83 FR 2104 - Bridging the Digital Divide for Low-Income Consumers, Lifeline and Link Up Reform and Modernization, Telecommunications Carriers Eligible for Universal Service Support
FEDERAL COMMUNICATIONS COMMISSION Federal Register Volume 83, Issue 10 (January 16, 2018)
Federal Register Volume 83, Issue 10 (January 16, 2018)
| Page Range | 2104-2119 | |
| FR Document | 2018-00153 |
[Federal Register Volume 83, Number 10 (Tuesday, January 16, 2018)] [Proposed Rules] [Pages 2104-2119] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-00153] ======================================================================= ----------------------------------------------------------------------- FEDERAL COMMUNICATIONS COMMISSION 47 CFR Part 54 [WC Docket Nos. 17-287, 11-42, 09-197; FCC 17-155] Bridging the Digital Divide for Low-Income Consumers, Lifeline and Link Up Reform and Modernization, Telecommunications Carriers Eligible for Universal Service Support AGENCY: Federal Communications Commission. ACTION: Proposed rule. ----------------------------------------------------------------------- SUMMARY: In this document, the Federal Communications Commission (Commission) proposes and seeks comment on reforms to ensure the Lifeline program rules comport with the authority granted to the Commission in the Communications Act and to curb wasteful and abusive spending in the Lifeline program. The Commission also seeks comment on how Lifeline might more efficiently target funds to areas and households most in need of help in obtaining digital opportunity. DATES: Comments are due on or before January 24, 2018, and reply comments are due on or before February 23, 2018. If you anticipate that you will be submitting comments, but find it difficult to do so within the period of time allowed by this document, you should advise the contact listed below as soon as possible. ADDRESSES: You may submit comments, identified by WC Docket Nos. 17- 287, 11-42, and 09-197, by any of the following methods:Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments. Federal Communications Commission's website: http://fjallfoss.fcc.gov/ecfs2/. Follow the instructions for submitting comments. People with Disabilities: Contact the FCC to request reasonable accommodations (accessible format documents, sign language interpreters, CART, etc.) by email: FCC504@fcc.gov 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: Jodie Griffin, Wireline Competition Bureau, (202) 418-7400 or TTY: (202) 418-0484. SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice of Proposed Rulemaking and Notice of Inquiry (NPRM and NOI) in WC Docket Nos. 17-287, 11-42, 09-197; FCC 17-155, adopted on November 16, 2017 and released on December 1, 2017. 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: http://transition.fcc.gov/Daily_Releases/Daily_Business/2017/db1201/FCC-17-155A1.pdf. The Fourth Report and Order, Order on Reconsideration and Memorandum Opinion and Order that was adopted concurrently with the NPRM and NOI are published elsewhere in this issue of the Federal Register. I. Introduction 1. In this Notice of Proposed Rulemaking, the Commission proposes and seeks comment on reforms to ensure the Lifeline program rules comport with the authority granted to the Commission in the Communications Act and to curb wasteful and abusive spending in the Lifeline program. Specifically, the NPRM seeks comment on ending the Commission's previous preemption of states' role in designating certain eligible telecommunications carriers and removing the Lifeline Broadband Provider designation; targeting Lifeline funds to facilities- based broadband-capable networks offering both voice and broadband services; adopting a self-enforcing budget cap for the program; improving the eligibility verification and recertification processes to further prevent waste, fraud, and abuse in the program; and improving providers' incentive to provide quality communications services by establishing a maximum discount level for Lifeline-supported service. In the Notice of Inquiry, the Commission seeks comment on how Lifeline might more efficiently target funds to areas and households most in need of help in obtaining digital opportunity. II. Notice of Proposed Rulemaking 2. In this Notice of Proposed Rulemaking, the Commission proposes and seeks comment on reforms to ensure that the Commission is administering the Lifeline program on sound legal footing, recognizing the important and Congressionally mandated role of states in Lifeline program administration, and rooting out waste, fraud, and abuse in the program. These steps must precede broader discussions about how the Lifeline program can be updated to effectively bring digital opportunity to those who are currently on the wrong side of the digital divide. 3. The Commission first seeks comment on ways the Commission can better accommodate the important and lawful role of the states in the Lifeline program. The Commission proposes to eliminate the Lifeline Broadband Provider category of ETCs and the state preemption on which it is based. The Commission also seeks comment on ways to encourage cooperative federalism between the states and the Commission to make the National Verifier a success. 4. In this section, the Commission addresses the serious concerns that have been raised that the Commission's creation of Lifeline Broadband Provider (LBP) ETCs and preemption of state commissions' designations of such LBPs was inconsistent with the role contemplated for the states in Section 214 of the Act. In the 2016 Lifeline Order, 81 FR 33026, May 24, 2016, the Commission established a framework to designate providers as Lifeline Broadband Providers (LBPs), eligible to receive Lifeline reimbursement for qualifying broadband internet access [[Page 2105]] service provided to eligible low-income consumers, but not Lifeline voice service. The Commission's role in this framework was premised on the Commission's authority to designate a common carrier ``that is not subject to the jurisdiction of a State commission.'' And to effectuate that policy goal, the agency preempted state authority in a manner wholly inconsistent with Section 214 of the Communications Act, which gives primary responsibility for designation of eligible telecommunications carriers to the states. (47 U.S.C. 214(e)(2), (3)). Based on these circumstances and on further review, the Commission believes it erred in preempting state commissions from their primary responsibility to designate ETCs under section 214(e) of the Act and seek comment on this issue. (See 47 U.S.C. 214(e)). 5. The 2016 Lifeline Order's preemption of state designation of LBPs was challenged by the National Association of Regulatory Utility Commissioners (NARUC) and a coalition of states led by the State of Wisconsin (State Petitioners). (See NARUC v. FCC, Case No. 16-1170 (DC Cir., filed June 3, 2016); Wisconsin v. FCC, Case No. 16-1219 (DC Cir. filed June 30, 2016). Among other issues, NARUC and the State Petitioners contend the Commission's decision to preempt states from exercising any authority to designate broadband providers as LBPs violates the Act and the Administrative Procedure Act. The United States Court of Appeals for the DC Circuit has remanded the legal challenges to the Commission for further proceedings. (NARUC v. FCC, Case No. 16-1170, Order (DC Cir., Apr. 19, 2017), granting the Commission's motion for voluntary remand.) The legal challenges to the LBP designation process question the Commission's legal authority to create an LBP designation process and designate providers under that process. Additionally, members of Congress have introduced legislation to reverse the Commission's preemption and clarify that the Communications Act of 1934 and the Telecommunications Act of 1996 cannot be interpreted to limit the jurisdiction of any state to designate an ETC. (See Preserving State Commission Oversight Act of 2017, S. 421, 115th Cong. (2017)). Would reversing the preemption in the 2016 Lifeline Order resolve the legal issues surrounding LBPs and their designation process? How would reversing the preemption in the 2016 Lifeline Order impact the future of LBPs in the Lifeline program? Should ETCs be designated through traditional state and federal roles either for purposes of only Lifeline or for both the high-cost and Lifeline programs? (See 47 U.S.C. 214(e)). What rule changes would be needed to restore the traditional state and federal roles for ETC designations? The Commission seeks comment on this proposal and on any alternatives. 6. The 2016 Lifeline Order ``applaud[ed] state programs for devoting resources designed to help close the affordability gap for communications services.'' Although not formally constraining how states administer those state programs for voice and/or broadband support, the Order recognized that its approach to ETC designations could create inconsistencies with the operation of those state programs. States continue to play an important role in ensuring affordability of voice, and also supporting broadband; accordingly, reversing the preemption in the 2016 Lifeline Order may resolve inconsistencies between state and federal efforts and provide benefits to the operation of state and federal programs. The Commission seeks comment on these issues. 7. The Commission also proposes eliminating stand-alone LBP designations to better reflect the structure, operation, and goals of the Lifeline program, as set forth in the Communications Act, as well as related state programs. For example, the existence of an LBP designation enables entities to participate in the Lifeline program without assuming any obligations with respect to voice service. The Commission seeks comment on this proposal. 8. In the 2016 Lifeline Order, the Commission established the National Verifier to make eligibility determinations and perform a variety of other functions necessary to enroll eligible subscribers into the Lifeline Program. As outlined in the 2016 Lifeline Order, ``[t]he Commission's key objectives for the National Verifier are to protect against and reduce waste, fraud, and abuse; to lower costs to the Fund and Lifeline providers through administrative efficiencies; and to better serve eligible beneficiaries by facilitating choice and improving the enrollment experience.'' A strong cooperative effort between the Commission and its state partners is critical to advancing these laudable objectives. In this Notice of Proposed Rulemaking, the Commission seeks comment on ways to ensure the Commission can partner with states to facilitate the successful implementation of the National Verifier. 9. The Commission seeks comment on ways states can be encouraged to work cooperatively with the Commission and USAC to integrate their state databases into the National Verifier without unnecessary delay. Because the National Verifier is a critical part of improving the integrity of the Lifeline program, it is important all states join the National Verifier in a timely manner. To protect the integrity of the enrollment and eligibility determination process, the Commission seeks comment on whether new Lifeline enrollments should be halted in a state at any point if the launch of the National Verifier has been unnecessarily delayed in that state. For example, when the plan for National Verifier initiation in a state falls behind schedule, what steps should be taken to ensure no ineligible subscribers enroll in the program because of the delay? What is the proper response when the scheduled launch of the National Verifier in a state is not accomplished by the announced date and carriers relying on the launch announcement are unprepared to handle eligibility determinations? Should enrollments be halted for all consumers in the state or only for those whose eligibility must be verified using a state database? 10. The Commission seeks comment on other steps to encourage cooperation and collaboration between the states, the Commission, and USAC to ensure the National Verifier is launched in a state in a timely fashion. Should the Commission adopt specific benchmarks or proposed timelines to guide this process? Are there ways to streamline the process of developing and executing the agreements necessary to allow data sharing between states and the Commission? In the event a state has demonstrated an unwillingness to engage in the effort to deploy the National Verifier or to do so at reasonable costs, are there other measures the Commission should take? In these situations, USAC is able to conduct a manual review of all eligibility documentation for potential Lifeline subscribers in that state but that measure is costly, burdensome, and inefficient; the Commission believes program expenses would be better directed towards electronic connections between state systems and the National Verifier platform. How can the Commission encourage states to work cooperatively with USAC to avoid unnecessary costs? 11. The Lifeline program has an important role in bringing digital opportunity to low-income Americans. The Commission believes that changes to Lifeline policies are warranted to ensure the Commission's administration [[Page 2106]] of Lifeline support is faithful to Congress's stated universal service goals and is focused on helping low-income households obtain the benefits that come from access to modern communications networks. In this section, the Commission proposes policy changes to focus Lifeline support on encouraging service provider investment in networks that offer quality, affordable broadband service. The Commission also seeks comment on the Commission's legal authority for these proposed changes. 12. Lifeline Support for Facilities-Based Broadband Service. The Commission seeks comment on focusing Lifeline support to encourage investment in broadband-capable networks. As explained in the 2016 Lifeline Order, broadband service is increasingly important for participation in the 21st Century economy. However, broadband service is not as ubiquitous or as affordable as voice service. This is particularly true in rural and rural Tribal areas, where broadband deployment lags behind other areas of the country. 13. Section 254(b) of the Act requires the Commission to base its policies for the preservation and advancement of universal service on the principles that ``[q]uality services should be available at just, reasonable, and affordable rates,'' ``[a]ccess to advanced telecommunications and information services shall be provided in all regions of the Nation'' and ``[c]onsumers in all regions of the Nation . . . should have access to . . . advanced telecommunications and information services, that are reasonably comparable to those services provided in urban areas and that are available at rates that are reasonably comparable to rates charged for similar services in urban areas.'' (47 U.S.C. 254(b)(1)-(3)). 14. Mindful of the direction given to the Commission by Congress, the Commission believes Lifeline support will best promote access to advanced communications services if it is focused to encourage investment in broadband-capable networks. The Commission therefore proposes limiting Lifeline support to facilities-based broadband service provided to a qualifying low-income consumer over the ETC's voice- and broadband-capable last-mile network. The Commission believes this proposal would do more than the current reimbursement structure to encourage access to quality, affordable broadband service for low- income Americans. In particular, Lifeline support can serve to increase the ability to pay for services of low-income households. Such an increase can thereby improve the business case for deploying facilities to serve low-income households. In this way, Lifeline can serve to help encourage the deployment of facilities-based networks by making deployment of the networks more economically viable. Furthermore, the competitive impacts of having multiple competing facilities-based networks can also help to lower prices for consumers. If Lifeline can help promote more facilities, it can then indirectly also serve to reduce prices for consumers. 15. The Commission seeks comment on this proposal. What rule changes would be necessary to implement this proposal? How can the Commission ensure Lifeline support is only disbursed to ETCs that provide broadband service over facilities-based networks? How would his proposal impact the availability and affordability of Lifeline broadband services? Are there other steps the Commission should take to focus Lifeline support to encourage investment in broadband networks? 16. Discontinuing Lifeline Support for Non-Facilities-Based Service. Next, the Commission seeks comment on discontinuing Lifeline support for service provided over non-facilities-based networks, to advance our policy of focusing Lifeline support to encourage investment in voice- and broadband-capable networks. The Commission proposes limiting Lifeline support to broadband service provided over facilities-based broadband networks that also support voice service. Under this proposal, Lifeline providers that are partially facilities- based may obtain designation as an ETC, but would only receive Lifeline support for service provided over the last-mile facilities they own. The Commission seeks comment on how the Commission should define ``facilities'' for this purpose. Should the Commission adopt the same definition of facilities that the Fourth Report and Order uses for enhanced support on rural Tribal lands? If the Commission adopts different facilities-based criteria for Lifeline generally, should the Commission also use that definition of ``facilities'' for purposes of enhanced Tribal support? The Commission seeks comment on any other rule changes that would be necessary to implement this proposal. 17. How would this proposal impact the number of Lifeline providers participating in the program and the availability of quality, affordable Lifeline broadband services? Are there other means of providing broadband service that should be considered facilities-based for purposes of the Lifeline program? How should the facilities-based requirement apply in a situation where a reseller and a facilities- based provider form a joint venture to provide Lifeline services? How should the Commission ensure Lifeline support is only issued to ETCs that satisfy the facilities requirement? Would the facilities-based requirement further the Commission's goal of eliminating waste, fraud, and abuse in the Lifeline program? On this last point, the Commission notes that the vast majority of Commission actions revealing waste, fraud, and abuse in the Lifeline program over the past five years have been against resellers, not facilities-based providers. And the proliferation of Lifeline resellers in 2009 corresponded with a tremendous increase in households receiving multiple subsidies under the Lifeline program. How do the incentives of resellers differ from those who use their own last-mile facilities? Why have waste, fraud, and abuse increased--including multiple-subsidies-per-household problems, self-certification problems, authentication-of-subscriber problems, phantom-subscriber problems, and eligibility problems--since the advent of multiple resellers within the program in 2009? 18. The Commission does not expect that this approach would impact the forbearance relief from section 214(e)(1)(A)'s facilities requirement. However, the Commission recognizes that not reversing this forbearance relief may create a tension that could be relieved by making the requirements for obtaining a Lifeline-only ETC designation under section 214(e)(1)(A) match the facilities requirement for receiving Lifeline reimbursement. The Commission seeks comment on such matters. 19. Alternatively, should the Commission reverse the forbearance from section 214(e)(1)(A)'s facilities requirement? If the Commission found that forbearing from the facilities-based requirement was no longer in the public interest, what other findings, if any, would the Commission need to make under section 10? If the Commission rescinded this forbearance, what effective date would give impacted ETCs and their customers an appropriate amount of time to make the transition? Furthermore, if the Commission were to rescind forbearance from the facilities requirement, should it reconsider its interpretation of that requirement? For example, Sec. 54.201(g) of our current rules states that an ETC's facilities need not be located within the relevant service area as long as the carrier uses them within the designated [[Page 2107]] service area. But the Commission has previously noted that ``[s]everal ETCs, some of which call themselves `facilities-based resellers,' have previously maintained they are facilities-based based on facilities that provision operator and/or directory assistance services, which are provided in conjunction with their retail offering.'' The Commission seeks comment on revising those rules to make clear that a carrier is only facilities-based under our rules if its facilities are located in its service area and it uses those facilities to provide last-mile service to its supported customers. The Commission also notes that the Act defines a facilities-based carrier as one that offers service ``either using its own facilities or a combination of its own facilities and resale of another carrier's services.'' (47 U.S.C. 214(e)(1)(A)). The Commission seeks comment on how to balance Congress's expectation that ETCs would invest universal service support in the areas they serve (See 47 U.S.C. 254(e).) and its recognition that some amount of resale should be permissible. The Commission seeks comment on any other formulations of this rule it should consider to ensure that facilities-based Lifeline carriers are in fact reinvesting the support they receive in facilities in the communities they serve. 