20120309Comments.pdf

NEIL PRICE
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
BARNO. 6864
RECEIVED
2nl2 ~lAR -9 PM 3: 24
Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5918
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF )
CRICKET COMMUNICATIONS, INC. FOR ) CASE NO. CRI-T-ll-Ol
DESIGNATION AS AN ELIGIBLE ')
TELECOMMUNICATIONS CARRER )
) COMMENTS OF THE
) COMMISSION STAFF
)
)
COMES NOW the Staff ofthe Idaho Public Utilities Commission, by and through its
attorney of record, Neil Price, Deputy Attorney General, and in response to the Notice of
Application and Notice of Modified Procedure issued in Order No. 32464 on Februar 17,2012,
in Case No. CRI-T-11-01, submits the following comments.
BACKGROUND
On November 7, 2011, Cricket Communications, Inc. (Cricket or Company) filed an
Application to be designated as "eligible telecommunications carer" (ETC) in Idaho. Cricket is
an existing facilities-based wireless provider serving Idaho customers with digital wireless
services. i The Company requests ETC designation pursuant to 47 USC § 214( e) and this
i Application at 2.
STAFF COMMENTS 1 MARCH 9, 2012
Commission's ETC requirements in Order No. 29841. Cricket is seeking ETC status in Idaho for
the purpose of receiving only low-income Lifeline support from the federal Universal Service
Fund (USF). Cricket wil not seek access to funds from the USF for the purpose of providing
service to high-cost areas, nor does Cricket seek Link-Up support in Idaho?
The Application
Cricket is a Delaware corporation and states that it curently provides service to
approximately 5.8 milion customers in 34 states, and the District ofColumbia.3 The Company is
a commercial mobile radio services (CMRS) carrier licensed by the FCC and is authorized to
provide wireless service throughout the requested ETC designation area.4 Cricket's designated
service areas currently include the wire centers of non-rual incumbent local exchange cariers
(ILECs) curently served by CenturyLink dba Qwest Communications and Citizens dba Frontier
Communications, Inc.5 The Application also includes one rual ILEC wire center served by
Farers Mutual Telephone Company.6 Cricket proposes as its Idaho service territory all rural and
non-rual ILEC service areas listed in Exhibit A of its Application, excluding any portions of
service areas on tribal lands.7 Cricket is curently designated as an ETC in the following states:
California, Oregon, Ilinois, Missouri, Marland, Colorado, and South Carolina.
8
Cricket's Application contains information related to the Company's voice grade access
service, local usage plan, functionally equivalent dual tone multi-frequency signaling, single pary
service, access to emergency services, access to operator services, access to interexchange (long-
distance) services, directory assistance and toll limitation for qualifying low-income consumers.9
Cricket states that it wil comply with the additional criteria mandated by the Idaho ETC
Requirements in Order No. 29841.10 Cricket's services wil be provided through the use of
"primarily its own facilities" and network infrastructure. i 1 The Company pledges to advertise its
services throughout its ETC service area using general media sources, through retail stores, and
2 Application at 1.
3 Id. at 2.
4 Id
5 Includes the partial service area in the GTE legacy area and the disaggregated service area of Frontier.6 Id, Attachment A.
7 Id. at 2.
8 Id at 3.
9 Id at 5-10.
10 Id. at 3.
II Id. at 10.
STAFF COMMENTS 2 MARCH 9, 2012
authorized agents.12 Cricket does not seek ETC designation, nor does it intend to offer its Lifeline
service on federal tribal lands. 13 The Company asserts that adequate backup battery power and
the abilty to re-route traffc around damaged facilities wil allow the Company to remain
fuctional during emergencies.14 Cricket is committed to consumer protection and the Cellular
Telecommunications and Internet Association's Consumer Code for Wireless Service (CTIA).15
Cricket believes that designating the Company as an ETC would serve the public interest
and that it wil comply with the anual certification requirements adopted by the Commission in
Order No. 29841, as applicable.
16
The Federal Lifeline and Link Up Reform and Modernization
On Februar 6, 2012, the FCC released a Report and Order (Order) to comprehensively
reform the low-income program of the Universal Service Fund (USF).17 The Order substantially
strengthens protection against waste, fraud, and abuse; improves program administration and
accountabilty; improves enrollment and consumer disclosures; initiates modernization of the
program for broadband; and constrains the growth of the program in order to reduce the burden
on all who contribute to the USF.18
On February 29, 2012, the FCC's Wireline Competition Bureau (Bureau) provided
guidance on the compliance plans that must be submitted to the Bureau by cariers seeking to
avail themselves of the Commission's conditional grant of forbearance in the above Lifeline
Reform Order.19
STAFF ANALYSIS
Staffhas reviewed the Cricket Application and has conducted an analysis of the
Company's compliance with the federal Telecommunications Act of 1996 ("The Act") and
Commission Order No. 29841. In addition, Staff has reviewed Cricket's FCC Petition seeking
12 Id at 11.
13 Id
14 Id. at 12.
15 Id. at 13.
16 Id. at 15.
17 See Lifeline and Link Up Reform and Modernization et ai, WC Dkt no. 11-42 et al., Report and Order and Further
Notice of Proposed Rulemaking, FCC 12-11, at para. 1, Appendix A (reI. Feb. 6, 2012) (Lifeline Reform Order).
18 Id. at paras. 361-381.
19 Wire line Competition Bureau's Guidancefor Complaince Plans pursuant to the Lifeline Reform Order WC Dkt
No. 09-197, 11-42.
STAFF COMMENTS 3 MARCH 9, 2012
Forbearance from the requirement that the service area of a Lifeline-only ETC conform to the
service area of any rual telephone company serving the same area. Finally, Staff reviewed the
Bureau's Order approving Cricket's Compliance Plan pertaining to conditions imposed in the
Cricket Forbearance Order.
Cricket's FCC Petition for Forbearance
On September 16,2011, the FCC granted Cricket's Petition for Forbearance from the
requirement that the service area of a competitive ETC conform to the service area20 of any rural
telephone company serving the same area, for the limited purpose of becoming designated as
Lifeline-only ETC.21 The FCC concluded that forbearance in these limited circumstances furthers
the Act's and its goals of promoting access to affordable service for low-income consumers by
reducing barriers to carriers participating in the Lifeline program. Moreover, the FCC determined
that application of the conformance requirements set forth in section 214(e)(5) of the Act and
section 54.207(b) of the FCC's rules for this limited circumstance was not necessary to ensure
that rates remained just and reasonable or to protect consumers. The FCC states that this
forbearance is limited to Cricket's Lifeline-only support status. If the Company petitions to
become an ETC to receive high-cost support, this forbearance order is inapplicable and Cricket
must satisfy all of the statutory requirements of an ETC under the Act. 22 The FCC evaluated
Cricket's petitions using the following criteria.
Just and Reasonable. The FCC agreed with Cricket's assertions that, if granted
forbearance and thereafter designated as a limited ETC, Cricket's Lifeline offerings wil compete,
at a minimum, with the Lifeline offerings of the incumbent wireline carrier, as well as other
wireline and wireless providers, in any given geographic area. The FCC also determined that this
competition would spur innovations among cariers in their Lifeline offerings, expanding the
choice of Lifeline products for eligible consumers. For these reasons, the FCC determined that
Cricket had met the "just and reasonable" criteria.23
20 The Act defines the service area of each rural telephone company to be that "company's" 'study area' unless and
until the Commission and the States, after taking into account recommendations of a Federal-State Joint
Board...establish a different definition of service area for such company." 47 U.S.C. § 2l4(e)(5); see also 47 C.F.R. §
54.207(b).21 See WC Docket No. 09-197, FCC 11-137 Cricket Forbearance Order.
22 ¡d. at 2.
23 ¡d. at 6.
STAFF COMMENTS 4 MARCH 9, 2012
Conformance and Public Interest. In the Petition for Forbearance, it is construed that a
designation for Lifeline support must conform to the service area of any rual telephone company
serving the same area. As such, the FCC's analysis focused on whether it should forbear from
applying the conformance requirement of section 214(e) of the Act and section 54.207(b) of the
federal rules. The FCC considered whether applying the conformance requirement to a facilities-
based mobile wireless carier that seeks ETC designation for Lifeline-only support is in the public
interest. The FCC determined that applying the conformance requirement in these limited
circumstances would not be in the public interest when balanced against the benefits of
introducing a competitive, alternative Lifeline provider to low-income consumers.24 Further, the
FCC found that the Act contained safeguards to address concerns submitted by the California
ILECs. The FCC noted that the Act already requires designating commissions to affrmatively
determine that designating a carier as an ETC within a rural service area is in the public interest,
and this is not affected by this grant of forbearance. The FCC stated it was confident that any
concerns raised by a rural telephone company wil be evaluated by the relevant commission when
it considers designating a limited, Lifeline-only ETC?5
Finally, in an effort to clarify its commitment to improve accountabilty for providers
receiving universal service support in the continued effort to fight waste, fraud, and abuse, the
FCC placed 11 additional conditions on its forbearance. These added conditions required Cricket
to take specific actions to improve program administration and accountabilty, to improve
enrollment and consumer disclosure, and to help constrain the growth of the program. The final
condition imposed on the Company, required Cricket to submit to the Wire line Competitive
Bureau a compliance plan outlining the measures the Company wil take to implement the
obligations contained in the forbearance Order within 30 days of the effective date.26 For
additional details, see attached Forbearance Order.
