt-out of a national verifier. The Commission seeks comment on 
requirements for state eligibility databases generally in order for a 
state to qualify to opt out of a national verifier. Specifically, the 
Commission seeks comment on whether state eligibility databases should 
be required to verify eligibility for each Lifeline qualifying program, 
or whether such a requirement would impose an unreasonable burden.
    71. To ensure the reliability and integrity of the state 
eligibility databases, the Commission seeks comment on whether we 
should set a requirement for updating eligibility data on a regular 
basis, and if so, what the appropriate time frame should be. For 
example, would the burden of a nightly refresh requirement outweigh the 
benefit of fully up-to-date data? What specific barriers prevent timely 
data updates?
    72. The Commission seeks comment on whether and to what extent to

[[Page 42681]]

include state database consumer privacy protections in any opt-out 
standard we adopt. Many of the state eligibility databases currently in 
use only return a ``yes'' or ``no'' response subsequent to an 
eligibility query. By doing so, the provider is unaware of which 
Federal Assistance program the consumer qualifies under for Lifeline. 
The Commission seeks comment on whether the Commission should require 
this type of ``yes'' or ``no'' response from Lifeline eligibility 
databases as a means to protect consumers' private information as part 
of our opt-out threshold. What other types of controls can the 
Commission adopt to protect consumer privacy?
    73. The Commission and USAC may need to be able to audit state 
databases to monitor compliance. Is direct access to the databases 
needed to perform a sufficient audit? What are the data privacy and 
security implications of allowing direct access? How can we reduce the 
administrative burden on states, while ensuring compliance? What state 
or Federal rules and statutes may limit the ability of USAC or the FCC 
to audit the state database?
    74. Lastly, the Commission seeks comment on how states may fund and 
implement any standards for their eligibility databases. Pursuant to 
Sec.  54.410(a) of the Commission's rules, providers are required to 
implement procedures to ensure their subscribers are eligible to 
receive the Lifeline benefit. Could this rule be interpreted to require 
providers to fund any necessary implementation efforts for state 
eligibility databases? More generally, the Commission seeks comment on 
the sources and scope of Commission authority to require minimum 
standards for state databases so as to opt out of a national verifier.
    75. Alternative State Interaction. In this section the Commission 
seeks comment on utilizing state eligibility systems as the primary 
means of verifying Lifeline eligibility, and utilizing a national 
verifier to promote and coordinate state eligibility verification 
efforts. As the Commission note above, a number of states have been 
proactive in their efforts to bring further efficiencies into the 
program by establishing state eligibility databases or other means to 
verify Lifeline eligibility. Therefore, it may be administratively 
inefficient to create a national verifier that would duplicate the 
functionality of these databases and systems already in place at the 
state level. The Commission seeks comment on this idea.
    76. The Commission acknowledges that the current tapestry of state 
eligibility systems is far from uniform and has some shortcomings. It 
notes, as mentioned above, that many states have Lifeline eligibility 
verification systems in place but these systems vary in functionality. 
In addition, other states do not have in place any means of verifying 
Lifeline eligibility. The Commission seeks comment on how to incent 
states to develop dependable means-tested processes to verify consumer 
Lifeline eligibility. Does the Commission have the authority to utilize 
universal service funds to finance the development and implementation 
of Lifeline eligibility verification systems at the state level? 
Section 54.410(a) of the Commission's rules requires providers to 
implement procedures to ensure their subscribers are eligible to 
receive the Lifeline benefit. Could this rule be interpreted to require 
providers to fund any necessary implementation efforts for state 
eligibility databases? The Commission seeks comment on the sources and 
scope of Commission authority to incent states, either through monetary 
or other means, to develop Lifeline eligibility verification systems. 
How can the Commission guarantee all state eligibility verification 
systems meet specific standards to ensure the reliability and integrity 
of those systems? If some states decline to develop systems meeting any 
minimum standards as set by the Commission, would a national verifier 
as envisioned act to verify consumer Lifeline eligibility? If a 
national verifier assumes the function of verifying consumer Lifeline 
eligibility for non-compliant states, what additional functions can a 
national verifier undertake to assist and encourage states to develop 
systems to verify Lifeline eligibility that meet Commission standards?
    77. In addition, the Commission seeks explicit comment from the 
states on this alternative course of action. As the Commission's 
partners in implementation and administration of the Lifeline program, 
any views or quantifiable data specifically from a state perspective 
would be beneficial in determining whether to move forward with this 
alternative option for verifying Lifeline eligibility.
    78. Dispute Resolution. The Commission seeks comment on any means 
or process for consumers or providers to contest a rejection of a 
prospective consumer's eligibility. The Commission seeks comment on a 
dispute resolution process that consumers may utilize should they 
believe that they have been wrongly denied Lifeline eligibility. Should 
the provider act on behalf of the consumer to resolve any eligibility 
disputes, or should the consumer interface directly with the national 
verifier? Should resolution of disputes be addressed by the national 
verifier in the first instance, subject to an appeal to USAC? In 
developing a dispute resolution/exceptions management process for the 
national verifier, the Commission generally seeks comment on additional 
issues such as implementation, transition, and timing of decisions.
    79. Privacy. Consumer privacy is of the utmost concern to us in 
establishing a national verifier, and the Commission proposes requiring 
that any national verifier put in place significant data privacy and 
security protections against unauthorized misappropriation, breach, or 
disclosure of personal information. It notes that in response to the 
Lifeline FNPRM, several commenters raised consumer privacy concerns 
with having a third-party entity review and retain prospective Lifeline 
subscriber qualifying documentation. Moreover, recently, we have 
emphasized that Lifeline providers must ``take every reasonable 
precaution to protect the confidentiality of proprietary or personal 
customer information,'' including ``all documentation submitted by a 
consumer or collected by a Lifeline provider to determine a consumer's 
eligibility for Lifeline service, as well as all personally 
identifiable information contained therein.'' In order to ensure that 
consumers' privacy is protected at all stages of the Lifeline 
eligibility verification process, the Commission seeks comment on how a 
national verifier can receive, process, and retain eligibility 
documentation while ensuring adequate protections of consumer privacy. 
The Commission seeks comment on how the functions of a national 
verifier would conform to government-wide statutory requirements and 
regulatory guidance with respect to privacy and information technology. 
What privacy and data security practices should the Commission require 
a national verifier to adopt with respect to its receipt, processing, 
use, sharing, and retention of applicant information? Should the 
Commission require a national verifier to adopt the minimum practices 
we require of Lifeline providers in the accompanying Order on 
Reconsideration? Should a national verifier be required to provide 
consumers with a privacy policy, and what topics should such a policy 
include? What responsibility, if any, should a national verifier have 
to notify consumers of a data breach or other unauthorized access to 
information

[[Page 42682]]

submitted to determine eligibility for Lifeline service? Are consumer 
privacy concerns mitigated if the Commission adopts a mechanism for 
coordinated enrollment with other federal benefits programs?
    80. Additional Functions of a National Verifier. The Commission 
seeks comment on additional functions that a national verifier could 
perform to further eliminate waste, fraud, and abuse. For example, 
should a national verifier become involved in the subscriber 
recertification process? Given its likely role in determining initial 
subscriber eligibility, should the duty to recertify subscribers be 
transitioned from Lifeline providers and/or USAC's current process to 
the national verifier? If so, the Commission seeks comment on whether 
any recertification performed by a national verifier should be 
mandatory. The Commission also seeks comment on how the recertification 
process as performed by a national verifier should differ, if at all, 
from the current process as performed by USAC.
    81. A national verifier could also interact with the NLAD to check 
for duplicates. The NLAD has been established to ensure that neither 
individual consumers nor households receive duplicative Lifeline 
support. Now that the NLAD is fully operational, Lifeline providers and 
states are required to access the NLAD prior to enrolling a potential 
subscriber to determine whether the subscriber already is receiving 
service and load an eligible subscriber's information into the NLAD. 
Are there efficiencies if both the national verifier and the NLAD are 
operated by the same entity? Should a national verifier be required to 
access the NLAD to check for duplicates on behalf of or in addition to 
the Lifeline providers and/or states? Should a national verifier also 
be responsible for loading subscriber information into the NLAD on 
behalf of Lifeline providers? If so, what kinds of communication and 
coordination must occur between a national verifier, the NLAD and 
Lifeline providers? Should a national verifier assist in the process of 
generating or verifying the accuracy of the Lifeline providers' FCC 
Form 497s? Lifeline providers are generally designated by wire center 
and it may be difficult to determine if a particular address is within 
a wire center where the Lifeline provider is designated to serve. Could 
a national verifier implement a function so that a Lifeline provider 
could query a mapping tool to determine whether a prospective 
subscriber's address is within the Lifeline provider's service area and 
not be permitted to serve that subscriber if the tool indicates that 
the subscriber does not reside within the service area? The Commission 
also seeks comment on any other functions that could be undertaken by a 
national verifier.
    82. Currently, the Commission believes that the administrative 
burden that Lifeline providers face in verifying subscriber eligibility 
is significant. A national verifier will lift this financial burden 
from Lifeline providers. The Commission proposes to require Lifeline 
providers to reimburse the Fund for part or all of the operations of 
the national verifier. Under this proposal, how should support be 
allocated amongst the contributing Lifeline providers? Would Lifeline 
providers that utilize a national verifier more than other Lifeline 
providers be required to pay more? The Commission seeks additional 
comment on any other ways to fund a national verifier outside of 
utilizing USF funds.
    83. Upon the establishment and implementation of a national 
verifier, the Commission anticipates that Lifeline providers would no 
longer be permitted to formally verify subscriber eligibility for 
Lifeline purposes, and the Commission seeks comment on that approach. 
It also seeks comment on how to handle the transition. Should the 
Commission define a transition path? If so, how long should such a 
period last?
    84. In the alternative, if we do not adopt a national verifier, the 
Commission seeks comment on whether, once Lifeline providers review 
subscriber eligibility, they should be required to send the eligibility 
documents to USAC so that they can be easily audited and reviewed 
later. The Commission seeks comment on this approach, including the 
cost to Lifeline providers and USAC to transmit, store and review such 
documentation. Are there benefits for USAC to receive such documents in 
the normal course instead of asking for them at the time of an audit? 
Under this approach, are there ways that USAC can examine eligibility 
documents on a regular basis to detect patterns of fraud?
    85. Document Retention. In the event the Commission establishes a 
national verifier or otherwise removes the responsibility for 
determining eligibility from the Lifeline provider, the Commission 
seeks comment on Lifeline providers' retention obligation for consumer 
eligibility documentation when the provider is no longer responsible 
for determining eligibility. How and when should providers cease 
retaining Lifeline consumer eligibility documentation? The Commission 
also seeks comment on transitioning to a third party. Should providers 
be required to send all retained Lifeline consumer eligibility 
documents to the third party verifier? What type of administrative 
burden would requiring providers to send retained Lifeline consumer 
eligibility documentation to a national verifier place on providers? 
How best can the Commission ensure such documentation will remain 
available and accessible for the purpose of audits?
2. Coordinated Enrollment With Other Federal and State Programs
    86. In this section, the Commission seeks comments on coordinating 
with federal agencies and their state counterparts to educate consumers 
about, or simultaneously allow consumers to enroll themselves in, the 
Lifeline program. The Commission seeks comments on this issue as an 
alternative, or supplement to, its inquiry regarding whether a third-
party should perform consumer eligibility determinations rather than 
Lifeline providers. Other federal benefit programs which qualify 
consumers for Lifeline already have mechanisms to confirm eligibility. 
In this section, the Commission seeks comments on how to leverage such 
existing processes including verification and additional fraud 
protections in lieu of creating a separate national verifier to confirm 
Lifeline.
    87. Background. One of the goals in the 2012 Lifeline Reform Order 
was to coordinate Lifeline enrollment with other government benefit 
programs that qualify low-income consumers for federal benefit 
programs. Coordinated enrollment with other Federal and state agencies 
will generate efficiencies in the Lifeline program by increasing 
awareness in the program and making enrollment more convenient for 
eligible subscribers, while also protecting the Fund against waste, 
fraud, and abuse by helping to ensure that only eligible consumers are 
enrolled.
    88. In order to qualify for support under the Lifeline program, the 
Commission's rules require low-income consumers to have a household 
income at or below 135 percent of the Federal Poverty Guidelines, or 
receive benefits from at least one of a number of federal assistance 
programs. Consumers qualifying for Lifeline under program-based 
criteria receive documentation from that program tying the eligibility 
and participation of both programs.
    89. For example, the Supplemental Nutritional Assistance Program 
(SNAP) is a qualifying program where coordinated enrollment may be 
particularly helpful. SNAP, formerly known as Food Stamps, provides 
financial assistance to eligible

[[Page 42683]]

households for food through an electronic benefit transfer (EBT) card, 
which functions like a debit card. Of roughly 33 million households 
eligible for traditional Lifeline support through participation in a 
federal assistance program, approximately 42 percent, or about 14 
million households, are eligible for Lifeline through SNAP. In 
verifying the eligibility of a consumer, Lifeline providers may accept 
program participation in SNAP (for example through a SNAP EBT card) as 
acceptable program eligibility documentation. Approximately 40 states 
use the EBT cards not only to deliver SNAP benefits, but also to 
coordinate the delivery of other eligible benefits.
    90. Discussion. Coordinated enrollment with other federal agencies 
and their state counterparts could streamline the Commission's efforts, 
produce savings for the Lifeline program and providers, increase checks 
and protections against fraud, and greatly reduce administrative 
burdens. For example, coordinated enrollment with other Federal and 
state benefit programs could: 1) Educate consumers about the 
possibility of signing up for Lifeline while they sign up for other 
programs, 2) leverage existing infrastructure and technologies further 
minimizing waste, fraud, and abuse, while confirming eligibility, 3) 
provide more dignity to the program and better protect consumer 
privacy, because it would limit the number of entities to which 
consumers would disclose personal information, 4) allow consumers to 
simultaneously apply for Lifeline as they enroll in other programs, and 
5) work, together with other benefit programs to transfer Lifeline 
benefits directly to consumers allowing consumers to redeem Lifeline 
benefits with the Lifeline provider of their choice.
    91. The Commission seeks comment on how best to leverage the 
existing technologies, databases, and fraud protections that already 
exist in other federal benefit programs. For example, the SNAP program 
requires states to cross check any potential subscriber against the 
Social Security Master Death File, Social Security's Prisoner 
Verification System, and FNS's Electronic Disqualified Recipient 
System, prior to certifying individuals for the program, to ensure that 
no ineligible people receive benefits. If the Commission coordinates 
with other federal benefit programs, Lifeline receives the benefit of 
having another agency already conducted these checks, which increases 
protection against fraud while incrementally more efficient than 
creating a separate process.
    92. How can the Commission better coordinate and build upon the 
work already invested by state and federal agencies to confirm 
consumers are eligible for programs. The Commission seeks comment on 
the incremental costs of adding Lifeline to an existing eligibility 
database in lieu of setting up a separate national framework. Would 
such administrative burdens and costs outweigh the benefits of such a 
proposal? Or would the Lifeline fund actually incur a net savings 
because of the administrative efficiencies that may result from 
coordinated enrollment? What are the various administrative, 
technological, or other barriers to implementation related to such 
coordinated enrollment? Should states be compensated for eligibility 
determinations and coordinated enrollment? If so, should it be per 
subscriber or another metric? Should such costs be borne equally by all 
Lifeline providers or should it be borne by the Lifeline program? The 
Commission seeks comment on the timeframe to implement such a change 
and whether the Commission should first start with a handful of states 
that already have coordinated enrollment across benefits programs. If 
so, the Commission seeks comment on how to identify these states.
    93. The Commission seeks comment on how the Commission may best 
facilitate coordinated enrollment with other Federal benefit programs 
such as the USDA and its state agency counterparts (collectively, 
``SNAP Administrators''). For example, should SNAP Administrators 
merely educate consumers about Lifeline? If so, should SNAP 
Administrators limit their role to providing relevant materials to 
their SNAP consumers and informing them that eligibility in SNAP 
qualifies such consumers for Lifeline, while also directing these 
consumers to the appropriate sources to apply for Lifeline? If the 
Commission establishes a national verifier, how may the Commission 
facilitate coordinated enrollment with SNAP Administrators? In this 
context, should SNAP administrators play a role in which they ``pre-
approve'' consumers who are eligible for SNAP and then forward the 
Lifeline application to a national verifier to complete the 
application? What responsibility, if any, should SNAP Administrators 
have for checking the NLAD prior to providing the consumer's 
application to a national verifier?
    94. Should the Commission pursue coordinated enrollment in a manner 
that authorizes SNAP administrators to allow consumers who qualify for 
SNAP to simultaneously sign up for Lifeline as well? Since SNAP 
Administrators can perform eligibility verifications, does it makes 
sense for the Commission or USAC to conduct these same checks again for 
Lifeline? Should the Commission establish a procedure where the 
Commission and the SNAP Administrators work together on a single, 
unified application? As the Commission discusses infra, the Commission 
seeks comment on whether the Commission should work with SNAP 
Administrators, to place Lifeline benefits directly on SNAP EBT cards, 
thereby transferring the benefit directly to consumers. This approach, 
in turn, allows consumers themselves to apply the Lifeline benefit to 
the Lifeline provider of their choice. How may the Commission best 
facilitate coordinated enrollment under this approach?
    95. Are there any legal and practical limitations of having the 
state or federal benefit administrators serve as agents for the 
Commission with respect to Lifeline? Are there other ways to coordinate 
enrollment with other Federal or state agencies? How does having SNAP 
Administrators or other Federal or state benefit programs affect the 
need for a national verifier? How can the Commission best coordinate 
with or rely upon SNAP Administrators when verifying eligibility and 
enrolling subscribers?
    96. The Commission also seeks specific comment on how to encourage 
coordinated enrollment with other Federal assistance programs that 
qualify participants for support under the Lifeline program--such as 
Medicaid; SSI; Federal Public Housing Assistance; LIHEAP; NSLP free 
lunch program; and Temporary TANF. As noted below, the Lifeline program 
has the potential to provide essential connectivity to the Nation's 
veterans. The Commission seeks comment on how we can coordinate its 
outreach and enrollment efforts to reach low-income veterans. For 
example, the Veterans Affairs Supportive Housing (VASH) program, a 
joint effort between the Department of Housing and Urban Development 
and the Department of Veterans Affairs, provides support to homeless 
veterans and their families to help them out of homelessness and into 
permanent housing. The program provides housing assistance and clinical 
and supportive services to veterans. These services require 
communication between veterans, veteran families and caseworkers. The 
Commission seeks comment on how it can coordinate outreach efforts 
related to the Lifeline program with the VASH program or other federal 
efforts designed to assist vulnerable veterans.

