2011-20847. Further Inquiry Into Four Issues in the Universal Service Lifeline/Link Up Reform and Modernization Proceeding

AGENCY:

Federal Communications Commission.

ACTION:

Proposed rule; solicitation of comments.

SUMMARY:

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

DATES:

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

ADDRESSES:

Interested parties may file comments and reply comments on or before the dates indicated above. All comments are to reference WC Docket Nos. 11-42, 03-109, and CC Docket No. 96-45 and may be filed using: (1) The Commission's Electronic Comment Filing System (ECFS) or (2) by filing paper copies. See Electronic Filing of Documents in Rulemaking Proceedings, 63 FR 24121, May 1, 1998.

• Electronic Filers: Comments may be filed electronically using the Internet by accessing the ECFS: http://fjallfoss.fcc.gov/​ecfs2/​.
• Paper Filers: Parties who choose to file by paper must file an original and one copy of each filing. If more than one docket or rulemaking number appears in the caption of this proceeding, filers must submit two additional copies for each additional docket or rulemaking number.

Filings can be sent by hand or messenger delivery, by commercial overnight courier, or by first-class or overnight U.S. Postal Service mail. All filings must be addressed to the Commission's Secretary, Office of the Secretary, Federal Communications Commission.

• All hand-delivered or messenger-delivered paper filings for the Commission's Secretary must be delivered to FCC Headquarters at 445 12th St., SW., Room TW-A325, Washington, DC 20554. The filing hours are 8 a.m. to 7 p.m. All hand deliveries must be held together with rubber bands or fasteners. Any envelopes must be disposed of before entering the building.
• Commercial overnight mail (other than U.S. Postal Service Express Mail and Priority Mail) must be sent to 9300 East Hampton Drive, Capitol Heights, MD 20743.
• U.S. Postal Service first-class, Express, and Priority mail must be addressed to 445 12th Street, SW., Washington, DC 20554.

People with Disabilities: To request materials in accessible formats for people with disabilities (Braille, large print, electronic files, audio format), send an e-mail to [e-mail] or call the Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-418-0432 (tty). For detailed instructions for where and how to file comments, see the SUPPLEMENTARY INFORMATION section of this document.

FOR FURTHER INFORMATION CONTACT:

Jamie Susskind, Attorney Advisor, Wireline Competition Bureau, Telecommunications Access Policy Division, [phone] or TTY [phone].

SUPPLEMENTARY INFORMATION:

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

1. Broadband Pilot Program

a. Scope of Permissible Funding. We seek comment on the Commission's statutory authority to permit universal service funds to be used for such purposes, directly or indirectly, and what other legal considerations must be addressed before the Commission proceeds with a broadband pilot program.

b. Consumer Eligibility for Pilot Program. We seek additional focused comment specifically on whether to maintain the current eligibility requirements for consumers participating in the pilot program that are currently used in the low-income program, or whether to adopt stricter or more permissive eligibility requirements for those consumers. How might adjusting the eligibility criteria affect our ability to maximize broadband adoption while providing support that is sufficient, but not excessive? How would it affect the reliability and statistical significance of the results of the pilot program? How would it help the pilot programs yield better data on how to accomplish our goals of maximizing adoption in low-income communities?

c. Barriers to Consumer Participation in Pilots. The National Association of Regulatory Utility Commissioners supports a Lifeline/Link Up broadband pilot program and urges the Commission not to require Lifeline/Link Up broadband service pilot program participants to change local telephone service providers, purchase bundled broadband and voice services, or otherwise be penalized when they purchase Lifeline and Link Up broadband services and enabling access devices. Commenters should address whether and how the Commission could implement those recommendations. Commenters are encouraged to provide a legal analysis to support their positions.

d. Pilot Evaluation. We invite further comment on the structure of the pilot projects, how to evaluate the results of pilot projects, and what reporting requirements should be adopted for pilot participants.

i. Should the Commission structure the pilot program so that each individual participant tests multiple design elements (e.g,, price of the service, length of the offer, service type, kind of device connected to the broadband, etc.), or should each participant test a single variable for comparison against pilots operated by other participants?

ii. The NPRM recognized that the cost of equipment is a major barrier to broadband adoption, and proposed to require at least some participants to provide the necessary hardware. It also proposed to test the impact of variations in equipment discounts. Should we also test the impact on adoption and broadband retention when equipment is leased, as opposed to purchased?

iii. What quantitative metrics could the Commission use to evaluate whether approaches tested during the pilot program further the proposed goals of supporting broadband adoption for low-income households and making broadband affordable while providing support that is sufficient, but not excessive? For instance, should we assess the total number of new adopters; new adopters as a percentage of eligible program participants; cost of support for each new adopter; average percentage of participants' discretionary income spent on discounted broadband service through the pilot relative to the national average percentage of household discretionary income spent on broadband; and/or some other metric(s)?

iv. How could we evaluate the relative impact of the service discount compared to other potential factors that could be part of a comprehensive strategy to increase broadband adoption, such as the provision of training or equipment? The Commission proposed to develop information about the cost per participant and cost per new adopter through the pilot program. This information could assist the Commission in assessing the costs and benefits of particular approaches to whether broadband should be supported, and if so, how. We seek further comment on this proposal and whether there are other types of data that the Commission should review to evaluate whether a given approach would provide support that is sufficient but not excessive.