On Februar 7, 2012, the Bureau approved the Cricket Compliance Plan pertaining to the
above conditions imposed in the Cricket Forbearance Order.27 Thus, Cricket satisfies the
conditions established by the FCC and therefore, is eligible to apply for designation as an ETC for
24 Id at 6-7.
25 Id at 7.
26 !d. at 8-9.
27 See Attached Compliance Plan Order, WC Dkt Nos. 09-197, 11-42.
STAFF COMMENTS 5 MARCH 9, 2012
Lifeline-only support, without redefining its service area to mirror the service area of the
underlying rural telephone company. 28
Other Public Interest Considerations
When applying the public interest test in an Application for ETC designation, Staff
believes there are considerations that merit discussion.
1. Contribution to Idaho Programs. As in the more recent TracFone ETC
Application,29 the Commission considered the carier's contribution to the Idaho Telephone
Service Assistance Program (ITSAP) and to the Idaho Emergency Communications Act (IECA)
Fund and determined that it was in the public interest to contribute to these funds?O Cricket states
that it has been remitting and wil continue to remit ITSAP and E911 fees on all wireless services
that it provides to Idaho customers, including plans that are paid in advance.
2. Cream Skimming Analysis. In evaluating the public interest portion of an ETC
Application, the Commission weighs whether the potential benefits of ETC designation outweigh
the potential hars. One consideration is whether the Applicant is committed to providing
universal service throughout the rural areas or, if not, whether the potential for cream skimming
exists. In this Application, Staff believes that the Company's elimination of high cost support
voids the cream skimming analysis.
Network Improvement Plan
In the Idaho ETC Designation Order,.the two-year network improvement and progress
report is required for all ETCs receiving high-cost support.31 "To reinforce the initial eligibility
requirements and ensure that federal USF funding is being used for its intended purpose, the
Commission requires the anual submission of a progress report on the ETC's most recent two-
year network improvement plan as well as the submission of a new two-year network
improvement plan. Each applicant must also demonstrate how signal quality, coverage or
capacity wil improve due to the receipt of high-cost support...,,32
28 /d. at para. I .
29 Case No. TFW-T-09-01, Order No. 32301 at 9.
30 Id
31 See Case No. WST-T-05-1, IPUC Order No. 29841, Appendix at 3.
32 Id at 18.
STAFF COMMENTS 6 MARCH 9, 2012
Cricket states that because it seeks only low-income support, the requirement to provide a
network improvement plan does not apply to this petition.33
In the Lifeline Reform Order, the FCC amended section 54.202 to clarfy that a common
carrier seeking designation as a Lifeline-only ETC is not required to submit a five-year network
improvement plan as par of its application for designation as an ETC.34 In the USF/ICC
Transformation Order and FNPRM, the FCC included a new requirement in section 54.202,
requiring a common carrier seeking to be designated as an eligible telecommunications carier by
the Commission to submit a five-year plan describing its proposed network improvements and
upgrades. However, as Lifeline-only ETCs are not receiving funds to improve or extend their
networks, the FCC stated that it saw little purose in requiring such plans as part of the ETC
designation process.35
Because Cricket is seeking Lifeline-only support and is not seeking high cost support,
Staff believes Cricket is exempt from Idaho's two-year network improvement plan requirement.
Abilty to Remain Functional in Emergencies
Cricket states that it maintains "a reasonable amount of back-up power to ensure
functionality without an external power source." Specifically, Cricket has at least four hours of
back up battery power at all of its Idaho cell sites in Idaho in the event of a commercial power
outage. Second, the Company is able to re-route traffic around damaged facilities, and is capable
of managing traffic spikes resulting from emergency situations.36 Additionally, Cricket has the
abilty to deploy mobile cell sites and power sources to areas where needed to avoid significant
interrptions in coverage.37 Based on this information, Staff believes the fault-tolerant network,
as described in this Application, provides adequate support to demonstrate the Company's abilty
to remain functional in an emergency.
33 Application at 14.
34 Lifeline and Link Up Reform and Modernization et aI, WC Dkt no. 11-42 et al., Report and Order and Further
Notice of Proposed Rulemaking, FCC 12-11 at para. 386.
35 Id
36 Application at 12.
37 Id.
STAFF COMMENTS 7 MARCH 9, 2012
Other ETC Designation Requirements
Additional requirements for ETC designation are detailed in Appendix 1 of Order No.
29841 and are discussed in more detail below.
1. Common Carrier Status. Cricket is a Commercial Mobile Radio Services carier
providing "mobile service" as defined in 47 U.S.C. §§ 153(27).38
2. Provide the Universal Services. Cricket offers all of the federally required services
defined in 47 U.S.C. § 54.l0(a).39
3. Advertising. Cricket wil advertise the availability and cost of its universal service
offerings using media of general distribution, to publicize the availabilty of its Lifeline service.4o
4. The Commitment and Ability to Provide Supported Services. Cricket wil provide the
supported services throughout its designated service area, consistent with all applicable
requirements.41
5. A Commitment to Consumer Protection and Service. Cricket states that it wil abide
by the CTIA consumer code for wireless service. The Company has already adopted the CTIA
Code and is committed to compliance with the CTIA Code.42
6. Description of the Local Usage Plan. Cricket states that it wil offer local usage plans
that compare favorably to those of incumbent local exchange carers.43
7. Tribal Notification. Cricket agrees to comply with this requirement and states that,
although one service area in which it seeks designation overlaps with the Coeur d Alene Indian
Reservation, it does not seek designation in the portion of the service area that is on Tribal lands,
nor wil it seek to provide Tier IV support.44
Staff believes Cricket meets the aforementioned ETC designation requirements.
38 Id at 3-4.
39 Id. at 4.
40 Id. at 11.
41 Id at 10.
42 Id. at 13.
43 Id at 4.
44 Id. at 11.
STAFF COMMENTS 8 MARCH 9, 2012
STAFF RECOMMENDATION
Staff has reviewed the Application of Cricket Communications, Inc. for designation as an
ETC. Staff believes that the Application demonstrates a commitment by the Company to fulfill
the obligations of an ETC in Idaho. The Company wil provide all universal services supported
by the federal USF throughout its territory; the Company has addressed all of the public interest
questions that accompany an ETC Application; and the Company wil provide multiple pricing
plans which will increase customer choice for low-income service.
Staff believes that the application of Cricket for designation of an ETC is in the public
interest and should be approved.
Respectfully submitted this ~ day of March 2012.
u5J
Meil Price
Deputy Attorney General
Technical Staff: Grace Seaman
i:umisc:comments/crit I I. I npgs comments
STAFF COMMENTS 9 MARCH 9, 2012
Federal Communications Commission FCC 11-137
Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of )
)
)
)
)
)
)
)
)
)
WC Docket No. 09- I 97Telecommunications Carriers Eligible for
Universal Service Support
NTCH, Inc. Petition for Forbearance from 47
U.S.C. § 214(e)(5) and 47 C.F.R. § 54.207(b)
Cricket Communications, Inc.
Petition for Forbearance
ORDER
Adopted: September 16, 2011 Released: September 16,2011
By the Commission:
I. INTRODUCTION
1. In this order, we address two petitions for forbearance, one fied by Cricket
Communications, Inc. (Cricket) and one fied by NTCH, Inc. and its affiliated operating entity NTCH-
West Tenn, Inc. (collectively, NTCH), pursuant to section 10 of the Communications Act of 1934, as
amended (the Act).' These petitions seek forbearance from the requirement that the service area of a
competitive eligible telecommunications carier (ETC) conform to the service area of any rural telephone
company serving the same area, for the limited purose of becoming designated as Lifeline-only ETCs.2
2. We conclude that forbearance in these limited circumstances fuhers the Act's and
Commission's goals of promoting access to affordable service for low-income consumers by reducing
bariers to carers participating in the Lifeline program. Moreover, we find that application of the
conformance requirements set forth in section 214(e)(5) of the Act and section 54.207(b) ofthe
Commission's rules in this limited circumstace is not necessary to ensure that rates remain just and
reasonable or to protect consumers.3 To promote accountabilty of universal service fuding and guard
against waste, fraud, and abuse in the Universal Service Fund (USF or Fund), we condition our
forbearance from applying the rural service area conformance requirement of the Act to NTCH and
Cricket upon their compliance with certin conditions previously imposed on other Lifeline-only ETCs.4
1 Crickct Communications, Inc. Pctition for Forbearance, WC Docket No. 09-197 (ftcd Junc 21, 2010) (Crickct
Forbearancc Petition); 47 U.S.C. § 160. On May 16,201 I, pursuant to section lO(c) of the Act, the Wircline
Competition Bureau (Bureau) extended until Septembcr 19,201 I, the datc on which the Cricket Forbearance
Petition shall be deemed granted in the absence of a Commission decision that the petition fails to meet the standard
for forbearance under section lO(a) of the Act. Telecommunications Carriers Eligible to Receive Universal Service
Support; Cricket Communications. Inc. Petition for Forbearance, WC Dockct No. 09-197, Order, 26 FCC Rcd 6822
(20 i i); NTCH, Inc. Petition for Forbearance, WC Docket No. 09- 197 (filed June 20, 20 11) (NTCH Forbearance
Petition).