[[Page 42684]]

    97. The Commission recognizes that individual states play an 
important role in the administration of various Federal assistance 
programs and seeks specific comment from these states about their 
experiences, best practices, and how to encourage coordinated 
enrollment with these Federal programs, state administrative agencies, 
and the Lifeline program. For example, the Commission understands that 
administration of the SNAP EBT card is performed at the state level and 
the Commission seeks specific comment from states on issues such as 
eligibility verification, placing Lifeline benefits on the SNAP EBT 
card, and any other administrative issues. Because many individual 
states have implemented coordinated enrollment with Federal assistance 
programs, the Commission solicits specific comments from these states. 
The Commission encourages coordinated enrollment and recognizes how it 
can increase the effectiveness of state eligibility databases. The 
Commission seeks comments from states operating state eligibility 
databases and specifically ask how the Commission may work best with 
such states. If the Commission moves to a third party verification 
model, should the Commission first attempt to transition with a handful 
of states already operating eligibility databases before attempting 
such a transition on a national scale?
3. Transferring Lifeline Benefits Directly to the Consumer
    98. In this section, the Commission seeks comments on whether 
designated third-party entities can directly transfer Lifeline benefits 
to individual consumers. As discussed, having a third-party make 
eligibility determinations removes this burden from Lifeline providers 
and should result in substantial cost savings and efficiencies. The 
Commission now seeks comment on establishing processes for the national 
verifier or another federal agency to transfer Lifeline benefits 
directly to consumers via a portable benefit.
    99. Background. The Commission has long considered assigning 
Lifeline benefits directly to the consumer. Under this approach, 
consumers can take their benefit to the Lifeline providers of their 
choosing and can receive Lifeline support for whatever service best 
meets their needs. In the 2012 Lifeline Reform FNPRM, the Commission 
sought to further develop the record on MetroPCS's proposal that the 
Commission implement a voucher-based Lifeline program in which Lifeline 
discounts would be provided directly to eligible low-income consumers. 
Under this approach, MetroPCS emphasized that ``[b]y allowing the 
payment to be made directly to the consumer, it would permit the 
consumer to decide how and on what telecommunications service to spend 
the payment.'' The Commission, in the 2012 Lifeline Reform Order, also 
considered, but ultimately declined to adopt, AT&T's proposal to 
transfer Lifeline benefits directly to the consumer by assigning 
subscribers with a unique identifier or Personal Information Number 
(PIN) that could be ``deactivated'' once a consumer is no longer 
eligible for Lifeline. In declining to adopt AT&T's proposal, the 
Commission reasoned that ``AT&T's proposal assumes that a third-party 
at the state level (e.g., state PUC) would issue and manage PIN numbers 
and there is no guarantee that states would be willing or economically 
able to take-on such an administrative function in the absence of 
explicit federal support.''
    100. Discussion. Consistent with the Commission's goal to reduce 
waste, fraud, and abuse, the Commission seeks comment on having third 
parties directly assigns Lifeline benefits to individual consumers 
through a physical media (e.g., like a debit card) or a unique code 
(e.g., PIN). Should the Commission require a national verifier, or work 
with other interested Federal and state agencies, to transfer Lifeline 
benefits directly to the consumer in the form of a portable benefit? 
Are there other entities that can serve this role or fulfill this task? 
What are the various administrative, technological, funding, or other 
barriers to implementation related to providing the portable benefit to 
the consumer? For example, how can a national verifier and other 
Federal and state agencies ensure that benefits are transferred to the 
consumer in a timely fashion following the submission of a Lifeline 
application? How can Lifeline providers best monitor continued 
eligibility of consumers once they are selected? How would a portable 
benefit work with the recertification requirement and permit a consumer 
to transfer the benefit from one Lifeline provider to another?
    101. The Commission also seeks comment on the appropriate mechanism 
that should be used to transfer the Lifeline benefit directly from a 
third-party to the consumer. For example, what are the costs and 
benefits of placing Lifeline benefits on a physical card? The 
Commission notes that in some states, SNAP as well as other benefits 
are encoded on the SNAP EBT card, providing the consumer with a single 
card for several social service needs. Should the Commission work with 
SNAP administrators to place Lifeline benefits directly on a SNAP EBT 
card? If so, how would such a process be implemented? What costs have 
SNAP administrators or other agencies incurred in encoding non-SNAP 
benefits on the card and would such costs compare with other approaches 
the Commission seeks comment on today such as the National Verifier? As 
the Commission discusses above, the Commission seeks comment on how to 
encourage coordinated enrollment with other Federal and state agencies 
that administer programs that also qualify participants for Lifeline. 
Because many individual states have implemented coordinated enrollment 
with SNAP benefits and other Federal assistance programs, it solicits 
specific comments from these states regarding their experiences and any 
best practices which they may have established.
    102. The Commission seeks comment on approaches other than a 
physical card but using alternative approaches such as an online portal 
or application on a user's device to submit payment. What is the most 
appropriate way to use an EBT-type card for a communications service? 
What are the costs and benefits to providers of moving to an EBT-type 
card? Can USAC pay Lifeline providers each month for EBT card is in 
use? How would USAC be informed that a card has been associated with a 
particular provider entitled to the benefit? What protections would 
need to be in place and how would USAC be notified when a consumer 
switches providers? Could the EBT card automatically notify USAC of a 
provider change?
    103. If a portable benefit is offered to consumers through a 
national verifier or state or Federal agency, how would such a benefit 
be provided? How should secure physical cards be issued to the 
consumer? How may the Commission best facilitate coordination between 
third parties determining eligibility and Lifeline providers during the 
transition? What protections should be put in place to prevent fraud or 
abuse by, for example, automatically deactivating the card if it is not 
used for a certain period of time, if the consumer is no longer 
eligible, or if the consumer reports that the card has been lost or 
stolen? If the benefit is placed on a federal or state benefit card, 
can the FCC put in place such protections or must the FCC work within 
the structures and rules already established by the other relevant 
agencies? Would the customer need to ``touch'' the Lifeline provider on 
a monthly basis to reapply the discount?
    104. As an alternative, or in addition to, the possibility of 
placing Lifeline benefits on a physical card, should

[[Page 42685]]

consumers' Lifeline benefits be distributed by a national verifier or 
state or federal agency through a unique identifier or PIN associated 
with individual consumers? The Commission seeks comment on the pros and 
cons of such an approach. A pin-based approach may be preferable to a 
physical card in those cases where the consumer signs up for Lifeline 
over the phone or online and cannot ``swipe'' the card with the 
Lifeline provider.
4. Streamline Eligibility for Lifeline Support
    105. Background. Currently, in order to qualify for support under 
the Lifeline program, the Commission's rules require low-income 
consumers to have a household income at or below 135 percent of the 
Federal Poverty Guidelines or receive benefits from at least one of a 
number of federal assistance programs. As of March 2014, roughly 42 
million households were eligible for support under the Lifeline program 
with nearly 80 percent of those households (approximately 33 million) 
eligible based solely on participation in at least one of the federal 
assistance programs. In addition to income qualification and the 
federal assistance programs, consumers may also gain entry to the 
Lifeline program if they are able to meet additional eligibility 
criteria established by a state.
    106. Discussion. The Commission seeks comment on the prospect of 
modifying the way low-income consumers qualify for support under the 
Lifeline program to target the Lifeline subsidy to those low-income 
consumers most in need of the support. In exploring these possible 
changes, we also seek to reduce the administrative burden on Lifeline 
providers to verify a low-income consumer's eligibility for Lifeline-
supported service and any burden to the Fund as a whole, and reduce the 
likelihood of waste, fraud, and abuse. The Commission seeks comment on 
how to streamline the program while promoting the Commission's goals of 
universal service and ensure that all consumers, including the nation's 
most vulnerable, are connected.
    107. The Commission first seeks comment on which federal assistance 
programs it should continue to use to qualify low-income consumers for 
support under the Lifeline program. The Commission specifically seeks 
comments on any potential drawbacks in limiting the qualification 
criteria for Lifeline support exclusively to households receiving 
benefits under a specific federal assistance program(s). For example, 
if the Commission no longer permits consumers to qualify through 
Tribal-specific programs, what would be the impact to low-income 
consumers on Tribal lands? In particular, as the Commission noted in 
the 2012 Lifeline Reform Order, because both SNAP and the Food 
Distribution Program on Indian Reservations (FDPIR) have income-based 
eligibility criteria, but households may not participate in both 
programs, some residents of Tribal lands did not qualify for Lifeline 
support simply because they chose to participate in FDPIR rather than 
SNAP. When adopting FDPIR as an additional assistance program that 
would qualify eligible residents of Tribal lands for Lifeline and Link 
Up, the Commission noted further that members of more than 200 Tribes 
currently receive benefits under FDPIR, and that elderly Tribal 
residents often opt for FDPIR benefits. What would become of these low-
income consumers' access to affordable voice service under a change to 
the eligibility rules? What would be the impact on Medicaid recipients 
if households could no longer qualify for Lifeline support through 
Medicaid?
    108. The Commission also seeks comment on whether it should 
continue to allow low-income consumers to qualify for Lifeline support 
based on household income and/or eligibility criteria established by a 
state. Under the current program, less than four percent of Lifeline 
subscribers subscribe to the service by relying on income level. Given 
the relatively low number of consumers using income as their qualifying 
method, the Commission seeks comment on any changes it should consider 
to ensure that the Lifeline program is targeted at the neediest.
    109. Further, the Commission seeks comment on whether low-income 
consumers should be permitted to qualify for Lifeline support through 
programs which do not currently qualify consumers for Lifeline 
benefits. For example, the Lifeline program has the potential to 
positively impact the lives of the veterans who have served this 
country. In the 2012 Lifeline NPRM, the Commission sought comment on 
whether to include homeless veterans programs as qualifying eligibility 
criteria for support under the Lifeline program. The Commission now 
seeks comment on whether federal programs targeted at low-income 
veterans should be considered to qualify those individuals for Lifeline 
support. Specifically, the Commission seeks comment on whether veterans 
and their families eligible for the Veterans Pension benefit should 
qualify those individuals for Lifeline support. To qualify for this 
program, veterans must have at least 90 days of active duty, including 
one day during a wartime period, and meet other means-tested criteria 
such as low-income limits and net worth limitations established by 
Congress. Should participation in the Veterans Pension program qualify 
an individual for Lifeline benefits? Given the income and net wealth 
limitations in the Veterans Pension program, the Commission seeks 
comment on whether it should serve as a qualifying program for 
Lifeline. It also seeks comment on ways to increase the awareness of 
the Lifeline program to low-income veterans. Are veterans aware of and 
utilizing the Lifeline program? How can the Lifeline program be 
targeted to better reach low-income veterans? The Commission further 
seeks comment on how low-income consumers, including low-income 
veterans, would certify and recertify their eligibility under any 
proposed alternatives.
    110. Additionally, the Commission seeks comments on the extent to 
which modifying eligibility criteria under the Lifeline program reduces 
and streamlines Lifeline providers' recordkeeping processes. The 
Commission anticipates that streamlining the eligibility criteria will 
reduce the costs and time incurred by Lifeline providers and state 
administrators and any national verifier. The Commission seeks comments 
on these anticipated efficiencies and any other potential improvements 
associated with restructuring the eligibility criteria.
    111. In potentially limiting the number of eligible federal 
assistance programs under the Lifeline program, some current Lifeline 
consumers will no longer qualify for Lifeline benefits. The Commission 
therefore recognizes the need for a transition period to allow those 
low-income consumers to transition to non-supported service with 
minimal disruption. It thus seeks comment on how such a transition 
should be structured. For example, should the Commission transition 
subscribers off of Lifeline support as part of the annual 
recertification process following the effective date of this Second 
FNRPM?
5. Standards for Eligibility Documentation
    112. In this section, the Commission proposes requiring Lifeline 
providers to obtain additional information in certain instances to 
verify that the eligibility documentation being presented by the 
consumer is valid, including obtaining eligibility documentation that 
includes identification information or a photograph. It also seeks 
comment on

[[Page 42686]]

ways to further strengthen the qualification and identification 
verification processes to ensure that only qualifying consumers receive 
Lifeline benefits.
    113. In the 2012 Lifeline Reform Order, the Commission adopted 
measures to verify a low-income consumer's eligibility for Lifeline 
supported services and required Lifeline providers to confirm an 
applicant's eligibility prior to enrolling the applicant in the 
Lifeline Program. However, program eligibility documentation may not 
contain sufficient information to tie the documentation to the identity 
of the prospective subscriber and often does not include a photograph.
    114. The Commission seeks comment on requiring Lifeline providers 
to obtain additional information to verify that the eligibility 
documentation being presented by the consumer is valid and has not 
expired. Should the consumer be required to provide underlying 
eligibility documentation that includes subscriber identification 
information or a photograph? Should we only impose such a requirement 
in certain circumstances? Are there other more effective means for 
Lifeline providers to evaluate program eligibility documentation? The 
Commission believes that requiring prospective subscribers to produce a 
government issued photo ID would improve the identification 
verification process and more easily tie the identity of the 
prospective subscriber to the proffered eligibility documentation. 
Additionally, in its recent report, GAO noted that many eligible 
consumers fail to complete the application process because they have 
difficulty providing information and do not have access to scanners and 
photocopiers. Therefore, the Commission seeks comment on how to address 
those factors in requiring consumers to provide additional information.

