20190417final_order_no_34314.pdf

Office of the Secretary
Service Date
April 17,2019
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )CASE NO.SAG-T-19-01
OF SAGE TELECOM COMMUNICATIONS,)
LLC FOR DESIGNATION AS AN ELIGIBLE )TELECOMMUNICATIONS CARRIER )ORDER NO.34314
On January 25,2019,Sage Telecom Communications,LLC dba TruConnect
("TruConnect"or "Company")applied to the Commission for an Order designatingit as an eligible
telecommunications carrier ("ETC")in the State of Idaho providing Lifeline-only services
("Application").On March 7,2019,the Commission issued a Notice of Application and Notice
of Modified Procedure setting comment and reply comment deadlines.Order No.34266.Now,
the Commission issues this Order approving the Application.
BACKGROUND
A.The Universal Service Fund and Lifeline
The Federal Communications Commission ("FCC")established the federal Universal
Service Fund ("USF")with the intent to make adequate,efficient communications available
nationwide,at reasonable charges.In the Matter of Lifeline and Link Up Reform and
Modernization,Lifeline and Link Up,Federal-State Joint Board on Universal Service,Advancing
Broadband AvailabilityThrough DigitalLiteracy Training("Lifeline and Link Up Reform Order")
27 F.C.C.R.6656,at 6660-62 (Feb.6,2012);47 U.S.C.§254(b).I Lifeline is a program supported
by the USF that provides monthlydiscounts to eligible low-income subscribers in order to maintain
access to communications networks.Lifeline and Link Up Reform Order,27 F.C.C.R.6656 at
6662-63.High-cost support from the USF,through the Connect America Fund,addresses initial
connections for services in high-cost areas.See In the Matter of Connect America Fund,27
F.C.C.R.4040,17672-73 (Nov.18,2011)(goals for high-cost support include ensuring and
advancing the availability of communications services).
Idaho has a state USF program,established in Idaho Code §§62-610 and 62-610A-
610F.Idaho also has a Lifeline program known as the Idaho Telecommunications Service
Assistance Program ("ITSAP").Idaho Code §56-901.
I See also Rural Telephone Coalition v FCC,838 F.2d 1307,1315 (D.C.Cir.1988).
ORDER NO.34314 1
B.ETC Designation Requirements
Under the federal Telecommunications Act,a carrier designated as an ETC is eligible
to receive federal support from the USF.47 U.S.C.§214(e).Jurisdiction to grant ETC
designations rests with state commissions.47 U.S.C.§214(e)(2);Idaho Code §§62-610D(l),62-
615(l);Order No.29841 ("ETC Requirements Order").Under this authority,this Commission
has granted ETC designations to numerous carriers in Idaho,includingwireless carriers.See e.g.
Order Nos.29841,32586,32645.
To qualify as an ETC,an applicant must satisfy several requirements established in
federal and state law.47 U.S.C.§214(e);Order No.29841.Under the federal
Telecommunications Act,the applicant must be a "common carrier"and must offer services
supported under Section 254(c)of the Act "using its own facilities or a combination of its own
facilities and resale of another carrier's services,"unless otherwise granted FCC forbearance.47
U.S.C.§§153(10),214(e)(l)(A),160(a)(3)(FCC has regulatory flexibilityto forbear application
where consistent with public interest).The Telecommunications Act also requires that the
applicant "advertise the availability of such services and the charges therefor using media of
general distribution."47 U.S.C.§214(e)(1)(B).
Under the Act,state commissions shall determine whether granting the requested ETC
designation is "consistent with the public interest,convenience,and necessity."47 U.S.C.§
214(e)(2).In evaluating this public interest element,this Commission has generally considered
two factors.See Order Nos.33002 at 2-3,33226 at 3.First,the Commission evaluates whether
the carrier contributes to state assistance programs such as ITSAP and the Idaho
Telecommunications Relay Services program.Id.;Idaho Code §61-1301.Second,the
Commission considers if the designation is sought for only part of a rural telephone company's
study area,thus leaving some (perhaps less profitable)customers without service.Id.Such
practice,known as "cream skimming,"is contrary to the public interest.Id.
Federal regulations include the following additional requirements,which the
Commission has adopted in evaluating applications for ETC designation:(1)compliance with
service requirements applicable to support received;(2)submission of a plan for proposed
improvements or upgrades to the network,where applicable;(3)demonstrated ability to remain
functional in emergencies without an external power source;(4)demonstrated willingness to
satisfy consumer protection and service quality standards;(5)financial and technical capability to
ORDER NO.34314 2
provide Lifeline service;(6)notice to affected Tribes where designation is sought for any part of
Tribal lands.47 C.F.R.§54.202;Order No.29841.
For applicants seeking Lifeline-only ETCs,the FCC has waived the requirement to
submit a network improvement and upgrade plan,noting that such ETCs do not receive funds to
improve or extend their networks.Lifeline and Link Up Reform Order,27 F.C.C.R.6656,¶386.
This Commission -which requires a two-year network improvement plan and progress report
(Order No.29841 at 18)where applicable -has also waived the requirement where a Lifeline-only
ETC is requested.Order No.33002 at 3,citing Lifeline and Link Up Reform Order,27 F.C.C.R.
6656,¶386.
THE APPLICATION
TruConnect provides prepaid wireless telecommunications services to consumers by
using the underlyingwireless networks of Sprint Spectrum,Verizon Wireless,and/or T-Mobile.
The Company operates as a Mobile Virtual Network Operator.The Company is designated as an
ETC in 24 states and Puerto Rico.The Company states that it has the ability to provide all services
supported by the universal service program throughoutIdaho.The Company states that its
Lifeline-supported voice and broadband services will meet or exceed the minimum service
standards in 47 C.F.R.§54.408.The Company's proposed Lifeline offerings will include 1,000
voice minutes,unlimited text messages,and 2 gigabytes of data per month at a net cost of $0.00
per month after application of Lifeline support,with additional voice minutes and data for
purchase.