2 See infra para. 9.
3 See 47 U.S.C. § 214(e)(5); 47 C.F.R. § 54.207(b).
4 See. e.g., TracFone Forbearance Order, 20 FCC Rcd at 15102-03, paras. 17-18; Virgin Mobile Forbearance
Order, 24 FCC Rcd at 3393, para. 29; i-wireless Forbearance Order, 25 FCC Rcd at 8790, para. 16;
(continued . . .)
Attachment A
Case No. CRI-T-II-0l
Staff Comments
03/09/12 Page i of 11
Federal Communications Commission FCC 11-137
We emphasize that the forbearance we are granting is limited to NTCH and Cricket's designation as a
Lifeline-only ETC. If either entity petitions to become an ETC to receive high-cost support, this
forbearance order is inapplicable and each entity must satisfy all of the statutory requirements applicable
to ETCs under the Act.
II. BACKGROUND
3. Congress directed the Commission to establish a universal service fund to help ensure
that "( q)uality services (are) available at just, reasonable, and affordable rates" for consumers throughout
the nation, "including low-income consumers."s The Commission's Lifeline program furters this goal
by reducing the price of monthly telephone service for low-income consumers.6 Section 254(e) of the Act
provides that only an entity designated as an eligible telecommunications carrier shall be eligible for
universal service high-cost and low-income support.7 To become an ETC, a carer must offer and
advertise the services supported by the federal universal service support mechanisms thoughout its
designated service area.8
4. The Act and the Commission's rules define the term "service area" and how it is
established for each ETC. An ETC's "service area" is a geographic area within which an ETC has
universal service obligations and may receive universal service support.9 Although a carier seeking to
become an ETC usually requests designation in a specific service area, it is the commission designating
that carrier-not the ETC itself-that establishes an ETC's service area.10 When a competitive ETC
seeks to serve an area already served by a rural telephone company, II section 214( e)( 5) of the Act
imposes an additional requirement that the competitive ETC's service area must conform to the rural
telephone company's service area.
12 Accordingly, if a commission seeks to designate a competitive ETC
(continued from previous page)
Telecommunications Carriers Eligiblefor Universal Service Support; Virgin Mobile USA, L.P. Petitionfor
Designation as an Eligible Telecommunications Carrier in the State of Alabama; Virgin Mobile USA. L.P. Petition
for Designation as an Eligible Telecommunications Carrier in the State of Connecticut; Virgin Mobile USA, L.P.
Petition for Designation as an Eligible Telecommunications Carrier in the District of Columbia; Virgin Mobile
USA, L.P. Petitionjòr Designation as an Eligible Telecommunications Carrier in the State of Delaware; Virgin
Mobile USA. L.P. Petition for Designation as an Eligible Telecommunications Carrier in the State of New
Hampshire, WC Docket No. 09-197, Order, 25 FCC Rcd 17797, 17804-5, paras. 20-24 (Wireline Compo Bur.
2010).
547 U.S.c. § 254(b)(3).
6 Through the Lifeline program, low-income consumers may receive discounts of up to $13.50 off the monthly cost
of telephone service, with the federal program reimbursing the ETC up to $10 each month. 47 C.F.R.
§ 54.401(a)(2). In Tribal areas, the federal program reimburses ETCs up to $25 each month. 47 C.F.R.
§ 54.403(a)(4).
747 U.S.C. § 254(e). An entity need not be an ETC to paricipate in the schools and libraries or rural health care
universal service programs. 47 U.S.C. § 254(h)( i )(A) and (B)(ii); see Federal-State Joint Board on Universal
Service, CC Docket No. 96-45, Report and Order, 12 FCC Rcd 8776, 9015, para. 449 (1997) (Universal Service
First Report and Order) (subsequent history omitted); Federal-State Joint Board on Universal Service, CC Docket
No. 96-46, Fourteenth Order on Reconsideration, 14 FCC Red 20106, 20114-15, para. 19 (1999) (Fourteenth Order
on Reconsideration).
847 U.S.C. § 214(e)(1); 47 C.F.R. § 54.201(d).
9 See 47 U.S.C. § 214(e)(5); 47 C.F.R. § 54.207(a).
10 See 47 U.S.C. § 214(e)(5); 47 C.F.R. § 54.207(a).
11 See 47 U.S.C. § 153(37) (defining "rural telephone company").
1247 U.S.c. § 214(e)(5)j see also 47 C.F.R. § 54.207(b).
2 Attachment A
Case No. CRI-T-II-0l
Staff Comments
03/09/12 Page 2 of 11
Federal Communications Commission FCC 11-137
for an area that differs from a rual telephone company's existing service area, that rual service area must
first be redefined under the process set forth under the Act. i 3
5. The Act defines the service area of each rual telephone company to be that "company's
'study area' unless and until the Commission and the States, after taking into account recommendations of
a Federal-State Joint Board. . . establish a different definition of service area for such company.,,14 TheCommission has interpreted this language to mean that "neither the Commission nor the states may act
alone to alter the definition of service areas served by rual carers."IS In reviewing a potential
redefinition of a rual service area in evaluating a request for ETC designation, the Commission and the
states have traditionally taken into account the thee factors recommended by the Federal-State Joint
Board on Universal Service: creamskimming, the Act's special treatment of rual telephone companies,
and the administrative burdens of redefinition. 16 These factors were identified in the context of an entity
seeking ETC designation to receive high cost and low-income support. The Commission's rules set fort
the procedures for considering redefinition petitions and allow either the state commission or the
Commission to propose to redefine a rual telephone company's service area. 17 A proposed redefinition,
however, does not take effect until the Commission and the appropriate state commission agree upon a
new definition. 18
6. Cricket Forbearance Petition. Cricket states that it provides digital wireless services in
35 states across the countr. 19 On December 22, 2009, Cricket fied with the Commission a petition
seeking designation as an ETC for the limited purpose of offering Lifeline and Link Up services in New
York, North Carolina, Tennessee, Virginia, and the Distrct ofColumbia.2o On June 21, 2010, Cricket
fied a petition seeking forbearance from applying section 214(e)(5) of the Act and section 54.207 of theCommission's rules to allow Cricket to become eligible to be designated a limited ETC to paricipate in
the Lifeline and Link Up programs only.21 Cricket subsequently narrowed the scope of its forbearance
1347 U.S.c. § 214(e)(5); Virginia Cellular, LLC Petitonfor Designation as an Eligible Telecommunications
Carrier/or the Commonwealth of Virginia, CC DocketNo. 96-45, Memorandum Opinion and Order, 19 FCC Rcd
1563, 1582, para. 41 (2004) (Virginia Cellular Order) ("In order to designate (a competitive carrer) as an ETC in a
service area that is smaller than the affected rural telephone company (service) areas, we must redefine the service
areas of the rural telephone companies in accordance with section 214(e)(5) of the Act."); Highland Cellular, Inc.
Petition for Designation as an Eligible Telecommunications Carrier for the Commonwealth of Virginia, CC DocketNo. 96-45, Memorandum Opinion and Order, 19 FCC Rcd 6422, 6439, paras. 37-38 (2004) (Highland Cellular
Order) (same).
1447 U.S.C. § 214(e)(5); see also 47 C.F.R. § 54.207(b).
15 Federal-State Joint Board on Universal Service, CC Docket No. 96-45, Report and Order, 12 FCC Rcd 8776,
8880, para. 187 (1997) (Universal Service First Report and Order) (subsequent history omitted).
16 Federal-State Joint Board on Universal Service, CC Docket No. 96-45, Recommended Decision, 12 FCC Rcd 87,
179-80, paras. 172-74 (1996) (1996 Recommended Decision); see also Highland Cellular Order, 19 FCC Rcd at
6426, para. 9. A carrier "cream-skims" when it serves only those consumers that are least expensive to serve. See
Universal Service First Report and Order, 12 FCC Rcd at 8881-82, para. 189.
