Federal Communications CommissionDA 12-934
Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter ofTelecommunications Carriers Eligible for Universal Service Support
i-wireless, LLC Amended Petition for Designation as an Eligible Telecommunications Carrier
in the States of Alabama, Connecticut, Delaware, Florida, New Hampshire, North Carolina, New York, Tennessee, the Commonwealth of Virginia, and the District of Columbia / )
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Amended Petition of Cricket Communications, Inc. for Designation as an Eligible Telecommunication Carrier / )
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ORDER
Adopted: June 13, 2012Released: June 13, 2012
By the Chief, Wireline Competition Bureau:
I.INTRODUCTION
1.In this order, we conditionally grant an amended petition filed by i-wireless, LLC (i-wireless) for limited designation as an eligible telecommunications carrier (ETC) for the purpose of providing Lifeline services in the states of Alabama, Connecticut, Delaware, Florida, New Hampshire, North Carolina, New York, Tennessee, Virginia and the District of Columbia.[1] We also conditionally grant an amended petition filed by Cricket Communications, Inc. (Cricket) seeking limited designation as an ETC for the purpose of providing Lifeline services in the states of New York, North Carolina, Tennessee, Virginia and the District of Columbia.[2] The Amended i-wireless ETC Petition and the Amended Cricket ETC Petition (together the Petitions) were filed pursuant to section 214(e)(6) of the Communications Act, as amended (the Act), and section 54.202 of the Commission’s rules.
2.The designation of i-wireless as an ETC is conditioned on i-wireless’s compliance with: (i) the representations and commitments made by i-wireless in its Amended ETC Designation Petition; (ii) the i-wireless Forbearance Order;[3] (iii) the commitments i-wireless made in its compliance plan;[4] and (iv) the Commission’s rules, including those adopted by the Commission in its Lifeline Reform Order.[5] In the i-wireless Forbearance Order, the Commission conditionally forbore from applying the statutory requirement that i-wireless serve its customers using its own facilities insofar as i-wireless sought limited ETC designation solely for the provision of Lifeline service.[6] To ensure that low-income consumers have access to 911 and enhanced 911 services and to protect the universal service fund from waste, fraud and abuse, the Commission conditioned forbearance on i-wireless obtaining approval of a compliance plan, outlining the measures i-wireless would take to provide its Lifeline subscribers with 911 and enhanced 911 services, and to implement certification procedures and processes to prevent waste, fraud and abuse in the Lifeline program,[7] The Wireline Competition Bureau (Bureau) approved i-wireless’s compliance plan on October 21, 2011.[8] i-wireless has also committed to following rules the Commission adopted in the Lifeline Reform Order aimed at preventing waste, fraud and abuse in the Lifeline program.[9]
3.The designation of Cricket as an ETC is conditioned on Cricket’s compliance with: (i) the representations and commitments made by Cricket in its Amended ETC Designation Petition; (ii) the Cricket Forbearance Order;[10] (iii) the commitments Cricket made in its compliance plan;[11] and (iv) the Commission’s rules, including those adopted by the Commission in its Lifeline Reform Order.[12] In the Cricket Forbearance Order, the Commission granted Cricket forbearance from the requirement to serve the entirety of a rural telephone company’s study area or to obtain approval to modify the service area boundaries, provided it obtains approval of a compliance plan, which includes the measures it would take to implement certification procedures and processes to prevent waste, fraud and abuse in the Lifeline program.[13] The Bureau approved Cricket’s compliance plan on February 7, 2012.[14]
II.BACKGROUND
A.The Act
4.Congress directed the Commission to establish the universal service support mechanisms to help ensure that “[q]uality services [are] available at just, reasonable, and affordable rates” for consumers throughout the nation, “including low-income consumers.”[15] The Commission’s Lifeline program furthers this goal by reducing the price of monthly telephone service for low-income consumers.[16]
5.Section 254(e) of the Act provides that “only an eligible telecommunications carrier designated under section 214(e) shall be eligible to receive specific federal universal service support.”[17] Pursuant to section 214(e)(1)(A) and (B), a common carrier designated as an ETC must offer the services supported by the federal universal service support mechanisms either using its own facilities or a combination of its own facilities and resale of another carrier’s services throughout its designated service area and must advertise the availability and charges for those services.[18]
