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The Federal Lifeline and Link Up Telephone Discount Programs

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Title: The Federal Lifeline and Link Up Telephone Discount Programs


1
The Federal Lifeline and Link Up Telephone
Discount Programs
  • Tennessee Training Session
  • USAC
  • September 12, 2007

2
Overview
  • USAC Overview
  • USACs role in administering Lifeline and Link Up
  • Lifeline and Link Up
  • Tennessee Participation Rate
  • Advertising Guidelines
  • New Resources
  • Q A

3
USF USAC
  • The Universal Service Fund (USF) is one fund with
    four programs
  • USAC is a not-for-profit corporation selected as
    the permanent administrator of the federal USF
  • In 2006, USAC disbursed approximately 6.6
    billion in universal service support
  • USAC administers support programs for
  • High cost companies serving remote and rural
    areas
  • Low-income consumers
  • Schools libraries
  • Rural health care providers
  • Through USAC, the USF provides communities across
    the country with affordable telecommunications
    services

4
One Fund Four Programs
  • Calendar Year 2006 Disbursements by
    Program(Unaudited and in thousands)

5
USACs Role
  • USACs functions and responsibilities include
  • Administering each of the universal service
    programs
  • Billing contributors, collecting contributions,
    and disbursing universal service support
  • Reporting quarterly to the FCC on disbursement of
    universal service support
  • USAC may not
  • Make policy
  • Interpret unclear provisions of the statute or
    rules
  • Interpret the intent of Congress
  • Advocate policy positions before the FCC or its
    staff, but may advocate positions on
    administrative issues relating to the programs

6
USACs Role
  • Process support claims
  • Disburse Lifeline, Link Up and TLS Support
  • Promote awareness of FCC USF rules and
    regulations
  • Provide information to stakeholders
  • ETCs
  • Consumers
  • FCC
  • State Commissions

7
Low Income Program
  • The Low Income Program, commonly known as
    Lifeline and Link Up, provides discounts that
    make basic, local telephone service affordable to
    help approximately 7 million low-income consumers
    stay connected.

8
Low IncomeComponents
  • Lifeline
  • Reduces eligible consumers' monthly charges for
    basic telephone service
  • The maximum federal support available for
    customers in Tennessee is 10.00
  • additional support is available for individuals
    living on federally recognized tribal lands
  • ETCs in Tennessee reduce their intrastate rates
    to receive a 50 match in federal Tier 3 support

9
Low IncomeComponents
  • Lifeline support is broken down into four tiers
    of support
  • Tier 1 support available to all eligible
    Lifeline subscribers, is equal to the incumbent
    eligible telecommunications carrier's (ETC's)
    actual federal tariffed subscriber line charge
    (SLC). The SLC rate, and therefore Tier 1
    support, is capped at 6.50.
  • Tier 2 support an additional 1.75 per month of
    federal Lifeline support, is available if the
    carrier certifies that it will pass through the
    full amount of Tier 2 support to its qualifying
    low-income consumers and if the carrier has
    received any non-federal regulatory approvals
    necessary to implement the required rate
    reduction.

10
Low IncomeComponents
  • Lifeline (Continued)
  • Tier 3 support an additional amount of federal
    Lifeline support equal to one-half the amount of
    any state-mandated Lifeline support, or one half
    of any Lifeline support provided by the carrier,
    up to a maximum of 1.75 per month.
  • Tier 4 support additional federal Lifeline
    support of up to 25 per month available to
    eligible residents of tribal lands, as defined in
    47 C.F.R. 54.400(e), as long as that amount
    does not bring the basic local residential rate
    below 1 per month per qualifying low-income
    subscriber.