20. The Commission also seeks comment on the transition period for implementing this approach. If Lifeline support is only provided to ETCs that provide Lifeline broadband services over facilities-based voice- and broadband-capable last-mile networks, what should the transition period and transition process be for non-facilities-based providers currently participating in the Lifeline program and their customers? Should the transition process consider whether there is a facilities-based provider in a specific market that intends to continue providing Lifeline service? If so, what geographic area would be the appropriate focus of this determination? What sources could the Commission use to determine whether a facilities-based Lifeline provider is present in and plans to continue offering Lifeline service in a particular geographic market? What other factors should the Commission consider in developing the transition process? What would be an appropriate transition period for impacted ETCs and their customers? Should the Commission provide a three-year support phase down period for non-facilities-based ETCs participating in the Lifeline program, or would a shorter period be appropriate? How would the transition process and period differ if the Commission reversed the forbearance from section 214(e)(1)(A)'s facilities requirement? 21. The Commission also seeks comment on how to determine whether existing or future resellers have fully complied with the statute's exhortation that universal service funding must be spent ``only for the provision, maintenance, and upgrading of facilities and services for which the support is intended.'' (47 U.S.C. 254(e)). Have Lifeline resellers passed through all Lifeline funding to their underlying carriers to ensure federal funding is appropriately spent on the required ``facilities and services'' rather than non-eligible expenses like free phones and equipment? What accounting measures have Lifeline resellers instituted to ensure that Lifeline funding has only been used for eligible expenses? Would eliminating resellers from the program address any concerns about the appropriate use of federal funds by Lifeline providers? Would limiting payments to resellers to what they pay their wholesale carriers fully effectuate the congressional intent of section 254(e)? What auditing or other review should the Commission or USAC carry out to ensure that resellers that have been receiving funds used them properly? 22. Alternatively, the Commission seeks comment on TracFone's suggestions that it minimizes waste, fraud, and abuse in the Lifeline program through ``conduct-based requirements.'' One form of conduct- based requirement would be to suspend for a year or disbar any Lifeline ETC with sufficiently high improper payment rates, whether on the basis of Payment Quality Assurance reviews or program audits. The Commission seeks comment on such a conduct-based requirement. If the Commission were to adopt such a requirement, what should be the measuring stick it uses and what should be the trigger? Should the Commission use a percent of Lifeline revenues improperly paid in a given state? Should the Commission establish a threshold amount of improper payments, such as $50,000, as a trigger for suspension in a state? What levels should be established for disbarment? And should the Commission apply such a requirement to all Lifeline providers, as TracFone suggests, or only wireless resellers, the historic source of most of the Commission's enforcement actions and investigations with respect to waste, fraud, and abuse? Another conduct-based requirement could be the suspension of companies that regularly engage in fraud-related conduct--such as practices that TracFone has previously suggested eliminating from the program. Would banning such practices and suspending those who engaged in them mitigate our concerns about rampant waste, fraud, and abuse? Would any of the conduct-based requirements minimize waste, fraud, and abuse in the Lifeline program to the same extent as the proposed facilities requirement? How could TracFone's proposals be implemented with minimal additional administrative burden on Lifeline service providers? How would such proposals ensure that Lifeline support is being appropriately used to advance the deployment of broadband- eligible networks? 23. Continuing the Phase Down of Lifeline Support for Voice Service. The Commission also seeks comment on continuing the phase down of Lifeline support for voice-only services. In the 2016 Lifeline Order, the Commission adopted rules to gradually phase out Lifeline support for voice-only services to further the Commission's goal of transitioning to a broadband-focused Lifeline program. The current rules provide that Lifeline support will decrease to zero dollars on December 1, 2021, with an exception permitting Lifeline voice support to continue in Census blocks where there is only one Lifeline provider. (47 CFR 54.403(a)(2)(iv).) In deciding to phase down Lifeline support for voice-only service, the Commission explained that continuing to provide Lifeline support for voice-only service may ``artificially perpetuate a market with decreasing demand'' and may incent Lifeline providers to ``avoid providing low-income consumers with modern services as Congress intended.'' The Commission also cited the declining prices of fixed and wireless voice-only services and the availability of a wide-range of voice-only services in the marketplace. 24. Continuing the phase down of Lifeline support is faithful to section 254(b)'s mandates and would support our proposal to focus Lifeline support to encourage investment in broadband-capable networks. (See 47 U.S.C. 254(b)(1)-(3)). The Commission acknowledges that some parties have argued against the phase down of Lifeline support for voice service, citing, among other concerns, the lack of affordable of voice service. However, the Commission expects that even without Lifeline voice support, low-income consumers would be able to obtain quality, affordable voice service in urban areas. Based on the 2018 Urban Rate Survey, several providers charge monthly rates of fifteen dollars or less [[Page 2108]] for fixed voice-only service, and the national average monthly rate for fixed voice-only service is $25.50. (See 2018 Urban Rate Survey, Voice Data, Column J, Rows 423, 496, 501, 763, 788, https://www.fcc.gov/general/urban-rate-survey-data-resources.) The 2016 Universal Service Monitoring Report indicates that telephone expenses represent under four percent of after-tax income for low-income households. (See Universal Service Monitoring Report, CC Docket No. 96-45, et al., at 57, Table 6.12 (2016) https://apps.fcc.gov/edocs__public/attachmatch/DOC-343025A1.pdf.) Therefore, the Commission expects that even without Lifeline support for voice-only service, the monthly cost of such service in urban areas would represent a small percentage of low-income households' after-tax income. The Commission seeks comment on continuing the phase down of Lifeline support for voice-only service. Should the Commission make any changes to the current schedule for phasing out Lifeline support for voice services to support the policy changes the Commission proposes in this section? Should the Commission retain the exception permitting Lifeline support for voice services after December 1, 2021 in areas where there is only one Lifeline provider? (47 CFR 54.403.) Would retaining this exception impede the adoption of Lifeline broadband service or investment in broadband- enabled networks? 25. In contrast, it is unclear whether low-income consumers would be able to obtain quality, affordable voice service in rural areas without Lifeline voice support. The Commission's rules require high- cost ETCs to offer voice service at rates that are reasonably comparable to the rates for similar services in urban areas, USF/ICC Transformation Order, 76 FR 73830, November 29, 2011. Although such rates may be affordable in theory, they may not be in practice: The 2018 reasonable-comparability benchmark for voice services is $45.38-- almost double the average urban rate. The Commission accordingly seeks comment on eliminating the phase down of Lifeline support for voice- only service in rural areas. Would eliminating the phase down be the best way to ensure that consumers in rural areas are offered affordable voice services? Should voice-only support be limited to a subset of rural areas where voice rates are actually above the urban average? If so, by how much? And how should the Commission determine the areas where voice-only support is available? Would offering voice-only support to rural Tribal lands ensure more affordable voice services in those areas? If so, what should be the level of support offered compared to the amount of support available for broadband? 26. Legal Authority. The Commission believes it has authority under Section 254(e) of the Act to provide Lifeline support to ETCs that provide broadband service over facilities-based broadband-capable networks that support voice service. Section 254(e) provides that a carrier receiving universal service support ``shall use that support only for the provision, maintenance, and upgrading of facilities and services for which the support is intended.'' Our proposed changes to Lifeline support comport with the Commission's authority under Section 254 because voice service would continue to be defined as a supported service under the Commission's rules, and the networks receiving Lifeline support would also support voice service. (47 CFR 54.401(a)(2)). Thus, under the proposed changes, Lifeline support would be used ``for the provision, maintenance, and upgrading of facilities and services for which the support is intended.'' (47 U.S.C. 254(e)). This legal authority does not depend on the regulatory classification of broadband internet access service and, thus, ensures the Lifeline program has a role in closing the digital divide regardless of the regulatory classification of broadband service. 27. Relying on the Commission's authority under Section 254(e) for the proposed changes to Lifeline support would also better reconcile the Commission's authority to leverage the Lifeline program to encourage access to broadband with the Commission's efforts to promote access to broadband through high-cost support. In the universal service high-cost program, the Commission relied on section 254(e) as its authority to require ETCs receiving support through the Connect America Fund (including the Mobility Fund) or the existing high cost-support mechanisms to invest in broadband-capable networks, but declined to add broadband internet access service to the list of supported services. In adopting this requirement, the Commission explained that Section 254(e) grants the Commission the authority to ``support not only voice telephony service but also the facilities over which it is offered'' and that Congress's use of the words ``services'' and ``facilities'' in Section 254(e) provides the ``Commission the flexibility not only to designate the types of telecommunications services for which support would be provided, but also to encourage the deployment of the types of facilities that will best achieve the principles set forth in section 254(b) and any other universal service principle that the Commission may adopt under section 254(b)(7), USF/ICC Transformation Order. The Commission further explained that it has a `` `mandatory duty' to adopt universal service policies that advance the principles outlined in section 254(b) and the Commission has the authority to `create some inducement' to ensure that those principles are achieved.'' In 2014, the U.S. Court of Appeals for the Tenth Circuit upheld the Commission's interpretation of its section 254(e) authority in the USF/ICC Transformation Order. 28. The Commission seeks comment on the Commission's legal authority to adopt the proposed changes to Lifeline support. Are there other sources of authority that allow the Commission to make these changes to Lifeline support proposed in this section? 29. The Commission seeks comment on ways the Lifeline program can responsibly empower Lifeline subscribers to obtain the highest value for the Lifeline benefit through consumer choice in a competitive market. In particular, the Commission seeks comment on a request from TracFone Wireless, Inc. (TracFone) to allow providers to meet the minimum service standards through plans that provide subscribers with a particular number of ``units'' that can be used for either voice minutes or broadband service. TracFone argues that the Bureau's previous guidance that such ``units'' plans do not meet the minimum service standards was given without public comment and represented an improper reading of the relevant rule. (47 CFR 54.408.) Should the Commission now allow ``units'' plans to receive reimbursement from the Lifeline program? What impact would these plans have on consumer choice in the Lifeline market? Would such a decision require a change in the Commission's rules? If the Commission permits such plans, how should the Commission determine the appropriate support amount for those plans that combine voice and broadband options when the support level for voice service decreases to $7.25 while the support amount for broadband service remains at $9.25? (See 47 CFR 54.403(a).) 30. The Commission also seeks comment on eliminating the Lifeline program's ``equipment requirement.'' (See 47 CFR 54.408(f).) That rule mandates that any Lifeline provider that ``provides devices to its consumers[] must ensure that all such devices are [[Page 2109]] Wi-Fi enabled,'' prohibits ``tethering charge[s],'' and requires mobile broadband providers to offer devices ``capable of being used as a hotspot.'' (See 47 CFR 54.408(f)(1)-(3)). The Commission never sought comment on such requirements before imposing them on all Lifeline providers and appears to lack the statutory authority to adopt or enforce such requirements. And although well-intentioned, the equipment mandate appears unnecessary if not affirmatively harmful. As the 2016 Lifeline Order recognized, a ``substantial majority'' of Americans already own Wi-Fi enabled smartphones, suggesting such mandates are not needed. And even those Lifeline providers that appear to support offering Wi-Fi-enabled devices or hotspot-enabled equipment acknowledge the increased cost of such equipment, and fail to explain why consumers should not be free to choose lower-cost options. For example, the equipment mandate would prohibit a cable Lifeline provider from offering a low-cost modem rather than an integrated modem-Wi-Fi-router, even if a Lifeline consumer wanted to use a desktop computer to access the internet. What is more, the 2016 Lifeline Order lacked record evidence suggesting that these mandates would have any meaningful impact on the homework gap--their nominal purpose. As such, it appears these mandates are more likely to widen the digital divide than close it. And so, for the first time, the Commission seeks comment on whether the Commission may or should retain the equipment mandates in our rules, or whether they instead should be eliminated. 31. In the interest of removing regulations that no longer benefit consumers, the Commission proposes to eliminate Sec. 54.418 of the Commission's rules, and the Commission seeks comment on this proposal. (See 47 CFR 54.418.) When enacted, section 54.418 required ETCs to notify their customers about the then-upcoming transition for over-the- air full power broadcasters from analog to digital service (the ``DTV transition'') over the course of several months in 2009. The DTV transition has since occurred, and it appears that the rule is no longer relevant. The Commission seeks comment on this proposal. 32. As the Commission embarks on an effort to reform the incentives and effectiveness of the Lifeline program, it is incumbent on the Commission to consider ways it can continue to fight and prevent waste, fraud, and abuse in the program. To that end, the Commission seeks comment on a number of proposals to improve the Lifeline program's administration to preserve program integrity. 33. The Commission proposes to adjust the process that USAC currently uses to identify which service providers will be subjected to Lifeline audits by transitioning to a fully risk-based approach. The Commission proposes to transition the independent audit requirements required by section 54.420 of the Commission's rules away from a $5 million threshold and, instead, to move toward identifying companies to be audited based on established risk factors and taking into consideration the potential amount of harm to the Fund. The Commission proposes modifying section 54.420 to allow companies to be selected based on risk factors identified by the Wireline Competition Bureau and Office of Managing Director, in coordination with USAC. This approach allows for adaptable, independent audits that respond to risk factors that change over time. The Commission believes this new audit approach will better target waste, fraud, and abuse in the program and also utilize administrative resources more efficiently and effectively than in prior years. 34. USAC's current audit program consists of audits targeted to high-risk participants as well as mandatory audits of certain carriers, such as all carriers offering Lifeline for the first time and any carrier receiving more than $5 million in program support in a given year. Recognizing that some mandatory audits were unnecessary, the Commission in the 2016 Lifeline Order directed the Office of Managing Director to work with USAC to modify the approach for determining the first-year Lifeline providers to be audited. The Commission intended this direction to prevent wasteful auditing of companies with limited subscriber bases, for example, and to allow USAC to more efficiently direct audit resources to higher risk providers. The Commission's rules still require carriers drawing more than $5 million annually from the program to obtain independent biennial audits. (47 CFR 54.420.) 35. The Commission seeks comment on transitioning from the mandatory $5 million threshold for the biennial independent audits under Sec. 54.420(a) of the Commission's rules to a purely risk-based model of targeted Lifeline audits. Under this approach, the Wireline Competition Bureau and Office of Managing Director, with support from USAC, would establish risk factors to identify the companies required to complete the biennial independent audits. The independent audits would then follow the same process currently outlined in the rules with the identified carriers obtaining an independent auditor and following a standardized audit plan outlined by the Commission. (47 CFR 54.420(a)). The Commission believes this approach would be more efficient and more effective at rooting out waste, fraud, and abuse in the program because the identified risk factors would better target potential violations than merely focusing on companies receiving large Lifeline disbursements. A wider range of risk factors would be more responsive to identified program risks. 36. The Commission also seeks comment on the impact and burdens the current audit program imposes on providers and whether this risk-based approach reduces those burdens. What resources have the current, non- risk-based audits consumed in terms of employee time, recordkeeping systems, and other related audit costs? Would transitioning all Lifeline audits to a risk-based model improve the accountability of the program? What factors are key indicators of potential abuse in the program? Are there other risk factors the Wireline Competition Bureau, Office of Managing Director, and USAC should consider when identifying companies that should be subject to audit? How many companies should be required to obtain independent audits? 37. In its recent report, the Government Accountability Office (GAO) identified significant fraud and an absence of internal controls by performing undercover work to determine whether ETCs would enroll subscribers who are not eligible for Lifeline support. (See GAO, Telecommunications: Additional Action Needed to Address Significant Risks in FCC's Lifeline Program, GAO-17-538, at 44-46 (2017), http://www.gao.gov/products/GAO-17-538.) The Commission seeks comment on conducting similar undercover work as part of the audits administered by USAC or a third-party auditor acting on USAC's behalf. Would such auditing techniques be a cost-effective way to eliminate fraud in the program? What administrative challenges would the Commission or USAC face in undertaking such undercover work? 38. Finally, the Commission seeks comment on how Lifeline program audits can ensure that Lifeline beneficiaries are actually receiving the service for which ETCs are being reimbursed. What documentation should an audit require to demonstrate that service is being provided? How should an audit detect and report instances where the subscriber's equipment makes it difficult or [[Page 2110]] impossible for the subscriber to use the relevant service? Would changes to auditing methods on this issue require any changes to the Lifeline program rules? Should the Commission require Lifeline service providers to demonstrate that they have addressed any issues that resulted in PQA failures above a certain threshold, or audit findings that result in recovery of more than a certain percentage of the disbursements during the audit period? 