Posts Tagged ‘ETC’
FCC Offers Guidance on Compliance Plans for Lifeline-Only ETCs
Posted on March 1, 2012In its recent Lifeline Reform and Modernization Order, the FCC announced that it will forbear from applying the Communications Act’s facilities-based requirement to all carriers that seek limited eligible telecommunications carrier (ETC) designation solely to participate in the Lifeline program, subject to certain conditions. To receive forbearance, carriers must (1) comply with certain 911 and enhanced 911 Public Safety requirements; and (2) file, and have the Wireline Competition Bureau approve, a compliance plan that provides information on service offerings and outlines measures that will be taken to implement the obligations contained in the Lifeline Reform and Modernization Order. To provide guidance to carriers, the FCC’s Wireline Competition Bureau has released a Public Notice explaining what should be contained in a compliance plan. Non-facilities-based carriers seeking a new Lifeline-only ETC designation and Lifeline-only ETCs designated prior to December 29, 2011 that no longer meet the facilities requirement because of the change in the definition of supported services will be required to file a compliance plan with the FCC. Plans may be filed using the FCC’s Electronic Comment Filing System.
FCC Seeking Comment on Cricket Forbearance Plan
Posted on October 6, 2011The FCC’s Wireline Competition Bureau has released a Public Notice seeking comment on a compliance plan filed by wireless provider Cricket Communications, Inc. (Cricket). Cricket is seeking designation as an eligible telecommunications carrier (ETC) to provide Lifeline service and was granted forbearance from the requirement that the service area of a competitive ETC conform to the service area of an existing rural telephone company serving the same area. Forbearance was granted on the condition that Cricket comply with a set of provisions intended to promote accountability of the universal service fund and guard against waste, fraud, and abuse. For instance, among other things, Cricket must require its Lifeline subscribers to self-certify that they receive Lifeline-supported service only from Cricket, and make available state-specific subscriber data to the Universal Service Administrative Company and state public utilities commissions to help stop duplicative enrollment by Lifeline subscribers. Cricket recently filed its compliance plan in docket 09-197 outlining the measures it will take to implement the conditions set out in the Forbearance order. Comments are due on or before November 4, 2011, and reply comments are due on or before November 21, 2011.
FCC SEEKS COMMENT ON UNIVERSAL SERVICE LOW INCOME PROGRAM FUNDING DISBURSEMENT PROCESS
Posted on September 29, 2011Please contact Michael Bennet at mbennet@bennetlaw.com or Tony Veach at tveach@bennetlaw.com for more information.
The Federal Communications Commission’s (FCC or Commission) Wireline Competition Bureau has released a Public Notice requesting comment on a new plan for disbursing support from the Universal Service Fund (USF) Low Income program.[1] Carriers currently receive Low Income program support each month according to a projection calculated by the Universal Service Administrative Company (USAC) which is based on past disbursements plus a projected growth factor and a true-up. Under the new proposal, support would be based upon claims for reimbursement of actual support payments made.
Bottom Line: The proposed disbursement plan is just another piece of the Low Income program reform puzzle. If the proposal is adopted, carriers may see a drop for support during the transition process.
BACKGROUND – SUPPORT DISBURSEMENT
The universal service Low Income program provides eligible consumers with a discount on monthly telephone service (Lifeline) and the initial costs of installing telephone service (Link-Up). The Lifeline program accounts for nearly all the support distributed through the Low Income program. Low Income program funding is not provided to low-income consumers, but instead, eligible carriers provide a discount on eligible low income consumers’ bills and later receive a reimbursement from the USF. Carriers are required to submit an FCC Form 497 that provides detailed information on the number of low income customers they serve, and can file a form quarterly or monthly, but must file at least once every six months to receive support without interruption.[2] Support is disbursed on the last business day of each month. Support is paid each month based on a projection calculated by USAC that reflects a carrier’s disbursements for the past 13 months plus a projected growth factor. Once USAC receives a carrier’s actual support claim on Form 497, it will “true up” the projected amount against the actual support claim.
NEW DISBURSEMENT PROPOSAL
In May of 2011, the FCC’s Office of Managing Director sent a letter to USAC instructing it to develop a process for disbursing Lifeline support based upon actual claims for reimbursement.[3] USAC submitted its proposal to the FCC in early August 2011. Pursuant to the new proposal, carriers would be required to submit claims by a monthly due date in order to receive a payment at the end of the following month. Failure to file by the monthly deadline in a given month would result in non-payment for the following month. Carriers would be allowed to continue to file quarterly (once every three months), but would no longer be paid monthly. Instead, carriers filing on a quarterly basis would receive one payment for all three months filed.
Under the current disbursement process, at the end of each calendar year, carriers have a fifteen month window for filing original or revised support claims for any monthly period of the past year. The new disbursement plan calls for a six month window for filing new and revised support claims for the past year.