11
Low IncomeComponents
  • Link Up
  • Reduces the cost of initiating new telephone
    service
  • 1/2 of the customary telephone connection charge,
    up to a maximum of 30.00
  • additional support is available for individuals
    living on federally recognized tribal lands
  • a deferred schedule for payment of the charges
    assessed for initiating telephone service, for
    which the consumer does not pay interest
  • interest charges not assessed to the consumer
    must be for connection charges up to 200 that
    are deferred for a period not to exceed one year

12
Low IncomeComponents
  • Toll Limitation Service (TLS)
  • Allows eligible consumers to subscribe to toll
    blocking or toll control at no cost
  • Consumers must voluntarily elect toll blocking
  • Carriers may only claim their incremental cost of
    providing TLS
  • Carriers may NOT claim their tariffed rate
  • The service deposit for providing local telephone
    service is waived if a consumer voluntarily
    elects TLS

13
Low IncomeComponents
14
Low Income Components
  • Telecommunications carriers cannot charge a
    Lifeline customer federal USF fees on the local
    service portion of their telephone bill
  • Additionally, telecommunications carriers cannot
    charge Lifeline customers a Local Number
    Portability fee on their monthly telephone bill

15
ConsumerEligibility Criteria
  • States that mandate their own Lifeline program
    can create their own eligibility criteria based
    on income or factors directly related to income
  • In Tennessee, in order to qualify for Lifeline
    and Link Up, a consumer must participate in one
    of the following programs
  • Food Stamps
  • Medicaid
  • Supplemental Security Income (SSI)
  • Temporary Assistance to Needy Families (TANF)
  • Families First
  • Total Household Income at or below 125 of the
    Federal Poverty Guidelines
  • The Following Criteria Apply to ATT, Crocket
    Telephone Company, Embarq, Peoples Telephone
    Company, and West Tennessee Telephone Company
    Customers Only
  • Federal Public Housing Assistance / Section 8
  • Low Income Energy Assistance Program (LIHEAP)
  • National School Lunch free lunch program
  • Total Household Income at or below 135 of the
    Federal Poverty Guidelines

16
Tennessee Telephone Assistance Programs
  • The Tennessee Regulatory Authority (TRA)
    administers the Low Income Telephone Assistance
    Programs
  • Each phone company processes their own consumers
    program-based Lifeline applications
  • TRA processes all income-based Lifeline
    applications. Consumers can call TRA directly at
    1-800-342-8359 to request an application or print
    an application online at http//www.state.tn.us/tr
    a/consumerfiles/llluapp.pdf and submit it to
  • Tennessee Regulatory Authority
  • Consumer Services Division
  • 460 James Robertson Parkway
  • Nashville, TN 37243-0505
  • 615-741-8953 (fax)

17
Verification vs. Certification
  • Because Tennessee is not a federal default state,
    all ETCs in Tennessee must submit an annual Low
    Income Certification to USAC by August 31
  • ETCs in Tennessee follow the federal verification
    procedures and must verify to the TRA and to USAC
    the continued eligibility of Lifeline consumers
    by August 31 using one of the following
    methodologies
  • ? Survey a statistically valid random sample
  • ? Verify Lifeline consumers continued
    eligibility directly from a state agency that
    administers one or more of the eligible
    programs
  • Consumers who qualify based on their total
    household income must verify their continued
    eligibility each year through the TRA

18
TennesseeLow Income Statistics
  • In 2nd Quarter 2007
  • 34 Eligible Telecommunications Carriers (ETCs)
    operated in Tennessee
  • 31 ETCs received Low Income support
  • 2,139,612 in Lifeline support was disbursed
  • 535,109 in Link Up support was disbursed
  • On average 69,111 households received Lifeline
    support
  • Approximately 13,578 households received the Link
    Up discount

19
TennesseeLow Income Participation
  • Tennessee ranked among the lowest 9 states
    (participation rate of less than 10)
  • Participation rate for Tennessee is 8.58 (based
    on July 2006 data when 53,121 households received
    Lifeline support)
  • USAC estimates that there are 619,272 eligible
    households in Tennessee