39. The Lifeline enrollment and recertification processes continue to demonstrate significant weaknesses that open the program to waste, fraud, and abuse that harms contributing ratepayers and fails to benefit low-income subscribers. The Commission therefore seeks comment on a number of potential changes to the eligibility verification and reverification processes in the Lifeline program. 40. ETC Representatives. The Commission seeks comment on prohibiting agent commissions related to enrolling subscribers in the Lifeline program and on codifying a requirement that ETC representatives who participate in customer enrollment register with USAC. The Commission believes these measures may benefit ratepayers by reducing waste, fraud, and abuse in the program. Many ETCs compensate sales employees and contractors with a commission for each consumer enrolled, and these sales and marketing practices can encourage the employees and agents of ETCs to enroll subscribers in the program regardless of eligibility, enroll consumers in the program without their consent, or engage in other practices that increase waste, fraud, and abuse in the program. 41. The Commission seeks comment on codifying in the Commission's rules the USAC administrative requirement that ETCs' customer enrollment representatives register with USAC in order to be able to submit information to the NLAD or National Verifier systems. The Commission also seeks comment on the scope of the use of representatives' information. USAC is currently implementing an ETC representative registration database to help detect and prevent impermissible activity when enrolling or otherwise working with USAC to enroll Lifeline subscribers. The Commission is aware of certain practices of sales representatives resulting in improper enrollments or otherwise violating the Lifeline rules. (See Letter from Ajit V. Pai, Chairman, FCC, to Vickie Robinson, Acting Chief Executive Officer and General Counsel, USAC, at 1-4 (July 11, 2017), http://transition.fcc.gov/Daily_Releases/Daily_Business/2017/db0711/DOC-345729A1.pdf; GAO, Telecommunications: Additional Action Needed to Address Significant Risks in FCC's Lifeline Program, GAO-17-538 (2017), http://www.gao.gov/products/GAO-17-538.) These practices include data manipulation to defeat NLAD protections, using personally identifying information (PII) of an eligible subscriber to enroll non-eligible subscribers, and obtaining false certifications from subscribers. USAC's current administrative efforts to create this database of ETC representatives would also combat waste in the event a representative using impermissible enrollment tactics is engaged by multiple ETCs. The Commission seeks comment on codifying the ETC representative registration requirement. How should the Commission define an ETC enrollment representative for these purposes? What information would be necessary for the creation of this database? What privacy and security practices should be used to safeguard this information? 42. The Commission also seeks comment on its ability to take appropriate enforcement action against registered ETC representatives who violate the rules governing Lifeline enrollment. For the Commission to exercise its forfeiture authority for violations of the Act and its rules without first issuing a warning, the wrongdoer must hold (or be an applicant for) some form of authorization from the Commission, or be engaged in activity for which such an authorization is required. (See 47 U.S.C. 503(b).) Toward this end, the Commission seeks comment on whether it should implement a certification or blanket authorization process applicable to ETC representatives who register with USAC. How would this blanket authorization coincide with the Commission's existing authority over Lifeline providers' officers, agents, and employees under Section 217 of the Act? (See 47 U.S.C. 217). 43. The Commission also seeks comment on whether the Commission should require ETCs to implement procedures that prohibit commission- based ETC personnel from verifying eligibility of Lifeline subscribers. By prohibiting commissions, the Commission hopes to dis-incent improper, fraudulent, or otherwise illegal enrollment processes sometimes utilized by ETCs' representatives. The Commission proposes that those employees, agents, or third parties who receive a significant portion of their compensation based on the number of Lifeline subscribers they enroll in the program be precluded from determining eligibility. The Commission is concerned that ETCs implementing procedures barring commission-based personnel from reviewing and verifying subscriber eligibility certifications and documentation will reduce financial incentives for commission-based personnel to enroll ineligible subscribers. Should this proposal preclude ETCs from using commission-based personnel altogether, or should it instead require ETCs to simply implement procedures precluding commission-based personnel from determining eligibility? As an additional safeguard, should the Commission require Lifeline providers to ensure that service provider representatives involved in soliciting customers are separated from service provider representatives who are involved in the verification process? 44. NLAD Dispute Resolution. The Commission seeks comment on requiring USAC to directly review supporting documents for manual NLAD dispute resolutions, including information regarding the ETC agent submitting the documentation. The Commission believes this requirement would reduce improper enrollments in the program. Currently, manual documentation review is required when a subscriber wishes to dispute an NLAD denial. An NLAD denial occurs when a subscriber fails one of the protective checks contained in the NLAD system. For example, if USAC's automated identity check rejects a consumer's application, that consumer may produce documentation verifying their identity, because the databases that are available to automatically verify identity are not comprehensive. A Lifeline subscriber may dispute an NLAD denial by submitting the appropriate documentation to the ETC. The ETC then reviews the documents, verifies the information at issue in the dispute, and processes the dispute resolution with USAC. 45. The current system's reliance on carrier certification for dispute resolution has been questioned for making the Lifeline program vulnerable to waste, fraud, and abuse. (See Testimony of FCC Commissioner Ajit Pai Before the Subcommittee on Communications and Technology of the United States House of Representatives Committee on Energy and Commerce, Oversight of the Federal Communications Commission, at 4-5 (July 12, 2016), available at https://www.fcc.gov/document/commissioner-pai-statement-house-oversight-hearing.) Having USAC conduct actual document review associated with NLAD dispute resolutions would increase the [[Page 2111]] accountability of the resolutions. The Commission seeks comment on this proposal. Do the associated costs and administrative burdens associated with such review justify this additional step? If the Commission directed USAC to adopt this measure, what would be the optimal response time for USAC to process such disputes? How should USAC collect the documentation and what privacy safeguards should be taken to protect that information? Should USAC offer a list of acceptable documentation, and what documentation should qualify? 46. Subscriber Recertification. The Commission seeks comment on prohibiting subscribers from self-certifying their continued eligibility during the Lifeline program's annual recertification process if the consumer is no longer participating in the program they used to demonstrate their initial eligibility for the program. Section 54.410(f) of the Commission's rules allows subscribers to self-certify that they continue to be eligible for the Lifeline program if their eligibility cannot be determined by querying an eligibility database. This is true even where the subscriber is seeking to recertify under a different qualifying program than the one they used to demonstrate their initial eligibility. Requiring eligibility documentation to be submitted in such cases would help to ensure the self-certification option for the eligibility recertification process is accurate and the subscriber is still eligible to participate in the Lifeline program through a different eligibility path. Should the Commission amend its rules to require documentation be submitted when the subscriber attempts to recertify by self-certification only when the subscriber seeks to recertify under a different program than the one through which they initially demonstrated eligibility and cannot be recertified through an eligibility database? Should the Commission require USAC to review that documentation? 47. Independent Economic Household Forms. The Commission next seeks comment on limiting ETCs' use of the Independent Economic Household (IEH) worksheet only when the consumer shares an address with other subscribers already enrolled in the Lifeline program. The 2016 Lifeline Order amended the language of Sec. 54.410(g) of the Commission's rules to require a prospective subscriber to complete an IEH worksheet upon initial enrollment and during any recertification in which the subscriber changes households and as a result shared an address with another Lifeline subscriber. The intended purpose of the IEH worksheet was for use when multiple independent households reside at the same residence. If an ETC collects an IEH worksheet from all subscribers regardless of whether another Lifeline subscriber resides at the same address, it is more difficult for USAC to monitor aggregate trends and particular ETCs' use of the IEH worksheet to detect improper activity. Prophylactic use of the household worksheet can therefore subvert the duplicate address protections and may result in increased waste, fraud, and abuse. The Commission seeks comment on amending the language of Sec. 54.404(b)(3) to only permit the use of an IEH worksheet after the ETC has been notified by the NLAD, or state administrator in the case of NLAD opt-out states, that the prospective subscriber resides at the same address as another Lifeline subscriber. 48. Additionally, the Commission seeks comment on other methods to prevent abuse of the IEH worksheet process. Should the Commission direct USAC to develop a list of addresses known to contain multiple households? The addresses would primarily be assisted-living and retirement facilities, homeless shelters, public housing, and similar institutions. This list would enable USAC or the Commission to more effectively investigate addresses with high numbers of enrollments that do not appear to be physically or organizationally capable of housing many independent economic households. How should this list of known multiple-household addresses impact whether an ETC may collect an IEH worksheet from the prospective Lifeline consumer? Should the Commission require Lifeline applicants residing in multi-person residences (e.g., homeless shelters, nursing homes, assisted living facilities) to submit a certification from the facility manager confirming that the applicant resides at the address and is not part of the same economic household as any other resident already receiving Lifeline support? What administrative approaches would reduce burdens on subscribers without creating vulnerabilities in the program's integrity? 49. More broadly, the Commission seeks comment on other dispute resolutions or ``overrides'' to Lifeline enrollment requirements that should be restricted or eliminated. Are there other points of the enrollment process that rely on the consumer's certification or manual document review in a way that irreparably weakens the integrity of the enrollment process? The Commission notes that, currently, a consumer may go through a dispute resolution process if that consumer is not found in a third-party identity verification database, has the same address as another Lifeline subscriber, has an address not recognized by the U.S. Postal Service, or cannot be found in an available eligibility program database. What additional steps should the Commission institute as part of this resolution process to reduce the opportunity for abuse? Should the Commission limit the ability of providers or subscribers to override those initial failures with additional documentation to prevent fraudulent or abusive practices? 50. Other Measures. Finally, the Commission seeks comment on whether there are other measures the Commission could take to further reduce waste, fraud, and abuse and improve transparency in the program. Should the Commission require USAC to conduct ongoing targeted risk- based reviews of eligibility documentation or dispute resolution documentation? Should the Commission codify a requirement that subscribers be compared to the Social Security Master Death Index during the enrollment and recertification processes? Should the Commission amend its rules to require that a provider's Lifeline reimbursement be based directly on the subscribers it has enrolled in the NLAD to prevent claims for ``phantom'' subscribers? Should the Commission prohibit Lifeline providers from distributing handsets in person to Lifeline consumers and, if so, should there be any exceptions? Are there additional measures the Commission should take to address waste, fraud, and abuse in the program? The Commission seeks comment on these proposals. 51. The Commission seeks comment on additional reports USAC could make public or available to state agencies to increase program transparency and accountability. The Commission seeks comment on directing USAC to periodically report suspicious activity or trends to the Wireline Competition and Enforcement Bureaus, as well as the Office of Managing Director, and any relevant state agencies. Suspicious activity would include trend analysis of NLAD exemptions, subscriber churn, TPIV failure rates, and IEH worksheet rates. It will also include information gained from analytics on the National Verifier data. In addition to more transparent reporting of NLAD exemptions, what information would state agencies need to access to increase the effectiveness of state enforcement in the Lifeline program? Further, what information should USAC make [[Page 2112]] accessible to other Lifeline stakeholders to increase the effectiveness and transparency of the program? 52. The Commission seeks comment on what additional reports USAC should make available for state agencies. USAC currently makes available a number of Lifeline program statistics and reports showing eligible Lifeline population estimates, Lifeline participation, and ETCs receiving Lifeline support. In addition to this information, state agencies may request NLAD access for their respective state. This access allows the state agency to review detailed subscriber information in the NLAD to aid their own program administration and enforcement, including information regarding which carriers are providing service. In the 2016 Lifeline Order, the Commission directed USAC to publish Lifeline subscriber counts on the study area code (SAC) level to ``increase[] transparency and continue[] to promote accountability in the program.'' 53. In the 2016 Lifeline Order, the Commission implemented a budget process for the Lifeline program. This budget approach, however, does not include any mechanism that automatically curtails disbursements beyond the budget amount absent further action by the Commission. Instead, if Lifeline disbursements in a given year meet or exceed 90 percent of that year's budget, initially set at $2.25 billion, the Bureau is required to issue a report to the full Commission detailing the reasons for the increased spending and recommending next steps. 54. The Commission proposes to adopt a self-enforcing budget mechanism to ensure that Lifeline disbursements are kept at a responsible level and to prevent undue burdens on the ratepayers who contribute to the program. The Commission believes a self-enforcing budget is appropriate to ensure the efficient use of limited funds. The Commission therefore proposes to replace the approach adopted in the 2016 Lifeline Order and require an annual cap for Lifeline disbursements. The Commission intends for the program to automatically make adjustments in order to maintain the cap in the event the budget is exceeded. 55. The Commission seeks comment on the operation of such a self- enforcing budget. What is the appropriate period over which the Commission should measure and enforce the cap? Would a six-month period be appropriate? For example, under this proposal, for each upcoming six-month period, USAC would forecast expected Lifeline and Link Up disbursements, as well as administrative expenses attributable to the operation of these programs. If projected disbursements and expenses are expected to exceed one half of the annual cap, USAC would proportionately reduce support amounts during the upcoming six-month period to bring total disbursements under one half of the annual cap. If, however, total payments in the upcoming six-month period are projected to be less than one half the annual cap, USAC would provide the full support amounts as determined by the Commission and collect only what is necessary to fund the demand. The Commission seeks comment on this proposal. What administrative difficulties should USAC anticipate when forecasting disbursements? What steps should USAC take, if any, in the midst of a six-month period in the event forecast disbursements and expenses vary significantly from actual disbursements and expenses? The Commission notes that USAC currently projects quarterly requirements for the Lifeline program and submits those projections to the Commission. What can the Commission learn from the accuracy of USAC's past forecasts that would inform how this proposal would work? Alternatively, would another period of time be more appropriate? Would a one-year period be more suitable for the Lifeline market? In particular, the Commission seeks comment on the concept of measuring the budget over a 12-month period and whether that concept fully protects the ratepayer from excessive spending. 56. Alternatively, the Commission seeks comment on a different self-enforcing budget mechanism that would allow Lifeline spending in a given period to exceed the cap, but would result in Lifeline disbursements being reduced in the next period to accommodate the excessive spending. In this mechanism, disbursements would be reduced proportionally throughout the following period to ensure the disbursements and expenses do not exceed the budget less the amount by which the previous period's disbursements and expenses exceeded the budget. The Commission seeks comment on this approach, noting that it has the benefit of not requiring a forecast or handling the inevitable under- or over-shooting of the actual demand. Under this proposal, when should the cap for the second period of time be set? At the beginning of the first period, or the second one? The Commission also seeks comment on whether it is acceptable to allow disbursements to exceed the budget in a given period, even where adjustments made in the following period mean the program spends less than the total budgeted amount over the two periods. Would any of the proposed budget mechanisms result in a significant variance in the disbursement cap for consecutive funding years, and if so, what impact would that have on Lifeline consumers and providers? 57. The Commission also seeks comment on whether Lifeline spending should be prioritized in the event that the cap is reached or USAC projects will be reached in a funding year. If so, the Commission proposes that the Commission prioritize funding in the following order if disbursements are projected to exceed the cap: (1) Rural Tribal lands, (2) rural areas, and (3) all other areas. The Commission seeks comment on this prioritization scheme and whether any other factors should weigh in our analysis. For example, should the Commission prioritize Lifeline spending in low-income areas where the business case for deployment is harder to make? If the Commission adopts such funding prioritizations, how should it implement such a system? Should the Commission adjust all of the support amount categories to different extents, or should categories with less prioritization receive no support before the support of the category with the next-highest prioritization is adjusted? The Commission seeks comment on these issues. 58. The Commission also seeks comment on the appropriate initial amount for this cap. Would historical disbursement levels be instructive in determining the appropriate annual cap? In 2008, when the Commission first allowed a non-facilities-based ETC to receive Lifeline support, Lifeline expenditures totaled approximately $820 million. By 2012, that amount had grown to over $2.1 billion. The Commission's initial steps to eliminate waste, fraud, and abuse within the program have reduced Lifeline disbursements to just over $1.5 billion in 2015. If the Commission adopted a previous disbursement level as the annual disbursement cap, which disbursement level would be appropriate? The Commission seeks comment on these issues and other relevant matters, such as whether this cap should include USAC's expenses for administering the Lifeline program. If so, how should the Commission incorporate these administrative expenses? 