DATE:	April 8, 2010
TO:	Office of Commission Clerk (Cole)
FROM:	Office of the General Counsel (Gervasi) Division of Economic Regulation (Hewitt) Division of Regulatory Analysis (Casey, Williams)
RE:	Docket No. 090504-TP – Proposed amendment of Rule 25-4.0665, F.A.C., Lifeline Service.
AGENDA:	04/20/10 – Regular Agenda – Rule Adoption – Participation is Limited to Commissioners and Staff
COMMISSIONERS ASSIGNED:			All Commissioners
PREHEARING OFFICER:			Klement
RULE STATUS:			Adoption Should Not Be Deferred – F.A.W. notice issued stating item will be considered at this agenda conference.
SPECIAL INSTRUCTIONS:			None
FILE NAME AND LOCATION:			S:\PSC\GCL\WP\090504.RCM.DOC

 

 Case Background

The Commission promulgated Rule 25-4.0665, Florida Administrative Code (F.A.C.), effective January 2, 2007, to implement a procedure for the notification and termination of Lifeline service.  The Rule was amended effective December 6, 2007, to implement procedures for the Lifeline service Automatic Enrollment Process, in compliance with Section 364.10(3)(h)2, Florida Statutes (F.S).  That section requires any state agency that determines a person is eligible for Lifeline service to immediately forward the information to the Commission for automatic enrollment, and required the Commission to adopt rules no later than December 31, 2007, creating procedures to automatically enroll eligible customers in Lifeline service.

Since the inception of the Florida Lifeline program, the Commission has issued various orders addressing specific Lifeline requirements.  Further, various state and federal laws have been adopted addressing Lifeline service.  This docket was opened in order to develop and promulgate rule amendments to consolidate various Lifeline and Link-Up requirements for eligible telecommunications carriers (ETCs).

On October 2, 2008, and November 13, 2009, the Commission issued Notices of Development of Rulemaking in the Florida Administrative Weekly, to implement eligibility requirements for Lifeline service and to amend the requirements ETCs must follow when offering Lifeline service.  Specific requirements designed to strengthen the program address certification, verification, data reporting, and other key issues related to Lifeline.

On November 5, 2008, Commission staff held a rule development workshop to allow interested persons to provide input regarding the proposed amendment of Rule 25-4.0665, F.A.C.  Various interested persons participated in the workshop, including ETCs and the Office of Public Counsel (OPC). Following the workshop, staff considered written comments submitted on December 12, 2008, and further refined the draft rule.[1]

The Commission approved staff’s draft rule proposal at its December 1, 2009, agenda conference.  No interested persons spoke at the agenda conference.  Thereafter, the Commission proposed the rule amendments to Rule 25-4.0665, F.A.C., to codify the requirements for participation in the Lifeline service program.

The Commission published its Notice of Rulemaking in the December 18, 2009, Florida Administrative Weekly (F.A.W.). The Notice required that any comments or requests for hearing must be filed with the Commission within 21 days of the Notice, by January 8, 2010.  The Commission did not receive a request for a rule hearing on the proposed rule.  However, on January 8, 2010, two ETCs, Cellco Partnership, d/b/a Verizon Wireless (Verizon Wireless) and NPCR, Inc. d/b/a Nextel Partners and Sprint Corporation n/k/a Sprint Nextel Corporation d/b/a Sprint PCS (Sprint Nextel), timely filed comments to the proposed rule.  In addition, the Commission received two letters from the staff of the Joint Administrative Procedures Committee (JAPC), dated December 23, 2009, and January 21, 2010, with questions about the proposed rule changes.

This recommendation addresses whether the Commission should make changes to the proposed rule based on the comments filed by Verizon Wireless and Sprint Nextel and the letters submitted by JAPC staff. The Commission has jurisdiction pursuant to sections 120.80(13)(d), 364.0252, 364.10, 364.105, and 364.183(1), F.S, and rulemaking authority pursuant to sections 120.54, 350.127(2), 364.0252, and 364.10(3)(j), F.S.

