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Entries in Lifeline Reform Order (8)

Tuesday
May012012
DateTuesday, May 1, 2012 at 2:43PM

FCC Gets Specific about Lifeline Broadband Pilot Programs

Applications due July 2, Bureau will Favor Projects “Designed as Field Experiments”

The FCC is moving full-steam ahead with the Lifeline Broadband Pilot Program adopted in the January 31, 2012 Lifeline Reform Report and Order and FNPRM. On April 30, the FCC released a Public Notice announcing that applications for the Pilot Program are due on July 2, 2012. The Public Notice outlined the FCC’s expectations for Pilot Program applicants and listed the items that applicants must submit by the July 2 deadline. Up for grabs is $25m for an 18-month Pilot Program, which consists of 3 months of administrative preparation, 12 months of subsidized broadband for low-income consumers, and 3 additional months of data collection and project evaluation.

The purpose of the Pilot Program, according the FCC, is “to gather data to test how the Lifeline program could be structured to promote the adoption and retention of broadband services by low-income households.” Additionally, “The primary goal of the Pilot Program is to gather high-quality data that will help identify effective approaches to increasing broadband adoption and retention by low-income consumers.” The FCC declares that at the end of the program, “the Commission will publicly recognize the ETCs and their partners that best succeed in meeting the Pilot Program goals.”

There appears to be a few specific caveats that may make it a bit of a challenge to be selected for the Pilot Program. First and foremost, only ETCs are eligible to participate, although ETCs are encouraged to partner with other entities like academic institutions, research firms, and non-profit organizations. The second challenge is that the FCC will “strongly favor pilot projects designed as field experiments that implement standard best practices common among field experiments”—this goes beyond simply providing low-income customers with a broadband discount and some digital literacy training thrown in for good measure. Conducting an extensive field experiment may require resources, expertise, and staff that a small rural telco does not have available, which is likely why the FCC suggests partnering with academic or private-sector researchers.

The application process is quite extensive too. The FCC explains, “In their applications, ETCs should submit a detailed description of the experimental design and other experimental protocols used suitable for a replication study, what variations on broadband service offerings will be tested (e.g., discount amount, duration of discount, speed, usage limits, digital literacy training or any other factors impacting broadband adoption) and how the project(s) will randomize variations on broadband service offerings (e.g. geographic randomization).” Short of sounding like a government-sponsored social science experiment, the Pilot Program definitely holds promise for the applicants who have the resources, expertise, and partnerships to take the plunge. The success of the Pilot Programs will likely determine if and how the FCC ultimately subsidizes broadband for low-income Americans, so participants are certainly contributing to “the greater good.”

The FCC discusses some of the factors it will consider in the selection process. It appears as though the applicant does not have to conduct a full-scale “field experiment,” but that is just one factor that the FCC will favor. Overall, the FCC is looking for “a diverse array of projects testing broadband adoption in different geographic areas (e.g., rural, urban, Tribal lands), using different technologies (e.g., fixed, mobile) and testing different variations of broadband service and discount plans.” The FCC adds that it “has a particular interest in learning which discount plans are most effective in promoting broadband adoption and retention.” The FCC will also look for effective customer outreach programs, digital literacy training options, if the projects encourage entrepreneurship, if consumer equipment will be provided at a discount, and the overall likelihood that the applicant will be able to successfully execute its proposal.

The application and data collection requirements are included in the Public Notice. The Wireline Bureau will notify the ETCs selected for the Pilot Program, and the “winners” will be required to complete a variety of forms and submit them to USAC. Finally, “Within three months after the conclusion of the 12-month period of offering subsidized broadband service, each ETC is strongly encouraged to submit a report to the Bureau describing in detail any data collected in addition to the data specified in the Appendix and a narrative describing the lessons learned from the Pilot Program, which may assist the Commission in modernizing the Lifeline program to promote the adoption and retention of broadband services by low-income households.”

What do you think—is the Lifeline Broadband Pilot Program a good opportunity for rural independent telecom providers (of any technology)? The data collected from this program will definitely be useful for creating future low-income broadband policies, but the trail-blazers who participate in the Pilot Program will have to be committed to the process, accept that it might not be a success, and have the resources and expertise to dedicate to the project. It will be very interesting to see which types of projects receive funding, and if many rural independent providers participate.