59. The Commission also seeks comment on whether and how the program's cap should be adjusted in subsequent years. Should the cap remain the same, absent further action [[Page 2113]] by the Commission, or should the cap be automatically indexed to inflation? Should the cap be tied to other metrics, like the growth or decrease of poverty nationwide or participation in means-tested programs? 60. In this section, the Commission seeks comment on ways to focus Lifeline support toward encouraging broadband adoption among low-income consumers and minimizing wasteful spending in the program. 61. Maximum Discount Level. The Commission seeks comment on whether to apply a maximum discount level for Lifeline services above which the costs of the service must be borne by the qualifying household. Today, many service providers use the monthly Lifeline support amount to offer free-to-the-end-user Lifeline service, for which the Lifeline customer has no personal financial obligation. In 2016, certain wireless Lifeline service providers estimated that 11 million Lifeline participants (85 percent of all Lifeline program participants) subscribed to plans providing free-to-the-end-user Lifeline service. (See Letter from John Heitmann, Kelly Drye & Warren LLP, to Marlene Dortch, Secretary, FCC, WC Docket No. 11-42 et al., at 2 (Feb. 3, 2016)). In contrast, the Commission's other universal service support programs all require beneficiaries or support recipients to pay a portion of the costs of the supported service. For example, the E-rate program discount levels range from 20 percent to 90 percent of the costs of eligible goods and services, and E-rate beneficiaries are required to pay the remaining costs of the supported goods and services. (47 CFR 54.505(b) and 54.504(a)(1)(iii).) Should the approach that the Commission has taken in other universal service support programs be instructive in the Lifeline context? Do the users of the supported service value that service more if they contribute financially? Are such users more sensitive to the price and quality of the service? Is there any particular approach taken by another universal service support program that should inform the Commission's analysis for the Lifeline program? Under the Commission's rules, providers of video relay service (VRS) are compensated for the reasonable costs of providing VRS. (47 CFR 64.604(c)(5)(iii)(E)(1).) Do the policies underlying that approach apply in the Lifeline context? The concept of maximum discount levels and mandatory contributions is not limited to federal benefit programs administered by the Commission. For example, many participants in the U.S. Department of Housing and Urban Development's (HUD's) Public Housing and Housing Choice Voucher programs and the U.S. Department of Health and Human Services' (DHHS') Low-Income Home Energy Assistance Program (LIHEAP) are required to pay a portion of the costs of their utilities or rent. The Commission seeks comment on the utility of comparing these programs to the Lifeline program, and if the Commission should consider the approach undertaken in other benefit programs with capped support amounts. For those other benefit programs, has the efficacy of mandatory end user payments been evaluated? Did the requirement of end user payments impact services provided to the consumer, program enrollment, or competition in the relevant market? Importantly, did such a requirement reduce the waste, fraud, and abuse in those programs that would have occurred absent the cap? 62. The Commission also seeks comment on the impact a maximum discount level would have on the Lifeline program. What impact would a maximum discount level have on the affordability, availability, and quality of communications service for low-income consumers? Would a maximum discount level for the Lifeline program impact the types of services that consumers obtain through the program? Would it change the quality of broadband service that Lifeline providers offer, including speed and data allowances? Would this change affect the availability of certain types of service more than others, for example, mobile versus fixed service? Would a maximum discount level help ensure that Lifeline funds are targeted at high-quality broadband service offerings that truly help close the digital divide for low-income consumers? Would adopting a maximum discount level encourage consumers to more carefully investigate and evaluate the service to which they wish to apply their Lifeline benefit, thereby decreasing Lifeline subscriber churn or violations of the one-per-household rule and helping further reduce waste, fraud, and abuse in the Lifeline program? 63. One proposal is to adopt a maximum discount level to improve the Lifeline program's efficiency and further reduce waste, fraud, and abuse in the program. Under the current structure, service providers may engage in fraud or abuse by using no-cost Lifeline offerings to increase their Lifeline customer numbers when the customers do not value or may not even realize they are purportedly receiving a Lifeline-supported service. The Commission seeks comment on whether Lifeline's current benefit structure fails to ensure that the program supports services that consumers value. Would a maximum discount level curtail such practices and prevent universal service funds from being spent on services of little to no value for the Lifeline consumer? 64. What rule changes would be needed to implement a maximum discount level? If the Commission established a maximum discount level requirement for Lifeline, how should such a requirement operate? Are there specific pricing data or other data that would help the Commission determine an appropriate maximum discount level? Should the required end user payment be a flat amount or a percentage of the price of the service? Should the maximum discount level apply differently to enhanced Lifeline support than standard Lifeline support? Should the maximum level apply to Link Up support? How would a maximum discount level apply for prepaid services or consumer payment structures that otherwise do not require a monthly billing relationship between the provider and the consumer? Should Lifeline service providers have flexibility to determine the timing of the customer's payment (e.g., upfront payments, monthly, post-paid)? What steps could the Commission take to ensure that Lifeline service providers actually collect the required customer share? How should the Commission treat partial payments by Lifeline subscribers? Should there be any exceptions to the maximum discount level and, if so, what is the justification for these exceptions? How could the Commission implement a maximum discount level with minimal increases in Lifeline service provider costs and administrative burdens? Are there specific data that would help the Commission evaluate the potential impact of a maximum discount level on the Lifeline participation rate of qualifying low-income consumers? Are there other alternatives the Commission should consider to ensure that the Lifeline program supports services that Lifeline customers value? 65. In the 2016 Lifeline Order, the Commission adopted minimum service standards to make sure that Lifeline customers receive quality Lifeline-supported services. A maximum discount level may also achieve this goal because consumers who pay a portion of the costs may be more sensitive to the price and quality of the service. Would a maximum discount level therefore make minimum service standards unnecessary? Do the minimum service standards serve additional purposes that would not be [[Page 2114]] served by a maximum discount level? If the Lifeline program rules included both a maximum discount level and minimum service standards, should the Commission revise the formulas used to determine the minimum service standards or adjust the mechanisms by which the minimum service standards are updated? Similarly, would adopting a maximum discount level eliminate the need for the usage requirement in Sec. 54.407(c)(2) of the Lifeline program rules and the related non-usage de-enrollment rule in Sec. 54.405(e)(3)? 66. Targeting Non-Adopters. The Lifeline program was originally created to promote low-income consumers' access to affordable services. Some parties have suggested that the Commission should target Lifeline support to low-income consumers who have not yet adopted broadband service. The Commission seeks comment on changes the Commission could make to target consumers who have not yet adopted broadband, and to what extent the Commission should weigh efforts that facilitate reaching those consumers specifically? The Commission seeks comment on whether and how the Commission should adopt a support framework that encourages adoption of high quality communications service by low- income consumers. What rule changes would be necessary to implement these changes? 67. The Commission seeks comment on the need for regulatory action to address the problems identified here, as well as the costs and benefits of our proposals along with data and other information that can be used to quantify these. Specifically, the Commission seeks comment on the need for and costs and benefits of regulatory action of the following proposals, relative to the status quo: Encouraging cooperative federalism between state data sources and the National Verifier; directing Lifeline support to facilities-based providers; alternatives to a facilities requirement; adopting a maximum discount level; changes to encourage Lifeline consumers to adopt broadband services; adopting a self-enforcing budget; enhancing targeted audits of participating providers; and acting on the other interpretive and policy changes for which the Commission seeks comment above. Commenters proposing alternatives to our proposals should discuss the need for and costs and benefits of their proposal, including relative costs and benefits of their proposal as compared to those set forth here, and should provide supporting evidence. The Commission also seeks comment on options to achieve the most effective use of resources to achieve the purposes of the Lifeline program, and specifically to lower the cost of adoption to lower-income subscribers. The Commission seeks data and information commenters believe is necessary for these analyses and comment on specific methodologies commenters believe are best suited for this purpose. The Commission also seeks comment generally on how to evaluate the relative importance of public interest outcomes that are not readily susceptible to quantification, such as ``equity, human dignity, fairness, and distributive impacts.'' (See Executive Order 13563, 76 FR 3821, 3821-23 (Jan. 18, 2011)). III. Notice of Inquiry 68. The Lifeline program is an important means of achieving universal service. In the 2016 Lifeline Order the Commission took the step of allowing Lifeline to support broadband to help low-income Americans obtain access to quality, affordable service. However, the Commission remains concerned about the well-documented digital divide for low-income Americans, and in particular low-income Americans residing in rural Tribal, rural, and underserved areas. 69. To ensure that the Lifeline program achieves universal service for 21st Century services, it is necessary to evaluate the ultimate purposes of the Lifeline program and identify the policies that will best accomplish those purposes. Sharpening the focus of the Lifeline program would further promote digital opportunity for low-income individuals, and in particular for low-income Americans who have not adopted broadband, or who reside in rural Tribal or rural areas. 70. To focus the Lifeline program on supporting affordable communications service for the nation's low-income households and on improving the economic incentives of providers serving them, the Commission begins a proceeding to reexamine the Lifeline program's support structure to encourage affordable access to high quality services for low-income consumers while the Commission continues to discourage the practices leading to program waste, fraud, and abuse. Accordingly, the Commission seeks comment on potential changes to the Lifeline program funding paradigm that will help the Lifeline program more efficiently target funds to areas and households most in need of help obtaining digital opportunity. 71. Ensuring that service providers have appropriate incentives to deploy and provide services to these populations can further the Commission's efforts to bring digital opportunity to low-income Americans who have not yet adopted broadband and low-income Americans residing in rural or rural Tribal areas who typically experience difficulty obtaining access to affordable, quality broadband. The Commission seeks comment on actions the Commission could take to create better economic incentives for providers participating in the Lifeline program. The Commission also seeks comment on how those incentives would impact the program's effectiveness at reaching certain subsets of the low-income population. 72. The Commission also seeks comment on how the Commission could leverage the Lifeline program to encourage broadband deployment in areas that have found themselves on the wrong side of the digital divide. Where a provider has already invested in building a broadband- capable network, that provider often has incentives to create mutually beneficial offerings that make affordable connectivity options available to low-income households within the network's footprint. The Commission seeks comment on whether the Commission should shape its Lifeline support structure to provide enhanced support in areas where providers do not have sufficient incentive to make available affordable high-speed broadband service. 73. The Commission seeks comment on whether and how the Commission should adopt rule changes to target Lifeline support to bring digital opportunity to areas that offer less incentive for deployment of high- speed broadband service, such as rural areas and rural Tribal areas. Rural and rural Tribal areas have higher percentages of broadband non- adopters compared to other areas. It is also well documented that lower-income households have lower broadband adoption rates and lower in-home broadband connectivity rates compared to higher-income households. Some have suggested that the Commission should therefore target Lifeline support primarily to nonadopters to improve the effectiveness and efficiency of the Lifeline program. In light of these analyses, the Commission seeks comment on whether the Lifeline program could better reach nonadopters of broadband by focusing Lifeline support in areas where providers need additional incentive to offer high-speed broadband service. 74. Rural and Rural Tribal Areas. The Commission specifically seeks comment on whether and how the Commission should adjust the Lifeline support amount to encourage affordable [[Page 2115]] broadband access for low-income consumers in rural areas. Low-income consumers in rural or rural Tribal areas may have difficulty obtaining affordable, quality broadband service because service providers have less incentive to incur the costs to deploy advanced facilities or to provide a wide range of services at competitive prices in these areas. In rural areas, higher deployment costs can also lead to fewer service options and higher prices that disproportionately impact low-income consumers. The Commission also focuses on rural Tribal areas in which affected stakeholders have suggested that the current Lifeline Tribal enhanced subsidy amount is insufficient to incentivize broadband deployment in rural Tribal areas. Although broadband deployment in both rural and rural Tribal areas is lagging compared to other areas, the current Lifeline program rules only provide targeted enhanced monthly Lifeline support (up to an additional $25 per month) for Lifeline customers residing on Tribal lands. (47 CFR 54.403(a)(3).) 75. The Commission is also mindful about the need to establish the correct support amounts. If the Commission establishes enhanced Lifeline support for consumers living in rural and rural Tribal areas, how could the Commission provide targeted support while also promoting the interests of fiscal responsibility and minimizing the burden on the ratepayers who support the Fund? Are there specific pricing data or other data that the Commission should consider in determining the appropriate enhanced monthly support amounts for Lifeline subscribers in rural and rural Tribal areas? Should a single enhanced monthly support amount apply in all rural areas or should Lifeline consumers in rural areas on Tribal lands or another subset of rural residents receive a higher monthly support amount? How should the enhanced monthly support amounts compare to the monthly support amount for Lifeline subscribers who do not live in rural areas? What data or metrics should the Commission use to identify the rural areas that qualify for enhanced support? What geographic level (e.g., county, Census tracts, Census block groups) should the Commission use to identify these rural areas? Is the E-rate program's definition of ``rural'' the best option for identifying rural areas in the Lifeline program, or should the Commission consider some other definition to identify rural areas? (47 CFR 54.505(b)(3)(i)-(ii)) 76. Underserved Areas. The Commission next seeks comment on whether and how the Commission should also target Lifeline support to bring digital opportunity to low-income areas where service providers have less incentive to invest in facilities or offer robust broadband offerings compared to other areas. Recent reports argue that certain low-income areas experience less facilities deployment when compared to other areas, and that low-income consumers in those areas may experience increased difficulty obtaining affordable, robust communications services. 77. The Commission seeks comment on how the Commission can address this issue with the Lifeline program. If the Commission permits an enhanced subsidy amount for households in these areas, how should the Commission define underserved areas for the purpose of this enhanced support, and how should the Commission identify these underserved areas? What data could inform the Commission as to the prevalence of service providers electing not to invest as much in facilities or robust broadband offerings compared to other areas, and the areas where this has occurred? What types of broadband deployment, service offerings, adoption data or other measures could the Commission use to determine whether areas are underserved because service providers have less incentive to invest in facilities and broadband services in those areas compared to other areas? Are there certain income levels or other markers in a geographic area that could help the Commission reliably identify whether an area is likely to be underserved? For example, could the Commission address underserved areas by offering enhanced Lifeline support in areas where the median household income and/or broadband investment rates are significantly lower than the national average? 78. What changes should the Commission make to the Lifeline program support structure to target support to underserved areas? Are there specific pricing or other data the Commission could use to determine the appropriate support amount for underserved areas? How should the targeted support for underserved areas compare to and interact with the support amounts for rural or Tribal areas? What level of geographic granularity (e.g., county, Census tracts, Census block groups) should the Commission use to identify areas that qualify for enhanced Lifeline support as underserved areas? How frequently should the Commission update the threshold for areas that qualify for enhanced support as underserved areas? 79. The Commission next seeks comment on whether the Commission should implement a benefit limit that restricts the amount of support a household may receive or the length of time a household may participate in the program. The objectives of such restrictions include encouraging broadband adoption without reliance on the Lifeline subsidy and controlling the disbursement of scarce program funds. Such a limit would provide low-income households incentives to not take the subsidy unless it is needed, since taking the subsidy in a given month will forfeit the opportunity to use it in a future month. The Commission seeks comment on whether the Commission should adopt a benefit limit for the Lifeline program. 