1747 C.F.R. § 54.207(c), (d).
1847 C.F.R. § 54.207(c)(3), (d)(2).
19 Cricket Forbearance Petition at 3; Letter from Matthew A. Brill, Counsel for Cricket Communications, Inc., to
Marlene Dortch, FCC, WC Docket No. 09-197, at 3 (Cricket Ex Parte Presentation June 21. 201l).
20 Cricket Communications, Inc. Petition for Designation as an Eligible Telecommunications Carrier, WC Docket
No. 09-197 (fied Dec. 22, 2009).
21 Cricket Forbearance Petition at 1,3-5. On June 25, 2010, the Bureau issued a public notice seeking comment on
the Cricket Forbearance Petition. Comment Sought on Cricket Communications, Inc. Petition for ForbearancefromEligible Telecommunications Carrier Service Area Requirement, WC Docket No. 09- 197, Public Notice, 25 FCC
(continued. . .)
3 Attachment A
Case No. CRI-T-II-01
Staff Comments
03/09112 Page 3 of 1 i
Federal Communications Commission FCC 11-137
petition to seek forbearance only for Lifeline support; it no longer seeks forbearance or ETC designation
with regard to Link Up support,z2
7. NTCH Forbearance Petition. NTCH states that it provides mobile wireless voice service
under the brand name ClearTalk in 17 different markets.23 On June 20, 20 I I , NTCH fied a petition
seeking forbearance from the application of the definition of "service area" in section 214(e)(5) of the Act
and section 54.207 of the Commission's rules so that it may be designated as a limited ETC eligible to
receive Lifeline-only support.24 In addition, NTCH filed with the Commssion petitions for limited ETC
designation in the states of Alabama and Tennessee, and Nort Carolina,zs NTCH states that its request
for forbearance satisfies the statutory requirements for forbearance and is in the public interest,26
III. DISCUSSION
8. The Act requires the Commission to forbear from applying any requirement of the Act or
of our regulations to a telecommunications carier if the Commission determines that: (I) enforcement of
the requirement is not necessar to ensure that the charges, practices, classifications, or regulations by,
for, or in connection with that telecommuncations carer are just and reasonable and are not unjustly or
unreasonably discriminatory; (2) enforcement of that requirement is not necessar for the protection of
consumers; and (3) forbearance from applying that requirement is consistent with the public interest,27
9. As we have previously recognized, our abilty to analyze a t.etition for forbearance is
highly dependent on knowing the exact scope of the requested forbearance.-8 Here, the petitions of
NTCH and Cricket for forbearance are constred as seeking forbearance from the requirement that the
service area of a competitive ETC that only seeks designation for Lifeline support must conform to the
service area of any rual telephone company serving the same area.29 As such, our analysis focuses on
(continued from previous page)
Rcd 8195 (Wireline Compo Bur. 2010). The Pennsylvania Public Utilty Commission (Pennsylvania Commission)
and TracFone Wireless, Inc. (TracFone) fied comments on this petition. Cricket fied reply comments.
22 Letter from Matthew A. Brill, Counsel for Cricket Communications, Inc., to Marlene Dortch, FCC, WC Docket
No. 09-197, at 1 (fied April 29, 2011) (Cricket Ex Parte Letter April 29, 2011); see also 47 C.F.R. § 1.59(b).
23 NTCH Forbearance Petition at 1.
24 See id. at L On June 29, 2011, the Bureau issued a public notice seeking comment on the Forbearance Petition.
Comment Sought on NTCH, Inc. Petition/or Designation as an Eligible Telecommunications Carrier in Alabama
and Tennessee and Petitonjòr Forbearancejrom Eligible Telecommunications Carrier Service Area Requirement,
WC Docket No. 09-197, Public Notice, 25 FCC Rcd 2569 (Wireline Compo Bur. 2011). NTCH fied comments to
clarfy its petition. No other pary fied comments. NTCH is not seeking universal service support for Link Up.
25 NTCH, Inc. Petition for Limited Designation as an Eligible Telecommunications Carrer in the States of Alabama
and Tennessee, WC Docket No. 09-197 (fied Mar. 5, 2010); NTCH, Inc. Petition for Limited Designation as an
Eligible Telecommunications Carrer in the States of North Carolina, WC Docket 09-197 (fied Mar. 3,2011).
26 NTCH Forbearance Petition at 3-9.
2747 U.S.C. § 160(a). In making a public interest determination, section lO(b) requires the Commission to consider
whether forbearance wil promote competitive market conditions. 47 U.S.C. § 160(b).
28 Petition to Establish Procedural Requirements to Govern Proceedings/or Forbearance Under Section 10 o/the
Communications Act 0/1934. as Amended, WC Docket No. 07-267, Report and Order, 24 FCC Rcd 9543, 9551,
9553, paras. 13, 16 (2009).
29 See 47 U.S.c. § 2 14(e)(5); 47 C.F.R. § 54.207. We do not read NTCH's or Cricket's petitions as requesting
forbearance from the requirement that a designating commission establish the service area of the competitive ETC
because neither petition examines that requirement in any detail nor argues how forbearing from that requirement
would be in the public interest. Instead, both petitions focus on the redefinition process that often occurs as a result
of the "conformance" requirement, Le., that a competitive ETC service area conform to that of the relevant rural
(continued . . .)
4 Attachment A
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whether we should forbear from applying the conformance requirement of section 214(e)(5) of the Act
and section 54.207(b) of the Commission's rules to NTCH and Cricket. Because both NTCH and Cricket
seek forbearance only for the purose of becoming a limited ETC to paricipate in the Commission's
Lifeline program, we examine the conformance requirement in light of the statutory goal of providinglow-income consumers with access to telecommunications services and as it relates to the Commission's
Lifeline program.30 We conclude that conditionally forbearing from the conformance requirement of
section 214(e)(5) ofthe Act and section 54.207(b) of the Commission's rules is appropriate and in the
public interest under these limited circumstances.31 As such, and for the limited purose of paricipationin the Lifeline program only, we conditionally forbear from applying the second sentence of section
2l4(e)(5) of the Act as well as section 54.207(b) of our rules insofar as those sections would require that
NTCH or Cricket's service area conform to the service area of any rual telephone company serving the
same area. We note that by forbearing from the conformance requirements for NTCH and Cricket to be
eligible for ETC designation for Lifeline-only support as stated herein, section 54.207(c) of theCommission's rules is inapplicable because redefinition is not necessar. As a result, if a commission
designates either NTCH or Cricket as a facilties-based, limited, Lifeline-only ETC in par of a rual
service area, that designation wi1 not require redefinition of the rual telephone company's service area.We emphasize, however, that if either Cricket or NTCH petitions to be an ETC to receive high-cost
support in par of a service area served by a rual telephone company, redefinition would be required by
the Act.
10. Just and Reasonable. Section 10(a)(l) of the Act requires that we consider whetherenforcement of the provisions from which forbearance is sought is necessar to ensure that the charges,
practices, classifications, or regulations are just and reasonable and not unjustly or uneasonably
discriminatory.32 We conclude that compliance with the conformance requirement of section 2l4(e)(5) of
the Act and section 54.207(b) of the Commission's rules is not necessar to ensure that NTCH's and
(continued from previous page)
telephone company. See. e.g., NTCH Forbearance Petition at 4;. Cricket Forbearance Petition at 3-4 (characterizingsection 2 14(e)(5) as only embodying the confonnance requirement).