 

Discussion of Issues

Issue 1: Should the Commission adopt any changes to proposed Rule 25-4.0665, Florida Administrative Code, as a result of questions posed by the Joint Administrative Procedures Committee staff?

 

Recommendation: 

  Yes, the Commission should adopt certain changes to proposed Rule 25-4.0665, Florida Administrative Code, and to the two Lifeline forms referenced in the proposed rule, as set forth in Attachment A. (Gervasi, Williams, Casey)

Staff Analysis: 

  By letter dated December 23, 2009, JAPC staff asked whether a person receiving assistance from a Bureau of Indian Affairs program qualifies for Lifeline service and whether it is necessary to incorporate by reference in subsection (1) of the proposed rule a citation to 42USC §1437f (Section 8  housing). In the letter, JAPC noted that Form PSC/RAD 157, the Application for Link-Up Florida and Lifeline Assistance form referenced in the proposed rule, indicated that Lifeline service was available to persons who participate in Bureau of Indian Affairs public assistance programs. In response to JAPC’s comments, staff recommends that the proposed rule and both forms referenced therein (Forms PSC/RAD 157 and 158) should include language indicating that persons who participate in Bureau of Indian Affairs public assistance programs are eligible for Lifeline.  The recommended additional language is contained on Attachment A, at page 1, lines 21-25 through page 2, lines 1-3 of the proposed rule, and on Forms PSC/RAD 157 and 158, which are attached to the proposed rule as part of Attachment A.  Moreover, staff recommends that the citation to 42 USC §1437f (Section 8  housing) on page 1, lines 8-9 of the proposed rule is unnecessary and should be stricken, as shown on Attachment A.

By letter dated January 21, 2010, JAPC asked why subsection 25-4.0665(1)(b) of the proposed rule provides that a subscriber is eligible for Lifeline service if his or her eligible telecommunications carrier has more than one million access lines and the household income is at or below 150% of the poverty line, while the forms provided only that this person “may be able to qualify.”  JAPC also inquired about the Office of Public Counsel’s role in this process, and the procedures to be followed by carriers with less than one million access lines that voluntarily elect to enroll Lifeline applicants based on their household income under the newly renumbered 25-4.0665(3) of the proposed rule.

By letter dated March 11, 2010, staff explained to JAPC that subsection 364.10(3)(a), F.S., provides that eligible telecommunications carriers that have more than one million access lines shall provide Lifeline service to persons who meet an income eligibility test at 150 percent or less of the federal poverty income guidelines for Lifeline customers. Staff further explained that subsection 364.10(3)(a) also provides that “[t]he Office of Public Counsel shall certify and maintain claims submitted by a customer for eligibility under the income test authorized by this subsection,” and that the statute does not authorize the Commission to require carriers with less than one million access lines to provide Lifeline service using the income-based eligibility standard.  Therefore, the proposed rule does not place any limitations on those carriers that elect to provide Lifeline service using the income-based eligibility standard on a voluntary basis.

In consideration of the foregoing, JAPC suggests that Forms PSC/RAD 157 and 158, referenced in the proposed rule, include language to clarify that: 1) customers who are at or below 150% of the federal poverty level and who receive service from AT&T Florida, CenturyLink, or Verizon, which carriers have more than one million access lines at this time, do qualify for Lifeline service; 2) those customers may demonstrate their eligibility for Lifeline service to the Office of Public Counsel; and 3) customers of other service providers who are at or below 150% of the federal poverty level should contact their service provider to see if their service provider is voluntarily enrolling Lifeline applicants through the income eligibility test. Staff recommends that Forms PSC/RAD 157 and 158 should be modified to include this clarifying language, as shown on Attachment A.

Staff recommends that the Commission adopt the above-described changes to proposed Rule 25-4.0665, F.A.C., and to the two Lifeline forms referenced therein.  These recommended changes will satisfy JAPC’s concerns about the proposed rule.