80. What rule changes would be necessary to implement a benefit limit or time limit for consumer participation in the Lifeline program? If the Commission established a benefit limit or time limit for Lifeline, how should such a requirement operate and how should it be enforced? Are there specific data that would help the Commission determine an appropriate monetary or temporal limit in support? Currently in the Lifeline program, households remain enrolled for 1.75 years on average. How should this information affect our decision to impose this restriction? Should the limit be applied to households or individuals, and how would the Commission or USAC track benefits received if consumers transfer to different providers? Should there be any exceptions to the benefit limit or time limit and, if so, what is the justification for these exceptions? How could the Commission implement a benefit limit or time limit with minimal increases in the costs or administrative burdens for Lifeline service providers? Are there specific data that would help the Commission evaluate the potential impact of a benefit or time limit on the Lifeline participation rate of qualifying low-income consumers? Are there other alternatives to a benefit limit that the Commission should consider to better focus Lifeline funds on those households who need it most? 81. This Notice of Inquiry seeks comments on potential ways to sharpen the focus of the Lifeline program to further promote digital opportunity for all Americans. The Commission now seeks comment on the program's goals and metrics that would allow us to better determine if Lifeline support is truly achieving the purpose of closing the digital divide. In 2015, the GAO reported that ``outcome-based performance goals and measures will help illustrate to what extent, if any, the Lifeline program is fulfilling the guiding principles set forth by Congress.'' (GAO, [[Page 2116]] Telecommunications: FCC Should Evaluate the Efficiency and Effectiveness of the Lifeline Program, GAO-15-335, at 13 (2015), http://www.gao.gov/assets/670/669209.pdf.) In 2016, the Commission revised its Lifeline program goals by including the affordability of voice and broadband service, as measured as the percentage of disposable household income spent on those services, to the goals established in the Commission's 2012 Lifeline Order, 77 FR 12951, March 2, 2012. The Commission agrees outcome-based performance goals and measures have an important role ensuring Lifeline support is achieving Congress's universal service goals. The Commission seeks comment on how the Commission should determine and define the Lifeline program's goals and metrics and how those goals should inform the Commission's efforts to sharpen the focus of the Lifeline program, as discussed in this Notice of Inquiry. IV. Procedural Matters A. Paperwork Reduction Act 82. This document contains proposed modified information collection requirements. The Commission, as part of its continuing effort to reduce paperwork burdens, invites the general public and the Office of Management and Budget (OMB) to comment on the information collection requirements contained in this document, as required by the Paperwork Reduction Act of 1995, Public Law 104-13. In addition, pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 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. 83. As required by the Regulatory Flexibility Act of 1980, as amended (RFA), the Commission has prepared this Initial Regulatory Flexibility Analysis (IRFA) of the possible significant economic impact on a substantial number of small entities from the policies and rules proposed in this Notice of Proposed Rulemaking (Notice). The Commission requests written public comment on this IRFA. Comments must be identified as responses to the IRFA and must be filed by the deadlines for comments on the Notice provided on the first page of the Notice. The Commission will send a copy of the Notice, including this IRFA, to the Chief Counsel for Advocacy of the Small Business Administration (SBA). In addition, the Notice and IRFA (or summaries thereof) will be published in the Federal Register. 84. 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. 85. When the Commission overhauled the Lifeline program in its 2016 Lifeline Order, it included broadband internet access service as a supported service; laid the groundwork for a National Verifier; strengthened protections against waste, fraud and abuse; improved program administration and accountability; and improved enrollment and consumer disclosures. In this NPRM, the Commission proposes steps to focus Lifeline program support to effectively and efficiently bridge the digital divide for low-income consumers while minimizing the contributions burden on ratepayers. The actions and proposals in this NPRM aim to facilitate the Lifeline program's goal of supporting affordable, high-speed internet access for low-income households. 86. In this NPRM, the Commission seeks comment on a number of significant reforms that will effectively and responsibly leverage the Lifeline program to bridge the digital divide for low-income consumers. The Commission seeks comment on respecting the states' primary role in eligible telecommunications carrier designation by eliminating Lifeline Broadband Provider designations. The Commission also seeks comment on proposals to enable consumer choice and proposed policies to focus Lifeline support to encourage investment in broadband-capable networks. Finally, the Commission proposes several program accountability improvements to reduce waste, fraud, and abuse and improve transparency in the program. 87. The legal basis for the NPRM is contained in sections 1 through 4, 201-205, 254, 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, and 403. 88. 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.'' 89. Small Entities, Small Organizations, Small Governmental Jurisdictions. Our actions, over time, may affect small entities that are not easily categorized at present. The Commission therefore describes here, at the outset, three comprehensive small entity size standards that could be directly affected herein. As of 2016, according to the SBA, there were 28.8 million small businesses in the U.S., which represented 99.9 percent of all businesses in the United States. Additionally, a ``small organization is generally any not-for-profit enterprise which is independently owned and operated and not dominant in its field.'' Nationwide, as of 2014, there were approximately 2,131,200 small organizations. Finally, 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.'' U.S. Census Bureau data published in 2012 indicates that there were 89,476 local governmental jurisdictions in the United States. The Commission estimates that, of this total, as many as 88,761 entities may qualify as ``small governmental jurisdictions.'' Thus, the [[Page 2117]] Commission estimates that most governmental jurisdictions are small. 90. In this NPRM, the Commission 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 issues the Commission seeks comment on in this NPRM are directed at enabling us to meet our goals and objectives for the Lifeline program, and reducing waste, fraud, and abuse. Specifically, the Commission seeks comment on a number of potential changes that would increase the economic burdens on small entities, and also seek comment on proposals that would decrease those burdens. The Commission has identified the applicable potential changes below that impact small entities. 91. Focusing Lifeline Support to Encourage Investment in Broadband- Capable Networks. The Commission seeks comment on several policy changes that would focus Lifeline support to encourage investment in broadband-capable networks, including limiting Lifeline support to facilities-based broadband service provided to Lifeline customers over the ETC's voice-and-broadband-capable network, discontinuing Lifeline support for non-facilities-based service, and continuing the phase down of Lifeline support for voice service in urban areas. 92. Reforms to Increase Efficient Administration of the Lifeline Program. The Commission seeks comment on a number of reforms to increase the efficient administration of the program, including requiring ETCs to supply documentation to USAC for National Lifeline Accountability Database (NLAD) dispute resolutions, ETCs to collect documentation for subscribers seeking to self-certify to continued eligibility, and limiting the use of independent economic household forms to only NLAD dispute resolutions. 93. 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.'' 94. The NPRM seeks comment on several policies that would bring the program closer to its core purpose and promote the availability of modern services for low-income families, and also reduce waste, fraud, and abuse in the program. As explained below, several of the policies would increase the economic burdens on small entities, and certain changes would lessen the economic impact on small entities. In those instances in which a policy would increase burdens on small entities, the Commission has determined that the benefits from such changes outweigh the increased burdens on small entities because those proposed changes would facilitate the Lifeline program's goal of supporting affordable, high-speed internet access for low-income Americans or would minimize waste, fraud, and abuse in the program. The Commission invites comments on ways in which the Commission can achieve its goals, but at the same time further reduce the burdens on small entities. The Commission expects to consider the economic impact on small entities, as identified in comments filed in response to the NPRM and this IRFA, in reaching its final conclusions and taking action in this proceeding. 95. Eliminating Lifeline Device Requirements. The Commission seeks comment on eliminating the Lifeline program's device requirements. This would decrease the burdens for small entities because they would no longer be required to meet criteria imposed by the rule, including the requirement that devices provided to consumers be Wi-Fi enabled and the requirement that mobile broadband providers offer devices that are ``capable of being used as a hotspot.'' Eliminating these requirements should reduce compliance costs for small entities because they will no longer be required to include these capabilities. 96. Focusing Lifeline Support to Encourage Investment in Broadband- Capable Networks. The Commission seeks comment on several potential policies that would focus Lifeline support to encourage investment in broadband-capable networks. The Commission also seeks comment on TracFone's suggested alternatives to the proposed facilities requirement. The Commission's proposed policies would change the services eligible for Lifeline support and would also change the type of providers that can receive Lifeline support. In particular, these policies would eliminate Lifeline support for ETCs that do not offer facilities-based broadband service over their own networks, or would continue the phase down of Lifeline support for voice-only service in urban areas. However, these policies would facilitate the Lifeline program goals of providing low-income consumers access to quality, affordable broadband services, in particular by encouraging service providers to invest in broadband networks in unserved and underserved areas. The Commission also notes that these policies may benefit small entities that operate facilities-based broadband-capable networks, whose services would be more affordable for low-income consumers through the application of the Lifeline discount. The benefits of these policies to Lifeline customers outweighs any impact of these changes on small entities. TracFone's suggested alternatives to the proposed facilities requirement would impact Lifeline service provider in-person hand-set distribution, operations practices concerning Lifeline solicitations and eligibility verifications, and application processes. These alternatives would increase service providers' administrative burdens. However, they would also minimize waste, fraud, and abuse in the program, which in turn benefits consumers and service providers that pay into the Universal Service Fund. Therefore, the benefits of these changes would outweigh and impact of these changes on small entities. 97. Focusing Lifeline Support on Modern Communications Services. The Commission seeks comment on adopting a maximum discount level for Lifeline subscribers, and potential changes to encourage Lifeline consumers to adopt broadband services. These changes could increase costs associated with ETCs' administrative processes, including billing. However, the Commission expects these burdens to be manageable for ETCs. Further, these proposed changes would help minimize waste, fraud, and abuse in the Lifeline program, and would also increase the effectiveness of Lifeline support by targeting support to Lifeline consumers who have not yet adopted broadband services. Therefore, the benefits of these proposed changes outweigh the impact of the proposed changes on small entities. 98. Reforms to Increase Efficient Administration of the Lifeline Program. The Commission seeks comment on a number of reforms to increase the efficient administration of the program, including requiring ETCs to supply documentation to USAC for National Lifeline Accountability Database (NLAD) dispute resolutions, ETCs to collect documentation for subscribers [[Page 2118]] seeking to self-certify to continued eligibility, and limiting the use of independent economic household forms to only NLAD dispute resolutions. These reforms could increase costs associated with ETCs' administrative processes. However, the Commission expects these burdens to be manageable for ETCs. In addition, in states where the National Verifier will be implemented, these burdens would be temporary because the National Verifier would take over eligibility verification and recertification in those states. Further, these proposed changes would help minimize waste, fraud, and abuse in the Lifeline program, which in turn would benefit consumers and providers that pay into the Universal Service Fund. Therefore, the benefits of these proposed changes outweigh the impact of these proposed changes on small entities. 99. Compliance burdens. Implementing any of our proposed rules (e.g., requiring ETCs to supply documentation to USAC for National Lifeline Accountability Database (NLAD) dispute resolutions, ETCs to collect documentation for subscribers seeking to self-certify to continued eligibility, and limiting the use of independent economic household forms to only NLAD dispute resolutions) 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. 100. The proceeding for this NPRM and NOI 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. D. Comment Filing Procedures 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 (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. [cir] 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. [cir] Commercial overnight mail (other than U.S. Postal Service Express Mail and Priority Mail) must be sent to 9050 Junction Drive, Annapolis Junction, MD 20701. [cir] U.S. Postal Service first-class, Express, and Priority mail must be addressed to 445 12th Street SW, Washington, DC 20554. Availability of Documents. Comments, reply comments, and ex parte submissions will be publicly available online via ECFS. These documents will also be available for public inspection during regular business hours in the FCC Reference Information Center, which is located in Room CYA257 at FCC Headquarters, 445 12th Street SW, Washington, DC 20554. The Reference Information Center is open to the public Monday through Thursday from 8:00 a.m. to 4:30 p.m. and Friday from 8:00 a.m. to 11:30 a.m. People with Disabilities. To request materials in accessible formats for people with disabilities (braille, large print, electronic files, audio format), send an email to fcc504@fcc.gov or call the Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202- 418-0432 (tty). V. Ordering Clauses 121. Accordingly, it is ordered, that pursuant to the authority contained in sections 1 through 4, 201 through 205, 254, and 403 of the Communications Act of 1934, as amended, 47 U.S.C. 151-154, 201-205, 254, and 403, and section 1.2 of the Commission's rules, 47 CFR 1.2, this Notice of Proposed Rulemaking and Notice of Inquiry is adopted. List of Subjects in 47 CFR Part 54 Communications common carriers, Health facilities, Infants and children, internet, Libraries, Reporting and recordkeeping requirements, Schools, Telecommunications, Telephone. Federal Communications Commission. Marlene H. Dortch, Secretary. Proposed Rules For the reasons discussed in the preamble, the Federal Communications [[Page 2119]] 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. Sec. 54.201 [Amended] 0 2. Amend Sec. 54.201 by removing paragraph (j). Sec. 54.202 [Amended] 0 3. Amend Sec. 54.202 by removing paragraphs (d) and (e). Sec. 54.205 [Amended] 0 4. Amend Sec. 54.205 by removing paragraph (c). 0 5. Amend Sec. 54.404 by revising paragraph (b)(3) to read as follows: Sec. 54.404 The National Lifeline Accountability Database. * * * * * (b) * * * (3) If the Database indicates that another individual at the prospective subscriber's residential address is currently receiving a Lifeline service, the eligible telecommunications carrier must not seek and will not receive Lifeline reimbursement for providing service to that prospective subscriber, unless the prospective subscriber has certified, pursuant to Sec. 54.410(d) that to the best of his or her knowledge, no one in his or her household is already receiving a Lifeline service. This certification may only be obtained after the eligible telecommunications carrier receives a notification from the Database or state administrator that another Lifeline subscriber resides at the same address as the prospective subscriber. * * * * * Sec. 54.408 [Amended] 0 6. Amend Sec. 54.408 by removing paragraph (f). 0 7. Amend Sec. 54.410 by revising paragraphs (f)(2)(iii) and (f)(3)(iii) and removing and reserving paragraph (g) to read as follows: Sec. 54.410 Subscriber eligibility determination and certification. * * * * * (f) * * * (2) * * * (iii) If the subscriber's program-based or income-based eligibility for Lifeline cannot be determined by accessing one or more state databases containing information regarding enrollment in qualifying assistance programs, then the eligible telecommunications carrier may obtain a signed certification from the subscriber on a form that meets the certification requirements in paragraph (d) of this section. The subscriber must present documentation meeting the requirements in paragraph (b)(1)(i)(B) or (c)(1)(i)(B) of this section to establish continued eligibility. If a Federal eligibility recertification form is available, entities enrolling subscribers must use such form to re- certify a qualifying low-income consumer. * * * * * (3) * * * (iii) If the subscriber's eligibility for Lifeline cannot be determined by accessing one or more databases containing information regarding enrollment in qualifying assistance programs, then the National Verifier, state Lifeline administrator, or state agency may obtain a signed certification from the subscriber on a form that meets the certification requirements in paragraph (d) of this section. The subscriber must present documentation meeting the requirements in paragraph (b)(1)(i)(B) or (c)(1)(i)(B) of this section to establish continued eligibility. If a Federal eligibility recertification form is available, entities enrolling subscribers must use such form to recertify a qualifying low-income consumer. * * * * * Sec. 54.418 [Removed and Reserved] 0 8. Remove and reserve Sec. 54.418. [FR Doc. 2018-00153 Filed 1-12-18; 8:45 am] BILLING CODE 6712-01-P
![2104 Federal Register / Vol. 83, No. 10 / Tuesday, January 16, 2018 / Proposed Rules
Oklahoma Water Resources Board DATES: Comments are due on or before on ending the Commission’s previous
(OWRB) Section 785:35–7–2. After January 24, 2018, and reply comments preemption of states’ role in designating
review of this OWRB regulation, an EPA are due on or before February 23, 2018. certain eligible telecommunications
groundwater expert finds the Oklahoma If you anticipate that you will be carriers and removing the Lifeline
rules to be more stringent than the submitting comments, but find it Broadband Provider designation;
requirements under 40 CFR 257.91(e). difficult to do so within the period of targeting Lifeline funds to facilities-
EPA preliminarily finds these changes time allowed by this document, you based broadband-capable networks
to be minor because the key aspects of should advise the contact listed below offering both voice and broadband
the CCR program including as soon as possible. services; adopting a self-enforcing
requirements for location restrictions, ADDRESSES: You may submit comments, budget cap for the program; improving
design and operating criteria, identified by WC Docket Nos. 17–287, the eligibility verification and
groundwater monitoring and corrective 11–42, and 09–197, by any of the recertification processes to further
action, closure requirements and post- following methods: prevent waste, fraud, and abuse in the
closure care, recordkeeping, notification • Federal eRulemaking Portal: http:// program; and improving providers’
and internet posting requirements are www.regulations.gov. Follow the incentive to provide quality
not substantially changed or reduced by instructions for submitting comments. communications services by
the Oklahoma revisions and in one • Federal Communications establishing a maximum discount level
example is more stringent. These Commission’s website: http:// for Lifeline-supported service. In the
changes do not keep the overall program fjallfoss.fcc.gov/ecfs2/. Follow the Notice of Inquiry, the Commission seeks
from being at least as protective as 40 instructions for submitting comments. comment on how Lifeline might more
CFR part 257, subpart D. EPA’s full • People with Disabilities: Contact the efficiently target funds to areas and
analysis of Oklahoma’s CCR permit FCC to request reasonable households most in need of help in
program can be found in the Technical accommodations (accessible format obtaining digital opportunity.
