The Federal Lifeline and Link Up Telephone Discount Programs

1
The Federal Lifeline and Link Up Telephone
Discount Programs

• Missouri Training Session
• USAC
• August 24, 2006

2
Overview

• USAC overview
• USACs role in administering Lifeline and Link Up
• Lifeline and Link Up
• Missouri Participation Rate
• Advertising guidelines and best practices
• 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 estimates it will disburse
  approximately 7.3 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 2005 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 RoleLow Income

• 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 over 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 Missouri is 10.00
• additional support is available for individuals
  living on federally recognized tribal lands
• ETCs in Missouri draw upon the Missouri Universal
  Service Fund state support and 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 Cont
• 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
• 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

13
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 Missouri, in order to qualify for Lifeline and
  Link Up, a consumer must participate in one of
  the following programs
• Food Stamps
• Medicaid
• Low Income Energy Assistance Program (LIHEAP)
• Beyond Welfare aka TANF
• Federal Public Housing Assistance / Section 8
• Supplemental Security Income (SSI)
• National School Lunch free lunch program
• Veteran Administration Disability Benefits, State
  Blind Pension, State Aid to Blind Persons,
  Federal Social Security Disability, or State
  Supplemental Payments (only those who are totally
  and permanently disabled or blind)

14
Missouri Telephone Assistance Programs

• The Missouri Universal Service Board governs the
  Missouri Universal Service Fund
• QSI Consulting, Inc. has been contracted to
  manage the fund
• Local telephone companies assist subscribers with
  the application and eligibility processes
• The Missouri Department of Social Services
  distributes brochures

15
MissouriLow Income Statistics

• In 2nd Quarter 2006
• There were 49 Eligible Telecommunications
  Carriers (ETCs)
• 46 ETCs received Low Income support
• 1,615,488 in Lifeline support was disbursed
• 37,308 in Link Up support was disbursed
• On average 58,454 households received Lifeline
  support
• Approximately 2,109 households had telephone
  service initiated using the Link Up discount

16
MissouriLow Income Participation

• Missouri ranked among the lowest 7 states
  (participation rate of less than 10)
• Participation rate for Missouri is 9.82 (based
  on July 2005 data when 48,490 households received
  Lifeline support)
• USAC estimates that there are 493,861 eligible
  households in Missouri

17
MissouriLow Income Participation

• Possible reasons why participation is low in
  Missouri
• Low awareness of programs
• Lack of automated enrollment
• Unsuccessful advertising

18
Outreach 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

19
Outreach 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

20
Outreach 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

21
Outreach 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

22
Outreach 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

23
Outreach Guidelines

• Recommended Guidelines
• States and carriers should utilize USAC as a
  resource
• Carriers can post information on USACs
  consumer-oriented web site, www.lifelinesupport.or
  g
• USAC works with carriers, associations, tribal
  organizations and consumers

24
USAC Resources

• Lifelinesupport.org
• Carriers can post customized information on
  USACs consumer oriented website
• Brochures
• Non-tribal and tribal
• Includes federal default criteria
• Consumer Outreach letter
• Can be customized for specific telephone company
• Federal default state and non-default state
  versions available
• Spanish version will be available soon

25
New Initiatives

• Implemented 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
• Working on ways to provide more detailed
  disbursement information
• Implemented in-depth data validations (IDV)
• Verify rule compliance
• To date, 176 IDVs have been completed

26
ImprovingCommunication

• Website Revitalization
• Newsletters
• Hurricane Katrina Web Site
• Training
• Fund Facts
• Annual Report
• Site Visits

27
ImprovingCommunications

• Site Visits
• Schools Libraries Site Visits
• Education and Outreach
• Compliance
• High Cost Site Visits
• Education and Outreach
• Low Income Site Visits will begin in 2007

28
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