C. Increasing Competition for Lifeline Consumers

    115. In this section, the Commission seeks comment on ways to 
increase competition and innovation in the Lifeline marketplace. The 
Commission believes the best way to do this is to increase the number 
of service providers offering Lifeline services. It therefore seeks 
comment on the best means to facilitate broader participation in the 
Lifeline program and encourage competition with most robust service 
offerings in the Lifeline market. The Commission makes these proposals 
consistent with the Commission's goal of avoiding waste, fraud, and 
abuse.
1. Streamlining the ETC Designation Process
    116. The Commission seeks comment on streamlining the ETC 
designation process at the state and federal levels to increase market 
entry into the Lifeline space. First, the Commission seeks comment on 
the Commission's authority under section 214(e) to streamline the ETC 
designation process at the Commission. In the ETC Designation Order 
(FCC 08-100 released April 11, 2008), the Commission adopted 
requirements consistent with section 214 of the Act, which all ETC 
applicants must meet to be designated an ETC by the Commission. In line 
with that decision, the Commission believes it has substantial 
flexibility to design a more streamlined ETC designation process for 
federal default states. The Commission seeks comment on this 
conclusion.
    117. Given this broad authority, the Commission seeks comment on 
ways in which to streamline the Commission's ETC designation process to 
best promote the universal service goals found in section 254(b). It 
believes many entities, including many cable companies and wireless 
providers, are unwilling to become ETCs and some have in fact 
relinquished their designations. Are there certain requirements that 
are overly burdensome? Can the Commission simplify or eliminate certain 
designation requirements while protecting consumers and the Fund? Will 
establishing a national verifier lessen the need to streamline the ETC 
designation process? The Commission specifically seeks input from the 
states on examples of requirements that could be simplified or 
eliminated in order to make it less difficult for companies to become 
ETCs under the Lifeline program and suggestions for how the Commission 
can best refine the ETC designation process.
    118. Second, the Commission seeks comment on coordinating and 
streamlining federal and state ETC designation processes. What are the 
benefits and drawbacks to a uniform, streamlined approach at both the 
state and federal levels? How can the Commission best encourage state 
commissions to adopt a path similar to a federal streamlined approach? 
The Commission strongly values input from the states on the pros and 
cons of such an approach and what measures could be adopted to 
encourage state commissions to adopt a similar streamlined approach.
    119. Proposals for ETC Relief from Lifeline Obligations. In this 
section, the Commission seeks comment on proposals in the record that 
the Commission permit ETCs to opt-out of providing Lifeline supported 
service in certain circumstances, Pursuant to Sec.  54.405 of the 
Commission's rules, carriers designated as ETCs are required to offer 
Lifeline supported service. AT&T, among others, notes in comments in 
response to the 2012 Lifeline FNPRM that competition in the Lifeline 
program has resulted in multiple areas where several ETCs provision 
Lifeline supported service to the same potential customer base. The 
Commission seeks additional comment on whether the Commission should 
relieve ETCs of the obligation to provide Lifeline supported service, 
pursuant to their ETC designation, in specific areas where there is a 
sufficient number of Lifeline providers. In considering this approach, 
the Commission seeks comment on what constitutes a sufficient number of 
providers and any other appropriate conditions to protect the public 
interest. The Commission also seeks comment on how to define an 
appropriate geographic area. It asks that any party supporting such an 
opt-out mechanism comment on the process, transition, and other issues 
associated with permitting ETCs to opt-out of providing Lifeline 
supported service in areas served by a sufficient number of ETCs 
offering Lifeline support.
    120. The Commission notes that these proposals are similar to those 
currently under consideration in two other Commission proceedings--the 
USTelecom forbearance proceeding, and the Connect America Fund 
proceeding. In both of those proceedings, AT&T and others have argued 
that the Commission should separate or ``de-link'' carriers' Lifeline 
obligations from their ETC status. To facilitate our consideration of 
relevant arguments previously raised in the Connect America Fund and 
USTelecom forbearance proceedings, we hereby incorporate by reference 
the pleadings in those proceedings.
    121. Other Measures to Increase Competition. The Commission seeks 
comment on other ways to ease market entry. The Commission recognizes 
that there are many other requirements for new companies wishing to 
offer Lifeline service. For example, non-facilities-based wireless 
providers must file and receive approval of a compliance plan prior to 
entering the market. The Commission appreciates that these requirements 
may pose challenges for companies. It thus seeks comment on other 
measures that can be taken to enhance competition and innovation in the 
market generally. Are there specific state or federal regulatory 
barriers that make it difficult for companies to participate and remain 
in the Lifeline

[[Page 42687]]

program? Are there economic barriers? The Commission seeks comments 
generally on such barriers and recommendations to address them.
    122. State Lifeline Support. The Commission also seeks specific 
comment on ways that it can increase competition and the quality of 
service by encouraging states to provide an additional subsidy for 
Lifeline service. Combined state and federal contributions to Lifeline 
have long been a critical part of the Lifeline program. The Commission 
notes that in states that provide a significant separate subsidy, 
service is more affordable for a given level of service and ETCs 
generally offer a higher level of service. Are there other ways that 
the Commission can incent states to provide an increased level of 
support? Are there ways that the Commission can reduce state Lifeline 
costs so that the savings can be used for an increased state subsidy? 
Does the establishment of minimum service levels encourage states to 
provide a separate subsidy because they understand that their subsidy 
will go towards robust, quality service? The Commission specifically 
seeks feedback from the states on ways in which it can increase 
competition and the quality of service among service providers 
providing service to low-income consumers under the Lifeline program.
    123. Innovative Services for Low-Income Consumers. The Commission 
also seeks comment on how best to utilize unlicensed bands, such as 
television white space or licensed bands, such as EBS, for the purpose 
of providing broadband service to low-income consumers. Unlicensed 
spectrum allows providers to deliver a variety of unlicensed offerings, 
such as Wi-Fi hotspots, without having to comply with numerous 
regulations that apply to licensed services. While there is unlicensed 
spectrum at other frequencies, TV white spaces are uniquely important 
in that they are lower in frequency than other unlicensed bands, which 
enables signals to better penetrate walls and trees and may enable a 
better consumer experience.
    124. Recognizing the value of both unlicensed and licensed spectrum 
as a community and educational asset that can be utilized to improve 
broadband access and provide for innovative uses among low-income 
Americans, the Commission seeks comment on how we can augment the 
Lifeline program through the use of wireless spectrum to extend the 
Lifeline program's reach to as many low-income consumers as possible. 
What, if any, additional costs may providers incur as part of employing 
unlicensed technology for the benefit of low-income consumers? How can 
the Commission best support the use of these more unconventional ways 
of providing broadband access to the low-income community?
    125. The Commission also seeks comment on other innovative wired or 
wireless technologies that may be similarly or better suited to provide 
low-income consumers with affordable broadband access than unlicensed 
or licensed spectrum or other, more traditional means of providing 
broadband. In proposing an alternative solution, commenters should 
describe how the alternative solution will complement the other 
programmatic changes and approaches the Commission discusses within 
this item.
2. Creating a New Lifeline Approval Process
    126. The Commission also seeks comment on alternative means by 
which it can increase competition in this space. The Commission's rules 
current require that a provider become an ETC prior to receiving 
Lifeline universal service support. As discussed above, evidence in the 
record indicates that the ETC designation may be an impediment to 
broader participation in the Lifeline program. Would creating a process 
to participate in Lifeline that is entirely separate from the ETC 
designation process required to receive high cost universal service 
support encourage broader participation by providers? The Commission 
seeks comment on a new process applying to all entities that provide 
Lifeline service and ask how to include sufficient oversight to address 
concerns about waste, fraud, and abuse. The Commission seeks comment on 
the policy benefits of such an approach, what responsibility the 
relevant Federal and state entities would have in such a scheme, and 
the Commission's legal authority to do so.
    127. Background. In 1985, the Commission created the Lifeline 
program to reduce qualifying consumers' monthly charges, and created 
Link Up to reduce the amount eligible consumers would pay for initial 
connection charges. The Commission did so because it found that 
``[a]ccess to telephone service has become crucial, to full 
participation in our society and economy, which are increasingly 
depending upon the rapid exchange of information. In many cases, 
particularly for the elderly, poor, and disabled, the telephone is 
truly a lifeline to the outside world. Our responsibilities under the 
Communications Act require us to take steps to prevent degradation of 
universal service and the division of our society into information 
`haves' and `have nots.' '' The Commission's legal authority for 
creating and amending the Lifeline program was pursuant to sections 1, 
4(i), 201, and 205 of the Communications Act.
    128. In the 1996 Act, Congress made explicit the universal service 
objective of ``quality services'' at ``affordable rates'' and that 
``low-income consumers . . . should have access to . . . advanced 
telecommunications and information services, that are reasonably 
comparable to those services provided in urban areas.'' In so doing, 
Congress embraced the Commission's Lifeline program and made clear that 
section 254 did not affect the pre-existing Lifeline program, stating 
``[n]othing in this section [254] shall affect the collection, 
distribution, or administration of the Lifeline Assistance Program.'' 
The Commission has interpreted section 254(j) to give the Commission 
the authority and flexibility to retain or modify the Lifeline program 
even if the Lifeline program has ``inconsistenc[ies] with other 
portions of the 1996 Act.'' Moreover, the Commission found that, ``by 
its own terms, section 254(j) applies only to changes made [to 
Lifeline] pursuant to section 254 itself. Our authority to restrict, 
expand, or otherwise modify the Lifeline program through provisions 
other than section 254 has been well established over the past 
decade.''
    129. Importantly, in 1997, when the Commission implemented the 
Telecommunications Act of 1996 and revised the Lifeline program, it 
found that it had the authority to provide Lifeline support to include 
carriers other than ETCs. At that time, however, the Commission decided 
that for administrative convenience and efficiency, it would only 
provide Lifeline support to ETCs. The Commission did observe that it 
would reassess this decision if it appeared Lifeline was not being made 
available to low-income consumers nationwide.
    130. Discussion. Some commenters have argued that nothing in the 
statute requires ETC designation to receive Lifeline support and urged 
the Commission to revise its rules accordingly. Section 254(e) states 
that entities must be ETCs to receive ``specific Federal universal 
service support'' but does not specifically tie this requirement to 
Lifeline, even though Congress did explicitly mention the Lifeline 
program in other parts of section 254. Does the legislative history 
suggest that the Congress did not intend for the ETC to be a 
precondition to receive Lifeline support? The history of this provision 
suggests that the ETC was

[[Page 42688]]

created to address concerns about cream skimming to ensure deployment 
in rural areas for high cost support was not compromised, concerns 
which are not present with an affordability program. The Commission 
seeks comment on these issues.
    131. Given the Commission's desire to promote competition for low-
income consumers and the evidence that the ETC process is currently 
deterring such entry, the Commission seeks comment on revisiting the 
1997 decision not to provide Lifeline support to non-ETCs to encourage 
broader participation in the Lifeline market. The Commission seeks 
comment on its legal authority to create a separate designation process 
for Lifeline. In particular, the Commission seeks comment on whether 
the Commission could provide Lifeline support based on universal 
service contributions made pursuant to section 254(d) authority, or 
would it need to adopt a separate mechanism relying on subsidies among 
rates as it used prior to the 1996 Act? The Commission has found that, 
``by its own terms, section 254(j) applies only to changes made 
pursuant to section 254 itself. Our authority to restrict, expand, or 
otherwise modify the Lifeline program through provisions other than 
section 254 has been well established over the past decade.'' Do 
sections 1, 4(i), 201, and 205 give the Commission authority to do so? 
Does section 706 of the 1996 Act or other statutory provisions provide 
the Commission with authority to give certain non-ETCs Lifeline 
support? As above, the Commission also seeks comment on whether the 
collection and disbursement of funds under an approach based on section 
706 (or other statutory provisions) would comport with federal 
appropriations laws.
    132. The Commission seeks comment on the process and mechanism to 
designate providers for participation in the Lifeline program and 
separate from the ETC designation process. What information should 
providers submit to participate in the Lifeline program? What 
certifications or other information should be required? Should the 
Commission use a process similar to certifications in the E-rate or 
rural health care programs today?
    133. In the Second FNPRM, the Commission is proposing and seeking 
comment on fundamental structural changes to the Lifeline program that 
further mitigate incentives for waste fraud and abuse, including 
removing the provider from determining eligibility. How do these 
changes impact the type of information and oversight necessary for 
Lifeline providers? For example, if the Commission reforms Lifeline to 
provide the subsidy to the consumer as a portable benefit, how does 
that impact the oversight necessary on the provider? Should the 
Commission consider a ``deemed grant'' approach to streamline approval? 
Should the Commission retain the use of compliance plans and, if so, 
should they be modified or changed? The Commission seeks comment on how 
to ensure sufficient oversight and accountability to reduce waste, 
fraud and abuse.
    134. The Commission seeks comment on the federal-state role in 
creating a new designation process. Lifeline and universal service 
generally has always involved federal-state partnerships and the 
Commission seeks comment on how to continue that work as the Commission 
seeks comment on a new framework. The Commission seeks comment on pros 
and cons of creating a national designation versus a state-by-state 
approach, or a combination thereof where states with individual 
Lifeline programs could supplement any federal Lifeline designation 
with additional conditions.
    135. The Commission seeks comment on the process of transitioning 
from designating ETCs to a new designation process. The Commission also 
seeks comment on opening a window for new providers to participate to 
help minimize administrative burdens on federal and state agencies. The 
Commission seeks comment on alternative approaches and how best to 
ensure that the Commission has sufficient checks and safeguards to 
address potential waste, fraud and abuse.

D. Modernizing and Enhancing the Program

    136. In this section, the Commission seeks comment on two proposals 
to update its rules to reflect the manner in which consumers use 
Lifeline service today. The Commission finds that all consumers, 
including low-income consumers, should have access to the same 
features, functions, and consumer protections.
1. TracFone Petition for Rulemaking Regarding Texting
    137. In light of the widespread use of text messages, and as part 
of the Commission's continuing efforts to modernize the Lifeline 
program, the Commission seeks comment on amending the Commission's 
rules to treat the sending of text messages as usage for the purpose of 
demonstrating usage sufficient to avoid de-enrollment from Lifeline 
service. In so doing, the Commission grants in part and denies in part 
a petition on this filed by TracFone. Specifically, the Commission 
grants that portion of Tracfone's petition that requests the initiation 
of a rulemaking proceeding to amend Sec.  54.407(c)(2) of the 
Commission's rules to allow Lifeline subscribers to establish usage of 
Lifeline service by sending text messages. The Commission denies, 
however, the portion of TracFone's petition that requests the 
initiation of a rulemaking to also include receipt of text messages to 
count as usage. Because the subscriber cannot control whether others 
send texts, the receipt of such texts should not be used as a basis for 
concluding that the subscriber wishes to retain service. The Commission 
also denies the portion of Tracfone's petition that concerns a request 
for interim relief allowing subscribers to use text messaging to 
establish usage during the pendency of the requested rulemaking. While 
the Commission thinks there is enough merit to TracFone's proposal to 
seek comment on a rule change, the Commission is not yet certain enough 
to find good cause to waive the rule to allow text messaging to count 
as usage.
    138. The Commission's rules currently require subscribers of 
prepaid Lifeline services to use the service at least once every 60 
days. The Commission adopted that requirement to ensure that Lifeline 
providers do not receive Lifeline support for customers who do not 
actually use the service. The requirement only applies to prepaid 
services because the Commission found that subscribers to post-paid 
Lifeline providers do not present the same risk of inactivity as 
subscribers to pre-paid services.
    139. In 2012, the Commission declined to include sending or 
receiving a text message in the list of activities that qualify as 
usage for purposes of Sec.  54.407(c)(2) of the Commission's rules, on 
the basis that text messaging is not a supported service. While it is 
true that text messaging is not currently a supported service, it is 
widely used by wireless consumers for their basic communications needs. 
According to TracFone, the rapid increase in use of texting by 
subscribers of wireless service, and the reliance on text messaging by 
individuals who are deaf, hard of hearing, or have difficulty with 
speech, weigh in favor of amending the Commission's rules to allow text 
messaging as an activity that constitutes usage of service.
    140. Allowing text messages to constitute usage would be a reversal 
of the Commission's previous decision. However, in light of the changes 
in consumer behavior highlighted by the extensive use of text 
messaging, the

[[Page 42689]]