The Company states it will not seek access to funds from the USF for the purpose of
participating in the Link Up program or providing service to high-cost areas.The Company
requests its designation as an ETC include the authority to participate in and receive
reimbursement from the ITSAP.
COMMENTS
Staff filed the only comments,and recommended the Commission approve the
Application.Staff determined the Company's ETC Application is in the public interest as the
Company will participate in the appropriate Idaho programs,and requests designation statewide;
therefore,no cream skimming concerns arise.Staff determined the Company is not required to
file a two-year network improvement and progress report with the Commission because the
Company seeks Lifeline-only ETC designation.Staff agrees that TruConnect's underlying carriers
ORDER NO.34314 3
provide sufficient ability for the Company to remain functional in an emergency.Staff believes
the Company meets all additional requirements for ETC designation.
COMMISSION FINDINGS AND DECISION
The Commission has authorityto grant ETC designation to a telephonecompany under
federal and state law.47 U.S.C.§214(e),Idaho Code §§62-610D,62-615(1).The Commission
has reviewed and considered the record,including TruConnect's Application and exhibits,and
Staff comments.We now make the followingfindings.
A.§214 ofthe Telecommunications Act of l996
We first address the requirements listed in §214(e)(l)of the Telecommunications Act
of 1996.That provision requires an applicant to be a "common carrier,"as defined by 47 U.S.C.
§153(11),that offers services "using its own facilities or a combination of its own facilities and
resale of another carrier's services."47 U.S.C.§214(e)(l)(A).On the record before us,we find
that TruConnect is a "common carrier"under the definition found at 47 U.S.C.§153(11).We
further find that the FCC has granted forbearance from the "own-facilities"requirement in §
214(e)(l)(A)for Lifeline-only ETCs through its Lifeline and Link Up Reform Order.2 47 U.S.C.
§214(e)(l)(B)requires the Company to "advertise the availability of [its]services and the charges
therefor using media of general distribution."The Company makes adequate assurances in its
Application that it will comply with this provision.Application at 14-15,Ex.5.Based on the
foregoing,we fmd that the Company satisfies the requirements of 47 U.S.C.§214(e)(l).
B.Public Interest
In examining the public interest under 47 U.S.C.§214(e)(2),we first consider whether
the Company would contribute to the appropriate Idaho funds.See Order No.33226 at 3.In its
Application,the Company committed to remit required ITSAP funds to the ITSAP administrator.
Because the Company is applying for Lifeline-onlydesignationas an ETC and does not seek high-
cost support,we find that the Company fulfills this first prong of our analysis.Next,we consider
whether the Company attempts to engage in "cream skimming."Order No.29841 at 16.In Order
No.29541 we explained,"Rural cream skimming occurs when competitors seek to serve only the
low-cost,high-revenue customers in a rural telephone company's study area."Order No.29541
at 16.The Company requests designation statewide (excluding tribal lands),not merely in low-
2 In the Matter ofLifeline and Link Up Reform and Modernization,Telecommunications Carriers Eligible for
Universal Service Support,Connect America Fund,WC Docket No.11-42,et al,and Third Report and Order,
Further Report and Order,and Order on Reconsideration,FCC 16-38.
ORDER NO.34314 4
cost areas.Application at 13.Therefore,the Company's Application does not raise cream
skimming concerns.Thus,we find that granting the Company's Application is consistent with the
public interest.
C.RemainingRequirements
Finally,we address the six remaining requirements from federal regulations and our
ETC Requirements Order.47 C.F.R.§54.202;Order No.29841.
(1)Service Requirements for Support Received.We find that TruConnect has
demonstrated compliance.Application at 11-13.
(2)Plan for Proposed Improvements or Upgrades to the Network.Consistent with our
prior Orders,and that of the FCC,we find this requirement inapplicable because TruConnect seeks
a Lifeline-only ETC designation for which it will receive no network improvement funds.Order
Nos.29841,32501;Lifeline and Link Up Reform Order,27 F.C.C.R.6656,¶386 (requirement
waived because Lifeline-only ETCs receive no network improvement funds).
(3)Ability to Remain Functional in Emergencies.We find the Company has
demonstrated compliance.See Application at 16.
(4)Willingness to Satisfy Consumer Protection and Service Quality Standards.We are
satisfied with the Company's assurances as to this requirement.See Id at 16-17.
(5)Financial and Technical Capability.Based on the Company's assurances,we also
find this requirement is satisfied.See Id at 17.
(6)Notice to Affected Tribes.TruConnect does not seek ETC designation on tribal
lands with this Application;therefore,this provision is inapplicable.See Id at 13.
Based on the above findings,we conclude that TruConnect has satisfied the federal and
state requirements for an ETC designation,and we therefore grant the Application.
ORDER
IT IS HEREBY ORDERED that the Application of TruConnect for designation as an
ETC throughoutIdaho,excluding tribal lands,is granted.
THIS IS A FINAL ORDER.Any person interested in this Order may petition for
reconsideration within twenty-one(21)days of the service date of this Order with regard to any
matter decided in this Order.Within seven (7)days after any person has petitioned for
reconsideration,any other person may cross-petition for reconsideration.See Idaho Code §§61-
626,62-619.
ORDER NO.34314 5
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this /
day of April 2019.
PAUL K.LLAND ,PRESIDENT
KRISTINE RAPER,COMMISSIONER
ERIC ANDERSON,COMMISSIONER
Diane M.Hanian
Commission Secretary
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