Support Document (TSD) located in the documents, sign language interpreters, II. Notice of Proposed Rulemaking
docket for this notice. CART, etc.) by email: FCC504@fcc.gov
2. In this Notice of Proposed
IV. Proposed Action or phone: (202) 418–0530 or TTY: (202)
Rulemaking, the Commission proposes
418–0432.
In accordance with 42 U.S.C. 6945(d), For detailed instructions for submitting and seeks comment on reforms to
EPA is proposing to wholly approve ensure that the Commission is
comments and additional information
ODEQ’s CCR permit program administering the Lifeline program on
on the rulemaking process, see the
application. sound legal footing, recognizing the
SUPPLEMENTARY INFORMATION section of
Dated: January 3, 2018. important and Congressionally
this document.
Barry N. Breen, mandated role of states in Lifeline
FOR FURTHER INFORMATION CONTACT: program administration, and rooting out
Principal Deputy Assistant Administrator, Jodie Griffin, Wireline Competition
Office of Land and Emergency Management. waste, fraud, and abuse in the program.
Bureau, (202) 418–7400 or TTY: (202) These steps must precede broader
[FR Doc. 2018–00474 Filed 1–12–18; 8:45 am] 418–0484. discussions about how the Lifeline
BILLING CODE 6560–50–P SUPPLEMENTARY INFORMATION: This is a program can be updated to effectively
summary of the Commission’s Notice of bring digital opportunity to those who
Proposed Rulemaking and Notice of are currently on the wrong side of the
FEDERAL COMMUNICATIONS Inquiry (NPRM and NOI) in WC Docket digital divide.
COMMISSION Nos. 17–287, 11–42, 09–197; FCC 17– 3. The Commission first seeks
155, adopted on November 16, 2017 and comment on ways the Commission can
47 CFR Part 54 released on December 1, 2017. The full better accommodate the important and
[WC Docket Nos. 17–287, 11–42, 09–197; text of this document is available for lawful role of the states in the Lifeline
FCC 17–155] public inspection during regular program. The Commission proposes to
business hours in the FCC Reference eliminate the Lifeline Broadband
Bridging the Digital Divide for Low- Center, Room CY–A257, 445 12th Street Provider category of ETCs and the state
Income Consumers, Lifeline and Link SW, Washington, DC 20554 or at the preemption on which it is based. The
Up Reform and Modernization, following internet address: http:// Commission also seeks comment on
Telecommunications Carriers Eligible transition.fcc.gov/Daily_Releases/Daily_ ways to encourage cooperative
for Universal Service Support Business/2017/db1201/FCC-17- federalism between the states and the
AGENCY: Federal Communications 155A1.pdf. The Fourth Report and Commission to make the National
Commission. Order, Order on Reconsideration and Verifier a success.
ACTION: Proposed rule. Memorandum Opinion and Order that 4. In this section, the Commission
was adopted concurrently with the addresses the serious concerns that have
SUMMARY: In this document, the Federal NPRM and NOI are published elsewhere been raised that the Commission’s
Communications Commission in this issue of the Federal Register. creation of Lifeline Broadband Provider
(Commission) proposes and seeks (LBP) ETCs and preemption of state
comment on reforms to ensure the I. Introduction commissions’ designations of such LBPs
Lifeline program rules comport with the 1. In this Notice of Proposed was inconsistent with the role
daltland on DSKBBV9HB2PROD with PROPOSALS
authority granted to the Commission in Rulemaking, the Commission proposes contemplated for the states in Section
the Communications Act and to curb and seeks comment on reforms to 214 of the Act. In the 2016 Lifeline
wasteful and abusive spending in the ensure the Lifeline program rules Order, 81 FR 33026, May 24, 2016, the
Lifeline program. The Commission also comport with the authority granted to Commission established a framework to
seeks comment on how Lifeline might the Commission in the Communications designate providers as Lifeline
more efficiently target funds to areas Act and to curb wasteful and abusive Broadband Providers (LBPs), eligible to
and households most in need of help in spending in the Lifeline program. receive Lifeline reimbursement for
obtaining digital opportunity. Specifically, the NPRM seeks comment qualifying broadband internet access
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![Federal Register / Vol. 83, No. 10 / Tuesday, January 16, 2018 / Proposed Rules 2105
service provided to eligible low-income federal roles either for purposes of only 9. The Commission seeks comment on
consumers, but not Lifeline voice Lifeline or for both the high-cost and ways states can be encouraged to work
service. The Commission’s role in this Lifeline programs? (See 47 U.S.C. cooperatively with the Commission and
framework was premised on the 214(e)). What rule changes would be USAC to integrate their state databases
Commission’s authority to designate a needed to restore the traditional state into the National Verifier without
common carrier ‘‘that is not subject to and federal roles for ETC designations? unnecessary delay. Because the National
the jurisdiction of a State commission.’’ The Commission seeks comment on this Verifier is a critical part of improving
And to effectuate that policy goal, the proposal and on any alternatives. the integrity of the Lifeline program, it
agency preempted state authority in a 6. The 2016 Lifeline Order is important all states join the National
manner wholly inconsistent with ‘‘applaud[ed] state programs for Verifier in a timely manner. To protect
Section 214 of the Communications Act, devoting resources designed to help the integrity of the enrollment and
which gives primary responsibility for close the affordability gap for eligibility determination process, the
designation of eligible communications services.’’ Although Commission seeks comment on whether
telecommunications carriers to the not formally constraining how states new Lifeline enrollments should be
states. (47 U.S.C. 214(e)(2), (3)). Based administer those state programs for halted in a state at any point if the
on these circumstances and on further voice and/or broadband support, the launch of the National Verifier has been
review, the Commission believes it Order recognized that its approach to unnecessarily delayed in that state. For
erred in preempting state commissions ETC designations could create example, when the plan for National
from their primary responsibility to inconsistencies with the operation of Verifier initiation in a state falls behind
designate ETCs under section 214(e) of those state programs. States continue to schedule, what steps should be taken to
the Act and seek comment on this issue. play an important role in ensuring ensure no ineligible subscribers enroll
(See 47 U.S.C. 214(e)). affordability of voice, and also in the program because of the delay?
5. The 2016 Lifeline Order’s supporting broadband; accordingly, What is the proper response when the
preemption of state designation of LBPs reversing the preemption in the 2016 scheduled launch of the National
Lifeline Order may resolve Verifier in a state is not accomplished
was challenged by the National
inconsistencies between state and by the announced date and carriers
Association of Regulatory Utility
federal efforts and provide benefits to relying on the launch announcement are
Commissioners (NARUC) and a
the operation of state and federal unprepared to handle eligibility
coalition of states led by the State of
programs. The Commission seeks determinations? Should enrollments be
Wisconsin (State Petitioners). (See
comment on these issues. halted for all consumers in the state or
NARUC v. FCC, Case No. 16–1170 (DC
7. The Commission also proposes only for those whose eligibility must be
Cir., filed June 3, 2016); Wisconsin v.
verified using a state database?
FCC, Case No. 16–1219 (DC Cir. filed eliminating stand-alone LBP
10. The Commission seeks comment
June 30, 2016). Among other issues, designations to better reflect the
on other steps to encourage cooperation
NARUC and the State Petitioners structure, operation, and goals of the and collaboration between the states,
contend the Commission’s decision to Lifeline program, as set forth in the the Commission, and USAC to ensure
preempt states from exercising any Communications Act, as well as related the National Verifier is launched in a
authority to designate broadband state programs. For example, the state in a timely fashion. Should the
providers as LBPs violates the Act and existence of an LBP designation enables Commission adopt specific benchmarks
the Administrative Procedure Act. The entities to participate in the Lifeline or proposed timelines to guide this
United States Court of Appeals for the program without assuming any process? Are there ways to streamline
DC Circuit has remanded the legal obligations with respect to voice service. the process of developing and executing
challenges to the Commission for The Commission seeks comment on this the agreements necessary to allow data
further proceedings. (NARUC v. FCC, proposal. sharing between states and the
Case No. 16–1170, Order (DC Cir., Apr. 8. In the 2016 Lifeline Order, the Commission? In the event a state has
19, 2017), granting the Commission’s Commission established the National demonstrated an unwillingness to
motion for voluntary remand.) The legal Verifier to make eligibility engage in the effort to deploy the
challenges to the LBP designation determinations and perform a variety of National Verifier or to do so at
process question the Commission’s legal other functions necessary to enroll reasonable costs, are there other
authority to create an LBP designation eligible subscribers into the Lifeline measures the Commission should take?
process and designate providers under Program. As outlined in the 2016 In these situations, USAC is able to
that process. Additionally, members of Lifeline Order, ‘‘[t]he Commission’s key conduct a manual review of all
Congress have introduced legislation to objectives for the National Verifier are to eligibility documentation for potential
reverse the Commission’s preemption protect against and reduce waste, fraud, Lifeline subscribers in that state but that
and clarify that the Communications and abuse; to lower costs to the Fund measure is costly, burdensome, and
Act of 1934 and the and Lifeline providers through inefficient; the Commission believes
Telecommunications Act of 1996 cannot administrative efficiencies; and to better program expenses would be better
be interpreted to limit the jurisdiction of serve eligible beneficiaries by directed towards electronic connections
any state to designate an ETC. (See facilitating choice and improving the between state systems and the National
Preserving State Commission Oversight enrollment experience.’’ A strong Verifier platform. How can the
Act of 2017, S. 421, 115th Cong. (2017)). cooperative effort between the Commission encourage states to work
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Would reversing the preemption in the Commission and its state partners is cooperatively with USAC to avoid
2016 Lifeline Order resolve the legal critical to advancing these laudable unnecessary costs?
issues surrounding LBPs and their objectives. In this Notice of Proposed 11. The Lifeline program has an
designation process? How would Rulemaking, the Commission seeks important role in bringing digital
reversing the preemption in the 2016 comment on ways to ensure the opportunity to low-income Americans.
Lifeline Order impact the future of LBPs Commission can partner with states to The Commission believes that changes
in the Lifeline program? Should ETCs be facilitate the successful implementation to Lifeline policies are warranted to
designated through traditional state and of the National Verifier. ensure the Commission’s administration
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of Lifeline support is faithful to thereby improve the business case for Lifeline program? How should the
Congress’s stated universal service goals deploying facilities to serve low-income facilities-based requirement apply in a
and is focused on helping low-income households. In this way, Lifeline can situation where a reseller and a
households obtain the benefits that serve to help encourage the deployment facilities-based provider form a joint
come from access to modern of facilities-based networks by making venture to provide Lifeline services?
communications networks. In this deployment of the networks more How should the Commission ensure
section, the Commission proposes economically viable. Furthermore, the Lifeline support is only issued to ETCs
policy changes to focus Lifeline support competitive impacts of having multiple that satisfy the facilities requirement?
on encouraging service provider competing facilities-based networks can Would the facilities-based requirement
investment in networks that offer also help to lower prices for consumers. further the Commission’s goal of
quality, affordable broadband service. If Lifeline can help promote more eliminating waste, fraud, and abuse in
The Commission also seeks comment on facilities, it can then indirectly also the Lifeline program? On this last point,
the Commission’s legal authority for serve to reduce prices for consumers. the Commission notes that the vast
these proposed changes. 15. The Commission seeks comment majority of Commission actions
12. Lifeline Support for Facilities- on this proposal. What rule changes revealing waste, fraud, and abuse in the
Based Broadband Service. The would be necessary to implement this Lifeline program over the past five years
Commission seeks comment on focusing proposal? How can the Commission have been against resellers, not
Lifeline support to encourage ensure Lifeline support is only facilities-based providers. And the
investment in broadband-capable disbursed to ETCs that provide proliferation of Lifeline resellers in 2009
networks. As explained in the 2016 broadband service over facilities-based corresponded with a tremendous
Lifeline Order, broadband service is networks? How would his proposal increase in households receiving
increasingly important for participation impact the availability and affordability multiple subsidies under the Lifeline
in the 21st Century economy. However, of Lifeline broadband services? Are program. How do the incentives of
broadband service is not as ubiquitous there other steps the Commission resellers differ from those who use their
or as affordable as voice service. This is should take to focus Lifeline support to own last-mile facilities? Why have
particularly true in rural and rural encourage investment in broadband waste, fraud, and abuse increased—
Tribal areas, where broadband networks? including multiple-subsidies-per-
deployment lags behind other areas of 16. Discontinuing Lifeline Support for household problems, self-certification
the country. Non-Facilities-Based Service. Next, the problems, authentication-of-subscriber
13. Section 254(b) of the Act requires Commission seeks comment on problems, phantom-subscriber
the Commission to base its policies for discontinuing Lifeline support for problems, and eligibility problems—
the preservation and advancement of service provided over non-facilities- since the advent of multiple resellers
universal service on the principles that based networks, to advance our policy within the program in 2009?