Commission proposes to amend Sec.  54.407(c)(2) of the Commission's 
rules to allow the sending of a text message by a subscriber to 
constitute usage. Is it appropriate to base a subscriber's intention to 
use a supported service on that subscriber's use of a non-supported 
service? The Commission also seeks comment on whether the distinctions 
between text messaging, voice, and email should remain relevant, for 
the purposes of the usage rules, given that all such transmissions may 
occur over the same broadband Internet access service. The Commission 
also seeks comment on the conclusion that we should not allow the 
receipt of text messages to qualify as usage, because this would leave 
control of whether the subscriber ``intended'' to use the service in 
the hands of others.
2. Subscriber De-Enrollment Procedures
    141. In this section, the Commission proposes to adopt procedures 
to allow subscribers to terminate Lifeline service in a quick and 
efficient manner. The Commission has received anecdotal evidence that 
some subscribers cannot readily reach their Lifeline provider to 
terminate service, or their request to terminate service is not 
followed. As a result, funds are wasted for services that are either 
not used or no longer desired.
    142. Background. In the 2012 Lifeline Reform Order, the Commission 
codified rules requiring Lifeline providers to de-enroll any subscriber 
indicating that he or she is receiving more than one Lifeline-supported 
service per household, or if the subscriber neglects to make the 
required one-per-household certification on his or her certification 
form. In order to ensure consumers are fully informed about the terms 
of usage, the Commission also adopted rules requiring pre-paid Lifeline 
providers to notify their subscribers at service initiation about the 
non-transferability of the phone service, its usage requirements, and 
that de-enrollment and deactivation will result following non-usage in 
any 60-day period of time. The Commission also required Lifeline 
providers to update the database within one business day of de-
enrolling a consumer for non-use. These rules were adopted, among other 
reasons, to substantially strengthen protections against waste, fraud, 
and abuse and improve program administration and accountability. The 
Commission reasoned that ``[a]dopting usage requirements should reduce 
waste and inefficiencies in the Lifeline program by eliminating support 
for subscribers who are not using the service and reducing any 
incentives ETCs may have to continue to report line counts for 
subscribers that have discontinued their service.''
    143. Although Sec.  54.405(e)(1) of the Commission's rules requires 
Lifeline providers to de-enroll subscribers when an Lifeline provider 
has a reasonable basis to believe that the subscriber no longer meets 
the Lifeline-qualifying criteria (including instances where a 
subscriber informs the Lifeline provider or the state that he or she is 
ineligible for Lifeline), this provision does not cover those 
situations where, for whatever reason, subscribers themselves wish to 
terminate Lifeline services.
    144. Discussion. The Commission proposes to require Lifeline 
providers to make readily available a 24 hour customer service number 
allowing subscribers to de-enroll from Lifeline services, for any 
reason, and codify the obligation that Lifeline providers must 
implement the subscriber's decision within two business days of the 
request. The Commission seeks comment on this proposal.
    145. The Commission seeks further comment on requiring Lifeline 
providers to publicize their 24-hour customer service number in a 
manner reasonably designed to reach their subscribers and indicate, on 
all materials describing the service that subscribers may cancel or de-
enroll themselves from Lifeline services, for any reason, without 
having to submit any additional documents. For the purposes of this 
rule, the Commission proposes that the term ``materials describing the 
service'' includes all print, audio, video, and web materials used to 
describe or enroll in the Lifeline service offering, including 
application and certification forms and materials sent confirming 
initiation of the service. The Commission seeks comment on a rule 
requiring Lifeline providers to record such requests for termination 
and make such records available to state and Federal regulators upon 
request. The Commission also makes clear that a Lifeline provider's 
failure to respect their subscribers' wishes to de-enroll from Lifeline 
service may subject the Lifeline provider to enforcement action.
    146. The Commission seeks comment on whether it should require a 
particular authentication process or leave that decision up to each 
Lifeline provider. In order to make this process easy for the 
subscriber wishing to terminate Lifeline service, the Commission 
proposes that ETCs authenticate subscribers solely through social 
security numbers, account numbers, or some other personal 
identification verifying the subscriber's identity. In order to 
minimize the burden on Lifeline providers implementing these de-
enrollment procedures, including any customer authentication processes 
the Commission adopts, the Commission further proposes that any rules 
regarding subscriber de-enrollment shall become effective six months 
after the release of an order implementing such rules, and seeks 
comment on this proposal. However, the Commission notes that, prior to 
the effective date of any requirements in this section, a Lifeline 
provider's failure to de-enroll the subscriber within a reasonable 
period of time upon request may constitute a violation of the Act and 
the Commission's rules.
    147. The Commission seeks comment on alternative ways to achieve 
the same goals. Relatedly, the Commission seeks comment on revising 
Sec.  54.405(e)(1) of the Commission's rules to require Lifeline 
providers to de-enroll subscribers within five business days. The 
Commission also seeks comment on any other barriers to implementation 
the Commission should consider related to subscriber de-enrollment. The 
Commission believes that these rules will further its interest in 
reducing waste and fraud, improve program administration and 
accountability, and facilitate subscriber choice and ultimate control 
over their Lifeline service.
3. Wireless Emergency Alerts
    148. Wireless Emergency Alerts (WEA) play an important role in the 
nation's alerting and public warning system. Participating carriers 
send, free-of-charge to their subscribers, text-like messages alerting 
subscribers of emergencies in their area, falling under one of the 
following three classes: (1) Presidential alerts, (2) imminent threats, 
and (3) child abduction emergency, or AMBER, alerts. This system 
(formerly known as the Commercial Mobile Alert System) allows 
authorized government agencies to send geographically targeted 
emergency alerts to commercial wireless subscribers who have WEA-
capable mobile devices and whose commercial wireless service provider 
has elected to offer the service. Under the WARN Act, participation in 
WEA system by wireless carriers is widespread but entirely voluntary. 
As a result, not all CMS providers currently provide WEA service or do 
not intend to provide WEA service through their entire service areas.
    149. The Commission seeks comment on ways to increase Lifeline 
provider participation in WEA. Are there measures the Commission could 
take to encourage support of WEA, consistent with the Commission's 
legal authority and core mission to promote the safety

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of life and property through communications? To what extent do Lifeline 
providers, both facilities-based and non-facilities-based, already 
support WEA today? The Commission observes that under the WARN Act, 
participation is voluntary; do providers have sufficient incentive to 
participate in WEA on a voluntary basis? In order to ensure that 
Lifeline service keeps pace with the IP-based network transitions, as 
well as evolving consumer needs, the Commission seeks comment on what 
additional public safety functionalities or capabilities it should 
consider as a critical component of Lifeline service offerings.

E. Efficient Administration of the Program

    150. In this section of the Second FNRPM, the Commission seeks 
comment on a number of reforms to increase the efficient administration 
if the program.
1. Program Evaluation
    The Government Accountability Office has recommended that the 
Commission conduct a program evaluation to determine how well Lifeline 
is serving its intended objectives. For example, one of the goals that 
the Commission has set for the Lifeline program is increasing the 
availability of voice service for low-income Americans, measured by the 
difference in the penetration rate (the percentage of households with 
telephone service) between low-income households and households with 
the next highest level of income. Without a program evaluation, 
however, GAO reports that the Commission is currently unable to 
determine the extent to which Lifeline has assisted in lowering the gap 
in penetration rates. The Commission therefore seeks comment on whether 
a program evaluation is needed to determine the extent to which 
Lifeline has contributed towards fulfilling its goals, such as 
narrowing the gap in telephone penetration rates, and at what cost. Is 
this the right goal for Lifeline program or should it focus on 
affordability? Should the Commission focus on measuring program 
efficiency by determining the amount of people who no longer need 
Lifeline? In measuring the effectiveness of Lifeline on low-income 
broadband subscribers, how can the Commission capture the benefits that 
flow from getting consumers connected, such as the ability to obtain 
employment, education and improve their health care? How should a 
program evaluation be structured? How expensive would it be to 
implement? Moreover, if Lifeline is expanded to include broadband 
support, how could we evaluate the effectiveness of such an expansion? 
What metrics and timeframe should the Commission use to determine 
whether such funds were being spent efficiently?
2. Tribal Lands Support
    151. The Commission now turns to the universal service support 
provided to low-income recipients residing on Tribal lands, often 
referred to as enhanced Tribal support. Enhanced support provides a 
higher monthly subsidy amount as well as Link Up at service activation. 
In this section, the Commission seeks additional information on whether 
and how enhanced Tribal support is being utilized on Tribal lands, and 
whether the minimum service level for Tribal consumers should be 
different from the proposed minimum service levels for other consumers. 
The Commission also seeks comment on narrowly tailoring enhanced 
support to ensure that it actually supports the deployment of 
infrastructure. It also seeks comment on requiring additional 
documentation to demonstrate that a subscriber resides on Tribal lands.
    152. Background. The Commission recognizes its historic federal 
trust relationship with federally recognized Tribal Nations, has a 
longstanding policy of promoting Tribal self-sufficiency and economic 
development, and has developed a record of helping ensure that Tribal 
Nations and their members obtain access to communications services. It 
is well documented that communities on Tribal lands historically have 
had less access to telecommunications services than any other segment 
of the U.S. population. Given the difficulties many Tribal consumers 
face in gaining access to basic services by living on typically remote 
and underserved Tribal lands, the Commission recognizes the important 
role of universal service support in helping to provide 
telecommunications services to the residents of Tribal lands.
    153. Under the current rules, Lifeline providers that are 
authorized to provide service on Tribal lands may receive the $9.25 per 
month that is offered for any eligible low-income consumer and an 
additional amount of up to $25 per month for service provided to 
eligible low-income residents of Tribal lands--a total of up to $34.25 
per month for each eligible low-income consumer on Tribal lands. 
Additionally, under the current enhanced Link Up program, Lifeline 
providers that receive high-cost support on Tribal lands may receive a 
one-time support payment of up to $100 for each eligible low-income 
subscriber on Tribal lands enrolled in the Lifeline program to cover 
the cost of connecting a consumer to service.
    154. In the 2000 Tribal Order, 65 FR 12280, August 4, 2000, the 
Commission adopted several measures to improve low-income support for 
eligible residents living on Tribal lands, including the adoption of 
enhanced Lifeline and Link Up support. The Commission stated that the 
additional support might provide Lifeline providers an incentive to 
``deploy telecommunications facilities in areas that previously may 
have been regarded as high risk and unprofitable'' and also to attract 
needed financing of facilities on Tribal lands. The Commission noted 
that, ``unlike in urban areas where there may be a greater 
concentration of both residential and business customers, carriers may 
need additional incentives to serve Tribal lands that, due to their 
extreme geographic remoteness, are sparsely populated and have few 
businesses.'' The Commission believed the enhanced Lifeline and Link Up 
support would encourage Lifeline providers to construct facilities on 
Tribal lands that lacked such facilities, encourage new entrants 
offering alternative technologies to seek ETC status, and address the 
high toll charges that Tribal residents incur.
    155. In its 2012 Annual Report, the Commission's Office of Native 
Affairs and Policy provided case studies that showed the benefits of 
enhanced Tribal support and what some Tribal Nations have been able to 
achieve in terms of affordable and accessible service on Tribal lands. 
For many Tribally-owned ETCs, for example, the names Lifeline and Link 
Up resonate strongly, given the very high levels of unemployment in 
Tribal lands, the very high percentage of Tribal families with incomes 
well under the Federal Poverty Guidelines, and the remote nature of 
Tribal Reservations. For example, seventy-eight percent of Hopi 
Telecommunications Inc.'s (HTI) residential customers are eligible for 
Lifeline. The Lifeline and Link Up programs have been vital assets as 
HTI has expanded the reach and adoption of communications services 
across the Hopi Reservation. While the Commission recognizes the 
benefits that enhanced Tribal support have provided to date, however, 
Tribal Nations have indicated that there is still much that can be done 
to encourage infrastructure build-out and improve the level of 
telecommunications service and affordability of those services for 
Tribal residents.
    156. Impact of Enhanced Lifeline and Link Up. The Commission seeks

[[Page 42691]]

additional information and data on the utilization of enhanced Lifeline 
and Link Up support for consumers on Tribal lands and the carriers that 
serve them. How is the enhanced Lifeline support utilized by carriers 
and how does it benefit consumers on Tribal lands? How much do 
residents of Tribal lands typically pay per month for voice service 
without enhanced Lifeline support? Does the additional $25 per month 
subsidy achieve the intended goal of making voice service affordable 
for residents of Tribal lands? If not, how should the Commission modify 
this to better effectuate the intended goal? What types of service 
plans are offered on Tribal lands, and how do they differ if the 
consumer receives enhanced Lifeline support from a wireless or a 
wireline carrier? How many minutes are offered to consumers on Tribal 
lands receiving enhanced Lifeline support?
    157. The Commission also seeks comment, information, and data on 
the utilization of enhanced Link Up support for the benefit of 
consumers on Tribal lands and the carriers that serve such consumers. 
How is the subsidy utilized by carriers and how does it affect the 
services delivered to consumers on Tribal lands? How much do residents 
of Tribal lands pay and how much do carriers charge for connecting a 
Tribal resident to voice service? What are the variables affecting how 
much is charged? Does the Link Up subsidy achieve the intended goal of 
making telephone service available and affordable for residents of 
Tribal lands? If not, how should the rule be modified to better 
effectuate the intended goal? If enhanced Tribal Link Up was 
eliminated, what effect would it have on affordability?
    158. Additionally, the Commission knows there are many factors that 
contribute to whether telecommunications service is available and 
affordable for low-income consumers living on Tribal lands. What 
policies or practices should the Commission adopt to ensure that the 
Lifeline and Link Up programs are successful on Tribal lands? What 
measures should be implemented to prevent waste, fraud, and abuse?
    159. Infrastructure Deployment. Recognizing that one of the 
Commission's original intentions in adopting enhanced Tribal Lifeline 
support was to encourage deployment and infrastructure build-out to and 
on Tribal lands, the Commission seeks comment on the extent to which 
new infrastructure development and deployment has resulted from 
enhanced Tribal support. In particular, the Commission seeks data and 
comment on where and what types of infrastructure deployments have 
occurred on Tribal lands in the last 14 years. What drives the 
successful build-out of telecommunications infrastructure on Tribal 
lands? Specifically, the Commission seeks comment on what measurable 
benefits the additional $25 per month in Lifeline support and the $100 
in Link Up support provide towards infrastructure deployment and the 
decisions about where and how to build infrastructure on and to Tribal 
lands. For example, has enhanced support resulted in additional 
deployment in areas that may have been regarded as ``high risk and 
unprofitable,'' or has it attracted needed financing of facilities on 
unserved Tribal lands, as the Commission originally intended?
    160. Lifeline program data show that two-thirds of enhanced Tribal 
support goes to non-facilities-based Lifeline providers, and it is 
unclear whether the support is being used to deploy facilities in 
Tribal areas. The Commission proposes, therefore, to limit enhanced 
Tribal Lifeline and Link Up support only to those Lifeline providers 
who have facilities. Should there, for example, be different approaches 
to enhanced support provided to non-facilities-based Lifeline providers 
serving Tribal lands? One option would be to limit enhanced Lifeline 
support only to those ETCs currently receiving high-cost support, 
similar to the Commission's Link Up reforms. Another option would be to 
adopt the proposal of the OCC that the Commission limit enhanced 
Lifeline support to those Lifeline providers that are deploying, 
building, or maintaining infrastructure on Tribal lands, even if they 
do not or are not eligible to receive high-cost support. The Commission 
seeks comment on the benefits and drawbacks to these proposed options. 
What would be the impact of such limitations on the provision of 
Lifeline-supported service to residents of Tribal lands? How can the 
Commission best accomplish the objective of encouraging build out to 
Tribal lands?
    161. If the Commission were to adopt a rule limiting enhanced 
Lifeline support as proposed above, the Commission seeks comment on 
whether the annual submission of FCC Form 481 would be sufficient to 
determine whether a Lifeline provider was deploying, building, or 
maintaining infrastructure on Tribal lands. Would any changes to that 
form be required to document that the build-out was occurring on Tribal 
lands? For those Lifeline providers that either are not receiving or 
are not eligible for high-cost support, but seek to receive enhanced 
Lifeline support consistent with the OCC proposal, what documentation 
would be necessary to ensure that build out was occurring on Tribal 
lands? Should such a Lifeline provider have to demonstrate that it is 
continuing to build infrastructure on Tribal lands?
    162. The Commission also seeks comment on whether we should focus 
enhanced Tribal support to those Tribal areas with lower population 
densities, on the theory that provision of enhanced support in more 
densely populated areas is inconsistent with the Commission's 
objectives. In the 2000 Tribal Order, the Commission determined that 
the ``unavailability or unaffordability of telecommunications service 
on tribal lands is at odds with our statutory goal of ensuring access 
to such services to `[c]onsumers in all regions of the Nation, 
including low-income consumers.' '' In response, the Commission 
established the enhanced Tribal Lifeline subsidy of up to an additional 
$25 available to qualified residents of Tribal lands in order to 
incentivize increased ``telecommunications infrastructure deployment 
and subscribership on tribal lands.'' Given the Commission's desire to 
use enhanced support to incent the deployment of facilities on Tribal 
lands, the Commission seeks comment as to whether it is appropriate to 
provide such enhanced support in areas with large population densities 
where advanced communications facilities are widely available. The 
Commission seeks comment on whether it is appropriate, given the 
Commission's goals, to focus enhanced Tribal support in this manner. 
Should the Commission focus enhanced support only on areas of low 
population density that are likely to lack the facilities necessary to 
serve subscribers? Should the Commission exclude urban, suburban, or 
high density areas on Tribal lands?
    163. Certain Tribal lands have within their boundaries more densely 
populated locations, such as Tulsa, Oklahoma, which is eligible for 
enhanced Tribal Lifeline support as it is within a former reservation 
in Oklahoma, but nonetheless has a comparatively high population 
density compared to many other Tribal lands. The Commission notes there 
are other potential locations on Tribal lands, such as Chandler, 
Arizona; Reno, Nevada; or Anchorage, Alaska. If we adopted an approach 
that focused Tribal support on less densely populated areas, what level 
of density would be sufficient to justify the continued receipt of 
enhanced Tribal lands support? What level of geographic granularity 
should we