Issue 2: 

  Should the Commission adopt the changes to proposed Rule 25-4.0665, Florida Administrative Code, as suggested by the ETCs?

Recommendation: 

 The Commission should adopt the proposed rule with one change as suggested by Verizon Wireless, to revise paragraph (18) to include the term “toll control,” as set forth in Attachment A.  The Commission should reject the other changes suggested by the ETCs in their comments.  (Gervasi, Williams, Casey)

Staff Analysis: 

 The Commission received comments from Sprint Nextel and from Verizon Wireless, as discussed below.

Sprint Nextel

            Necessity for Rule Amendments

In its comments, Sprint Nextel suggests that the Commission may want to consider whether additional Lifeline rules are necessary, given the dramatic increases in Lifeline subscribership reported in the Commission’s December 2009 Report to the Governor, President of the Senate and Speaker of the House, which indicated that the number of Lifeline participants grew 236% from July 2008 through June 2009.  Sprint Nextel suggests that the Commission consider whether the existing Lifeline process under existing rules is a sufficient and less costly alternative to accomplish the objective.

Staff recommends that it is necessary for the proposed rule to be adopted with the changes as set forth in this recommendation because there is a need to consolidate the various Lifeline and Link-Up requirements for ETCs.  By doing so, ETCs will have the benefit of referring to one source to obtain information and guidance regarding Lifeline and Link-Up program requirements.

Commission Authority to Make Rules Applicable to Wireless ETCs

 Sprint Nextel argues that Chapter 364, F.S., provides the Commission with very limited statutory authority to make rules applicable to wireless ETCs, and that section 364.011, F.S., expressly provides that “wireless telecommunications, including commercial mobile radio service providers” (CMRS providers) are “exempt from oversight by the commission, except to the extent delineated in this chapter or specifically authorized by federal law.”  Sprint Nextel argues that Chapter 364, F.S., does not provide the Commission with jurisdiction over wireless ETCs, and that the statutory definition of “eligible telecommunications carriers” in Section 364.10(2)(a) expressly excludes wireless providers.  That section provides that “[f]or the purposes of this section, the term ‘eligible telecommunications carrier’ means a telecommunications company, as defined by Section 364.02, which is designated as an eligible telecommunications carrier by the commission pursuant to 47 C.F.R. § 54.201.”  The definition of “telecommunications company” in Section 364.02(14)(c) expressly excludes CMRS providers.  Sprint Nextel argues that Chapter 364’s Lifeline provisions therefore apply only to “eligible telecommunications carriers” as defined in Section 364.10(2)(a) and thus expressly exclude wireless providers.

Sprint Nextel argues that NPCR, Inc. and Sprint Corporation were designated as ETCs by the Federal Communications Commission (FCC), and that under federal law, those existing designations will continue to be administered solely under the FCC’s jurisdiction.  At the time the FCC established additional ETC designation and annual reporting requirements in 2005, the federal agency reasserted its ongoing regulatory authority and oversight over those carriers previously designated as ETCs pursuant to the FCC’s authority under 47 U.S.C. § 214(e)(6).  Among other things, the FCC required all carriers previously designated under § 214(e)(6) to submit all of the information required of new applicants under FCC Rule 54.202(a).  Likewise, the FCC required all carriers previously designated under § 214(e)(6) to annually file with the FCC information demonstrating their continued compliance with the federal ETC requirements.  Thus, according to Sprint Nextel, it is the FCC, not the Commission, that has jurisdiction over carriers previously designated under 47 U.S.C. § 214(e)(6).

Sprint Nextel argues that federal law provides that in states such as Florida that have established their own Lifeline program, ETCs must comply with certain limited state-specific types of Lifeline rules or regulations, as follows:

•           Pursuant to 47 C.F.R. § 54.409(a), “[t]o qualify to receive Lifeline service in a state that mandates state Lifeline support, a consumer must meet the eligibility criteria established by the state commission for such support.”  Thus, Sprint Nextel would be required to use the eligibility criteria set forth in proposed Rule 25-4.0665(1)(a). 