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Sunday
Apr222012
DateSunday, April 22, 2012 at 5:39PM

FCC Considers Transition for Rural Health Care Pilot Program  

Montana Telecom Association Cautions that FCC “Puts the Cart Before the Horse”

On February 27, 2012, the FCC released a Public Notice about the seldom-discussed USF Rural Health Care (RHC) program, and comments were due on April 18. For consideration is whether the FCC should transition 50 projects from a pilot program to a more permanent funding mechanism. The FCC has studied this issue in the past, but now seeks “more focused comment on supporting select Pilot Program participants at their current funding levels to ‘bridge’ the disparity in funding and application requirements between the Pilot Program and Primary Programs for the 2012-2013 funding year.”

The FCC proposes to use existing funds that “were previously designated for projects that withdrew from the Program or otherwise failed to meet the June 30, 2011 deadline,” about $30m, as the bridge fund. The pilot program was created in 2006 “to examine ways to use the RCH support mechanism to enhance public and non-profit health care providers’ access to advanced telecommunications and information services.” The FCC initially selected 69 projects, but that number was whittled down to 50 over time as projects merged or pulled out of the program. The FCC explains that now 484 individual health care providers, who participate as consortia, will reach their funding cap in 2012. The FCC believes that these health care providers may find it difficult to obtain funding from the permanent RHC fund do to “significant differences…regarding eligibility and funding.”

The Montana Telecommunications Associations filed comments in this proceeding where it argued the FCC’s Public Notice “puts the cart before the horse.” MTA elaborates, “[The FCC] assumes that pilot projects that will run out of funds in 2012 should continue to be funded despite the temporary nature of the Pilot Program, questions raised about the Rural Health Care Program by the U.S. Government Accountability Office (GAO), and still-unresolved questions about contour of the Rural Health Care support mechanism itself as discussed in the 2010 Rural Health Care Program Notice of Public Rulemaking.” MTA further states that there is no clear evidence that the FCC is required to provide ongoing funding to participants at the conclusion of the Pilot Program. Also, the FCC was supposed to release a report about the results of the program, which it has not yet done.

MTA points out a potential flaw of the pilot program: by funding infrastructure projects, the Pilot Program “puts rural health care providers in the business of telecommunications construction, which is not the expertise of health care providers and places them in competition with commercial providers of broadband service.” MTA also argues that the program encourages overbuilding and reselling of excess capacity to non-healthcare providers. Overall, MTA recommends that the FCC resolve these issues (and others) and “process the lessons learned from the Pilot Program before it adopts ‘bridge funding’ or a transition mechanism to bring pilot programs into the permanent funding mechanism, especially if such bridge funding or transition mechanisms involve the perpetuation of projects whose funding is not justified in the absence of any performance measurement or other due-diligence scrutiny.”

MTA’s response to the RHC Pilot Program Public Notice is interesting because it addresses the issue of non-telecom entities using government subsidies to compete with, or bypass, commercial telecom businesses. It also sheds some light on potential problems that may occur once the Lifeline broadband pilot programs kick off—such as the tendency for “pilot programs” to drag on indefinitely while an agency has more pressing issues to deal with than studying and making choices about pilot programs. The proposed Lifeline pilot program has already encountered some criticism for being beyond the scope of the FCC’s authority, and for targeting a problem that is largely being solved by the commercial market and existing public-private partnerships. On the grand scale of the entire USF, these pilot programs don’t make up a very large slice…but with the FCC’s constant nagging about sticking to a budget, every little bit matters.

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Wednesday
Apr042012
DateWednesday, April 4, 2012 at 3:14PM

USTelecom Files Lifeline Comments and Petition for Reconsideration

FCC Should Avoid Premature Decisions on Digital Literacy Program, $9.25 Monthly Support

On April 2, 2012, USTelecom filed both comments and a petition for reconsideration and clarification regarding the FCC’s February 6 Lifeline Reform Order and FNPRM. The comments focused on issues in the FNPRM like the proposed federally-funded digital literacy training program and the national eligibility database. In its petition for reconsideration and clarification, USTelecom identified 14 specific aspects of the Order “for which additional clarity at the initiation of the rules and procedures would serve the interests of participants and the Commission.” In both filings, USTelecom emphasized the importance of minimizing confusion and regulatory burdens, and ensuring that funds are used appropriately and efficiently.

USTelecom emphasized that the role of ETCs should not include determining eligibility; “That determination is properly the role of the government,” USTelecom said in its comments. “As service providers, ETCs should be able to query the national eligibility database and receive a yes or no answer as to whether a household is eligible for the Lifeline discount.” USTelecom also warns against premature decisions regarding digital literacy training programs and the monthly level of support—the FCC should undertake a data-driven analysis of the impacts of the Order before making a final decision about either of these proposals.

