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