•           Pursuant to 47 C.F.R. § 54.415(a), “[i]n a state that mandates state Lifeline support, the consumer qualification criteria for Link Up shall be the same as the criteria that the state established for Lifeline qualification in accord with 47 C.F.R. § 54.409(a).” 

•           Pursuant to 47 C.F.R. §54.410(a)(1), “eligible telecommunications carriers in states that mandate state Lifeline support must comply with state certification procedures to document consumer income-based eligibility for Lifeline prior to that consumer’s enrollment if the consumer is qualifying under an income-based criteria.” 

•           Pursuant to 47 C.F.R. § 54.410(c)(1), “eligible telecommunications carriers in states that mandate state Lifeline support must comply with state verification procedures to validate consumers’ continued eligibility for Lifeline.” 

•           Pursuant to 47 C.F.R. § 54.405(c)-(d), “[a] carrier providing Lifeline service in a state that has dispute resolution procedures applicable to Lifeline termination, that requires, at a minimum, written notification of impending termination, must comply with applicable state requirements. 

•           Pursuant to 47 C.F.R. § 54.417(a), ETCs “must maintain records to document compliance with all [FCC] and state requirements governing the Lifeline/Link-Up programs for the three full preceding calendar years and provide that documentation to the [FCC] or Administrator upon request.”

            Sprint Nextel argues that to the extent a particular proposed rule amendment is not specifically authorized by federal law, the Commission has no authority to adopt it as to wireless ETCs and it would not be applicable to Sprint Nextel. Sprint Nextel further argues that a statement buried in a footnote of the FCC’s designating orders for both Sprint and NPCR, Inc. has been misconstrued by staff in the past to support the notion that Sprint Nextel is subject to all Florida ETC rules.  That footnote specifies that “ETCs must comply with state requirements in states that have Lifeline programs.”[2]  According to Sprint Nextel,  the footnote pertains only to state-specific procedures for certification of income-based eligibility and does not give blanket authority for states to require Sprint Nextel to comply with every ETC-related state rule and regulation regardless of the state commission’s lack of jurisdiction over wireless ETCs.

 

Staff disagrees that the Commission lacks the authority to make the Lifeline rule applicable to wireless ETCs. By Order No. PSC-07-0288-PAA -TP, issued April 3, 2007, in Docket Nos. 060581-TP and 060582-TP,[3] the Commission noted that section 364.011, F.S., allows the Commission oversight over wireless telecommunications, including CMRS providers, to the extent “specifically authorized by federal law.”  In a footnote to the orders granting ETC status to the wireless carriers, the FCC specifically stated that the ETCs “must comply with state requirements in states that have Lifeline programs.”[4]  Sprint Nextel reads that statement narrowly, to mean that ETCs must only comply with state requirements pertaining to state-specific procedures for certification of income-based eligibility.  However, that is not what the footnote says.  Florida has a Lifeline program, as set forth in section 364.10, F.S.  The proposed Lifeline rule implementing Florida’s Lifeline program is applicable to all ETCs and does not distinguish wireline from wireless ETCs.  Should Sprint Nextel believe that it meets the requirements for obtaining a variance or rule waiver under section 120.542, F.S., it may petition the Commission for such relief from complying with those portions of the rule.

Enrollment Based on Commission Lifeline Application Forms

Sprint-Nextel believes the Commission should clarify that although ETCs must accept the Commission’s forms as a method of application to certify that the applicant qualifies for Lifeline, it may be necessary to distribute additional materials to the applicant in order to ensure they consent to the terms of the Lifeline plan before enrollment.  Staff disagrees.  Staff points out that self-certification has been ordered by the Commission, and the use of the current forms has served the enrollment process well.  In addition, ETCs have the opportunity to request additional information from Lifeline customers during the verification process.