As for the digital literacy program, USTelecom is wary that the FCC has the authority to fund and administer such a program. USTelecom explains, “It is premature to address potential funding of digital literacy programs when the Commission has not yet even accepted applications for the broadband pilot programs which will provide needed information on the costs and effectiveness of various strategies to increase broadband adoption.” Likewise, the FCC should not jump to conclusions about changing the $9.25 monthly support level, and the FCC should not change the one-per-household rule at this time. USTelecom asserts that “The suggestions in the Lifeline Reform FNPRM that a household be able to split the Lifeline discount across two or more lines would be an administrative nightmare as well as be inconsistent with the purpose of Lifeline support, which is to ensure that the household has a connection to the outside world, not multiple connections.”

The areas of the Lifeline Order of which USTelecom believes the FCC should clarify or reconsider include:

  1. The requirement for carriers to follow up with customers at a ‘temporary address;’
  2. The obligation to provide Toll Limitation Service (TLS) despite a lack of funding for such service;
  3. The requirement for retaining annual recertification forms and providing them to USAC and the state commissions if the state performs the annual recertification function;
  4. Compliance by providers where the Order’s mandates apply to states or other parties not under the control of ETCs;
  5. The requirement for ETCs to provide service initiation dates;
  6. Unnecessary burdens in the audit requirements;
  7. Appropriate documentation of program eligibility;
  8. The time period to remove de-enrolled Lifeline customers from the database;
  9. Disclosures required in Lifeline advertising;
  10. The requirement to describe how partial payments will apply to bundled services;
  11. Payments suspended for non-compliance;
  12. Collection of the Tribal identification number by the ETC;
  13. Tribal reporting requirements;
  14. Unequal speed benchmarks for Low-Income Broadband Pilot Program applicants

Many of the areas USTelecom urges the FCC to reconsider or clarify deal with the administrative burdens and the fundamental responsibilities of ETCs in the Lifeline program. For example, USTelecom argues that the requirement for wireline ETCs to confirm a Lifeline recipient’s “temporary address” at 90-day intervals is “superfluous,” because wireline accounts would be disconnected if the recipient moved.  USTelecom also questions whether it is appropriate for carriers to “make judgment calls as to the acceptable documentation for eligibility purposes.” USTelecom recommends that the FCC clarify specifically which forms of documentation are acceptable by issuing a comprehensive list that will be available on the USAC website and include examples of the acceptable documents. A comprehensive list, USTelecom argues, “will support the integrity of the Lifeline program.”

Also notable, USTelecom argues that applying different speed benchmarks for Broadband Pilot Program participants violates the goal of technological neutrality and could give wireless carriers an unfair advantage. USTelecom suggest that “The Commission should replace its technology-specific speed benchmarks with a single benchmark of 3 Mbps downstream.” Although lower than the generally-accepted 4 Mbps broadband definition, USTelecom believes an across-the-board 3 Mbps benchmark will ensure that Broadband Pilot Program participants will be able to access standard definition video for health and education applications.

USTelecom’s Lifeline filings reflect concerns held by wireline ETCs that some of the reforms could place unnecessary administrative burdens on carriers—however; USTelecom and other telecom industry commenters generally applaud the FCC’s efforts to modernize and streamline the Lifeline program. As with the high-cost fund and intercarrier compensation reforms, the FCC should avoid making further premature decisions without undertaking a comprehensive analysis of the initial round of reforms.

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Monday
Mar122012
DateMonday, March 12, 2012 at 4:11PM

FCC Seeks Comment on Lifeline Order Waiver Petition 

USTelecom and Rural Associations Seek to Extend Effective Date of New Rules

On March 9, 2012 the FCC released a Public Notice seeking comments on a Petition for Waiver and Clarification of the Lifeline Reform Order filed by USTelecom, the Independent Telephone and Telecommunications Alliance (ITTA), NTCA, OPASTCO, WTA and ERTA. The FCC explains that the petition “requests that the Commission waive for ‘post-paid ETCs,’ the April 2, 2012 effective date for (1) the establishment of the new flat-rate Lifeline reimbursement amount for subscribers on non-Tribal lands; (2) the elimination of Link Up discounts on non-Tribal lands and (3) changes to the Link Up discount on Tribal lands.” The petitioners ask the FCC to extend the effective date of the requirements to October 1, 2012.