6.Section 214(e)(2) of the Act gives state commissions the primary responsibility for designating ETCs in their states.[19] Section 214(e)(6) directs the Commission, upon request, to designate as an ETC “a common carrier providing telephone exchange service and exchange access that is not subject to the jurisdiction of a state commission.”[20] Under section 214(e)(6), the Commission may, with respect to an area served by a rural telephone company, and shall, in all other cases, designate more than one common carrier as an ETC for a designated service area, consistent with the public interest, convenience, and necessity, so long as the requesting carrier meets the requirements of section 214(e)(1).[21] Before designating an additional ETC for an area served by a rural telephone company, the Commission must determine that the designation is in the public interest.[22] The Bureau has delegated authority to consider ETC designation requests.[23]
B.Requirements for ETC Designation by the Commission
7.In 1997, the Commission issued a Public Notice setting forth the procedures a carrier must use when requesting designation as an ETC from the Commission. Pursuant to that Notice, a carrier seeking ETC designation must file a petition providing the following: (1) a certification and brief statement of supporting facts demonstrating that the petitioner is not subject to the jurisdiction of a state commission; (2) a certification that the petitioner offers all services designated for support by the Commission pursuant to section 254(c) of the Act; (3) a certification that the petitioner offers the supported services either using its own facilities or a combination of its own facilities and resale of another carrier’s services;[24] (4) a description of how the petitioner advertises the availability of the supported services and the charges therefor using media of general distribution; (5) if the petitioner is not a rural telephone company, a detailed description of the geographic service area for which it requests to be designated as an ETC from the Commission; and (6) a certification that neither the petitioner, nor any party to the application is subject to a denial of federal benefits pursuant to the Anti-Drug Abuse Act of 1988.[25]
8.In addition, the Commission’s rules require that in order to be designated as an ETC, an applicant must: (1) certify that it will comply with the service requirements applicable to the support that it receives; (2) demonstrate its ability to remain functional in emergency situations; (3) demonstrate that it will satisfy applicable consumer protection and service quality standards; (4) demonstrate that it is financially and technically capable of providing the Lifeline service; and (5) submit information describing the terms and conditions of any voice telephony plans offered to Lifeline subscribers, including details on the number of minutes provided as part of the plan, additional charges, if any, for toll calls, and rates for each such plan.[26]
9.Prior to designating an ETC pursuant to section 214(e)(6), the Commission must determine whether such designation is in the public interest.[27] In determining the public interest, the Commission historically has considered the benefits of increased consumer choice and the unique advantages and disadvantages of the applicant’s service offering.[28]
C.Federal Universal Service Lifeline Support
10.The federal universal service Lifeline program is designed to reduce the monthly cost of telecommunications service for qualifying consumers. The Lifeline program reimburses ETCs for providing qualifying low-income consumers with discounts of $9.25 off of the monthly cost of their telephone service.[29] The Lifeline program provides additional reimbursement to ETCs for providing eligible residents of Tribal lands with discounts of up to an additional $25.00 off the monthly cost of their telephone service.[30]
III.DISCUSSION
11.As described below, in their respective petitions, i-wireless and Cricket (collectively, petitioners) have both provided the Commission with the information required to designate each of them as an ETC in the areas in which they have requested designation. We find that the public interest supports such designations subject to the petitioners’ compliance with (i) the representations and commitments made by the petitioners in their petitions, (ii) each petitioner’s respective forbearance orders, (iii) the Commission’s rules, and (iv) the conditions set forth in their respective compliance plan orders.