30 See Petiton ofTracFone Wireless. Inc.
for Forbearancefrom 47 u.s.c. § 214(e)(I)(A) and 47 C.P.R. § 54. 201 (i).CC Docket No. 96-45, Order, 20 FCC Rcd 15095, 15099-00, paras. 9-10 (2005) (TracFone Forbearance Order);
Petiton for Designation as an Eligible Telecommunications Carrier in the State of New York; Petition for
Designation as an Eligible Telecommunications Carrier in the Commonwealth of Virginia; Petition
for LimitedDesignation as an Eligible Telecommunications Carrier in the State of North Carolina; Petiton for Limited
Designation as an Eligible Telecommunications Carrier in the State of Tennessee, CC Docket No. 96-45, Order, 24
FCC Rcd 3381,3388, paras. 15':16 (2009) (Virgin Mobile Forbearance Order); Federal-State Joint Board onUniversal Service; Telecommunications Carriers Eligible for Universal Service Support; i-wireless, LLC Petition
for Forbearancefrom 47 U.S.c. § 214(e)(1)(A), CC Docket No. 96-45, WC Docket No. 09-197, Order, 25 FCC Rcd
8784,8787, para. 6 (2010) (i-wireless Forbearance Order); Telecommunications Carriers Eligiblefor Universal
Service Support; Federal-State Joint Board on Universal Service; Head Start Petiton for Forbearance; ConsumerCellular Petition for Forbearance; Midwestern Telecommunications Inc. Petitonfor Forbearance; Line Up. LLC
Petitonfor Forbearance, WC Docket No. 09-197, CC Docket No. 96-45, Order, 25 FCC Rcd 10510, 10514, para. 6
(20 I 0); Telecommunications Carriers Eligible for Universal Service Support; Conexions Petition for Forbearance,
WC Docket No. 09-197, CC Docket No. 96-45, Order, 25 FCC Rcd 13866, 13868, para. 6 (2010) (Conexions
Forbearance Order). TracFone argues that the forbearance requested by Cricket should be extended to aU similarly
situated ETCs who have been designated for the limited purpose of providing services supported by the Universal
Service Fund low income program. See TracFone Comments at i. In the alternative, TracFone requests that the
Commission issue a declaratory ruling that section 214(e)(5) of the Act and section 54.207 of the Commission'srules do not require carrers seeking Lifeline-only ETC designations to conduct cream skimming analyses. See
TracFone Comments at 5. TracFone did not properly fie its request as a petition for forbearance and thus, its
request goes beyond the scope of this proceeding, and we decline to address it at this time. See 47 C.F.R. § 1.53
31 See 47 U.S.C. § 214(e)(5); 47 C.F.R. § 54.207.
3247 U.S.C. §§ 160(a)(I),214(e).
5
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Cricket's charges, practices, and classifications are just and reasonable and not unjustly or uneasonably
discriminatory where it is providing Lifeline service only.33 Lifeline support, designed to reduce thé
monthly cost of telecomimmications services for eligible consumers, is distrbuted on a per-subscriber
basis and is directly reflected in the price that the eligible subscriber pays.34 NTCH and Cricket maintain
that forbearance would give consumers access to lower rates and increased competition, which would
help to ensure that rates are just, reasonable and non-discriminatory.3s Furermore, forbearance from the
service area conformance requirement would not prevent the Commission from enforcing sections 201 or
202 of the Act, which require all carrers to charge just, reasonable, and non-discriinatory rates.36 We
agree with NTCH and Cricket's assertions that, if granted forbearance and thereafter designated as a
limited ETC, NTCH and Cricket's Lifeline offerings wil compete, at a minimum, with the Lifeline
offerings of the incumbent wireline carrer, as well as other wireline and wireless providers, in any given
geographic area.37 We also expect that this competition wil spur innovation among cariers in their
Lifeline offerings, expanding the choice of Lifeline products for eligible consumers.38 For these reasons,
we find that NTCH and Cricket have demonstrated that the first prong of section 10(a) is met.
11. Consumer Protection. Section 10(a)(2) requires that we consider whether applying the
conformance requirement to a mobile wireless voice service provider that seeks a Lifeline-only ETC
designation is necessar for the protection of consumers. IfNTCH or Cricket receives Lifeline-only ETC
designations, they wil be offering Lifeline-eligible consumers an additional choice of providers for
discounted telecommunications services. NTCH states that it plans to offer Lifeline services over its
third-generation network without an anual contract requirement, which would provide reliabilty as well
as flexibilty to consumers who need the mobility, security, and convenience ofa wireless phone, but who
are concerned about credit checks, deposits, or long-term contracts.39 Similarly, Cricket states that its
flat-rate, unlimited service model wil be attractive for many consumers on a limited budget.40 We
disagree with the arguent that forbearing from the conformance requirement for Lifeline-only support .
may har consumers41-these new offerings provide additional competitive choices to many low-income
consumers who canot afford non-discounted offerings. Moreover, there is no evidence that forbearance
from the conformance requirement for the limited purpose of being a Lifeline-only ETC would har
33 A provision or regulation is "necessary" if there is a strong connection between the requirement and regulatory
goal. See CTIA v. FCC, 330 F.3d 502, 512 (D.C. Cir. 2003).
3447 C.F.R. §§ 54.401, 54.403.
35 NTCH Forbearance Petition at 6 (noting that forbearance from the service area confonnance requirement would
also help to ensure that the rates and tenns of other carriers are kept reasonable through competition as competitors
can also offer Lifeline service); Cricket Forbearance Petition at 5-6.
36 Cncket Forbearance Petition at 6; see 47 U.S.c. §§ 201, 202.
37 NTCH Forbearance Petition at 6; Cricket Forbearance Petition at 6-7; see 47 C.F.R. § 54.405(a)-b) (requinng
ETCs to offer and publicize the availabilty of Lifeline services).
38 See, e.g., TracFone Forbearance Order, 20 FCC Rcd at 15101, para. 13; Virgin Mobile Forbearance Order, 24
FCC Rcd at 3389, para. 19; i-wireless Forbearance Order, 25 FCC Rcd at 8787, para. 9.
39 NTCH Forbearance Petition at 1.
40 Cricket Forbearance Petition at 8.
41 Letter from Patrick M. Rosvall, Counsel for Calaveras Telephone Co., Cal-Ore Telephone Co., Ducor Telephone
Co., Foresthil Telephone Co., Happy Valley Telephone Co., Hornitos Telephone Co., Kennan Telephone Co.,
Pinnacles Telephone Co., The Ponderosa Telephone Co., Sierra Telephone Co., The Siskiyou Telephone Co.,
Volcano Telephone Co., and Winterhaven Telephone Co., to Marlene H. Dortch, Secretar, FCC, WC Docket No.
09-197, at 3 (fied Apr. 20, 2011) (California Rural Telephone Companies Ex Parte Letter); see also Letter from
Stuar Polikoff, OPASTCO, to Marlene H. Dortch, Secretary, FCC, WC Docket No. 09-197, at 1 (fied Aug. 5,
2011) (OPASTCO Ex Parte).
6 Attachment A
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Federal Communications Commission FCC 11-137
consumers currently served by the rural telephone companies in the relevant service areas. For these
reasons, we find that NTCH and Cricket have demonstrated that the second prong of section lO(a) is met.
12. Public Interest. Section 10(a)(3) requires that we consider whether applying the
conformance requirement to a facilities-based mobile wireless carrer that seeks ETC designation for
Lifeline support only is in the public interest. Petitioners assert, and we agree, that forbearing from the
conformance requirement in these limited circumstaces wil promote competitive market conditions for
the low-income program.42 Both petitioners seek to be designated as Lifeline-only ETCs in a number of
states in order to provide services to low-income consumers. Requiring each petitioner to conform its
service areas to those of the rural carers in the states they seek to participate only in the Lifeline program
would result in numerous redefinition proceedings, which could delay their entr into those markets,
make it more diffcult to market to potential Lifeline consumers on a statewide basis, and deprive low-
income consumers in areas where the incumbent wire line provider is a rural telephone company of an
additional choice of service provider. For example, Cricket and NTCH both state that they have
confronted situations in which the redefinition process has taken years to resolve and, as such, has cost
consumers competitive alternatives to Lifeline offerings.43 We find that applying the conformance
requirement in these limited circumstances would not be in the public interest when balanced against the
benefits of introducing a competitive, alternative Lifeline provider to low-income consumers.
13. We disagree with assertions that granting forbearance from the conformance r~uirement
for Lifeline-only ETC designation wil have a detrmenta effect on rual telephone companies. As both
Cricket and NTCH note, the amount of Lifeline support is not tied to the cost of serving an area.4S Rather,Lifeline support is a fixed, per-line amount nationwide, and ETCs are required to pass through the
Lifeline support they receive to the benefit of their subscribers.46 As such, any cream skimming concernsthat may have been raised in the context of an ETC designation for high cost support in an area of a rual
telephone company are not relevant in considering the designation of a Lifeline-only ETC. The
California Rural ILECs express concerns that granting Cricket and NTCH forbearance from the
conformance requirement and redefinition process can impact rual carriers' abilties to serve the entire
rural service terrtories and therefore states should be able to consider a competitive ETC's impact on the
rural telephone companies and its consumers.47 We find, however, that the Act contans safeguards to
address the concerns stated by the California ILECs. The Act already requires designating commissions
to affrmatively determne that designating a carer as an ETC within a rual service area is in the public
interest, and this is not affected by this grat offorbearance. We are confident that any concerns raised
by a rural telephone company wil be evaluated by the relevant commission when considering designating
a limited, Lifeline-only ETC.
42 See 47 U.S.C. §§ 160(b), 254(b); NTCH Forbearance Petition at 7-8.
43 Cricket Forbearance Petition at 4; NTCH Forbearance Petition at 4 (stating that NTCH has suffered losses of
tensof thousands of dollars in revenues and legal fees and an ultimate loss of a foothold in the marketplace, ultimately
resulting in loss of competition and consumer choice).