The petitioners argue, “because of the importance of the Lifeline program to low-income consumers…the timeframes for the implementation of certain aspects of the Order by postpaid eligible telecommunications carriers are unrealistic and could harm the very consumers the program is intended to benefit.” The waiver petition states that the new $9.25 flat rate reimbursement and Link Up elimination will require ETCs to submit revised tariffs, provide customers with notification of the changes, modify billing systems, and train employees—which simply cannot be accomplished on such a tight deadline. The petitioners comment that, “Although this new structure will be simpler to administer and easier for subscribers to understand, it represents a dramatic change that will require extensive work to implement. Given that the Order was released on February 6, 2012, postpaid ETCs have less than sixty days to complete the tasks necessary to implement these reforms, which is simply not a sufficient period of time.”

The petitioners also ask the FCC to clarify three aspects of the new Lifeline certification requirements in Section 54.407(d). Section 54.407(d) requires ETCs to certify that they are in compliance with all of the Lifeline rules in order to receive reimbursement from the Universal Service Fund. The petitioners request that the FCC clarify the date by which states must modify automatic Lifeline enrollment programs; that ETCs can qualify for reimbursement by certifying compliance with all of the rules in effect at the time of the request (since new rules might not be in effect at the time of certification); and “the Commission should clarify the mechanics of how the certification requirement will be implemented.”

The FCC adopts an expedited timeline for comments since the rules are supposed to become effective in less than one month. Comments are due March 20, 2012.

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Thursday
Feb092012
DateThursday, February 9, 2012 at 4:09PM

Lifeline Order Strikes Balance between Needs, Burdens

New Rules are Mostly Housekeeping; Broadband Pilot Program has Promise

The Genachowski Commission continued its mission to go down in history as the Commission that modernized telecommunications regulation for a broadband world (or at least attempted to do so) with its latest sweeping revamp of the Universal Service Fund. The Lifeline Reform Report and Order and FNPRM was released on February 6, 2012, following the Commission’s January 31 vote to approve the rules. The new rules might be a bit short of a “sweeping revamp,” but they do appear to thoroughly close loopholes and accomplish a considerable amount of administrative reform in the Lifeline program in order to move towards a more streamlined, effective and organized support system for low income Americans. The FCC attempts to create balance between meeting the communications needs of low-income consumers and minimizing the contributions burden on those who pay into the Fund. The FCC also attempts to minimize administrative burdens for ETCs who provide Lifeline discounts while also ensuring that only individuals who truly qualify are enrolled.

While most of the rules largely constitute housekeeping, the proposed pilot programs for Lifeline-supported broadband may prove more interesting. As it is challenging to pinpoint where to draw the line between a service that should be subsidized and a service that is not a basic living necessity, the broadband pilot program may bring some controversy too. However, as Commissioner Mignon Clyburn is prone to saying, broadband is rapidly becoming a necessity, not a luxury. 

For rural independent telecom providers, the new Lifeline rules generally appear favorable. However, the various benefits (like controlling the growth of the Lifeline fund) may come at a cost of increased administrative obligations, according to NTCA director of legal and industry Jill Canfield. She explained to JSICA that the FCC attempted to strike a balance between controlling the size of the fund and expanding the benefits of Lifeline for consumers, but the direct impacts of the new rules on RLECs still remains to be seen. Canfield commented that NTCA is working with its RLEC members who are interested in participating in the broadband pilot program. She explained that some RLECs are already experimenting with low-income broadband programs similar to Comcast’s Internet Essentials and the FCC-driven Connect to Compete; but since these programs are locally-tailored, they tend not to “get the big splash” of media attention. Canfield also warned that the underlying networks must be supported in order for a broadband Lifeline program to be successful. The Order itself states, “For broadband to be ‘available’ to low-income consumers, a broadband network (or networks) must have been deployed to the consumer, and the broadband service offered over the network must be affordable and provide a sufficient level of robustness (e.g. bandwidth) to meet basic broadband needs.”

The new rules will attempt to bring Lifeline, a patchwork quilt of state-by-state eligibility and administrative procedures, under an umbrella of uniform nationwide standards. The FCC adopts “minimum floor” requirements for eligibility and enrollment, where participants must have a household income at or below 135% of the Federal Poverty Guideline or be in one participating federal assistance program. The FCC hopes that uniform eligibility criteria will ease auditing burdens, help consumers who move between states to stay in the program, and streamline the enrollment process.