20
TennesseeLow Income Participation
  • Possible reasons why participation is low in
    Tennessee
  • Low awareness of programs
  • Lack of automated enrollment
  • Unsuccessful advertising
  • Recent expansion of eligibility criteria

21
Advertising Requirements and Guidelines
  • FCC rule on outreach requires carriers to
    publicize the availability of Lifeline service
    in a manner reasonably designed to reach those
    likely to qualify for the service. (47 C.F.R.
    54.405(b)
  • The Lifeline and Link Up order released in April
    2004 offers guidelines for effective outreach
  • Requirement to publicize Lifeline is mandatory
  • Guidelines are recommended, rather than mandatory
  • States and carriers have flexibility to determine
    most appropriate outreach mechanisms

22
Advertising Guidelines
  • Recommended Guidelines
  • States and carriers should utilize outreach
    materials and methods designed to reach
    households that do not currently have telephone
    service
  • Notices at public transportation, shelters, soup
    kitchens, public assistance agencies
  • Public service announcements

23
Advertising Guidelines
  • Recommended Guidelines
  • States and carriers should utilize outreach
    materials and methods designed to reach
    households that do not currently have telephone
    service
  • Bill inserts and advertising in telephone books
    are not likely to attract individuals who do not
    have phone service
  • Internet notice should not be the primary means
    of outreach

24
Advertising Guidelines
  • Recommended Guidelines
  • States and carriers should develop advertising
    that can be read by members of any sizeable
    non-English speaking populations
  • Offer toll-free number in other languages
  • Make available applications in other languages

25
Advertising Guidelines
  • Recommended Guidelines
  • States and carriers should coordinate their
    outreach efforts with governmental agencies that
    administer any of the relevant government
    assistance programs
  • Social service agencies
  • Tribal organizations
  • Community centers
  • Organizations such as AARP, United Way

26
Advertising Guidelines
  • Recommended Guidelines
  • States and carriers should utilize USAC as a
    resource
  • Carriers can post information on USACs
    consumer-oriented web site www.lifelinesupport.org
    using the On-Line ETC Posting Tool
  • Currently, only 40 of ETCs in Tennessee have
    posted to the site
  • USAC works with carriers, associations, tribal
    organizations and consumers

27
Low Income Resources
  • New Low Income Program Brochures
  • Carrier and Consumer
  • Includes federal default criteria
  • Consumer Outreach letter
  • Can be customized for specific telephone company
  • Federal default state and non-default state
    versions available

28
Low Income Tools
  • Online Disbursement Tool
  • Allows ETCs to view disbursement amounts several
    days before payments are made
  • Allows ETCs to track historical disbursements
    dating back to 2004
  • Online Posting Tool
  • ETCs can post company specific information about
    the availability of the Lifeline and Link Up
    programs on www.lifelinesupport.org

29
Recent Initiatives
  • In addition to telecom industry conferences, USAC
    has attended conferences focused on Low Income
    issues
  • American Public Human Services Associations
    National Spring Conference
  • Life _at_ 50 AARPs National Event and Expo
  • National Anti-Hunger Policy Conference
  • National Congress of American Indians Annual
    Convention
  • National Low Income Housing Coalition Policy
    Conference

30
ImprovingCommunication
  • Website Revitalization
  • Newsletters
  • On-line Tools
  • Training
  • Fund Facts
  • Annual Report
  • Site Visits
  • Brochures

31
ImprovingCommunications
  • Site Visits
  • Schools Libraries Site Visits
  • Education and Outreach
  • Compliance
  • High Cost Site Visits
  • Education and Outreach
  • Low Income Site Visits began 2Q2007

32
Thank You
  • Visit us on the web at www.usac.org and
    www.lifelinesupport.org
  • Or call us at 202-776-0200
  • Pamela Gallant
  • Director, Low Income Program
  • High Cost Low Income Division
  • pgallant_at_usac.org
  • Universal Service Administrative Company
  • 2000 L St., NW, Suite 200
  • Washington, DC 20036
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