44 California Rural Telephone Companies Ex Parte Letter at 2-3; OPASTCO Ex Parte.
45 See NTCH Forbearance Petition at 5; Cricket Forbearance Petition at 7-9.
46 See NTCH Forbearance Petition at 5; Cricket Forbearance Petition at 7-9; 47 C.F.R. §§ 54.401, 54.407, 54.504.
47 Letter from Patrck M. Rosvall, Counsel for Calaveras Telephone Co., Cal-Ore Telephone Co., Ducor Telephone
Co., Foresthil Telephone Co., HappyValley Telephone Co., Hornitos Telephone Co., Kerman Telephone Co.,
Pinnacles Telephone Co., The Ponderosa Telephone Co., Sierra Telephone Co., The Siskiyou Telephone Co.,
Volcano Telephone Co., and Winterhaven Telephone Co., to Marlene H. Dortch, Secretary, FCC, we Docket No.
09-197, at 3 (fied July 15,201 I); OPASTCO Ex Parte.
7 Attachment A
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14. We also disagree with the argument that granting these petitions wil eliminate the role of
states in ETC designation and redefinition.48 Forbearance in these limited circumstances merely removes
the conformance requirement for NTCH and Cricket when seeking ETC designation for Lifeline-only
support, so that states, which have jurisdiction over most ETCs, may now designate NTCH or Cricket as
limited ETCs eligible for Lifeline only support in par of a rural service area without requiring
redefinition of that rual service area. State commissions are stil required to consider the public interest,
convenience and necessity of designating Cricket and NTCH as a competitive ETC in a rual area already
served by a rual telephone company.49 Ou action does not disturb the roles of state commissions and
this Commission in the ETC designation process or in the redefinition process in other circumtances
when redefinitiön is required. so
15. The Commission has made clear its commitment to improve accountability for providers
receiving universal service support in its continued effort to fight waste, fraud, and abuse.si Accordingly,
consistent with obligations imposed on other cariers seeking to become Lifeline-only ETCs, we require
NTCH and Cricket to assume additional obligations designed to protect against waste, fraud, and abuse.s2
Specifically, we condition our forbearance from the conformance requirement on NTCH and Cricket by:
(1) requiring each eligible Lifeline consumer to self-certify under penalty of perjur at the time of
enrollment and anually thereafter until a national duplicates database is in place that he or she is
the head of household, receives Lifeline-supported service only from NTCH or only from
Cricket, and does not receive Lifeline from any other provider;
(2) requiring each eligible Lifeline consumer at the time of enrollment to initial on the
certification form that to the best of his or her knowledge that he or she is not receiving Lifeline-
supported service from any other Lifeline provider, and listing as examples the brand names of at
least the leading wireline and leading two wireless Lifeline providers in the area to ensure the
consumer understands what is meant by "Lifeline-supported service";
(3) requiring NTCH and Cricket to make available state-specific subscriber data, including name
and address of Lifeline subscribers, to the Universal Service Administrative Company (USAC)
48 Pennsylvania Commission Comments at 2.
4947 U.S.C. §214((e)(3); 47 C.F.R. § 54.201(c).
so The redefinition process is stil required for ETCs to receive federal universal service high-cost support and
nothing in this order alters the redefinition process for ETCs seeking federal universal service High Cost support.
51 Connect America Fund; A National Broadband Plan for Our Future; Establishing Just and Reasonable Rates for
Local Exchange Carriers; High-Cost Universal Service Support; Developing an Unifed Intercarrier Compensation
Regime; Federal-State Joint Board on Universal Service; Lifeline and Link-Up, WC Docket Nos. 10-90,07-135,05-
337,03-109, ON Docket No. 09-51, CC Docket Nos. 01-92, 96-45, Notice of Proposed Rulemaking and Further
Notice of Proposed Rulemaking, 27 FCC Rcd 4554 (2011); Lijè/ine and Link UP Reform and Modernization;
Federal-State Joint Board on Universal Service; Lijèline and Link Up, WC Docket Nos. 11-42, 03-109, CC 96-45,
Report and Order, FCC 11-97, (reI. June 21, 2011).
52 See, e.g., TracFone Forbearance Order, 20 FCC Rcd at 15102-03, paras. 17-18; Virgin Mobile Forbearance
Order, 24 FCC Rcd at 3393, para. 29; i-wireless Forbearance Order, 25 FCC Rcd at 8790, para. 16;
Telecommunications Carriers Eligiblefor Universal Service Support; Virgin Mobile USA, L.P. Petition for
Designation as an Eligible Telecommunications Carrier in the State of Alabama; Virgin Mobile USA, L.P. Petition
for Designation as an Eligible Telecommunications Carrier in the State of Connecticut; Virgin Mobile USA, L.P.
Petition lòr Designation as an Eligible Telecommunications Carrier in the District of Columbia; Virgin Mobile
USA, L.P. Petitionfor Designation as an Eligible Telecommunications Carrier in the State of Delaware; Virgin
Mobile USA, L.P. Petiionlòr Designation as an Eligible Telecommunications Carrier in the State of New
Hampshire, WC Docket No. 09- 1 97, Order, 25 FCC Rcd 17797, 17804-05, paras. 20-24 (Wireline Compo Bur.
2010).
8 Attachment A
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and to each state public utilties commission where it operates for the purose of detennining
whether an existing Lifeline subscriber receives Lifeline service from another carier;
(4) requiring NTCH and Cricket to assist the Commission, USAC, state commissions, and other
ETCs in resolving instances of duplicative enrollment by Lifeline subscribers, including by
providing to USAC and/or any state commission, upon request, the necessar infonnation to
detect and resolve duplicative Lifeline claims;
(5) requiring NTCH and Cricket to establish safeguards to prevent their subscribers from
receiving multiple Lifeline subsidies at the same address and safeguards to prevent individual
subscribers from receiving more than one Lifeline discount;
(6) requiring NTCH and Cricket to implement a non-usage policy, if applicable, in all states
where NTCH and Cricket provide Lifeline services to subscribers at no monthly chargeS3,
requiring NTCH and Cricket to identify its subscribers that have not used its Lifeline service for
60 days and not seek support for such subscribers if they do not actively use its Lifeline service
during a 30-day grace period;
(7) requiring NTCH and Cricket to deal directly with the subscriber to certify and verify the
subscriber's Lifeline eligibilty;
(8) requiring NTCH and Cricket to explain in prominent, plain, easily comprehensible language
to all new and potential subscribers that no consumer is pennitted to receive more than one
Lifeline subsidy;
(9) requiring NTCH and Cricket to ensure that all marketing materials for the service make clear
that it is a Lifeline-supported service;
(i 0) requiring NTCH and Cricket to immediately de-enroll any subscriber whom Cricket or
NTCH knows is receiving Lifeline-supported service from another ETC or knows is no longer
eligible;
and
(i I) requiring NTCH and Cricket to submit to the Wireline Competition Bureau a compliance
plan outlining the measures the carer wil tae to implement the obligations contained in this
order within 30 days of the effective date of this order.
16. We find that these obligations are appropriate to Împrove the accountabilty of the
disbursement of universal service funds while deterrng waste, fraud, and abuse.s4 These obligations
apply in any state in which NTCH or Cricket seeks to tae advantage of this forbearance order.
Consistent with obligations previously imposed on other companies seeking forbearance from ETC
requirements for the purose of paricipating as a provider in the Lifeline program, we require NTCH and
Cricket to state the penalties for perjur in clear and conspicuous language on the subscriber self.
certification fonn to comply with the first obligation and to monitor compliance of subscribers' self-
certifications by retaining those self-certifications and providing them, as well as documentation of how
53 This obligation does not apply ifNTCH or Cricket requires subscribers to pay a monthly fee for the service.
54 These obligations are in addition to, and do not supplant, the certification and verification eligibility already
required by our rules for federal default states and any similar state rules for the non-federal default states. See. e.g.,
47 C.F.R. § 54.410. On May 4,2010, the Commission asked the Federal-State Joint Board on Universal Service to
review the Commission's eligibility, verification, and outreach rules for the Lifeline and Link Up universal service
programs. See Federal-State Joint Board on Universal Service; Lifeline and Link Up, CC Docket No. 96-45, WC
Docket No. 03-109, Order, 25 FCC Rcd 5079 (2010).
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the carer obtained the certification, to the Commission upon request.ss Moreover, these obligations
fuer underscore the Commission's commitment to reduce waste, fraud, and abuse in Lifeline.s6
17 . We note that after NTCH and Cricket submit their compliance plans, the Bureau wil
review those compliance plans for conformance with this order. Although NTCH or Cricket may be
designated an ETC by either a state commission or this Commission in non-rual areas or for entire rural
service areas in the meantime, neither NTCH nor Cricket may be designated in a par of a rural service
area or receive federal Lifeline support in these areas until the Bureau approves the respective compliance
plan.