A.Commission Authority to Perform the ETC Designation
12.In order for the Commission to designate a carrier as an ETC, an applicant must provide a certification and a brief statement of supporting facts demonstrating that the petitioner is not subject to the jurisdiction of a state commission.[31] Petitioners have complied with this requirement by each providing a statement of supporting facts and certification from each of the relevant state commissions providing that the state commission lacks jurisdiction to perform the requested ETC designation and that the Commission has authority to consider the relevant petitioner’s petition under section 214(e)(6) of the Act.[32] Specifically, i-wireless has demonstrated that it is not subject to the jurisdiction of the Alabama Public Service Commission (Alabama Commission), Connecticut Department of Public Utility Control (Connecticut Commission), Delaware Public Service Commission (Delaware Commission), New Hampshire Public Utilities Commission (New Hampshire Commission), North Carolina Utilities Commission (North Carolina Commission), New York Public Service Commission (New York Commission), Tennessee Regulatory Authority (Tennessee Commission), Virginia State Corporation Commission (Virginia Commission), Florida Public Service Commission (Florida Commission), and the District of Columbia Public Service Commission (District of Columbia Commission). Cricket has demonstrated that it is not subject to the jurisdiction of the North Carolina Commission, New York Commission, Tennessee Commission, Virginia Commission, and the District of Columbia Commission. Accordingly, we find that the relevant state commissions lack jurisdiction to designate the petitioners as an ETC and this Commission has authority to perform the requested ETC designations.[33]
B.Eligibility Requirements
13.Offering the Services Designated for Support. Applicants for ETC designation must certify that they offer all services designated for support by the Commission pursuant to section 254(c) of the Act.[34] The petitioners have demonstrated through their filings and certifications that they now offer or will offer upon designation as a limited ETC, the voice telephony services supported by the Lifeline program.[35] The petitioners state that they provide the services and functionalities enumerated in section 54.101(a) of the Commission’s rules throughout their licensed service areas.[36]
14.Offering the Supported Services Using a Carrier’s Own Facilities. In general, applicants for ETC designation must certify that they will offer the supported services either using their own facilities or a combination of their own facilities and the resale of another carrier’s services.[37] However, in the Lifeline Reform Order, the Commission forbore from applying this requirement to all telecommunications carriers that seek limited ETC designation to participate in the Lifeline program as long as such carriers meet certain conditions, approved by the Bureau in each carrier’s compliance plan.[38]
15. i-wireless, as a non-facilities based carrier, received forbearance from the facilities-based requirement before the Commission issued its Lifeline Reform Order. i-wireless has demonstrated its commitment to comply with the conditions imposed in the i-wireless Forbearance Order and that its implementing procedures, as set forth in its Revised Compliance Plan, fully satisfy the conditions established by the Commission.[39] Additionally, we find that i-wireless has demonstrated its commitment to comply with the additional requirements set forth in the Lifeline Reform Order.[40]
16.Cricket has demonstrated that it offers, or will offer upon designation as an ETC, the supported service using either its own facilities or a combination of its own facilities and resale of another carrier’s services.[41]
17.Advertising Supported Services. Applicants for ETC designation must advertise the availability of the supported services and the charges therefor using media of general distribution and provide a description of how they will do so.[42] The petitioners have committed to advertise the availability of the supported services using media of general distribution.[43] In addition, the petitioners have committed to advertising and promoting availability of Lifeline services in a manner reasonably designed to reach those likely to qualify for Lifeline.[44] To increase accountability within the program and to target support where it is needed most, the Commission has adopted rules requiring ETCs to explain in their marketing materials that Lifeline service is a government benefit, that the individual must be eligible to receive the benefit and that the consumer may receive no more than one benefit at a time from the program.[45] The petitioners have demonstrated their commitment to comply with these Commission rules regarding marketing of Lifeline service.[46]
18.Designated Service Area. Applicants for ETC designation must provide a detailed description of the geographic service area for which they seek designation.[47] The petitioners complied with this requirement. In its Amended Petition i-wireless sought ETC designation in its licensed service areas in Alabama, Connecticut, Delaware, Florida, New Hampshire, North Carolina, New York, Tennessee, Virginia and the District of Columbia as provided in Appendices B and C of this order.[48] For its part, Cricket sought designation as a limited ETC, eligible only for Lifeline support, in its licensed service areas in North Carolina, New York, Tennessee, Virginia and the District of Columbia as provided in Appendix D.[49]
19.Anti-Drug Abuse Act Certification. Applicants for ETC designation must provide a certification that neither the petitioner nor any party to the application is subject to denial of federal benefits pursuant to the Anti-Drug Abuse Act of 1988.[50] The petitioners have provided a certification consistent with the requirements of the Anti-Drug Abuse Act of 1988.[51] We find that each petitioner’s certification satisfies the requirements of the Anti-Drug Abuse Act of 1988, as codified in sections 1.2001–1.2003 of the Commission’s rules.
