Carriers and States Want FCC to Postpone Some Lifeline Rules

Sprint Nextel doesn’t object to the waiver request as long as the extension applies to all Lifeline service providers, not just to post-paid ETCs, it said in a filing (http://xrl.us/bmyzhr). “A post-paid ETC will have a competitive advantage if it is able to offer a $10 Lifeline benefit in a state in which a pre-paid ETC is only able to offer a $9.25 benefit. The competitive disparity adds insult to injury to those pre-paid ETCs for which the $9.25 flat rated Lifeline amount is less than their current support amount.” On Link-Up, the FCC should require the ILECs to “provide a list of which ETCs need a waiver, in which states, and for how long,” Sprint said. “Besides being unnecessary and overbroad, a blanket waiver of the elimination of Link Up support for all post-paid ETCs will have a negative impact on projected Low Income Fund savings, thereby changing the calculus on which the entire package of reform measures was balanced.”

The Rural Cellular Association largely agreed the waiver should apply to all (http://xrl.us/bmyzih): “Like the wireline postpaid ETCs on which the Petition focuses, wireless CETCs must modify their billing systems to account for the new rates, develop new training for employees and enrollment materials for subscribers, and update verification and other procedures, all of which require a significant amount of time and effort.” TracFone said the “regulatory and operational roadblocks to implementing these and other rule changes within the narrow timeframes established by the Commission are not limited to postpaid ETCs” (http://xrl.us/bmyzj3).

Verizon and Verizon Wireless jointly asked the FCC to grant the waiver. “Even if necessary state and local approvals can be obtained for the Lifeline and Link-Up rate changes mandated in the order, carriers will have to make changes to their billing systems to properly bill customers and seek reimbursement” from the Universal Service Administrative Co., Verizon said (http://xrl.us/bmyzi2). “Verizon, for example, must carefully analyze the capabilities and limitations of each of its multiple active billing systems for Verizon ETC entities and implement necessary programming and other changes to ensure that the new $9.25 flat-rate reimbursement amount is properly accounted for on Lifeline customer bills.”

AT&T urged the Commission to grant the waiver on an expedited basis, saying the implementation deadlines were “unrealistic” and “aggressive,” and failed to account for state-mandated tariffing and customer notification requirements, contractual requirements between ETCs and customers, and necessary changes to billing systems (http://xrl.us/bmyz7y). “Unlike prepaid Lifeline providers, postpaid ETCs obviously issue bills to their Lifeline customers and thus must make changes to their billing systems in order to implement the new flat-rate Lifeline discount amount,” AT&T said. If the Commission intended for ETCs to modify how the discount amount is calculated and displayed on the customer’s bill, that change could require a lead time of “many months,” it said. AT&T also asked the commission to clarify how carriers should implement the new rule limiting Link-Up to ETCs that also receive high-cost support on Tribal lands. AT&T wants the FCC to clarify that ETCs receiving high-cost support anywhere within its service area shall make Link-Up available to any eligible consumer residing on Tribal lands within the service area. “It would be extraordinarily confusing to consumers if Link-Up was available one year but not the next because the ETC was no longer receiving high-cost support for that area,” AT&T said.

CenturyLink said an April implementation “may not be unreasonable” for certain providers, but ILECs like CenturyLink would face several challenges meeting the Commission’s intended implementation schedule (http://xrl.us/bmyz9y). The order “creates a very significant amount of work” that must be “done with care,” CenturyLink said, estimating it would need at least 75 days to prepare and make its more than 90 necessary filings. The telco proposed a detailed timeline for states to review the order, and for ILECs to file updated tariffs, complete necessary billing system changes and notify customers. CenturyLink also asked the commission to clarify that until states that make determinations of initial eligibility change their process, ETCs may certify compliance with program requirements without obtaining a customer certification from the state entity determining Lifeline eligibility.

Frontier said it, too, would have trouble implementing some of the order’s reforms by the deadline (http://xrl.us/bmyz96). Frontier, which operates in 27 states, has been working to file its 77 tariff revisions since the day the order was published in the Federal Register, but has still been unable to clear the notice requirements, it said. Aside from a problem of sufficient manpower, 13 of the states have 30-day notice requirements, which “has made compliance difficult.” Frontier also faces unique difficulties in that it recently acquired nine states from Verizon, and faces a “massive conversion” process of IT systems, it said. “When Frontier provided notice to the Commission in July 2011 that it intended to convert these systems, Frontier did not contemplate that rapidly-enacted Lifeline changes would also require immediate additional IT support,” it said.

The National Association of Regulatory Utility Commissioners (http://xrl.us/bmy2ik) and several individual state commissions also supported the petition. Officials with the California Public Utilities Commission said it’s transitioning to a new third-party administrator and therefore would be difficult for the state to implement the new requirements by the currently scheduled dates (http://xrl.us/bmy2gt). CPUC also sought clarification regarding whether the FCC intended to disqualify customers that fail to provide Social Security number and date of birth data to re-certify. CPUC asked the FCC whether states are generally permitted to have additional lifeline program rules and measures that aren’t inconsistent with the FCC rules.

Some of Nebraska’s eligible telecom carriers are “just now learning about the Commission’s Lifeline Reform Order,” the state commission said (http://xrl.us/bmy2g3). It’s clear that the April 2 deadline would be difficult if not impossible to meet for some carriers, it said. Meanwhile, for many of the regulated carriers in the state, billing systems would need to be updated, notice to affected customers would need to be given and marketing materials would need to be changed, it said. Additionally, the commission needs to change its forms, rules, orders and internal process to implement the order. The June deadline for implementing those changes to program criteria and certification processes “may also be problematic,” it said.

The Montana Public Service Commission sought clarification of Section 54.407(d) of the revised Lifeline rules (http://xrl.us/bmy2ie). The section requires that an ETC certify “that it is in compliance with all of the rules in this subpart, and, to the extent required under this subpart, has obtained valid certification and re-certification forms from each of the subscribers for whom it is seeking reimbursement.”