The FCC further adopts a one-per-household rule, where a household is flexibly defined as one “economic unit,” which will still allow individuals who live in group homes, shelters, Tribal communities and other such residences to receive a supported phone as long as the applicants “affirmatively certify that other Lifeline residents residing at the address are part of a separate household.” ETCs will also be required to confirm a residential address, not a P.O. box, of Lifeline recipients in order to help reduce duplicative support, waste, fraud and abuse. John Staurulakis, Inc.’s Darla Parker commented that “The one-discount-per-household rule will be a task to implement for all ETCs, simply because service addresses will have to be precise and recognizable as an ‘economic unit’ in the words of the FCC.”

The FCC intends to curtail enrollment abuse by requiring documentation of federal assistance program-based eligibility. A new rule requires ETCs “prior to enrolling a new subscriber in Lifeline, to access state or federal eligibility databases, where available.” According to the FCC, “Lifeline subscribership data reflects troubling evidence suggesting that ineligible consumers may be enrolling in the program at a particularly rapid rate;” and “Up to an estimated 15 percent of existing Lifeline subscribers could be ineligible for Lifeline benefits, potentially representing hundreds of millions of dollars in support.” The FCC acknowledges that these problems are especially severe in states that do not require certain documentation for enrollment. For example, enrollment increased 1,565% in Louisiana from 2008 to 2011 where documentation of federal assistance program participation is not required; enrollment increased 105% in Kansas where such documentation is required.

The National Lifeline Accountability Database is likely one of the most significant and needed reforms in the Lifeline Order. The proposed core functions of this database include, “the ability to receive and process subscriber information provided by ETCs to identify whether a subscriber is receiving a Lifeline benefit from another ETC…utilize subscriber data provided by ETCs to identify and reduce current instances of duplicative support… [and] be capable of accepting queries from an ETC to enable them to determine if a subscriber is already receiving Lifeline support from another ETC.” The FCC anticipates that the cost of the database, maybe around $10m, will be far outweighed by the benefits of eliminating duplicative support, which is as much as $200m per year. The database will require ETCs to submit the full name, address, phone number, enrollment or de-enrollment date, means of eligibility, last four digits of the participant’s social security number, amount of support received each month, if the subscriber received a Link Up discount (although Link Up will be eliminated as per the Order), and whether the participant has a non-traditional address. The database is supposed to be up and running within one year, and ETCs will have 60 days following a Public Notice to provide the necessary information.

JSI’s Darla Parker commented that the database “could be a burden lifted from the rural ILECs, where today they must figure and must certify if a customer meets the Lifeline eligibility criteria.” Parker also discussed how RLECs could risk losing customers who are currently receiving duplicative support: “The intent appears to make the dual-discount customer choose only one service provider’s discounted service. Understandable, yes, but that customer may keep both services, one that’s discounted, or may drop the undiscounted service which could be the RLEC.” Although it is important to reduce the contributions burden by eliminating duplicative support, it appears as though lost customers could be a negative side effect of this particular reform.

Finally, the Broadband Pilot Program is adopted in the Order, and the FCC solicits comments on this program (as well as the database and other issues) in the FNPRM. The pilot program will be funded by $25m saved from duplicative support elimination, and “will focus on testing the necessary amount of subsidies for broadband and the length of support.” Pilot programs will run for a duration of 18 months—3 months for administration and 12 months for testing the programs. The FCC will seek “diversity” in programs, “with different amounts and durations of subsidies, different types of geographic areas (e.g., urban, rural), and different types of broadband networks (e.g. fixed and mobile) and technologies.” The FCC will give preference to programs that will offer at least 4/1 Mbps, and the FCC encourages ETCs to partner with third parties such as libraries. Projects should focus on households that do not currently have broadband. The FCC does not intend for the pilot program “to retread the ground already covered by public and private broadband adoption projects, but to benefit from the work already done.”

Overall, the Lifeline Order appears to be a positive step toward modernizing Lifeline for a broadband world and reducing administrative and contributions burdens on ETCs and non-low-income consumers. However, the success of broadband Lifeline in rural areas is contingent upon rural networks actually existing, which the high-cost USF and ICC reform threatens to upset. Furthermore, it is becoming more and more evident that the FCC needs to quickly act on contributions reform.

What do you think of the Lifeline Order and FNPRM? Share your ideas on JSICA’s LinkedIn USF Forum.  

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