20.Compliance with Applicable Service Requirements. Applicants for ETC designation must certify that they will comply with all service requirements applicable to the support they receive.[52] Both i-wireless and Cricket have done so and have demonstrated their commitment to comply with the Commission’s Lifeline rules, and specifically to comply with the rules regarding consumer enrollment and certification of eligibility.[53] We also find that each of the petitioner’s sample Lifeline certification forms used for consumer enrollment, and attached as exhibits to their petitions, satisfies the Commission’s rules.[54]
21.Ability to Remain Functional in Emergency Situations. Applicants for ETC designation must demonstrate their ability to remain functional in emergency situations.[55] With respect to providing access to emergency services, i-wireless states that it will provide access to emergency services consistent with the requirements set forth in the i-wireless Forbearance Order as modified by paragraph 383 of the Lifeline Reform Order and 47 C.F.R. § 20.18(m).[56] i-wireless also states that it complies with the Commission’s regulations governing the deployment and availability of enhanced 911 compatible handsets.[57] We find that continuing to require i-wireless to comply with these requirements promotes public safety among Lifeline subscribers.
22.Cricket states that it is committed to providing and maintaining telecommunications services in times of emergency, by maintaining a reasonable amount of back-up power to ensure the functionality of its service without an external power source, is able to reroute traffic around damaged facilities, and is capable of managing traffic spikes resulting from emergency situations.[58] We find that Cricket has demonstrated its ability to remain functional in emergency situations.
23.Satisfaction of Applicable Consumer Protection and Service Quality Standards. Applicants for ETC designation must demonstrate that they will satisfy applicable consumer protection and service quality standards.[59] The petitioners have committed to providing applicable consumer protection and service quality standards.[60] Given that the petitioners have established track records as ETCs in other states, we find that reliance on petitioners’ commitments to meet these requirements is reasonable and consistent with the public interest and the Act.
24.Financial and Technical Capability. Applicants for ETC designation must demonstrate that they are financially and technically capable of providing Lifeline supported services.[61] i-wireless states that it is 50 percent owned by Kroger, one of the nation’s largest grocery retail chains, has been providing telecommunications service for the past 6 years, including Lifeline service in 13 states and has not been subject to enforcement action or ETC revocation proceedings in any state.[62] Cricket states that it is a facilities-based wireless carrier with nearly 6 million customers and a market capitalization of more than $800 million.[63] We find that each of the petitioners is financially and technically capable of providing Lifeline supported services.
25.Information Regarding the Terms and Conditions of Lifeline Plans. Applicants for ETC designation must submit information regarding the terms and conditions of any voice telephony plans they offer to Lifeline subscribers.[64] i-wireless states that it will offer Lifeline consumers three Lifeline Plan choices: (1) 150 anytime minutes per month, rollover minutes, free incoming text messages, free customer care calls and participation in the Kroger Co. (Kroger) loyalty Free Minute program;[65] (2) 250 anytime minutes per month; and (3) application of the Lifeline discount to any i-wireless monthly retail plan.[66]
26.Cricket states that it will offer Lifeline consumers any standard Cricket service plan, which starts at $35 per month (minus the applicable Lifeline discount) for unlimited local and long distance calling.[67]
C.Public Interest Analysis
27.Considering whether these designations are in the public interest, we find that each of the petitioners’ service offerings will provide a variety of benefits to Lifeline-eligible consumers including increased consumer choice, high-quality service offerings, and mobility. New entrants in the Lifeline service market should incent existing ETCs to offer better service and terms to their subscribers. i-wireless’s prepaid feature may be attractive to Lifeline-eligible consumers who might otherwise be reluctant to subscribe to telephone service because of concerns about usage charges and long-term contracts.[68] Cricket’s offers with unlimited voice service at rates starting at $35 per month (before applying Lifeline discount) with no credit checks, long-term contracts, or early termination fees also provide low-income consumers with valuable choices within the marketplace.[69]