2. One-Per-Residence Limitation

In the 2011 Lifeline and Link Up NPRM, the Commission proposed to codify a rule that would allow eligible low-income consumers to receive only one Lifeline and Link Up discount per residential address, and sought comment on related issues.

a. Defining “Household” or “Residence”. We seek focused comment on whether a one-per-household or one-per-family rule would provide an administratively feasible approach to providing Lifeline/Link Up support, and how the Commission could implement such a rule.

i. Commenters recommend that the Commission adopt a definition of “household” that mirrors the definitions used to establish eligibility for other Federal benefit programs or used by other Federal agencies. We seek comment on whether any of these definitions, such as the definition of “household” used to establish eligibility for the Low Income Home Energy Assistance Program (LIHEAP) or the definition used by the U.S. Census Bureau for surveying purposes, would provide an administratively feasible option for the Commission to employ to define who is eligible for Lifeline/Link Up support.

ii. We seek comment on whether, if the Commission ultimately adopts a one-per-household rule (or a one-per-residential-address rule), requiring all ETCs to utilize similar procedures when signing up applicants in unique living situations would be an effective means of ensuring compliance with such a rule.

iii. MFY Legal Services recommends that the Commission use room numbers and, if applicable, bed numbers to serve as potentially unique address identifiers for residents of group living facilities. We seek comment on this recommendation. If implemented, what types of information could constitute unique address identifiers? Who should be responsible for providing such information to the ETC—the consumer or the group living facility? Are there group living situations where a unique identifier would not be available, for example a shelter that houses all of its residents in a single room?

b. Exceptions or Waivers from the “One-Per-Household” or “One-Per-Residential-Address” Rule. On May 25, 2011, MFY Legal Services filed an ex parte presentation that included a copy of the National Telecommunications and Information Administration's (NTIA) rule providing a limited waiver of the household-based eligibility process for the Digital-to-Analog Converter Box Coupon Program to allow applications from individuals residing in nursing homes, intermediate care facilities, and assisted living facilities. The NTIA rule waived the one-per-residence requirement for individuals residing in nursing homes, intermediate care facilities, and assisted living facilities licensed by a state, as well as individuals using post office boxes for mail receipt. Third party designees, such as facility administrators and family members, were also allowed to apply on behalf of residents. We seek comment on whether that rule could serve as a model for how to address such situations in the context of the low-income program. If the Commission were to adopt a similar rule, what information should applicants be required to provide to demonstrate they reside in such a facility?

c. One-per-person for Tribal Residents. Smith Bagley provides further calculations in its comments as to the costs associated with providing enhanced Lifeline service to one additional adult per household on Tribal lands. Smith Bagley projected that, assuming a 100% take rate, the cost of providing this additional funding would be $77.7 million per year, or just under one percent of the current size of the overall universal service fund. We seek comment on the analysis provided by Smith Bagley.

3. Link Up

The NPRM addressed a number of issues regarding Link Up reimbursement for voice services.

a. Sprint states that the costs associated with initiating phone service have fallen, noting that “the ever-increasing level of automation has reduced the cost of initiating service,” and proposes that Link Up support be limited or eliminated. We seek comment on this proposal.

b. We seek further focused comment on whether the Commission should provide reimbursement for Link Up only for service initiations that involve the physical installation of facilities by the provider at the consumer's residence.

4. Verification of Consumer Eligibility for Lifeline—Sampling Methodology

In the 2011 Lifeline and Link Up NPRM, the Commission proposed to amend § 54.410 of its rules to establish a uniform methodology for conducting verification sampling that would apply to all ETCs in all states. The NPRM also asked commenters to consider two proposals for modifying the existing sampling methodology to more effectively balance the need for an administratively feasible sampling methodology with the Commission's obligation to ensure that ineligible consumers do not receive Lifeline/Link Up benefits. We invite additional comment on this issue.

a. With respect to the Commission's sample-and-census proposal, could the Commission implement it in a way that would be more easily administrable for ETCs, particularly ETCs with a small number of Lifeline subscribers?

b. TCA proposes that, if the Commission adopts a sample-and-census rule, carriers with a small number of Lifeline subscribers should be required to sample fewer consumers than ETCs with a larger number of Lifeline subscribers. We seek comment on this proposal. Should the Commission consider a smaller sample size for ETCs with a small number of Lifeline customers in a given state? What number of respondents could ETCs with a smaller number of Lifeline customers feasibly sample in a given year, keeping in mind that reducing the required number of respondents could result in larger margins of error?

c. Alternatively, should carriers with a small number of Lifeline subscribers be required to sample only a specified percentage of their customer base? What would be a reasonable percentage in such cases?

This matter shall be treated as a “permit-but-disclose” proceeding in accordance with the Commission's ex parte rules. Persons making oral ex parte presentations are reminded that memoranda summarizing the presentations must contain summaries of the substance of the presentation and not merely a listing of the subjects discussed. More than a one or two sentence description of the views and arguments presented generally is required. Other rules pertaining to oral and written ex parte presentations in permit-but-disclose proceedings are set forth in § 1.1206(b) of the Commission's rules.

Federal Communications Commission.

Trent Harkrader,

Division Chief, Wireline Competition Bureau.