USAC proposes moving to a process that disburses support based on actual support claims instead of projections. In order to transition to actual support claims, USAC would have to true-up all payments against projections for each eligible telecommunications carrier (ETC) that receives low income support. The Public Notice states that “ETCs currently paid based on projections will likely receive little or no support for the month in which the program transitions to payments against actual claims,” and provides an example of how a transitional month would affect a carrier’s support payment. It is possible the true up process would result in some carriers incurring a negative balance, and if the next month’s payment did not cover the negative balance, carriers would be required to pay the remainder to USAC. The Commission is requesting comment on the proposed transition process, as well as the appropriate date for implementation. Additionally, USAC will implement an outreach campaign to make each ETC aware of the new disbursement process and how it will affect support payments.
CONCLUSION
Ultimately, the FCC is seeking a disbursement process that provides for greater accuracy in payment processing and eliminates the risks associated with basing support payments on projections. According to USAC, “[t]he most substantial benefit of paying Low Income Program support based on actual support claims is the elimination of the risk to the program if a carrier ceases business operations or drastically reduces its support claims.”[4] Additionally, the transition to a new disbursement process is in line with other reform proposals submitted in 2011 by the FCC, which focus on asserting tighter control of the Low Income program and controlling its overall fund size.
Comments and reply comments on the disbursement proposal are due 30 days and 45 days, respectively, after the date of publication of the Public Notice in the Federal Register, which has not yet occurred. If you are interested in filing comments or would like further information on USAC’s proposal for disbursing low income support, please contact us.
[1] Inquiry Into Disbursement Process for the Universal Service Fund Low Income Program, WC Docket Nos. 11-42, 03-109, Public Notice, DA 11-1593 (Sep. 23, 2011) (Public Notice).
[2] See Step 7: Payment Process and Status, USAC.org, http://usac.org/li/telecom/step07/default.aspx.
[3] Letter from Dana R. Shaffer, Deputy Managing Director, FCC Office of Managing Director, to Scott Barash, Acting CEO, USAC, DA 11-872 (May 16, 2011).
[4] See Public Notice, Attachment A, p. 12, ¶16.
FCC Grants Forbearance From Service Area Requirement
Posted on September 19, 2011The FCC has issued an Order conditionally granting Petitions for forbearance filed by Cricket Communications, Inc. and NTCH, Inc. Both companies are seeking designation as an eligible telecommunications carrier (ETC) for the limited purpose of providing Lifeline service only, and filed Petitions for forbearance from the requirement that the service area of a competitive ETC must conform to the service area of an existing rural telephone company serving the same area. The FCC analyzed the Petitions “in light of the statutory goal of providing low-income consumers with access to telecommunications services” and within the context of its Lifeline program. The Commission concluded it is in the public interest to grant the Petitions, but, citing its commitment to prevent waste, fraud, and abuse of the universal service fund, applied a series of conditions to both Cricket and NTCH. The conditions include strengthened enrollment processes and requirements designed to cut down on subscribers receiving multiple Lifeline discounts.
FCC Provides Guidance on ETC Advertising Obligation
Posted on April 8, 2011The FCC has provided written guidance to the Universal Service Administrative Company (USAC) regarding the obligation of eligible telecommunications carriers (ETCs) to advertise services supported by federal universal service fund (USF) support mechanisms. USAC had asked for guidance on whether ETCs are required to separately list each of nine USF supported services enumerated in Section 54.101 of the FCC’s USF rules when advertising the availability of such services. These enumerated services include (1) voice grade access to the public switched network; (2) local usage; (3) dual-tone multi-frequency signaling or its functional equivalent; (4) single-party service or its functional equivalent; (5) access to emergency services; (6) access to operator services; (7) access to interexchange service; (8) access to directory assistance; and (9) toll limitation for qualifying low income consumers. The FCC’s guidance clarifies that ETCs need not list all nine services, explaining that all are considered to be components of a single service—voice telephony service—and that advertising the availability of voice telephony service effectively advertises the nine enumerated supported services.
FCC Offers Guidance on Capped AT&T/ALLTEL Universal Service Support
Posted on April 4, 2011The FCC has provided written guidance at the request of the Universal Service Administrative Company (USAC) regarding implementation of the interim caps on high-cost, competitive eligible telecommunications carrier (competitive ETC) support for AT&T and ALLTEL. The interim caps were adopted as conditions of their respective mergers in late 2007, several months before the FCC adopted the interim cap for all competitive ETCs. The guidance clarifies that the industry-wide cap was prospective and not retroactive, and that USAC should implement the company-specific interim competitive ETC caps for the time period from the consummation of each respective merger until the industry-wide cap took effect on August 1, 2008.