 

The Necessity for Program-Based Eligibility Letters for Self-Certification

Sprint Nextel requests that the Commission clarify that ETCs are not required to seek or review eligibility determination letters or other documentation of program-based eligibility.  Staff acknowledges that the self-certification application and the on-line application should be the primary vehicle for enrollment.  However, consistent with the process that was established by the Commission prior to the use of the self-certification application and on-line application, public assistance eligibility documents should be accepted as proof of eligibility.  Staff further points out that these documents are currently accepted for initial certification and for annual verification purposes.

Social Security Numbers

Sprint Nextel argues that the customer’s complete social security number is useful in identifying existing customer accounts and matching them to Lifeline applications.  Staff disagrees.  Requiring the last four digits of the social security number has worked well in the identification of Lifeline customers, as well as serving to address privacy and security concerns.

Creole Language

 

Sprint Nextel argues that if the intent of the rule is to require ETCs to handle and process Creole language applications, the Commission should conduct an analysis of the additional costs that could be associated with doing so, including hiring bilingual staff, engaging translation services, and any additional costs associated with processing applications in Creole.

 

Staff  disagrees. Spanish and Creole Lifeline applications and brochures are currently being used, and are effective tools in educating and enrolling consumers.  Use of Spanish and Creole applications and brochures was widely supported by interested parties when initially implemented, and the Commission has not received any comments or complaints by other ETCs regarding cost.  The rule does not require ETCs to publish applications or brochures in Spanish or Creole. Moreover, staff notes that the Lifeline applications do not elicit any narrative information that would require translation from Creole or Spanish into English.  The application forms require applicants to fill out their name, address, telephone number, date, date of birth, last four digits of social security number, and to place check marks next to their service provider and public assistance programs(s).  This information is easily decipherable on the Creole or Spanish application forms even to non-Creole or non-Spanish speakers.  Thus, there should be no additional costs to the ETCs.

 

Verizon Wireless

Enrollment Based on Commission Lifeline Application Forms

Consistent with Sprint Nextel’s argument, Verizon takes issue with allowing a Lifeline applicant to present alternative documentation demonstrating receipt of public assistance.  Verizon argues that telecommunications carriers are ill-equipped to receive and interpret unfamiliar public assistance documentation.  Staff disagrees.  Consistent with our response to Sprint Nextel’s argument, staff acknowledges that the self-certification application and the on-line application should be the primary vehicle for enrollment,  However, consistent with the process that was established by the Commission prior to the use of the self-certification application and on-line application, public assistance eligibility documents should be accepted as proof of eligibility.  Staff further points out that these documents are currently accepted for initial certification and for annual verification purposes.

Social Security Numbers

Like Sprint Nextel, Verizon also argues that the customer’s complete social security number should be required. Verizon argues that ETCs must be able to collect complete social security numbers to determine credit risk.  Staff disagrees.  Requiring the last four digits of the social security number has worked well in the identification of Lifeline customers, and has served to address privacy and security concerns.  Further, ETCs can require customers to subscribe to toll limitation service or pay a deposit to address credit risk.

 

            Toll

 

Verizon argues that the second sentence of paragraph (18) should be revised to expressly reference “toll control” or use the all-inclusive term “toll limitation.”  Staff agrees and recommends the use of the term “toll control” for clarification purposes in both sentences of paragraph (18), as shown on Attachment A.

 

Based upon the foregoing analysis, staff recommends that the Commission accept one change to proposed Rule 25-4.0665, F.A.C., as suggested by Verizon, to revise paragraph (18) to include the term “toll control.”

Issue 3: 

 Should proposed Rule 25-4.0665 be filed for adoption with the Secretary of State and the docket be closed?

Recommendation: 

 Yes, the rule as approved by the Commission should be filed for adoption with the Secretary of State and the docket should be closed after a Notice of Change is published in the F.A.W. (Gervasi)

Staff Analysis: 

 If the Commission approves staff’s recommendation in Issues 1 and 2, a Notice of Change must be published in the F.A.W. before the rule is filed for adoption with the Secretary of State.  Once the rule is filed for adoption with the Secretary of State, the docket should be closed.