18. For the reasons stated herein, we find that the statutory requirements for forbearance
pursuant to section i 0 of the Act.are met and that conditionally granting NTCH and Cricket forbearance
from the conformance requirement for the limited purose of seeking a Lifeline-only ETC designation
wil fuher the statutory goals of providing low-income subscribers access to telecommunications and
emergency services and promoting more competitive options for low-income consumers while protecting
the universal service fud against waste, fraud, and abuse.s7 To the extent, however, that our predictive
judgment proves incorrect and these conditions prove to be inadequate safeguards, paries may fie
appropriate petitions with the Commission and we have the option of reconsidering this forbearance
ruling.s8 We also note that state commissions and this Commission are stil required to make an
independent assessment as to whether granting NTCH and Cricket an ETC designation is in the public
interest before including any par of a rual service area in NTCH's or Cricket's service area.S9
Furthermore, forbearance from the conformance requirement stated herein does not apply ifNTCH or
Cricket seeks ETC designation to receive high cost support. In that instance, NTCH and Cricket must
conform its service area to that of the rual telephone company or else seek redefinition of the service
area.
55 See TracFone Forbearance Order, 20 FCC Rcd at 15103-04, paras. 18-21; Virgin Mobile Forbearance Order,
24 FCC Rcd at 3392, para. 25; i-wireless Forbearance Order, 25 FCC Rcd at 8790, paras. 16-17.
56 On June 21, 2011, the Commission addressed potential waste in the Lifeline program by preventing duplicative
program payments for multiple Lifeline-supported services to the same individuaL. See Federal-State Joint Board on
Universal Service; Lijeline and Link Up, WC Docket Nos. i 1-42, 03-109, CC 96-45, Report and Order, FCC 11-97,
(reI. June 21, 2011) (Duplicates Order). The Duplicates Order adopts two changes to the Commission's Lifeline
rules: 1) clarifies that low-income consumers may receive no more than a single lifeline discount at a time; and 2)
requires ETCs to de-enroll subscribers that are receiving multiple benefits in violation of that rule within five
business days of receiving notification from USAC that the consumer has not chosen that ETC after a minimum 30-
day notice period to continue receiving service from that ETC. These rules wil assist the Commission in its efforts
to detect and resolve duplicative Lifeline claims. The Commission is also actively evaluating the longer-term
program refonns proposed in the Connect America Fund. See Connect America Fund; A National Broadband Plan
for Our Future; Establishing Just and Reasonable Rates for Local Exchange Carriers; High-Cost Universal Service
Support; Developing an Unijìed Intercarrier Compensation Regime; Federal-State Joint Board on Universal
Service; Ltleline and Link-Up, WC Docket Nos. 10-90,07-135,05-337,03-109, GN Docket No. 09-51, CC Docket
Nos. 01-92, 96-45, Notice of Proposed Rulemaking and Further Notice of Proposed Rulemaking, 27 FCC Rcd 4554
(2011) (Connect America Fund).
5747 U.S.C. § 160(a).
58 See Petitionfor Forbearance of the Verizon Telephone Companies Pursuant to 47 Us.c. § I60(c), WC Docket
No. 01-338, Memorandum Opinion and Order, 19 FCC Rcd 21496, 21508-09, para. 26 & n.g5 (2004); see also
Petition of SBC Communications Inc. for Forbearancefrom Structural Separations Requirements of Section 272 of
the Communications Act of 1934, As Amended, and Requestfor Re/iefto Provide International Directory Assistance
Services, CC Docket No. 97-172, Memorandum Opinion and Order, 19 FCC Rcd 5211, 5223-24, para. 19 & n.66
(2004); Cellnet Communications, Inc. v. FCC, 149 F Jd 429, 442 (6th Cir. 1998).
5947 U.S.C. § 214(e)(2), (e)(6).
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IV. ORDERING CLAUSES
19. Accordingly, IT is ORDERED that, pursuant to the authority contained in sections 4(i),
40), 10,214, and 254 of the Communications Act of 1934, as amended, 47 U.S.c. §§ 154(i), i 54(j), 214,254, the petitions for forbearance filed by NTCH, Inc., NTCH-West Tenn, Inc., and Cricket
Communications, Inc. AR GRANTED to the extent discussed herein and conditioned on fulfillment of
the obligations set fort in this order.
20. IT is FURTHER ORDERED, pursuant to the authority contained in sections 4(i), 4(j),
10,214, and 254 of the Communications Act of 1934, as amended, 47 U.S.C. §§ 154(0, 154(j), 214, 254,
that the request of Cricket Communications, Inc. to narow its petition for forbearance is GRANTED to
the extent discussed herein.
21. IT is FURTHER ORDERED that, pursuant to the authority contained in sections 4(i),
4(j), 10,214, and 254 of the Communications Act of 1934, as amended, 47 U.S.c. §§ 154(i), 154(j), 160,
2 14, 254, we FORBEAR from applying the conformance requirement of section 2 i 4( e)( 5) of the
Communications Act of 1934, as amended, 47 U.S.C. § 214(e)(5), and section 54.207(b) of theCommission's rules, 47 C.F.R. § 54.207(b), to NTCH, Inc., NTCH-West Tenn, Inc., and Cricket
Communications, Inc. to the extent discussed herein and conditioned on fulfillment of the obligations set
forth in this order.
22. IT is FURTHER ORDERED that, pursuant to section i.03(a) of the Commission'srules, 47 C.F.R. § i.03(a), ths order SHALL BE effective upon release.
FEDERA COMMICATIONS COMMISSION
Marlene H. Dortch
Secretary
11
Attachment A
Case No. CRI-T-II-0l
Staff Comments
03/09/12 Page 1 l()f 1 i
Federal Communications Commission DA 12-158
Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of )
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)
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)
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)
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WC Docket No. 09-197Telecommunications Carrers Eligible for
Universal Service Support
Cricket Communications, Inc.
Petition for Forbearance
ORDER
Adopted: February 7, 2012 Released: February 7, 2012
By the Chief, Wireline Competition Bureau:
1. In this Order, we approve a Compliance Plan submitted by Cricket Communications, Inc.
(Cricket) for complying with conditions imposed in the Cricket Forbearance Order.' In the Cricket
Forbearance Order, the Commission conditionally granted, for the limited purose of Lifeline-only
federal universal service support, Cricket's request for forbearance from the service area confonnance
requirement of the Communications Act of 1934, as amended (the Act) and section 54.207(b) of the
Commission's rules.2 In order to receive federal universal service support for Lifeline service, Cricket
must comply with the conditions set forth in the Cricket Forbearance Order.3 In this Order, we conclude
that the Cricket Compliance Plan adequately implements the conditions of forbearance established in the
Cricket Forbearance Order. Accordingly, Cricket is eligible to seek ETC designation without
confonning its service area to that of the underlying rural telephone company for Lifeline-only support
provided that it fulfills the commitments in its Compliance Plan in each state where it is designated to
provide Lifeline service.
2. Cricket is a facilties-based provider of digital wireless telecommunications services in 35
states nationwide.4 On June 21, 2010, Cricket filed a petition seeking forbearance from the service area
confonnance requirement of section 214(e)(5) of the Act and section 54.207 of the Commission's rules
for the limited purose of Lifeline-only federal universal service support.s The service area conformance
i Cricket Communications, Inc. Petition for Forbearance, WC Docket No. 09- I 97, Compliance Plan (fied
September 23, 201 I) (Cricket Compliance Plan); NTCH, Inc. Petition for Forbearancefrom 47 u.s.C. §§ 2I4(e)(5)
and 47 C.P.R. §§ 54.207(b); Cricket Communications, Inc. Petiton for Forbearance, WC Docket No. 09-197,
Order, 26 FCC Rcd 13723 (201 I) (Cricket Forbearance Order).
2 Cricket Forbearance Order, 26 FCC Rcd at 13723, 13726-27, paras. 1,9; see 47 U.S.C. § 2 14(e)(5); 47 C.F.R. §
54.207(b). Forbearance from the service area conformance requirement applies only to federal universal service
Lifeline support; Cricket must abide by the service area conformance requirements and seek redefinition of a service
area ifit seeks federal universal service high-cost support. Cricket Forbearance Order, 26 FCC Rcd at 13723-24,
para. 2.
3 Cricket narowed the scope of its forbearance request to not seek Link Up support and is therefore not eligible for
Link Up support. Cricket Forbearance Order, 26 FCC Rcd at 13726, para. 6.
4 Cricket Forbearance Order, 26 FCC Rcd at 13726, para. 6.
5 Cricket Communications, Inc. Petition for Forbearance, WC Docket No. 09-197 (fied June 21, 2010) (Cricket
Forbearance Petition).