‘‘[q]uality services should be available at of focusing Lifeline support to 18. The Commission does not expect
just, reasonable, and affordable rates,’’ encourage investment in voice- and that this approach would impact the
‘‘[a]ccess to advanced broadband-capable networks. The forbearance relief from section
telecommunications and information Commission proposes limiting Lifeline 214(e)(1)(A)’s facilities requirement.
services shall be provided in all regions support to broadband service provided However, the Commission recognizes
of the Nation’’ and ‘‘[c]onsumers in all over facilities-based broadband that not reversing this forbearance relief
regions of the Nation . . . should networks that also support voice may create a tension that could be
have access to . . . advanced service. Under this proposal, Lifeline relieved by making the requirements for
telecommunications and information providers that are partially facilities- obtaining a Lifeline-only ETC
services, that are reasonably comparable based may obtain designation as an designation under section 214(e)(1)(A)
to those services provided in urban ETC, but would only receive Lifeline match the facilities requirement for
areas and that are available at rates that support for service provided over the receiving Lifeline reimbursement. The
are reasonably comparable to rates last-mile facilities they own. The Commission seeks comment on such
charged for similar services in urban Commission seeks comment on how the matters.
areas.’’ (47 U.S.C. 254(b)(1)–(3)). Commission should define ‘‘facilities’’ 19. Alternatively, should the
14. Mindful of the direction given to for this purpose. Should the Commission reverse the forbearance
the Commission by Congress, the Commission adopt the same definition from section 214(e)(1)(A)’s facilities
Commission believes Lifeline support of facilities that the Fourth Report and requirement? If the Commission found
will best promote access to advanced Order uses for enhanced support on that forbearing from the facilities-based
communications services if it is focused rural Tribal lands? If the Commission requirement was no longer in the public
to encourage investment in broadband- adopts different facilities-based criteria interest, what other findings, if any,
capable networks. The Commission for Lifeline generally, should the would the Commission need to make
therefore proposes limiting Lifeline Commission also use that definition of under section 10? If the Commission
support to facilities-based broadband ‘‘facilities’’ for purposes of enhanced rescinded this forbearance, what
service provided to a qualifying low- Tribal support? The Commission seeks effective date would give impacted
income consumer over the ETC’s voice- comment on any other rule changes that ETCs and their customers an
and broadband-capable last-mile would be necessary to implement this appropriate amount of time to make the
network. The Commission believes this proposal. transition? Furthermore, if the
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proposal would do more than the 17. How would this proposal impact Commission were to rescind forbearance
current reimbursement structure to the number of Lifeline providers from the facilities requirement, should it
encourage access to quality, affordable participating in the program and the reconsider its interpretation of that
broadband service for low-income availability of quality, affordable requirement? For example, § 54.201(g)
Americans. In particular, Lifeline Lifeline broadband services? Are there of our current rules states that an ETC’s
support can serve to increase the ability other means of providing broadband facilities need not be located within the
to pay for services of low-income service that should be considered relevant service area as long as the
households. Such an increase can facilities-based for purposes of the carrier uses them within the designated
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service area. But the Commission has transition process and period differ if as practices that TracFone has
previously noted that ‘‘[s]everal ETCs, the Commission reversed the previously suggested eliminating from
some of which call themselves forbearance from section 214(e)(1)(A)’s the program. Would banning such
‘facilities-based resellers,’ have facilities requirement? practices and suspending those who
previously maintained they are 21. The Commission also seeks engaged in them mitigate our concerns
facilities-based based on facilities that comment on how to determine whether about rampant waste, fraud, and abuse?
provision operator and/or directory existing or future resellers have fully Would any of the conduct-based
assistance services, which are provided complied with the statute’s exhortation requirements minimize waste, fraud,
in conjunction with their retail that universal service funding must be and abuse in the Lifeline program to the
offering.’’ The Commission seeks spent ‘‘only for the provision, same extent as the proposed facilities
comment on revising those rules to maintenance, and upgrading of facilities requirement? How could TracFone’s
make clear that a carrier is only and services for which the support is proposals be implemented with
facilities-based under our rules if its intended.’’ (47 U.S.C. 254(e)). Have minimal additional administrative
facilities are located in its service area Lifeline resellers passed through all burden on Lifeline service providers?
and it uses those facilities to provide Lifeline funding to their underlying How would such proposals ensure that
last-mile service to its supported carriers to ensure federal funding is Lifeline support is being appropriately
customers. The Commission also notes appropriately spent on the required used to advance the deployment of
that the Act defines a facilities-based ‘‘facilities and services’’ rather than broadband-eligible networks?
carrier as one that offers service ‘‘either non-eligible expenses like free phones 23. Continuing the Phase Down of
using its own facilities or a combination and equipment? What accounting Lifeline Support for Voice Service. The
of its own facilities and resale of another measures have Lifeline resellers Commission also seeks comment on
carrier’s services.’’ (47 U.S.C. instituted to ensure that Lifeline continuing the phase down of Lifeline
214(e)(1)(A)). The Commission seeks funding has only been used for eligible support for voice-only services. In the
comment on how to balance Congress’s expenses? Would eliminating resellers 2016 Lifeline Order, the Commission
expectation that ETCs would invest from the program address any concerns adopted rules to gradually phase out
universal service support in the areas about the appropriate use of federal Lifeline support for voice-only services
they serve (See 47 U.S.C. 254(e).) and its funds by Lifeline providers? Would to further the Commission’s goal of
recognition that some amount of resale limiting payments to resellers to what transitioning to a broadband-focused
should be permissible. The Commission they pay their wholesale carriers fully Lifeline program. The current rules
seeks comment on any other effectuate the congressional intent of provide that Lifeline support will
formulations of this rule it should section 254(e)? What auditing or other decrease to zero dollars on December 1,
consider to ensure that facilities-based review should the Commission or USAC 2021, with an exception permitting
Lifeline carriers are in fact reinvesting carry out to ensure that resellers that Lifeline voice support to continue in
the support they receive in facilities in have been receiving funds used them Census blocks where there is only one
the communities they serve. properly? Lifeline provider. (47 CFR
22. Alternatively, the Commission 54.403(a)(2)(iv).) In deciding to phase
20. The Commission also seeks seeks comment on TracFone’s down Lifeline support for voice-only
comment on the transition period for suggestions that it minimizes waste, service, the Commission explained that
implementing this approach. If Lifeline fraud, and abuse in the Lifeline program continuing to provide Lifeline support
support is only provided to ETCs that through ‘‘conduct-based requirements.’’ for voice-only service may ‘‘artificially
provide Lifeline broadband services One form of conduct-based requirement perpetuate a market with decreasing
over facilities-based voice- and would be to suspend for a year or disbar demand’’ and may incent Lifeline
broadband-capable last-mile networks, any Lifeline ETC with sufficiently high providers to ‘‘avoid providing low-
what should the transition period and improper payment rates, whether on the income consumers with modern
transition process be for non-facilities- basis of Payment Quality Assurance services as Congress intended.’’ The
based providers currently participating reviews or program audits. The Commission also cited the declining
in the Lifeline program and their Commission seeks comment on such a prices of fixed and wireless voice-only
customers? Should the transition conduct-based requirement. If the services and the availability of a wide-
process consider whether there is a Commission were to adopt such a range of voice-only services in the
facilities-based provider in a specific requirement, what should be the marketplace.
market that intends to continue measuring stick it uses and what should 24. Continuing the phase down of
providing Lifeline service? If so, what be the trigger? Should the Commission Lifeline support is faithful to section
geographic area would be the use a percent of Lifeline revenues 254(b)’s mandates and would support
appropriate focus of this determination? improperly paid in a given state? our proposal to focus Lifeline support to
What sources could the Commission use Should the Commission establish a encourage investment in broadband-
to determine whether a facilities-based threshold amount of improper capable networks. (See 47 U.S.C.
Lifeline provider is present in and plans payments, such as $50,000, as a trigger 254(b)(1)–(3)). The Commission
to continue offering Lifeline service in for suspension in a state? What levels acknowledges that some parties have
a particular geographic market? What should be established for disbarment? argued against the phase down of
other factors should the Commission And should the Commission apply such Lifeline support for voice service, citing,
consider in developing the transition a requirement to all Lifeline providers, among other concerns, the lack of
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process? What would be an appropriate as TracFone suggests, or only wireless affordable of voice service. However, the
transition period for impacted ETCs and resellers, the historic source of most of Commission expects that even without
their customers? Should the the Commission’s enforcement actions Lifeline voice support, low-income
Commission provide a three-year and investigations with respect to waste, consumers would be able to obtain
support phase down period for non- fraud, and abuse? Another conduct- quality, affordable voice service in
facilities-based ETCs participating in the based requirement could be the urban areas. Based on the 2018 Urban
Lifeline program, or would a shorter suspension of companies that regularly Rate Survey, several providers charge
period be appropriate? How would the engage in fraud-related conduct—such monthly rates of fifteen dollars or less
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for fixed voice-only service, and the Tribal lands ensure more affordable encourage the deployment of the types
national average monthly rate for fixed voice services in those areas? If so, what of facilities that will best achieve the
voice-only service is $25.50. (See 2018 should be the level of support offered principles set forth in section 254(b) and
Urban Rate Survey, Voice Data, Column compared to the amount of support any other universal service principle
J, Rows 423, 496, 501, 763, 788, https:// available for broadband? that the Commission may adopt under
www.fcc.gov/general/urban-rate-survey- 26. Legal Authority. The Commission section 254(b)(7), USF/ICC
data-resources.) The 2016 Universal believes it has authority under Section Transformation Order. The Commission
Service Monitoring Report indicates that 254(e) of the Act to provide Lifeline further explained that it has a
telephone expenses represent under support to ETCs that provide broadband ‘‘ ‘mandatory duty’ to adopt universal
four percent of after-tax income for low- service over facilities-based broadband- service policies that advance the
income households. (See Universal capable networks that support voice principles outlined in section 254(b)
Service Monitoring Report, CC Docket service. Section 254(e) provides that a and the Commission has the authority to
No. 96–45, et al., at 57, Table 6.12 carrier receiving universal service ‘create some inducement’ to ensure that
(2016) https://apps.fcc.gov/edocs__ support ‘‘shall use that support only for those principles are achieved.’’ In 2014,
public/attachmatch/DOC- the provision, maintenance, and the U.S. Court of Appeals for the Tenth
343025A1.pdf.) Therefore, the upgrading of facilities and services for Circuit upheld the Commission’s
Commission expects that even without which the support is intended.’’ Our interpretation of its section 254(e)
Lifeline support for voice-only service, proposed changes to Lifeline support authority in the USF/ICC
the monthly cost of such service in comport with the Commission’s Transformation Order.
urban areas would represent a small authority under Section 254 because 28. The Commission seeks comment
percentage of low-income households’ voice service would continue to be on the Commission’s legal authority to
after-tax income. The Commission seeks defined as a supported service under the adopt the proposed changes to Lifeline
comment on continuing the phase down Commission’s rules, and the networks support. Are there other sources of
of Lifeline support for voice-only receiving Lifeline support would also authority that allow the Commission to
service. Should the Commission make support voice service. (47 CFR make these changes to Lifeline support
any changes to the current schedule for 54.401(a)(2)). Thus, under the proposed proposed in this section?
phasing out Lifeline support for voice changes, Lifeline support would be used 29. The Commission seeks comment
services to support the policy changes ‘‘for the provision, maintenance, and on ways the Lifeline program can
the Commission proposes in this upgrading of facilities and services for responsibly empower Lifeline
section? Should the Commission retain which the support is intended.’’ (47 subscribers to obtain the highest value
the exception permitting Lifeline U.S.C. 254(e)). This legal authority does for the Lifeline benefit through
not depend on the regulatory consumer choice in a competitive
support for voice services after
classification of broadband internet market. In particular, the Commission
December 1, 2021 in areas where there
access service and, thus, ensures the seeks comment on a request from
is only one Lifeline provider? (47 CFR
Lifeline program has a role in closing TracFone Wireless, Inc. (TracFone) to
54.403.) Would retaining this exception
the digital divide regardless of the allow providers to meet the minimum
impede the adoption of Lifeline
regulatory classification of broadband service standards through plans that
broadband service or investment in
service. provide subscribers with a particular
broadband-enabled networks?
27. Relying on the Commission’s number of ‘‘units’’ that can be used for
25. In contrast, it is unclear whether authority under Section 254(e) for the either voice minutes or broadband
low-income consumers would be able to proposed changes to Lifeline support service. TracFone argues that the
obtain quality, affordable voice service would also better reconcile the Bureau’s previous guidance that such
in rural areas without Lifeline voice Commission’s authority to leverage the ‘‘units’’ plans do not meet the minimum
support. The Commission’s rules Lifeline program to encourage access to service standards was given without
require high-cost ETCs to offer voice broadband with the Commission’s public comment and represented an
service at rates that are reasonably efforts to promote access to broadband improper reading of the relevant rule.
comparable to the rates for similar through high-cost support. In the (47 CFR 54.408.) Should the
services in urban areas, USF/ICC universal service high-cost program, the Commission now allow ‘‘units’’ plans to
Transformation Order, 76 FR 73830, Commission relied on section 254(e) as receive reimbursement from the Lifeline
November 29, 2011. Although such rates its authority to require ETCs receiving program? What impact would these
may be affordable in theory, they may support through the Connect America plans have on consumer choice in the
not be in practice: The 2018 reasonable- Fund (including the Mobility Fund) or Lifeline market? Would such a decision
comparability benchmark for voice the existing high cost-support require a change in the Commission’s
services is $45.38—almost double the mechanisms to invest in broadband- rules? If the Commission permits such
average urban rate. The Commission capable networks, but declined to add plans, how should the Commission
accordingly seeks comment on broadband internet access service to the determine the appropriate support
eliminating the phase down of Lifeline list of supported services. In adopting amount for those plans that combine
support for voice-only service in rural this requirement, the Commission voice and broadband options when the
areas. Would eliminating the phase explained that Section 254(e) grants the support level for voice service decreases
down be the best way to ensure that Commission the authority to ‘‘support to $7.25 while the support amount for
consumers in rural areas are offered not only voice telephony service but broadband service remains at $9.25?
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affordable voice services? Should voice- also the facilities over which it is (See 47 CFR 54.403(a).)
only support be limited to a subset of offered’’ and that Congress’s use of the 30. The Commission also seeks
rural areas where voice rates are words ‘‘services’’ and ‘‘facilities’’ in comment on eliminating the Lifeline
actually above the urban average? If so, Section 254(e) provides the program’s ‘‘equipment requirement.’’
by how much? And how should the ‘‘Commission the flexibility not only to (See 47 CFR 54.408(f).) That rule
Commission determine the areas where designate the types of mandates that any Lifeline provider that
voice-only support is available? Would telecommunications services for which ‘‘provides devices to its consumers[]
offering voice-only support to rural support would be provided, but also to must ensure that all such devices are
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Wi-Fi enabled,’’ prohibits ‘‘tethering Lifeline program’s administration to outlined in the rules with the identified
charge[s],’’ and requires mobile preserve program integrity. carriers obtaining an independent
broadband providers to offer devices 33. The Commission proposes to auditor and following a standardized
‘‘capable of being used as a hotspot.’’ adjust the process that USAC currently audit plan outlined by the Commission.
(See 47 CFR 54.408(f)(1)–(3)). The uses to identify which service providers (47 CFR 54.420(a)). The Commission
Commission never sought comment on will be subjected to Lifeline audits by believes this approach would be more
such requirements before imposing transitioning to a fully risk-based efficient and more effective at rooting
them on all Lifeline providers and approach. The Commission proposes to out waste, fraud, and abuse in the
appears to lack the statutory authority to transition the independent audit program because the identified risk
adopt or enforce such requirements. requirements required by section 54.420 factors would better target potential
And although well-intentioned, the of the Commission’s rules away from a violations than merely focusing on
equipment mandate appears $5 million threshold and, instead, to companies receiving large Lifeline
unnecessary if not affirmatively move toward identifying companies to disbursements. A wider range of risk
harmful. As the 2016 Lifeline Order be audited based on established risk factors would be more responsive to
recognized, a ‘‘substantial majority’’ of factors and taking into consideration the identified program risks.