[[Page 42692]]

examine to apply any population density-based test? The Commission 
notes that, with respect to Tulsa, Oklahoma, the history of Tribal 
lands in Oklahoma has led at least one other federal program to exclude 
certain higher density Tribal lands from Tribal income assistance 
programs in Oklahoma. For instance, the United States Department of 
Agriculture's (USDA) Food Distribution Program on Indian Reservations 
(FDPIR) excludes from eligibility residents of towns or cities in 
Oklahoma greater than 10,000. The Commission seeks comment on whether 
we should implement a similar approach that excludes urban areas on 
Tribal lands from receiving enhanced Tribal support. The Commission 
directs ONAP, in coordination with the Bureau, and other Bureaus and 
Offices as appropriate, to engage in government-to-government 
consultation with Tribal Nations to develop the record and obtain the 
perspective of Tribal governments on this question.
    164. Changes to Self-Certification Requirement. The Commission 
seeks comment on whether to require additional evidence of residency on 
Tribal lands beyond self-certification. The Commission recognizes that 
there may be challenges in verifying Tribal residency, but it is 
concerned that a lack of verification may provide opportunities for 
waste, fraud, and abuse, particularly in light of the substantial 
enhanced support currently available to Lifeline providers operating on 
Tribal lands. The Commission also seeks comment on the manner in which 
residents of Tribal lands living at non-standard addresses should prove 
their residence on Tribal lands. Should the obligation to confirm 
Tribal residency rest with the Lifeline provider, rather than the 
subscriber? If the Commission implements a requirement to verify Tribal 
lands residency, what impact will that have on potential eligible, low-
income and current eligible, low-income subscribers of Lifeline? The 
Commission specifically invites and will foster government-to-
government consultation with Tribal Nations on these matters.
3. E-Sign
    165. In this section, the Commission seeks comment on ways to 
strengthen the integrity of electronic signatures in a manner that is 
both consistent with the Electronic Signatures in Global and National 
Commerce Act and that increases protections against waste, fraud, and 
abuse. The Commission also seeks comment on reforms to ensure that the 
clear intent of the subscriber to enroll in Lifeline and his/her 
understanding of the rules is reflected in the completed Lifeline 
application.
    166. Background. The 2012 Lifeline Reform Order clarified that 
Lifeline providers could obtain electronic signatures from potential or 
current subscribers certifying eligibility pursuant to Sec.  54.410 of 
the Commission's rules. The Commission determined that electronic 
signatures and interactive voice response systems allow Lifeline 
providers to simplify their enrollment procedures for consumers 
applying for Lifeline service and that it is in the public interest to 
allow such signatures. While the E-Sign Act contains a strong 
presumption in favor of permitting electronic signatures or electronic 
records between private parties in transactions involving interstate or 
foreign commerce, it also permits federal and state agencies to issue 
rules and guidance pertaining to electronic signatures and records, 
consistent with the E-Sign Act. The Commission notes that simply making 
a signature or record electronic does not inoculate the record from 
concerns about fraud or abuse. To the extent an electronic signature or 
record raises concerns about fraud or abuse in the Lifeline context, 
the Commission and/or USAC may investigate how the signature was 
obtained and the record (e.g., certification or recertification form) 
finalized. Illegible signatures, similarities between signatures, or 
automatically generated signatures, in the absence of more information 
about how the signature was generated, may well raise questions about 
whether the named subscriber in fact had ``the intent to sign the 
record.''
    167. Discussion. The Commission recognizes the ever increasing use 
of tablets and other electronic devices to sign up potential Lifeline 
subscribers, and laud Lifeline provider efforts to reach out to 
legitimate subscribers who can benefit from Lifeline service. 
Nevertheless, given the Commission's responsibility to safeguard the 
Fund from waste, fraud, and abuse, it must ensure that new technologies 
are deployed with adequate protections and mechanisms that permit 
oversight. Thus, the Commission seeks comment at this time on the types 
of techniques or processes whose use might, in the event of an 
investigation or audit, show that an electronic signature is valid.
    168. In responding to this query, commenters may also take note of 
other proposals in this Second FNPRM and state whether coupling certain 
signature verification processes with additional proposed safeguards 
may help in demonstrating that a signature is in fact a valid 
``electronic signature.'' In other words, does the signature shown on 
the electronic certification form in fact reflect the subscriber's 
intent to sign up for Lifeline service?
    169. The Commission seeks comment on whether adopting regulations 
based on what state governments or other federal agencies have done 
would be suitable in this context. The Commission recognizes that in 
many instances state and federal regulations concern transactions 
between a state or federal agency and the public, perhaps allowing for 
greater government leeway in determining what specific technology 
should be used. While the Commission does not wish to dictate the use 
of technologies, it cannot permit a system where a random stray mark, 
attributed to stylus difficulties, or an automatically generated 
signature, without more constitute valid signatures. In this regard, 
the Commission seeks comment on what safeguards Lifeline providers have 
adopted to date to ensure that an electronic signature represents the 
named subscriber's ``intent to sign the record.'' The Commission also 
seeks comment on the utility of requiring service providers to retain 
the IP, or other unique identifier, such as a MAC address, affiliated 
with the email or device that was used for signing up a subscriber. The 
Commission seeks comment on whether such mechanisms might be useful in 
detecting and ultimately curtailing fraud. For example, would retaining 
the MAC addresses associated with iPads used by sales agents enable 
service providers and, if the need should arise, regulators to better 
monitor the sign-up practices of such agents? Such an approach would 
assist companies and auditors in determining patterns of fraudulent 
behavior by agents or a subset of agents within the company.
    170. Moreover, as an added protection, to ensure all subscribers 
truly understand the certifications they are making, the Commission 
proposes that all written certifications (irrespective of whether they 
are in paper or electronic form) mandate that subscribers initial their 
acknowledgement of each of the requirements contained in 47 CFR 
54.410(d)(3). In proposing these requirements, the Commission 
emphasizes that Lifeline service providers remain mindful of their 
obligation under 15 U.S.C. 7001(e) to ensure that an electronic record 
be in a form that is capable of being retained and accurately 
reproduced for later reference. In this regard, the Commission finds 
that it is consistent with section 7001(e) of the E-Sign Act that 
Lifeline providers be able to

[[Page 42693]]

reproduce their certification and recertification forms, along with the 
actual signatures placed on the forms, in the event of a federal or 
state inquiry. The Commission seeks comment on these proposals.
4. The National Lifeline Accountability Database: Applications and 
Processes
    171. As part of the Commission's ongoing efforts to guard against 
waste, fraud, and abuse in the Lifeline program, we propose a number of 
additional applications to the NLAD, including the use of the NLAD to 
calculate Lifeline providers' monthly Lifeline reimbursement. The 
Commission seeks comment on this proposal and others below.
    172. Using the NLAD for Reimbursement. The Commission seeks comment 
on the legal and administrative aspects of transitioning to a process 
whereby Lifeline providers' support is calculated based on Lifeline 
provider subscriber information in the NLAD. For example, how would 
officers continue to make the monthly certifications now required on 
the FCC Form 497 in the NLAD? Should the Commission consider requiring 
officers to make a separate electronic certification? The Commission in 
the 2012 Lifeline Reform Order permitted states to opt out of the NLAD 
by demonstrating that they had a comprehensive system in place to check 
for duplicative federal Lifeline support. To date, four states and one 
territory have received permission to opt out of the NLAD and Lifeline 
providers serving Lifeline subscribers in those states are not required 
to submit subscriber information to the NLAD. If the Commission decides 
to calculate Lifeline support based on Lifeline provider submissions to 
the NLAD, would Lifeline providers operating in states that opted out 
of the NLAD be required to continue to file FCC Form 497s for those 
states?
    173. The Commission notes that in the national verifier section 
above, it sought comment on whether it would be equitable and non-
discriminatory pursuant to section 254(d) to require only those 
Lifeline providers that will benefit from the functions of the national 
verifier to contribute to its implementation and operation through 
additional USF funds. Since only certain Lifeline providers will 
utilize the NLAD, just as the national verifier, the Commission seeks 
comment on whether it is equitable and non-discriminatory to require 
Lifeline providers that will utilize the benefits of the NLAD to 
contribute additional USF funds pursuant to section 254(d). Under this 
proposal, how would support be allocated amongst the contributing 
Lifeline providers? Would Lifeline providers that utilize the NLAD more 
than other Lifeline providers be required to pay more? What methodology 
should the Commission use if implementing this support mechanism?
    174. The Commission also asks about methods to address situations 
in which there is a dispute about a Lifeline provider's subscribership. 
The Commission's rules, for example, currently require that the NLAD be 
updated with subscriber de-enrollments within one business day. If 
Lifeline providers receive reimbursement from the NLAD, should this 
rule be modified to ensure that Lifeline providers do not receive 
reimbursement for subscribers that they no longer serve? The NLAD 
incorporates a dispute resolution process whereby Lifeline providers 
have an opportunity to ensure that eligible subscribers are not 
inadvertently rejected by the NLAD as ineligible. How should support 
for subscribers in the dispute resolution process be treated for the 
purpose of determining Lifeline support? What additional safeguards 
against fraud, if any, should be implemented in the NLAD in light of a 
direct relationship between subscriber counts in the NLAD and receipt 
of payment?
    175. Transition Period. The Commission recognizes that using 
information in the NLAD to generate Lifeline provider support payments 
may constitute a substantial change in the way Lifeline providers 
operate and USAC administers the program. The Commission therefore 
proposes to establish a transition period to ensure that Lifeline 
providers and USAC have put in place the necessary systems and 
processes. The Commission seeks comment on the length and contours of 
such a transition period.
    176. Fees for Using the NLAD TPIV Search. To date, the costs 
associated with developing the NLAD, maintaining the applications and 
all of its functionalities, including the Third-Party Identification 
Verification (TPIV) check, have come from the Fund. The Commission 
seeks comment on whether Lifeline providers should pay some or all of 
the cost for TPIV checks and whether the Commission has the authority 
to impose such a requirement. These costs are incurred on a per-
transaction basis and are paid for by the Fund to the TPIV vendor. At 
the request of the industry, USAC implemented a process to permit 
Lifeline providers to submit subscriber information through the TPIV 
check prior to enrolling the subscriber. Running the TPIV check prior 
to determining whether to enroll a potential subscriber might be 
considered a routine customer acquisition cost and, viewed in this 
light, it might be appropriate to require Lifeline providers to pay 
this cost. In addition, the TPIV check is run again when the subscriber 
is actually enrolled in the NLAD. The Commission seeks comment on 
whether some or all of the costs associated with running a TPIV check 
within the NLAD should be paid for by Lifeline providers. Are there 
other ways that the NLAD can recoup the cost of TPIV functionality? The 
Commission seeks comment on whether the NLAD should recoup the cost of 
TPIV functionality through additional contributions from Lifeline 
providers to the Fund that utilize the TPIV functionality. The 
Commission seeks comment on whether recouping the costs of TPIV 
functionality through contributions from those Lifeline providers that 
utilize the functionality would be equitable and non-discriminatory 
pursuant to section 254(d). Similarly, the Fund currently pays for the 
recertification process for those Lifeline providers that elect to use 
USAC. Should Lifeline providers be required to pay for some or all of 
that cost?
    177. Additional Applications of and Changes to NLAD and Related 
Processes. The Commission also seeks comment on using the information 
stored in the NLAD for other aspects of the Lifeline program. For 
example, should USAC use subscriber information in the NLAD to perform 
recertification in those instances where a Lifeline provider selects 
USAC to perform the recertification? The Commission seeks comment on 
the manner in which the NLAD currently works and whether there are 
changes that could be made that would further limit the potential for 
waste, fraud, and abuse.
5. Assumption of ETC Designations, Assignment of Lifeline Subscriber 
Base and Exiting the Market
    178. The Commission proposes rules to minimize the disruption to 
Lifeline subscribers associated with the transfer of control of ETCs or 
the sale of assets and lists of customers receiving benefits under the 
program, as well as the transfer of ETC designations between providers. 
The Commission seeks comment on proposals for when it should permit an 
ETC to assume an ETC designation from another carrier. The Commission 
also proposes establishing notification requirements when a carrier 
sells or otherwise transfers Lifeline

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subscribers to another provider or exits the market. Today, in order to 
receive reimbursement for providing Lifeline service to qualified-low-
income consumers, a carrier must be an ETC. Although state commissions 
have primary responsibility for designating ETCs under section 
214(e)(2) of the Act, that responsibility shifts to the Commission for 
carriers ``providing telephone exchange service and exchange access 
that is not subject to the jurisdiction of a State commission.'' The 
Bureau has previously determined that the transfer of control of 
licenses and other authorizations from an entity already designated as 
an ETC to another entity that has not been designated as an ETC is 
insufficient for the transferee to assume the ETC status of the 
acquired ETC. Rather, the transferee must petition the proper 
designating authority for its own designation. The transferee is an ETC 
only after the relevant authority determines that the transferee 
satisfies all the requirements of the Act.
    179. The Commission also requires any non-facilities-based carriers 
seeking to offer Lifeline service to submit to the Bureau and receive 
approval of a compliance plan. The approval of a compliance plan is 
limited to the entity, and its ownership, as they are described in the 
compliance plan approved by the Bureau, and any material changes in 
ownership or control require modification of the compliance plan that 
must be approved by the Bureau in advance of the changes. The 
Commission has not otherwise addressed specific requirements on ETCs 
that seek to transfer a Lifeline subscriber to another entity.
    180. Finally, section 214 of the Act requires domestic 
telecommunications carriers to obtain authorization to undertake 
acquisitions of assets such as by the purchase of transmission lines or 
customers, or through acquisition of corporate control, such as by 
acquisitions of equity ownership. The Commission treats acquisitions, 
whether they are through a stock or asset transaction, in the same 
manner by requiring section 214 approval prior to consummation of the 
transaction. In cases in which a carrier does not transfer its 
subscriber base to another entity but instead discontinues service for 
those customers, the carrier must obtain authorization from the 
Commission prior to discontinuing the service. In practice, however, 
today these rules apply to wireline or fixed wireless service ETCs, 
either facilities-based or resellers. The Commission has forborne from 
imposing the section 214(a) requirements on commercial mobile radio 
service (CMRS) providers' provision of domestic telecommunication 
services.
    181. Assumption of ETC Designations. The Commission proposes 
requirements to facilitate assumption of ETC designations in which the 
Commission is the designating authority (FCC Designated ETCs). In 
circumstances when an entity seeks to acquire an FCC Designated ETC, 
the Commission proposes to continue to require an acquiring entity that 
has not been designated as an ETC by the Commission to file a petition 
with the Commission seeking ETC designation for the jurisdictions 
subject to the proposed transaction involving the FCC Designated ETC 
and await Commission action in determining whether such petition 
satisfies all the requirements of the Act just as carriers are required 
to do today. For the questions below, the Commission also seeks comment 
on applying a similar process if the Commission provides Lifeline 
support to non-ETCs or creates a separation designation.
    182. The Commission proposes that these requirements would apply 
when the acquiring entity becomes the ETC using a different corporate 
name or operating entity, and also would apply when the acquiring 
entity maintains the acquired ETC's corporate name or operating entity. 
In proposing such requirements, the Commission seeks comment on the 
approval process and obligations for all impacted entities, including 
the acquired ETCs. The Commission also proposes that these requirements 
would not apply to designations in which the acquired entity was 
designated by the state and the state continues to exercise authority 
to designate such carriers (State Designated ETCs). The Commission is 
persuaded that entities it has never evaluated as an ETC should 
continue to have the obligation to file their own ETC petition and that 
a more streamlined approach is better suited for transactions where the 
acquiring entity is an existing FCC Designated ETC.
    183. The Commission proposes a more streamlined approach for 
transactions where the acquiring entity is also an FCC Designated ETC. 
The Commission has already evaluated whether such entities satisfy the 
requirements of the Act so there is a presumption it is unnecessary for 
the Commission to undertake the same analysis again. The Commission 
seeks comment on requiring an acquiring entity that is an FCC 
Designated ETC, and where such designation has not been relinquished or 
revoked, to notify the Commission of its intent to assume control of 
the FCC Designated ETC held by the acquired entity, details of the 
transaction, how the acquiring entity is financially and technically 
capable to offer Lifeline service to the selling carrier's Lifeline 
subscribers, and how allowing the acquiring entity to assume the 
selling carrier's ETC designation is in the public interest. To comply 
with a Commission notification requirement, the Commission seeks 
comment on the period of time that an acquiring entity would notify the 
Commission of its intent to acquire or assume the selling carrier's ETC 
designation and the details contained in such notice, including whether 
such transaction involved high-cost support prior to consummation of 
the transaction. If the Commission or Bureau does not act on the ETC's 
notification within a certain period, the Commission proposes that the 
transaction would be deemed approved and seek comment on that period of 
time. If the Commission or Bureau acts on the ETC's notification within 
the designated period of time via Public Notice or other type of notice 
to impacted entities, the proposed transaction would not take effect 
until the Commission or Bureau take affirmative action on the proposed 
transaction. The Commission seeks comment on this process for the 
Commission or Bureau to act regarding such transactions, and whether 
the process should change if there is an underlying transaction 
connected with the assumption or transfer of the ETC designations 
(e.g., transfer of licenses required to provision wireless service, 
obligations specific to section 214 of the Act).
    184. The Commission recognizes that states, as designating 
authorities, have their own procedures to address the assumptions and 
transfers of ETC designations. The Commission seeks comment from states 
and third parties on whether we should consider certain state 
procedures addressing transfer of ETC designations in modifying the 
Commission's processes.
    185. Requirements for the Assignment of Subscriber Base. In 
addition to procedures for the assumption or transfer of ETC 
designations, the Commission proposes to adopt rules to govern the sale 
or transfer of its Lifeline subscriber list to another service 
provider, including any rules regarding the transfer of subscribers 
between ETCs within the NLAD. To make certain all relevant authorities 
and the affected Lifeline subscribers are aware of a transaction in 
which one provider acquires another ETC or its Lifeline subscriber 
base, the Commission seeks comment propose rules to ensure