Attachment B
Case No. CRI-T-l1-01
Staff Comments
03/09/12 Page 1 of 4
Federal Communications Commission DA 12-158
requirement of section 214(e)(5) of the Act and section 54.207 of the Commission's rules require that, in
the case of an area served by a rual telephone company, a competitive ETC's service area must be
defined as the rural telephone company's "study area" unless and until the Commission and the States
redefine the underlying service area.6 In the Cricket Forbearance Order, the Commission found that
Cricket met the statutory requirements for forbearance, subject to certin conditions, and forbore from
applying the service area conformance requirement of section 214(e)(5) ofthe Act and section 54.207(b)
of the Commission's rules, for the limited purose of allowing Cricket to seek designation as a Lifeline-
only ETC eligible for support from the universal service fund for the provision of Lifeline service to
eligible subscribers.7 On September 23,2011, Cricket fied a plan outlining measures that it wil
undertake to implement the conditions imposed in the Cricket Forbearance Order, including certification
procedures and measures to prevent waste, fraud and abuse, including measures to prevent duplicative
Lifeline benefits from being provided to the same person or household.8 The Bureau released a public
notice concerning Cricket's Compliance Plan on October 5, 2011.9
3. In the Cricket Forbearance Order, the Commission conditioned forbearance on Cricket
implementing certain protections designed to prevent waste, fraud and abuse in the program. 10 Cricket's
Compliance Plan implements these protections, in particular by committing to the following: ii
(1) requiring each eligible Lifeline consumer to self-certify under penalty of perjury, at the time
of enrollment and annually thereafter until a national duplicates database is in place, that he or she is the
head of household, and that to the best of his or her knowledge, he or she receives Lifeline service only
from Cricket and is not receiving Lifeline-supported service from another Lifeline provider; 12
(2) assisting consumers in making the self-certification by accurately listing as examples the
brand names of at least the leading wireline and two leading wireless Lifeline providers in the area to
ensure the consumer understads what is meant by "Lifeline-supported service;,,13
(3) requiring Cricket to make available state-specific subscriber data, including name and address
of Lifeline subscribers, to the Universal Service Administrative Company (USAC) and to each state
public utilties commission (PUC) where it operates for the purpose of determining whether an existing
Lifeline subscriber receives Lifeline service from another carrier; 14
(4) requiring Cricket to investigate any notification that it receives from a state PUC, the
Commission or USAC that one of its subscribers already receives Lifeline service from another carier,
and to assist the Commission, USAC, state commissions, and other ETCs in resolving instances of
duplicative enrollment by Lifeline subscribers, including by providing to USAC and/or any state
commission, upon request, the necessary information to detect and resolve duplicative Lifeline claims;ls
6 See 47 U.S.c. §214(e)(5); 47 C.F.R. §54.207(b).
7 Cricket Forçearance Order.
8 See Cricket Compliance Plan.
9 Comment Sought on Cricket Communications. Inc. Plan/or Conditions Associated with Forbearance, WC Docket
No. 09-197, Public Notice, 26 FCC Rcd 14245 (Wireline Compo Bur. 2011). No parties fied comments to Cricket's
Compliance Plan.
II Cricket Forbearance Order, 26 FCC Rcd at 13730-32, paras. 15-16.
i i See Cricket Forbearance Order, 26 FCC Rcd at 13730-32, paras. 15-16; Cricket Compliance Plan.
12 Cricket Compliance Plan at 8.
13 Cricket Compliance Plan at 7.
14 Cricket Compliance Plan at 10. We note that this condition may not sunset upon implementation ofa national
duplicates database, as Cricket argues. Therefore, Cricket must comply with this condition until further notice.
15 ¡d.
2 Attachment B
Case No. CRI-T-I 1-01
Staff Comments
03/09/12 Page 2 of 4
Federal Communications Commission DA 12-158
(5) requiring Cricket to establish safeguards to prevent their subscribers from receiving multiple
Lifeline subsidies at the same address and safeguards to prevent individual subscribers from receiving
more than one Lifeline discount; 16
(6) requiring Cricket to deal directly with the subscriber to certify and verify the subscriber's
Lifeline eligibility; i 7
(7) requiring Cricket to explain in prominent, plain, easily comprehensible language to all new
and potential subscribers that no consumer is permitted to receive more than one Lifeline subsidy;18
(8) requiring Cricket to review proof of eligibilty for consumers in all states in which Cricket
provides Lifeline service; 19
(9) requiring Cricket to ensure that all marketing materials for the service make clear that it is a
Lifeline-supported service;20 and
(10) requiring Cricket to immediately de-enroll any subscriber whom Cricket knows is receiving
Lifeline-supported service from another ETC or knows is no longer eligible, and no longer report that
subscriber on an FCC Form 497 if a Cricket investigation, a state commission, the Commission or USAC
concludes that the subscriber receives Lifeline services from another carrier in violation ofthe
Commission's regulations.2 I
4. Cricket maintains that its implementing procedures, as set forth in its Compliance Plan,
fully satisfy the conditions established by the Commission.22 We agree and conclude that Cricket's
Compliance Plan adequately implements the conditions of forbearance imposed by the Cricket
Forbearance Order. We therefore approve the Compliance Plan, and, subject to Cricket's fulfillng the
commitments it makes therein, it may be eligible to apply for designation as an ETC for Lifeline-only
support, without redefining its service area to mirror the service area of the underlying rual telephone
company. In taking this action, we remind Cricket that the Commission may institute an inquiry on its
own motion to examine the company's records and documentation to ensure that the universal service
Lifeline support it receives is being used for the purose for which it was intended.23 Cricket must
provide such records and documentation to the Commission and USAC upon request. If Ciicket fails to
fulfill its obligations under the Act, the Commission's rules, or the Cricket Forbearance Order after it
begins receiving Lifeline support, the Commission may revoke Cricket's forbearance and/or limited ETC
designations, should they be granted, or assess forfeitues as permitted under the Act and the
Commission's rules.24
16 Cricket Compliance Plan at 3-8.
17 Cricket Compliance Plan at 6.
18 Cricket Compliance Plan at 7.
19 Cricket Compliance Plan at 6. For states that require Cricket to enroll subscribers identified by the state or as
eligible in a state database, Cricket may continue to rely on the state database.
20 Cricket Compliance Plan at 4.
21 Cricket Compliance Plan at 10.
22 Cricket Compliance Plan at 11. The Non-Usage condition stated in the Cricket Forbearance Order, is
inapplicable because Cricket requires subscribers to pay a monthly fee for the service. See Cricket Compliance Plan
at 2.; Cricket Forbearance Order, 26 FCC Rcd at 13732, para. 15.
2347 U.S.C. §§ 220,403.
24 See 47 U.S.C. §§ 254(e), 503(b); Federal-State Joint Board on Universal Service; Western Wireless Corporation
Petition/or Preemption 0/ an Order o/the South Dakota Public Utilties Commission, CC Docket No. 96-45,
Declaratory Ruling, 15 FCC Red 15168, 15174, para. 15 (2000).
3
Attachment B
Case No. CRI-T-l 1-01
Staff Comments
03/09/12 Page 3 of 4
Federal Communications Commission DA 12-158
5. ACCORDINGLY, IT is ORDERED, pursuant to the authority contained in sections 10
and 214(e) of the Communications Act, 47 U.S.c. §§ 160, 214(e), and the authority delegated under
sections 0.91 and 0.291 of the Commission's rules, 47 C.F.R. §§ 0.91, 0.291, that the Cricket
Communications, Inc. Compliance Plan submitted as a condition of forbearance eligible only for Lifeline
support in its licensed service areas is APPROVED as described herein.
6. IT is FURTHER ORDERED that, pursuant to section 1.02(b)(1) of the Commission's
rules, 47 C.F.R. § 1.02(b)(1), this order SHALL BE effective upon release.
7. IT is FURTHER ORDERED that a copy of this order SHALL BE transmitted to the
Universal Service Administrative Company.
FEDERAL COMMUNICA nONS COMMISSION
Sharon E. Gilett
Chief
Wire line Competition Bureau
4 Attachment B
Case No. CRI-T-l 1-01
Staff Comments
03/09/12 Page 4 of 4
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 9th'DAY OF MARCH 2012,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. CRI-T-11-01, BY MAILING A COpy THEREOF, POSTAGE PREPAID,
TO THE FOLLOWING:
BILL SMITH
CORP RELATIONS SUPER
CRICKET COMMUNICATIONS
6380 S FIDDLERS GREEN CR
GREENWOOD VILLAGE CO 80111
E-MAIL:
govemmentinquirey(fcricketcommunications.
com
JJ~
SECRETAR
CERTIFICATE OF SERVICE