Americans already own Wi-Fi enabled potential amount of harm to the Fund. 36. The Commission also seeks
smartphones, suggesting such mandates The Commission proposes modifying comment on the impact and burdens the
are not needed. And even those Lifeline section 54.420 to allow companies to be current audit program imposes on
providers that appear to support offering selected based on risk factors identified providers and whether this risk-based
Wi-Fi-enabled devices or hotspot- by the Wireline Competition Bureau and approach reduces those burdens. What
enabled equipment acknowledge the Office of Managing Director, in resources have the current, non-risk-
increased cost of such equipment, and coordination with USAC. This approach based audits consumed in terms of
fail to explain why consumers should allows for adaptable, independent employee time, recordkeeping systems,
not be free to choose lower-cost options. audits that respond to risk factors that and other related audit costs? Would
For example, the equipment mandate change over time. The Commission transitioning all Lifeline audits to a risk-
would prohibit a cable Lifeline provider believes this new audit approach will based model improve the accountability
from offering a low-cost modem rather better target waste, fraud, and abuse in of the program? What factors are key
than an integrated modem-Wi-Fi-router, the program and also utilize indicators of potential abuse in the
even if a Lifeline consumer wanted to administrative resources more program? Are there other risk factors the
use a desktop computer to access the efficiently and effectively than in prior Wireline Competition Bureau, Office of
internet. What is more, the 2016 Lifeline years. Managing Director, and USAC should
Order lacked record evidence suggesting 34. USAC’s current audit program consider when identifying companies
that these mandates would have any consists of audits targeted to high-risk that should be subject to audit? How
meaningful impact on the homework participants as well as mandatory audits many companies should be required to
gap—their nominal purpose. As such, it of certain carriers, such as all carriers obtain independent audits?
appears these mandates are more likely offering Lifeline for the first time and 37. In its recent report, the
to widen the digital divide than close it. any carrier receiving more than $5 Government Accountability Office
And so, for the first time, the million in program support in a given (GAO) identified significant fraud and
Commission seeks comment on whether year. Recognizing that some mandatory an absence of internal controls by
the Commission may or should retain audits were unnecessary, the performing undercover work to
the equipment mandates in our rules, or Commission in the 2016 Lifeline Order determine whether ETCs would enroll
whether they instead should be directed the Office of Managing Director subscribers who are not eligible for
eliminated. to work with USAC to modify the Lifeline support. (See GAO,
31. In the interest of removing approach for determining the first-year Telecommunications: Additional Action
regulations that no longer benefit Lifeline providers to be audited. The Needed to Address Significant Risks in
consumers, the Commission proposes to Commission intended this direction to FCC’s Lifeline Program, GAO–17–538,
eliminate § 54.418 of the Commission’s prevent wasteful auditing of companies at 44–46 (2017), http://www.gao.gov/
rules, and the Commission seeks with limited subscriber bases, for products/GAO-17-538.) The
comment on this proposal. (See 47 CFR example, and to allow USAC to more Commission seeks comment on
54.418.) When enacted, section 54.418 efficiently direct audit resources to conducting similar undercover work as
required ETCs to notify their customers higher risk providers. The Commission’s part of the audits administered by USAC
about the then-upcoming transition for rules still require carriers drawing more or a third-party auditor acting on
over-the-air full power broadcasters than $5 million annually from the USAC’s behalf. Would such auditing
from analog to digital service (the ‘‘DTV program to obtain independent biennial techniques be a cost-effective way to
transition’’) over the course of several audits. (47 CFR 54.420.) eliminate fraud in the program? What
months in 2009. The DTV transition has 35. The Commission seeks comment administrative challenges would the
since occurred, and it appears that the on transitioning from the mandatory $5 Commission or USAC face in
rule is no longer relevant. The million threshold for the biennial undertaking such undercover work?
Commission seeks comment on this independent audits under § 54.420(a) of 38. Finally, the Commission seeks
proposal. the Commission’s rules to a purely risk- comment on how Lifeline program
32. As the Commission embarks on an based model of targeted Lifeline audits. audits can ensure that Lifeline
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effort to reform the incentives and Under this approach, the Wireline beneficiaries are actually receiving the
effectiveness of the Lifeline program, it Competition Bureau and Office of service for which ETCs are being
is incumbent on the Commission to Managing Director, with support from reimbursed. What documentation
consider ways it can continue to fight USAC, would establish risk factors to should an audit require to demonstrate
and prevent waste, fraud, and abuse in identify the companies required to that service is being provided? How
the program. To that end, the complete the biennial independent should an audit detect and report
Commission seeks comment on a audits. The independent audits would instances where the subscriber’s
number of proposals to improve the then follow the same process currently equipment makes it difficult or
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![2112 Federal Register / Vol. 83, No. 10 / Tuesday, January 16, 2018 / Proposed Rules
accessible to other Lifeline stakeholders the operation of these programs. If program spends less than the total
to increase the effectiveness and projected disbursements and expenses budgeted amount over the two periods.
transparency of the program? are expected to exceed one half of the Would any of the proposed budget
52. The Commission seeks comment annual cap, USAC would mechanisms result in a significant
on what additional reports USAC proportionately reduce support amounts variance in the disbursement cap for
should make available for state agencies. during the upcoming six-month period consecutive funding years, and if so,
USAC currently makes available a to bring total disbursements under one what impact would that have on
number of Lifeline program statistics half of the annual cap. If, however, total Lifeline consumers and providers?
and reports showing eligible Lifeline payments in the upcoming six-month 57. The Commission also seeks
population estimates, Lifeline period are projected to be less than one comment on whether Lifeline spending
participation, and ETCs receiving half the annual cap, USAC would should be prioritized in the event that
Lifeline support. In addition to this provide the full support amounts as the cap is reached or USAC projects will
information, state agencies may request determined by the Commission and be reached in a funding year. If so, the
NLAD access for their respective state. collect only what is necessary to fund Commission proposes that the
This access allows the state agency to the demand. The Commission seeks Commission prioritize funding in the
review detailed subscriber information comment on this proposal. What following order if disbursements are
in the NLAD to aid their own program administrative difficulties should USAC projected to exceed the cap: (1) Rural
administration and enforcement, anticipate when forecasting Tribal lands, (2) rural areas, and (3) all
including information regarding which disbursements? What steps should other areas. The Commission seeks
carriers are providing service. In the USAC take, if any, in the midst of a six- comment on this prioritization scheme
2016 Lifeline Order, the Commission month period in the event forecast and whether any other factors should
directed USAC to publish Lifeline disbursements and expenses vary weigh in our analysis. For example,
subscriber counts on the study area code significantly from actual disbursements should the Commission prioritize
(SAC) level to ‘‘increase[] transparency and expenses? The Commission notes Lifeline spending in low-income areas
and continue[] to promote that USAC currently projects quarterly where the business case for deployment
accountability in the program.’’ requirements for the Lifeline program is harder to make? If the Commission
53. In the 2016 Lifeline Order, the and submits those projections to the adopts such funding prioritizations,
Commission implemented a budget Commission. What can the Commission how should it implement such a
process for the Lifeline program. This learn from the accuracy of USAC’s past system? Should the Commission adjust
budget approach, however, does not forecasts that would inform how this all of the support amount categories to
include any mechanism that proposal would work? Alternatively, different extents, or should categories
automatically curtails disbursements would another period of time be more with less prioritization receive no
beyond the budget amount absent support before the support of the
appropriate? Would a one-year period
further action by the Commission. category with the next-highest
be more suitable for the Lifeline market?
Instead, if Lifeline disbursements in a prioritization is adjusted? The
In particular, the Commission seeks
given year meet or exceed 90 percent of Commission seeks comment on these
comment on the concept of measuring
that year’s budget, initially set at $2.25 issues.
the budget over a 12-month period and
billion, the Bureau is required to issue 58. The Commission also seeks
whether that concept fully protects the
a report to the full Commission detailing comment on the appropriate initial
ratepayer from excessive spending.
the reasons for the increased spending amount for this cap. Would historical
and recommending next steps. 56. Alternatively, the Commission disbursement levels be instructive in
54. The Commission proposes to seeks comment on a different self- determining the appropriate annual
adopt a self-enforcing budget enforcing budget mechanism that would cap? In 2008, when the Commission
mechanism to ensure that Lifeline allow Lifeline spending in a given first allowed a non-facilities-based ETC
disbursements are kept at a responsible period to exceed the cap, but would to receive Lifeline support, Lifeline
level and to prevent undue burdens on result in Lifeline disbursements being expenditures totaled approximately
the ratepayers who contribute to the reduced in the next period to $820 million. By 2012, that amount had
program. The Commission believes a accommodate the excessive spending. In grown to over $2.1 billion. The
self-enforcing budget is appropriate to this mechanism, disbursements would Commission’s initial steps to eliminate
ensure the efficient use of limited funds. be reduced proportionally throughout waste, fraud, and abuse within the
The Commission therefore proposes to the following period to ensure the program have reduced Lifeline
replace the approach adopted in the disbursements and expenses do not disbursements to just over $1.5 billion
2016 Lifeline Order and require an exceed the budget less the amount by in 2015. If the Commission adopted a
annual cap for Lifeline disbursements. which the previous period’s previous disbursement level as the
The Commission intends for the disbursements and expenses exceeded annual disbursement cap, which
program to automatically make the budget. The Commission seeks disbursement level would be
adjustments in order to maintain the cap comment on this approach, noting that appropriate? The Commission seeks
in the event the budget is exceeded. it has the benefit of not requiring a comment on these issues and other
55. The Commission seeks comment forecast or handling the inevitable relevant matters, such as whether this
on the operation of such a self-enforcing under- or over-shooting of the actual cap should include USAC’s expenses for
budget. What is the appropriate period demand. Under this proposal, when administering the Lifeline program. If
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over which the Commission should should the cap for the second period of so, how should the Commission
measure and enforce the cap? Would a time be set? At the beginning of the first incorporate these administrative
six-month period be appropriate? For period, or the second one? The expenses?
example, under this proposal, for each Commission also seeks comment on 59. The Commission also seeks
upcoming six-month period, USAC whether it is acceptable to allow comment on whether and how the
would forecast expected Lifeline and disbursements to exceed the budget in program’s cap should be adjusted in
Link Up disbursements, as well as a given period, even where adjustments subsequent years. Should the cap
administrative expenses attributable to made in the following period mean the remain the same, absent further action
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![Federal Register / Vol. 83, No. 10 / Tuesday, January 16, 2018 / Proposed Rules 2119
Commission proposes to amend 47 CFR obtain a signed certification from the 17–105, by any of the following
part 54 as follows: subscriber on a form that meets the methods:
certification requirements in paragraph • Federal Communications
PART 54—UNIVERSAL SERVICE (d) of this section. The subscriber must Commission’s website: http://
present documentation meeting the fjallfoss.fcc.gov/ecfs2/. Follow the
■ 1. The authority citation for part 54 requirements in paragraph (b)(1)(i)(B) or instructions for submitting comments.
continues to read as follows: (c)(1)(i)(B) of this section to establish • Mail: Filings can be sent by hand or
Authority: 47 U.S.C. 151, 154(i), 155, 201, continued eligibility. If a Federal messenger delivery, by commercial
205, 214, 219, 220, 254, 303(r), 403, and 1302 eligibility recertification form is overnight courier, or by first-class or
unless otherwise noted. available, entities enrolling subscribers overnight U.S. Postal Service mail. All
§ 54.201 [Amended] must use such form to re-certify a filings must be addressed to the
■ 2. Amend § 54.201 by removing qualifying low-income consumer. Commission’s Secretary, Office of the
paragraph (j). * * * * * Secretary, Federal Communications
(3) * * * Commission.
§ 54.202 [Amended] (iii) If the subscriber’s eligibility for People with Disabilities: Contact the
■ 3. Amend § 54.202 by removing Lifeline cannot be determined by FCC to request reasonable
paragraphs (d) and (e). accessing one or more databases accommodations (accessible format
containing information regarding documents, sign language interpreters,
§ 54.205 [Amended] enrollment in qualifying assistance CART, etc.) by email: FCC504@fcc.gov
■ 4. Amend § 54.205 by removing programs, then the National Verifier, or phone: (202) 418–0530 or TTY: (202)
paragraph (c). state Lifeline administrator, or state 418–0432.
■ 5. Amend § 54.404 by revising agency may obtain a signed certification FOR FURTHER INFORMATION CONTACT: For
paragraph (b)(3) to read as follows: from the subscriber on a form that meets additional information on this
§ 54.404 The National Lifeline the certification requirements in proceeding, contact Maria Mullarkey of
Accountability Database. paragraph (d) of this section. The the Policy Division, Media Bureau at
subscriber must present documentation Maria.Mullarkey@fcc.gov, or (202) 418–
* * * * *
(b) * * * meeting the requirements in paragraph 2120.
(3) If the Database indicates that (b)(1)(i)(B) or (c)(1)(i)(B) of this section SUPPLEMENTARY INFORMATION: This is a
another individual at the prospective to establish continued eligibility. If a summary of the Commission’s Notice of
subscriber’s residential address is Federal eligibility recertification form is Proposed Rulemaking, FCC 17–168,
currently receiving a Lifeline service, available, entities enrolling subscribers adopted and released on December 14,
the eligible telecommunications carrier must use such form to recertify a 2017. The full text of this document is
must not seek and will not receive qualifying low-income consumer. available electronically via the FCC’s
Lifeline reimbursement for providing * * * * * Electronic Document Management
service to that prospective subscriber, System (EDOCS) website at https://
§ 54.418 [Removed and Reserved] apps.fcc.gov/edocs_public/attachmatch/
unless the prospective subscriber has
certified, pursuant to § 54.410(d) that to ■ 8. Remove and reserve § 54.418. FCC-17-168A1.docx. Documents will be
the best of his or her knowledge, no one [FR Doc. 2018–00153 Filed 1–12–18; 8:45 am] available electronically in ASCII,
in his or her household is already BILLING CODE 6712–01–P Microsoft Word, and/or Adobe Acrobat.
receiving a Lifeline service. This This document is also available for
certification may only be obtained after public inspection and copying during
the eligible telecommunications carrier FEDERAL COMMUNICATIONS regular business hours in the FCC
receives a notification from the Database COMMISSION Reference Information Center, Federal
or state administrator that another Communications Commission, 445 12th
47 CFR Part 76 Street SW, CY–A257, Washington, DC
Lifeline subscriber resides at the same
address as the prospective subscriber. [MB Docket Nos. 17–317, 17–105; FCC 17– 20554. Alternative formats are available
* * * * * 168] for people with disabilities (Braille,
large print, electronic files, audio
§ 54.408 [Amended] Electronic Delivery of MVPD format), by sending an email to fcc504@
■ 6. Amend § 54.408 by removing Communications; Modernization of fcc.gov or calling the Commission’s
paragraph (f). Media Regulation Initiative Consumer and Governmental Affairs
■ 7. Amend § 54.410 by revising Bureau at (202) 418–0530 (voice), (202)
AGENCY: Federal Communications
paragraphs (f)(2)(iii) and (f)(3)(iii) and 418–0432 (TTY).
Commission.
removing and reserving paragraph (g) to Synopsis
ACTION: Proposed rule.
read as follows:
1. In this Notice of Proposed
§ 54.410 Subscriber eligibility SUMMARY: In this document, the Federal
Rulemaking (NPRM), we address ways
determination and certification. Communications Commission
to modernize certain notice provisions
(Commission) addresses ways to
* * * * * in part 76 of the Federal
(f) * * * modernize certain notice provisions in
Communications Commission’s rules
the Commission’s rules governing
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(2) * * * governing multichannel video and cable
(iii) If the subscriber’s program-based multichannel video and cable television
television service. First, we seek
or income-based eligibility for Lifeline service.
comment on proposals to modernize the
cannot be determined by accessing one DATES: Comments are due on or before rules in subpart T of part 76 (subpart
or more state databases containing February 15, 2018; reply comments are T),1 which sets forth notice
information regarding enrollment in due on or before March 2, 2018. requirements applicable to cable
qualifying assistance programs, then the ADDRESSES: You may submit comments,
eligible telecommunications carrier may identified by MB Docket Nos. 17–317, 1 47 CFR 76.1601 through 76.1630.
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Document Created: 2018-01-13 02:02:24
Document Modified: 2018-01-13 02:02:24
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Proposed Rules | |
| Action | Proposed rule. | |
| Dates | Comments are due on or before January 24, 2018, and reply comments are due on or before February 23, 2018. If you anticipate that you will be submitting comments, but find it difficult to do so within the period of time allowed by this document, you should advise the contact listed below as soon as possible. | |
| Contact | Jodie Griffin, Wireline Competition Bureau, (202) 418-7400 or TTY: (202) 418-0484. | |
| FR Citation | 83 FR 2104 | |
| CFR Associated | Communications Common Carriers; Health Facilities; Infants and Children; Internet; Libraries; Reporting and Recordkeeping Requirements; Schools; Telecommunications and Telephone |
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