[[Page 42695]]

adequate notice is given to relevant parties.
    186. Specifically, the Commission proposes requiring an acquiring 
carrier that is not currently subject to the 214 requirements, or 
already subject to Commission approval of the underlying transaction 
(i.e., transfer of licenses required to provision wireless service), to 
provide notice to the affected customers, Commission, USAC, and the 
state designating authority of the transaction involving assignment of 
the Lifeline subscriber base. The Commission has previously adopted 
rules to implement section 214 that require telecommunications carriers 
other than CMRS providers to seek authorization from the Commission of 
forthcoming transfers of control or assignment of assets such as 
subscriber lists from one provider to another. By extension, the 
Commission is persuaded that the Commission, USAC, state designating 
authorities, and, most importantly, affected Lifeline subscribers, 
should have notice of such transactions (including those involving CMRS 
providers) to ensure that subscribers have the option of choosing 
alternative providers and that the relevant authorities are on notice 
of such transfers to ensure compliance with Lifeline program rules. If 
the Commission were to adopt such requirements, the Commission seeks 
comment on the time period and content for such notice to each of the 
affected parties--affected subscribers, the Commission, USAC, and the 
state designating authority.
    Exiting the Lifeline Market. In some circumstances, a Lifeline 
provider may stop providing Lifeline service and we propose in such 
situations that the Lifeline provider's subscribers be provided notice 
of the upcoming event. For example, when ETCs decide to exit the market 
or transfer to a non-ETC, the Commission seeks comment on whether the 
ETC should give affirmative notice to the Commission and its affected 
Lifeline subscribers that it will no longer be providing Lifeline 
service, if it is not already subject to such an obligation. The 
Commission notes that CMRS-provider ETCs, for example, are not subject 
to the Commission's discontinuance rules. The Commission seeks comment 
on applying this requirement to any ETCs or non-ETCs that are not 
subject to the Commission's discontinuance rules. The Commission is 
concerned that the absence of such notification rules in the 
circumstances described above could lead to consumer disruption or 
encourage waste and abuse of the Lifeline program. What form should 
such notices take? Should notices also be sent to states, USAC, or 
other entities?
    187. The Commission proposes that this requirement would be a 
condition of receipt of Lifeline support. Under this scenario, the 
Commission is not proposing to reinstate the discontinuance 
authorization rules for which the Commission has forborne for CMRS 
providers. The notice requirements the Commission seeks comment on here 
are not pre-approval requirements but are intended to ensure that 
Lifeline consumers have the opportunity to seek an alternative 
provider. The notice provisions would also support the Commission's 
efforts against waste by requiring providers to inform regulators 
before exiting the market and attempting either to benefit from exit 
transactions or to shift funds away before USAC or the Commission could 
obtain repayment, if appropriate. The Commission seeks comment on such 
requirements and the impact to the affected subscribers.
    188. Other Requirements. The Commission also seeks comment on any 
other notice requirements for the transfer of Lifeline subscribers or 
discontinuance of service. The Commission notes that some states have 
specific requirements concerning the transfer of Lifeline subscribers 
and the Commission seeks comment on whether it should look to a certain 
state to serve as a model for national rules governing transfer of 
subscribers among ETCs.
    189. In regards to transfers among entities, the Commission also 
notes that any material changes in ownership or control of entities 
with approved compliance plans require modification of those compliance 
plans, which in turn, must be approved by the Bureau in advance of 
changes. To facilitate transfers between entities with approved 
compliance plans, should the Commission consider other rules that will 
minimize disruption to Lifeline subscribers? Should the Commission also 
consider other rules to minimize disruption to Lifeline subscribers 
associated with the transfer of control of ETCs receiving benefits 
under the program, as well as the transfer of ETC designations between 
providers? Given that a majority of states designate competitive ETCs, 
the Commission seeks comment from states on these matters. The 
Commission seeks comment on whether states impose discontinuance of 
service requirements on CMRS ETCs and if so, whether those states' 
requirements should serve as a model for the Commission's rules.
6. Shortening the Non-Usage Period
    190. As part of the Commission's ongoing efforts to reduce waste 
and inefficiency in the Lifeline program, the Commission proposes to 
reduce the non-usage interval to 30 days. In the Lifeline Reform Order, 
the Commission amended its rules to prevent ETCs from receiving 
Lifeline support for inactive subscribers. At that time, the Commission 
determined that imposing a 60-day usage period appropriately balanced 
the interests of subscribers and commenters, as well as the risks 
associated with potential waste in the program. However, the Commission 
now seeks comment on whether the 60-day period of time is too long and 
should be reduced to 30 days. Would reducing the time period benefit 
the program and help us to better achieve the Commission's goals to 
reduce waste, fraud, and abuse in the program? How would this change 
affect consumers? If the Commission modified the non-usage period, 
should it also modify the notice period?
    191. The Commission further seeks comment on how this change would 
impact ETCs. Would a reduction in the usage period cause administrative 
burdens for ETCs? If yes, what are the burdens and would there be ways 
to minimize these burdens? Are there benefits to reducing the non-usage 
period, for example, to 30 days instead of the current 60 days?
7. Increasing Public Access to Lifeline Program Disbursements and 
Subscriber Counts
    192. To increase transparency and promote accountability in the 
program, the Commission proposes to direct USAC to modify its online 
disbursement tool to display the total number of subscribers for which 
the ETC seeks support for each SAC, including how many are subscribers 
for which it claims enhanced Tribal support. Making this data more 
accessible will allow the public to more easily ascertain the number of 
subscribers that each ETC serves within each SAC on a monthly basis.
    193. Within the Lifeline program, ETCs provide discounts to 
eligible households and receive support from the Fund for the provision 
of such discounts. ETCs submit an FCC Form 497 to USAC on a monthly or 
quarterly basis, which lists the number of subscribers it served for 
the previous month(s) and the requested support amount. USAC has a 
disbursement tool available on its Web site that provides the 
disbursement amounts that are authorized for payment for a particular

[[Page 42696]]

month within each study area code (SAC) based on the ETC's submission 
of its FCC Form 497. While the FCC Form 497 includes the number of 
subscribers the ETC served for the previous month(s), the USAC Web site 
does not currently display this information.
    194. Even though the public can already derive Lifeline subscriber 
counts from USAC's Web site and Quarterly Reports, we propose this 
additional transparency step so the public, including state commissions 
and policymakers at the state and federal levels, can more easily 
examine these aspects of the program through one resource. In proposing 
these modifications, the Commission seeks comment on the impact to 
ETCs. The Commission also seeks comment on whether there are other 
modifications to USAC's disbursement tool that should be made to 
promote transparency and accountability in the program. For example, 
should USAC modify the disbursement tool to provide more clarity on an 
ETC's adjustments made to its FCC Form 497 filings within the last 12 
months?
8. Universal Consumer Certification, Recertification, and Household 
Worksheet Forms
    195. In this section, the Commission seeks comment on adopting 
forms approved by the Office of Management and Budget (OMB) that all 
consumers, ETCs, or states, where applicable, must use in order to 
certify consumers' initial and ongoing eligibility for Lifeline 
benefits. The Commission believes that standardization of subscriber 
certification forms will save time by avoiding the need to analyze each 
form to make sure it contains all of the requirements of the federal 
rules, and allow for easier compliance checks. The Commission 
specifically seeks comment on whether the Commission should adopt 
standard forms for consumers' initial and annual certifications of 
consumer eligibility as well as the ``one-per-household worksheet'' for 
when multiple households reside at the same address and seek Lifeline 
benefits.
    196. All ETCs must obtain a signed certification from the consumer 
that complies with Sec.  54.410 of the Commission's rules. ETCs are 
required to annually recertify each subscriber's eligibility for 
Lifeline, and may recertify subscribers by requiring each subscriber to 
submit an annual re-certification form to the ETC. In instances where 
multiple households reside at the same address, the consumer must 
affirmatively certify through the ``one-per-household worksheet'' that 
other Lifeline recipients residing at that address are part of a 
separate household, i.e., a separate economic unit that does not share 
income and expenses.
    197. Currently, ETCs (or states, where applicable) may create and 
use their own forms, so long as their forms comply with the 
Commission's rules. The Commission has received anecdotal evidence 
expressing concerns that the forms for these purposes are inconsistent, 
deficient, or are difficult for consumers to understand. To increase 
compliance with the rules, facilitate administration of the program and 
to reduce burdens placed upon ETCs, the Commission proposes creating an 
official, standardized initial certification form, annual 
recertification form and ``one-per household'' worksheet. Standardized 
forms would allow ETCs, the states, and consumers to better interface 
with any national verifier or state or federal agency that assists with 
enrollment, as proposed elsewhere in this item. The Commission seeks 
comment on potential drawbacks to adopting a standardized form. In 
GAO's most recent report on Lifeline, it notes that many eligible 
consumers may struggle to complete an application due to lack of 
literacy or language skills. The Commission thus seeks comment on how 
to improve the language used on such forms so that consumers are better 
able to understand their and the ETC's obligations.
    198. The URL,www.usac.org/li/FCCForComment, displays sample forms 
that USAC currently uses for recertification and provides to ETCs to 
use for the household worksheet. While we do not propose to adopt these 
specific forms, the Commission seeks comment on the sample forms 
displayed at the URL as a starting point. What are the shortcomings of 
these forms, if any? What other information should be included on these 
forms? Are there other mechanisms by which the Commission can increase 
consistency and uniformity in its certification and recertification 
practices?
9. Execution Date for Certification and Recertification
    199. The Commission proposes to require Lifeline providers to 
record the subscriber execution date on certification and 
recertification forms. In the 2012 Lifeline Reform Order, the 
Commission required consumers to make a number of standardized 
certifications at the time of enrollment. Consumers are required to 
certify under penalty of perjury that they are eligible to receive 
Lifeline supported service and that they understand the Lifeline 
program rules before enrolling in the program. ETCs must also collect 
specific information about the certifying consumer on the certification 
form, such as the consumer's date of birth and the last four digits of 
the consumer's Social Security number or Tribal government 
identification card number. The 2012 Lifeline Reform Order did not, 
however, require ETCs to obtain from the consumer the date on which the 
certification form was executed (``execution date'') or to record such 
date. The lack of an execution date can create confusion regarding 
which rules should apply to a given subscriber's enrollment.
    200. The Commission seeks comment on requiring Lifeline providers 
to record the subscriber execution date on certification and 
recertification forms. Mandating an execution date produces a number of 
benefits for ETCs and regulators. An execution date will ensure that 
USAC, the Commission, and independent auditors can, among other things, 
determine the relevant rules that apply to the enrollment or 
recertification of that subscriber. Obtaining the execution date will 
also allow USAC to recover funds for enrollment and recertification 
rule violations more accurately.
    201. The Commission seeks additional comment on the manner in which 
the execution date should be collected and retained. For example, 
should the execution date appear in a particular designated area on the 
certification or recertification form? How would this requirement be 
implemented for subscribers that complete a certification or 
recertification form online or through other electronic means? How 
would this obligation interact with the E-Sign Act and any additional 
requirements the Commission proposes to implement for electronic 
signatures?
10. Officer Training Certification
    202. In order to increase ETC accountability and compliance with 
the Lifeline rules, the Commission proposes to require an officer of an 
ETC to certify on each FCC Form 497 that all individuals taking part in 
that ETC's enrollment and recertification processes have received 
sufficient training on the Lifeline rules. In the 2012 Lifeline Reform 
Order, the Commission required all subscribers to show documentation of 
eligibility upon enrollment. The Commission also considered whether to 
require ETCs, rather than their agents or representatives, to review 
all documentation of eligibility, but the Commission declined to adopt 
such a rule at that time. The Commission reasoned that such a measure 
was unnecessary because ETCs remain

[[Page 42697]]

responsible for ensuring the agent's or independent contractor's 
compliance with the Lifeline rules.
    203. Subsequent to the 2012 Lifeline Reform Order, there have been 
allegations of agents hired by ETCs abusing program rules by enrolling 
unqualified consumers in the Lifeline program. The Indiana Regulatory 
Commission expressed concern about the acts of agents in the field, and 
in July 2013, two ETCs fired 700 agents that enrolled consumers in the 
Lifeline program because the ETCs were uncertain if the agents were 
complying with the Lifeline rules. The Commission has also acted to 
increase oversight over the Lifeline enrollment process. The 
Enforcement Bureau released an enforcement advisory reminding ETCs that 
they are responsible for the actions of their agents and of ETCs' 
obligations to ensure compliance with the Lifeline rules. In addition, 
the Bureau codified the requirement that ETCs verify a Lifeline 
subscriber's eligibility for Lifeline service prior to activating such 
service.
    204. Interested parties have suggested additional reforms to the 
Lifeline program intended to reduce agent abuses. In June 2013, the 
Lifeline Reform 2.0 Coalition filed a petition urging the Commission to 
establish a rule that requires all ETCs to have only their employees 
review and approve consumers' documentation of eligibility, rather than 
an agent or independent contractor, before the ETC activates Lifeline 
service or seeks reimbursement from the Fund. To minimize any improper 
financial incentives, the Lifeline Reform 2.0 Coalition argued that the 
Commission should implement a rule to no longer permit employees who 
are paid on a commission to review and approve applicants of the 
program. In responding to the June 2013 Lifeline Reform 2.0 Coalition 
petition, the Michigan Public Service Commission suggested that the 
Commission require ETCs to develop quality control procedures tailored 
to their particular business plan in lieu of having the Commission 
impose one specific set of procedures.
    205. Consistent with the Michigan PSC's suggestion, the Commission 
now proposes to require an officer of an ETC to certify on each FCC 
Form 497 that all individuals taking part in that ETC's enrollment and 
recertification processes have received sufficient training on the 
Lifeline rules. Under this proposal, ETCs would be required to 
affirmatively certify on each FCC Form 497 that all individuals, both 
company employees and third-party agents (``covered individuals''), 
interfacing with consumers on behalf of the company have received 
sufficient training on the Lifeline program rules. The Commission seeks 
comment on how an ETC can show sufficiency of training. The Commission 
believes that this requirement will not only help to ensure that 
covered individuals are adequately trained but will also create an 
environment of compliance at all levels of the company, thereby 
reducing the risk of waste, fraud, and abuse. In addition, adequate 
training will have the additional benefit of reducing consumer 
confusion during the enrollment process. The Commission seeks comment 
on these views.
    206. The Commission proposes to require that ETCs obtain a 
signature of all covered individuals certifying that the covered 
individual has completed such training. This would allow auditors, the 
FCC, and other interested government agencies to ensure that the ETC is 
acting in accordance with its Form 497 certification. The Commission 
seeks comment on alternative means to document the training of covered 
individuals. To ensure that covered individuals remain aware of the 
current rules, we propose that every covered individual must receive 
such training before taking part in the enrollment process on behalf of 
the company and again every twelve months thereafter in order to ensure 
that every person involved in enrolling and verifying consumers for 
Lifeline has been adequately educated about the program and its 
requirements. The Commission seeks additional comment and solicit ideas 
for any additional safeguards that may be necessary to ensure that 
agents or other employees enrolling subscribers do not have the 
opportunity or incentive to defraud the Fund.
    207. As the Lifeline program enters its fourth decade, it must 
continue to evolve to ensure that it is serving its statutory mission. 
The proposals and questions included herein are intended to solicit the 
kind of record that will allow the Commission to ensure that it is 
meeting the requirements of section 254 while strengthening protections 
against waste, fraud, and abuse.
11. First-Year ETC Audits
    208. To ensure the Lifeline audits are the best use of Commission 
resources, do not unduly burden Lifeline providers and accurately 
demonstrate a Lifeline provider has complied with Commission rules, the 
Commission proposes to revise the Commission's rule requiring all 
first-year Lifeline providers to undergo an audit within the first year 
of receiving Lifeline benefits.
    209. The Commission has directed USAC to establish an audit program 
for all of the universal service programs, including Lifeline. As part 
of the audit program, in the 2012 Lifeline Reform Order, the Commission 
required USAC to conduct audits of new Lifeline carriers within the 
first year of their participation in the program, after the carrier 
completes its first annual recertification of its subscriber base. The 
Commission specifically declined to adopt a minimum dollar threshold 
for those audits and instead directed USAC to conduct a more limited 
audit of smaller newly established ETCs.
    210. Since the adoption of the 2012 Lifeline Reform Order, USAC has 
audited a number of first-year Lifeline providers. Many of those 
Lifeline providers are still ramping up operations within that first 
year and the number of subscribers they are serving results in a sample 
size too small to draw conclusions regarding compliance with Commission 
rules. For example, USAC has two Lifeline providers that it is 
preparing to audit--Glandorf Telephone Company and NEP Cellcorp, Inc.--
that have only one or two subscribers as of March 2015. In addition, 
although USAC is conducting limited-scope ``desk audits'' of these 
Lifeline providers, these still impose costs on the Commission, USAC, 
and Lifeline providers that might not be warranted by the benefits of 
audits in particular circumstances. If the audits are made even more 
limited in scope, it would reduce the costs, but it would not further 
limit their utility.
    211. Given the three years of experience auditing these carriers 
since the adoption of the 2012 Lifeline Reform Order, the Commission 
now believes that, in limited instances, it is not the best use of USF 
resources to audit every Lifeline provider within the first year of its 
operations. Instead, if the Lifeline providers have sufficiently 
limited operations, the Commission proposes to delay the audit until 
such time it is useful to audit the Lifeline provider. As such, the 
Commission seeks comment on its proposal to revise Sec.  54.420(b) of 
the Commission's rules to allow the Office of Managing Director (OMD) 
to determine if a Lifeline provider should be audited within the first 
year of receiving Lifeline benefits in the state in which it was 
granted ETC status. The Commission believes this slight change to its 
audit requirement will allow for the best use of audit resources and 
protect against waste, fraud and abuse. The Commission seeks comment on 
this conclusion.
    212. Instead of adopting a bright-line threshold to identify those 
audits of

[[Page 42698]]

first-year Lifeline providers that should be delayed, the Commission 
proposes to delegate authority to OMD, in its role of overseeing the 
USF audit programs, to work with USAC to identify those audits of 
first-year Lifeline providers that will not result in useful audits and 
permit those carriers to be audited after the one-year deadline, when 
the auditors can evaluate sufficient data to identify non-compliance 
and when it might be more cost-effective. The Commission seeks comment 
on this proposal. Are there particular metric(s), threshold(s), or 
criteria that the Commission should identify to provide more specific 
guidance to inform OMD's determination of when an audit is unlikely to 
be useful given the scope of the Lifeline provider's operations, 
perhaps based on considerations of the sort discussed below?
    213. The Commission also seeks comment on whether, if an audit is 
delayed, it should establish a deadline by which the audit must be 
conducted, even if the Lifeline provider still has limited operations. 
The Commission notes that it can audit any beneficiary at any time. Is 
there some benefit to a Lifeline provider in knowing that it will 
definitely be audited within its first year? Alternatively, or in 
addition, are there procedures that OMD, Bureau, or USAC should follow 
beyond those typically used in the case of other audits under Sec.  
54.707 of the Commission's rules? For example, should a letter or other 
notification be sent to the Lifeline provider to set a period of time 
in advance of when the audit was scheduled to occur notifying the 
provider it will be delayed? After a delay, should USAC notify the 
Lifeline provider when it has been determined that an audit will be 
announced? If so, how far in advance? Should any such notification 
simply inform the Lifeline provider of the forthcoming audit pursuant 
to Sec.  54.420(b) of the Commission's rules, or is there additional 
information that should be included?
    214. Instead of setting a specific time frame by which an audit 
must be conducted after the current one-year deadline or delegating 
authority to OMD, to determine when an audit should be conducted, 
should the Commission instead adopt a minimum threshold under which 
audits should not be conducted because they are unlikely to be useful? 
If so, what metric(s) should be used to define the threshold(s)? Should 
it be measured in dollars or subscribers, some other metric(s), or some 
combination? Under such an approach, what metrics would best enable an 
evaluation of the usefulness of a Sec.  54.420(b) of the Commission's 
rules audit, in terms of both substance (i.e., the metric(s) bear a 
strong relationship to whether the audit is likely to be useful) and 
ease of administration (e.g., the data needed to evaluate the metric 
are readily available and verifiable, and the metric(s) otherwise can 
be readily implemented in practice). What should the magnitude of any 
such threshold(s) be (whether dollars, subscribers, other metric(s), or 
some combination)? The Commission believes allowing OMD some discretion 
in determining which carriers should be exempt from the audit 
requirement will allow for situations in which an audit may be 
warranted for a first-year Lifeline provider with limited Lifeline 
operations. The Commission seeks comment on this conclusion.
    215. Finally, the Commission seeks comment on whether there are 
variations or combinations of the forgoing options or other 
alternatives that the Commission should consider. Commenters advocating 
particular alternatives should explain how readily they can be used to 
identify whether an audit is likely to be useful and how readily 
administrable the alternatives would be.

III. Procedural Matters

F. Initial Regulatory Flexibility Analysis

    216. As required by the Regulatory Flexibility Act of 1980, as 
amended, the Commission has prepared an Initial Regulatory Flexibility 
Analysis (IRFA) for the Second Further Notice of Proposed Rulemaking 
(FNPRM), of the possible significant economic impact on a substantial 
number of small entities by the policies and rules proposed in this 
Second FNPRM. Written public comments are requested on this IRFA. 
Comments must be identified as responses to the IRFA and must be filed 
by the deadlines for comments on the Second FNPRM. The Commission will 
send a copy of the Second FNPRM, including this IRFA, to the Chief 
Counsel for Advocacy of the Small Business Administration.
    217. The Commission is required by section 254 of the 
Communications Act of 1934, as amended, to promulgate rules to 
implement the universal service provisions of section 254. The Lifeline 
program was implemented in 1985 in the wake of the 1984 divestiture of 
AT&T. On May 8, 1997, the Commission adopted rules to reform its system 
of universal service support mechanisms so that universal service is 
preserved and advanced as markets move toward competition. The Lifeline 
program is administered by the Universal Service Administrative Company 
(USAC), the Administrator of the universal service support programs, 
under Commission direction, although many key attributes of the 
Lifeline program are currently implemented at the state level, 
including consumer eligibility, eligible telecommunication carrier 
(ETC) designations, outreach, and verification. Lifeline support is 
passed on to the subscriber by the ETC, which provides discounts to 
eligible households and receives reimbursement from the universal 
service fund (USF or Fund) for the provision of such discounts.

G. Initial Paperwork Reduction Act Analysis

    218. The Second FNPRM seeks comment on a potential new or revised 
information collection requirement. If the Commission adopts any new or 
revised information collection requirement, the Commission will publish 
a separate notice in the Federal Register inviting the public to 
comment on the requirement, as required by the Paperwork Reduction Act 
of 1995, Public Law 104-13 (44 U.S.C. 3501-3520). In addition, pursuant 
to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, 
44 U.S.C. 3506(c)(4), the Commission seeks specific comment on how it 
might ``further reduce the information collection burden for small 
business concerns with fewer than 25 employees.''

H. Comment Filing Procedures

    219. Comments and Replies. The Commission invites comment on the 
issues and questions set forth in the FNPRM and IRFA contained herein. 
Pursuant to Sec. Sec.  1.415 and 1.419 of the Commission's rules, 47 
CFR 1.415 and 1.419, interested parties may file comments on this 
Second FNPRM on or before 30 days after publication of this Second 
FNPRM in the Federal Register and may file reply comments on or before 
60 days after publication of this Second FNPRM in the Federal Register. 
All filings related to this Second FNPRM shall refer to WC Docket Nos. 
11-42, 09-197, and 10-90. Comments may be filed using the Commission's 
Electronic Comment Filing System (ECFS) or by filing paper copies. See 
Electronic Filing of Documents in Rulemaking Proceedings, 63 FR 24121 
(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.

[[Page 42699]]

     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 8:00 a.m. to 7:00 p.m. All hand deliveries must be held together 
with rubber bands or fasteners. Any envelopes and boxes 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.
    220. People with Disabilities. To request materials in accessible 
formats for people with disabilities (braille, large print, electronic 
files, audio format), send an email to [email protected] or call the 
Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-
418-0432 (tty).
    221. In addition, one copy of each paper filing must be sent to 
each of the following: (1) The Commission's duplicating contractor, 
Best Copy and Printing, Inc., 445 12th Street SW., Room CY-B402, 
Washington, DC 20554; Web site: www.bcpiweb.com; phone: (800) 378-3160; 
(2) Jonathan Lechter, Telecommunications Access Policy Division, 
Wireline Competition Bureau, 445 12th Street SW., Room 5-B442, 
Washington, DC 20554; email: [email protected]; and (3) Charles 
Tyler, Telecommunications Access Policy Division, Wireline Competition 
Bureau, 445 12th Street SW., Room 5-A452, Washington, DC 20554; email: 
[email protected].
    222. Filing 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: www.bcpi.com, by email at [email protected], by telephone at 
(202) 488-5300 or (800) 378-3160 or by facsimile at (202) 488-5563.
    223. 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. All interested parties 
must 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. The Commission also strongly encourages parties to 
track the organization set forth in the Second FNPRM in order to 
facilitate the Commission's internal review process.
    224. For additional information on this proceeding, contact 
Jonathan Lechter at (202) 418-7387 in the Telecommunications Access 
Policy Division, Wireline Competition Bureau.

I. Need for, and Objectives of, the Proposed Rules

    225. When the Commission overhauled the Lifeline program in its 
2012 Lifeline Reform Order, it substantially strengthened protections 
against waste, fraud and abuse; improved program administration and 
accountability; improved enrollment and consumer disclosures; and took 
preliminary steps to modernize the Lifeline program for the 21st 
Century. While the Commission is pleased that the Commission's previous 
reforms have taken hold and sustained the integrity of the Fund, it 
realizes that the Commission's work is not complete. In light of the 
realities of the 21st Century communications marketplace, the 
Commission must overhaul the Lifeline program to ensure it complies 
with the statutory directive to provide consumers in all regions of the 
nation, including low-income consumers, with access to 
telecommunications and information services. At the same time, the 
Commission must ensure that adequate controls are in place as it 
implements any further changes to the Lifeline program to guard against 
waste, fraud and abuse.
    226. In the Second FNPRM, the Commission therefore seeks comment on 
a package of potential reforms to modernize and restructure the 
Lifeline program. First, it proposes to establish minimum service 
levels for voice and broadband Lifeline service to ensure value for its 
USF dollars and more robust services for those low-income Americans who 
need them. Second, the Commission seeks to reset the Lifeline 
eligibility rules. Third, to encourage increased competition and 
innovation in the Lifeline market, the Commission seeks comment on 
ensuring the effectiveness of its administrative rules while also 
ensuring that they are not unnecessarily burdensome. Fourth, the 
Commission examines ways to enhance consumer protection. Finally, the 
Commission seeks comment on other ways to improve administration and 
ensure efficiency and accountability in the Lifeline program. The rules 
the Commission proposes in the Second FNPRM are directed at enabling 
the Commission to meet these goals and objectives for the Lifeline 
program.

J. Legal Basis

    227. The legal basis for the Second FNPRM is contained in sections 
1 through 4, 201-205, 254, 303(r), and 403 of the Communications Act of 
1934, as amended by the Telecommunications Act of 1996, 47 U.S.C. 151 
through 154, 201 through 205, 254, 303(r), and 403.

K. Description and Estimate of the Number of Small Entities To Which 
the Proposed Rules Will Apply

    228. 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 
28.2 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.''
    229. Nationwide, as of 2007, 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 2007 indicate that 
there were 87,476 local governmental jurisdictions in the United 
States. We estimate that, of this total, 84,506 entities were ``small 
governmental jurisdictions.'' Thus, we estimate that most governmental 
jurisdictions are small.

[[Page 42700]]

1. Wireline Providers
    230. 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 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 employment of 1,000 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. 
Thus under this category and the associated small business size 
standard, the majority of these incumbent local exchange service 
providers can be considered small.
    231. 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 category for this service is the 
category Wired Telecommunications Carriers. Under the category of Wired 
Telecommunications Carriers, such a business is small if it has 1,500 
or fewer employees. Census Bureau data for 2007 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 1,000 
employees or more. Thus under this category and the associated small 
business size standard, the majority of these Competitive LECs, CAPs, 
Shared-Tenant 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 Notice.
    232. Interexchange Carriers. Neither the Commission nor the SBA has 
developed a small business size standard specifically for providers of 
interexchange services. The appropriate category for Interexchange 
Carriers is 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 Notice.
    233. Operator Service Providers (OSPs). Neither the Commission nor 
the SBA has developed a small business size standard specifically for 
operator service providers. The appropriate category for Operator 
Service Providers 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 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 the Commission's proposed action.
    234. 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 Notice.
    235. 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 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 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 the Commission's 
action.
    236. 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

[[Page 42701]]

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 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 pre-paid 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 Notice.
    237. 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 category for these services is the category 
Telecommunications Resellers. Under that category and corresponding 
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 the Commission's data, as of 
September 2009, the number of 800 numbers 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 affected by the Commission's 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
    238. Wireless Telecommunications Carriers (except Satellite). This 
industry comprises establishments engaged in operating and maintaining 
switching and transmission facilities to provide communications via the 
airwaves. Establishments in this industry have spectrum licenses and 
provide services using that spectrum, such as cellular phone services, 
paging services, wireless Internet access, and wireless video services. 
The appropriate size standard under SBA rules is for the category 
Wireless Telecommunications Carriers. The size standard for that 
category is that a business is small if it has 1,500 or fewer 
employees. For this category, census data for 2007 show that there were 
11,163 establishments that operated for the entire year. Of this total, 
10,791 establishments had employment of 999 or fewer employees and 372 
had employment of 1000 employees or more. Thus under this category and 
the associated small business size standard, the Commission estimates 
that the majority of wireless telecommunications carriers (except 
satellite) are small entities that may be affected by the Commission's 
proposed action.
    239. 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 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.
    240. Satellite Telecommunications Providers. Two economic census 
categories address the satellite industry. The first category has a 
small business size standard of $32.5 million or less in average annual 
receipts, under SBA rules. The second has a size standard of $32.5 
million or less in annual receipts.
    241. 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 the Commission's 
action.
    242. 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.'' The SBA has developed 
a small business size standard for All Other Telecommunications, which 
consists of all such firms with gross annual receipts of $32.5 million 
or less. 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 
the Commission's action.
    243. Common Carrier Paging. As noted, since 2007 the Census Bureau 
has placed paging providers within the broad economic census category 
of Wireless Telecommunications Carriers (except Satellite).
    244. In addition, in the Paging Second Report and Order, the 
Commission

[[Page 42702]]

adopted a size standard for ``small businesses'' for purposes of 
determining their eligibility for special provisions such as bidding 
credits and installment payments. A small business is an entity that, 
together with its affiliates and controlling principals, has average 
gross revenues not exceeding $15 million for the preceding three years. 
The SBA has approved this definition. An initial auction of 
Metropolitan Economic Area (``MEA'') licenses was conducted in the year 
2000. Of the 2,499 licenses auctioned, 985 were sold. Fifty-seven 
companies claiming small business status won 440 licenses. A subsequent 
auction of MEA and Economic Area (``EA'') licenses was held in the year 
2001. Of the 15,514 licenses auctioned, 5,323 were sold. One hundred 
thirty-two companies claiming small business status purchased 3,724 
licenses. A third auction, consisting of 8,874 licenses in each of 175 
EAs and 1,328 licenses in all but three of the 51 MEAs, was held in 
2003. Seventy-seven bidders claiming small or very small business 
status won 2,093 licenses.
    245. Currently, there are approximately 74,000 Common Carrier 
Paging licenses. According to the most recent Trends in Telephone 
Service, 291 carriers reported that they were engaged in the provision 
of ``paging and messaging'' services. Of these, an estimated 289 have 
1,500 or fewer employees and two have more than 1,500 employees. We 
estimate that the majority of common carrier paging providers would 
qualify as small entities under the SBA definition.
    246. 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 2010 Trends 
Report, 413 carriers reported that they were engaged in wireless 
telephony. Of these, an estimated 261 have 1,500 or fewer employees and 
152 have more than 1,500 employees. We have estimated that 261 of these 
are small under the SBA small business size standard.
3. Internet Service Providers
    247. 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 $32.5 million or less.

L. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements for Small Entities

    248. In this Second FNPRM, we propose and seek public input on new 
and additional solutions for the Lifeline program, including reforms 
that would bring the program closer to its core purpose and promote the 
availability of modern services for low-income families. The rules we 
propose in this Second FNPRM are directed at enabling us to meet the 
Commission's goals and objectives for the Lifeline program. 
Specifically, the Commission seeks comment on a number of proposed 
changes that would increase the economic burdens on small entities. 
These proposed changes include:
    249. Eligibility documentation. In the 2012 Lifeline Reform Order, 
the Commission adopted measures to verify a low-income consumer's 
eligibility for Lifeline supported services and required Lifeline 
providers to confirm an applicant's eligibility prior to enrolling the 
applicant in the Lifeline Program. However, program eligibility 
documentation may not contain sufficient information to tie the 
documentation to the identity of the prospective subscriber and often 
does not include a photograph. In this Second FNPRM, the Commission 
seeks comment on requiring Lifeline providers to obtain additional 
information to verify that the eligibility documentation being 
presented by the consumer is valid and has not expired.
    250. Use of National Lifeline Accountability Database (NLAD) for 
reimbursement. In this Second NPRM, the Commission seeks comment on 
whether the Commission should establish a national Lifeline eligibility 
verifier (national verifier) to make eligibility determinations and 
perform other functions related to the Lifeline program. As part of the 
proposed functions of the national verifier, the Commission seeks 
comment on using the national verifier to calculate ETCs' support.
    251. Reforms to Increase Efficient Administration of the Lifeline 
Program. As part of this Second FNPRM, the Commission seeks comment on 
a number of reforms to increase the efficient administration if the 
program, including requiring an officer of an ETC to certify that 
individuals taking part in the ETC's enrollment and recertification 
processes have received training, and requiring Lifeline providers to 
record the subscriber execution date.

M. Steps Taken To Minimize the Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered

    252. The RFA requires an agency to describe any significant, 
specifically small business, alternatives that it has considered in 
reaching its proposed 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 and 
reporting requirements under the rule for such 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 such small 
entities.''
    253. As indicated above, in the Second FNPRM, while the Commission 
seeks comment on several proposed changes that would increase the 
economic burdens on small entities, it also proposes a number of 
changes that would lessen the economic impact on small entities. In 
those instances in which a proposed change would increase burdens on 
small entities, the Commission has determined that the benefits from 
such changes outweigh the increased burdens on small entities.
4. Proposed Changes That Lessen Economic Impact on Small Entities
    254. National Lifeline eligibility verifier. The Commission's 
proposal to remove the responsibility of conducting the eligibility 
determination from the ETC and shift this responsibility to a trusted 
third-party lessens the recordkeeping and compliance burden on small 
entities by relieving them of the obligation to conduct eligibility 
determinations.
    255. Coordinated enrollment with other federal and state agencies. 
The Commission's proposal to coordinate enrollment with other 
government benefit programs that qualify low-income consumers, thus 
allowing consumers to enroll themselves, lessens the recordkeeping and 
compliance burden on small entities by shifting this responsibility to 
the low-income consumer along with other government benefit programs.

[[Page 42703]]

    256. New FCC Forms. The Commission's proposal to adopt standardized 
FCC Forms that all ETCs, where applicable, must use in order to certify 
a consumers' eligibility for Lifeline benefits will decrease burdens on 
small entities, increase compliance with the Commission's rules, and 
facilitate administration of the Lifeline program.
    257. Use of National Lifeline Accountability Database (NLAD) for 
reimbursement. In the long-term, the Commission's proposal to 
transition to a process where the NLAD is used to calculate ETCs' 
support will ultimately reduce the burden on small entities, because 
they will no longer have to file the FCC Form 497 (Lifeline Worksheet).
    258. First-year ETC audits. The Commission's proposal to revise its 
rules to allow the Office of Managing Director to determine if a 
Lifeline provider should be audited within the first year of receiving 
Lifeline benefits in the state in which it was granted ETC status, 
rather than requiring all first-year Lifeline providers to undergo an 
audit within the first year of receiving Lifeline benefits, will 
minimize the burden on a substantial number of small entities to 
respond to requests for information as part of an audit.
5. Proposed Changes That Increase Economic Impact on Small Entities
    259. Eligibility documentation. The Commission's proposal to 
require ETCs to obtain additional information in certain instances to 
verify that the eligibility documentation being presented by the 
consumer is valid increases the recordkeeping burden on small entities. 
Such proposal, however, supports the Commission's objective to 
eliminate waste, fraud, and abuse in the Lifeline program.
    260. Use of National Lifeline Accountability Database (NLAD) for 
reimbursement. The Commission's proposal to transition to a process 
where the NLAD is used to calculate ETCs' support may initially 
increase the burden upon small entities to change the way in which they 
calculate support payments. However, the Commission proposes a 
transition period to ensure that entities and USAC have time to put in 
place the necessary systems and processes.
    261. Compliance burdens. Implementing any of the Commission's 
proposed rules (e.g., requiring an officer of an ETC to certify that 
individuals taking part in the ETC's enrollment and recertification 
processes have received training, and requiring Lifeline providers to 
record the subscriber execution date) would impose some burden on small 
entities by requiring them to make such certifications and entries on 
FCC forms, and requiring them to become familiar with the new rules to 
comply with them. For many of proposed the rules, there is a minimal 
burden. Thus, these new requirements should not require small 
businesses to seek outside assistance to comply with the Commission's 
rule but rather are more routine in nature as part of normal business 
processes. The importance of bringing the Lifeline program closer to 
its core purpose and promoting the availability of modern services for 
low-income families, however, outweighs the minimal burden requiring 
small entities to comply with the new rules would impose.

N. Federal Rules That May Duplicate, Overlap, or Conflict With the 
Proposed Rules

    262. None

O. Ex Parte Presentations

    263. Permit-But-Disclose. The proceeding the Second FNPRM initiates 
shall be treated as a ``permit-but-disclose'' proceeding in accordance 
with the Commission's ex parte rules. Persons making ex parte 
presentations must file a copy of any written presentation or a 
memorandum summarizing any oral presentation within two business days 
after the presentation (unless a different deadline applicable to the 
Sunshine period applies). Persons making oral ex parte presentations 
are reminded that memoranda summarizing the presentation must (1) list 
all persons attending or otherwise participating in the meeting at 
which the ex parte presentation was made, and (2) summarize all data 
presented and arguments made during the presentation. If the 
presentation consisted in whole or in part of the presentation of data 
or arguments already reflected in the presenter's written comments, 
memoranda, or other filings in the proceeding, the presenter may 
provide citations to such data or arguments in his or her prior 
comments, memoranda, or other filings (specifying the relevant page 
and/or paragraph numbers where such data or arguments can be found) in 
lieu of summarizing them in the memorandum. Documents shown or given to 
Commission staff during ex parte meetings are deemed to be written ex 
parte presentations and must be filed consistent with rule 1.1206(b). 
In proceedings governed by rule 1.49(f) or for which the Commission has 
made available a method of electronic filing, written ex parte 
presentations and memoranda summarizing oral ex parte presentations, 
and all attachments thereto, must be filed through the electronic 
comment filing system available for that proceeding, and must be filed 
in their native format (e.g., .doc, .xml, .ppt, searchable .pdf). 
Participants in this proceeding should familiarize themselves with the 
Commission's ex parte rules.

List of Subjects in 47 CFR Part 54

    Communications common carriers, Reporting and recordkeeping 
requirements, Telecommunications, Telephone.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.
    For the reasons discussed in the preamble, the Federal 
Communications Commission proposes to amend 47 CFR part 54 as follows:

PART 54--UNIVERSAL SERVICE

0
1. The authority citation for part 54 continues to read as follows:

    Authority: 47 U.S.C. 151, 154(i), 155, 201, 205, 214, 219, 220, 
254, 303(r), 403, and 1302 unless otherwise noted.

0
2. Amend Sec.  54.101 by revising paragraph (a) to read as follows:


Sec.  54.101  Supported services for rural, insular and high cost 
areas.

    (a) Services designated for support. Voice Telephony services and 
broadband Internet access services shall be supported by federal 
universal service support mechanisms. Eligible voice telephony services 
must provide voice grade access to the public switched network or its 
functional equivalent; minutes of use for local service provided at no 
additional charge to end users; access to the emergency services 
provided by local government or other public safety organizations, such 
as 911 and enhanced 911, to the extent the local government in an 
eligible carrier's service area has implemented 911 or enhanced 911 
systems; and toll limitation services to qualifying low-income 
consumers as provided in subpart E of this part.
* * * * *
0
3. Amend Sec.  54.400 by adding and reserving paragraph (k); and adding 
paragraphs (l) and (m) to read as follows:


Sec.  54.400  Terms and definitions.

* * * * *
    (l) Broadband Internet access service. Broadband Internet access 
service is defined as a mass-market retail service by wire or radio 
that provides the

[[Page 42704]]

capability to transmit data to and receive data from all or 
substantially all Internet endpoints, including any capabilities that 
are incidental to and enable the operation of the communications 
service, but excluding dial-up service.
    (m) Supported services. Voice Telephony services and broadband 
Internet access services are supported services for the Lifeline 
program.
0
4. Amend Sec.  54.401 by revising paragraphs (a)(2) and (b) to read as 
follows:


Sec.  54.401  Lifeline defined.

    (a) * * *
    (2) That provides qualifying low-income consumers with Voice 
Telephony service or broadband Internet access service as defined in 
Sec.  54.400(l). Toll limitation service does not need to be offered 
for any Lifeline service that does not distinguish between toll and 
non-toll calls in the pricing of the service. If an eligible 
telecommunications carrier charges Lifeline subscribers a fee for toll 
calls that is in addition to the per month or per billing cycle price 
of the subscribers' Lifeline service, the carrier must offer toll 
limitation service at no charge to its subscribers as part of its 
Lifeline service offering.
    (b) Eligible telecommunications carriers may allow qualifying low-
income consumers to apply Lifeline discounts to any residential service 
plan that includes Voice Telephony service or broadband Internet access 
service, including bundled packages of both voice and broadband 
Internet access services; and plans that include optional calling 
features such as, but not limited to, caller identification, call 
waiting, voicemail, and three-way calling. Eligible telecommunications 
carriers may also permit qualifying low-income consumers to apply their 
Lifeline discount to family shared calling plans.
* * * * *
0
5. Amend Sec.  54.405 by revising paragraph (e)(1) and adding paragraph 
(e)(5) to read as follows:


Sec.  54.405  Carrier obligation to offer Lifeline.

* * * * *
    (e) * * *
    (1) De-enrollment generally. If an eligible telecommunications 
carrier has a reasonable basis to believe that a Lifeline subscriber no 
longer meets the criteria to be considered a qualifying low-income 
consumer under Sec.  54.409, the carrier must notify the subscriber of 
impending termination of his or her Lifeline service. Notification of 
impending termination must be sent in writing separate from the 
subscriber's monthly bill, if one is provided, and must be written in 
clear, easily understood language. A carrier providing Lifeline service 
in a state that has dispute resolution procedures applicable to 
Lifeline termination, that requires, at a minimum, written notification 
of impending termination, must comply with the applicable state 
requirements. The carrier must allow a subscriber 30 days following the 
date of the impending termination letter required to demonstrate 
continued eligibility. A subscriber making such a demonstration must 
present proof of continued eligibility to the carrier consistent with 
applicable annual re-certification requirements, as described in Sec.  
54.410(f). An eligible telecommunications carrier must de-enroll any 
subscriber who fails to demonstrate continued eligibility within five 
business days after the expiration of the subscriber's time to respond. 
A carrier providing Lifeline service in a state that has dispute 
resolution procedures applicable to Lifeline termination must comply 
with the applicable state requirements.
* * * * *
    (5) De-enrollment requested by subscriber. If an eligible 
telecommunications carrier receives a request from a subscriber to de-
enroll, it must de-enroll the subscriber within two business days after 
the request.
0
6. Amend Sec.  54.407 by revising paragraph (a), by adding paragraph 
(c)(2)(v), and by revising paragraph (d) to read as follows:


Sec.  54.407  Reimbursement for offering Lifeline.

    (a) Universal service support for providing Lifeline shall be 
provided directly to an eligible telecommunications carrier based on 
the number of actual qualifying low-income customers it serves directly 
as of the first day of the month in the NLAD.
* * * * *
    (c) * * *
    (2) * * *
    (v) Sending a text message.
    (d) In order to receive universal service support reimbursement, an 
officer of each eligible telecommunications carrier must certify, as 
part of each request for reimbursement, that:
    (1) The ETC is in compliance with all of the rules in this subpart;
    (2) The ETC has obtained valid certification and recertification 
forms to the extent required under this subpart for each of the 
subscribers for whom it is seeking reimbursement; and
    (3) The ETC has provided sufficient training on all of the rules in 
this subpart to all individuals who interact with consumers during 
enrollment, recertification, or consumer information calls.
* * * * *
0
7. Amend Sec.  54.410 by revising paragraphs (d) introductory text, 
(d)(1) introductory text, (d)(2) introductory text, and by adding 
paragraph (d)(2)(ix) and by revising paragraphs (d)(3) introductory 
text, (f)(1), (f)(2)(iii), (f)(3)(iii), and by adding paragraph (h) to 
read as follows:


Sec.  54.410  Subscriber eligibility determination and certification.

* * * * *
    (d) FCC Form [XXX] Certification of Eligibility. Eligible 
telecommunications carriers and state Lifeline administrators or other 
state agencies that are responsible for the initial determination of a 
subscriber's eligibility for Lifeline must use FCC Form [XXX] to enroll 
a qualifying low-income consumer into the Lifeline program.
    (1) The FCC Form [XXX] shall provide the following information in 
clear, easily understood language:
* * * * *
    (2) The FCC Form [XXX] shall require each prospective subscriber to 
provide the following information:
* * * * *
    (ix) The date on which the certification form was executed.
    (3) The FCC Form [XXX] shall require each prospective subscriber to 
initial his or her acknowledgement of each of the following 
certifications individually and under penalty of perjury:
* * * * *
    (f) * * *
    (1) All eligible telecommunications carriers must annually re-
certify all subscribers using FCC Form [XXX], except for subscribers in 
states where a state Lifeline administrator or other state agency is 
responsible for re-certification of subscribers' Lifeline eligibility.
    (2) * * *
    (iii) Obtaining a signed certification from the subscriber on the 
FCC Form [XXX] that meets the certification requirements in paragraph 
(d) of this section.
    (3) * * *
    (iii) Obtaining a signed certification from the subscriber on the 
FCC Form [XXX] that meets the certification requirements in paragraph 
(d) of this section.
* * * * *
    (h) The FCC Form [XXX] One-Per-Household Worksheet. The prospective 
subscriber will complete the FCC Form [XXX] One-Per-Household Worksheet

[[Page 42705]]

upon initial enrollment. At re-certification, if there are changes to 
the subscriber's household that would prevent the subscriber from 
accurately certifying to paragraph (d)(3)(vi) of this section (that is, 
that the subscriber's household will receive only one Lifeline service 
and to the best of his or her knowledge, the subscriber's household is 
not already receiving Lifeline service), then the subscriber must 
complete a One-Per-Household Worksheet.
0
8. Amend Sec.  54.420 by revising paragraph (b) to read as follows:


Sec.  54.420  Low income program audits.

* * * * *
    (b) Audit requirements for new eligible telecommunications 
carriers. After a company is designated for the first time in any state 
or territory, the Administrator will audit that new eligible 
telecommunications carrier to assess its overall compliance with the 
rules in this subpart and the company's internal controls regarding 
these regulatory requirements. This audit should be conducted within 
the carrier's first twelve months of seeking federal low-income 
Universal Service Fund support, unless otherwise determined by the 
Office of Managing Director.

[FR Doc. 2015-17289 Filed 7-16-15; 8:45 am]
BILLING CODE 6712-01-P