20100312Decision Memo.pdf

DECISION MEMORANDUM 1
DECISION MEMORANDUM

TO: COMMISSIONER KEMPTON
COMMISSIONER SMITH
COMMISSIONER REDFORD
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL

FROM: NEIL PRICE
DEPUTY ATTORNEY GENERAL

DATE: MARCH 11, 2010

SUBJECT: AMENDED APPLICATION OF TRACFONE WIRELESS, INC. FOR
DESIGNATION AS AN ELIGIBLE TELECOMMUNICATIONS
CARRIER IN THE STATE OF IDAHO, CASE NO. TFW-T-09-01

On October 29, 2009, TracFone Wireless, Inc. (“TracFone” or “Company”) filed an
Application, pursuant to Section 214(e)(2) of the Communications Act of 1934, for designation
as an Eligible Telecommunications Carrier (“ETC”). Application at 1. TracFone is seeking ETC
designation solely for the purpose of providing Lifeline service under its trade name SafeLink
Wireless and will not seek funds from the federal Universal Service Fund. Id.
On January 15, 2010, Commission Staff submitted a decision memorandum
recommending that the Commission deny TracFone’s Application. On February 5, 2010, the
Commission issued an Order denying TracFone’s Application. See Order No. 30996.
On March 1, 2010, TracFone filed a Petition for Reconsideration and an Amended
Application for ETC designation. On March 8, 2010, Commission Staff filed an Answer to
TracFone’s Petition. Subsequently, TracFone submitted a letter withdrawing its Petition for
Reconsideration and expressing its support for a process that would facilitate a Staff review and
recommendation regarding its Amended Application within 60 days.
AMENDED APPLICATION
TracFone is incorporated in the State of Delaware and is headquartered in Miami,
Florida. First Amended Application at 3. TracFone is a reseller of commercial mobile radio
service (CMRS) throughout the United States, including the State of Idaho. Id. TracFone has
DECISION MEMORANDUM 2
obtained a Certificate of Authority and Certificate of Good Standing from the Idaho Secretary of
State. Id., Exhs. 1-2.
The Company provides service through a virtual network consisting of services
obtained from numerous licensed operators of wireless networks and has provided CMRS
service throughout the State of Idaho for the past ten years. Id. at 4. In Idaho, TracFone obtains
service from several underlying carriers, including AT&T Mobility, T-Mobile, and Verizon
Wireless that enable the Company to offer services wherever these providers offer service. Id.
Initially, TracFone will offer its LifeLine service in all areas of Idaho currently being served by
AT&T Mobility and T-Mobile and expand its service to areas being served by Verizon Wireless
in the second quarter of 2010. Id. at 17-18.
TracFone states that it “will provide Lifeline service to qualifying customers
requesting these services pursuant to the universal service program and in accordance with 47
C.F.R. § 54.202(a)(l).” Id. TracFone states that its Lifeline program can be differentiated from
other ETCs’ Lifeline programs in the following ways: (1) TracFone will offer low-income
consumers the convenience and portability of wireless services; (2) many of its Lifeline-eligible
consumers will be able to obtain subsidized wireless service; and (3) TracFone will not charge
consumers for certain quantities of its Lifeline service. Id.
TracFone will provide a free wireless handset to its Lifeline customers. Id. at 5.
These customers will not incur any activation or usage charges. Id. TracFone service is
available at nationally uniform rates. Id.
On April 9, 2008, the Federal Communications Commission (FCC) granted all of
TracFone’s pending petitions for designation as an ETC, subject to certain conditions. Id. at 6, 9.
The FCC’s decision opened the door for the Commission to consider TracFone’s Application
seeking ETC designation in Idaho under Section 214(e)(2) of the federal Communications Act.
Id. at 7-8.
TracFone has been granted ETC designation in the following states: Florida, Georgia,
Illinois, Louisiana, Maine, Maryland, Michigan, Missouri, New Jersey, Ohio, Texas, West
Virginia and Wisconsin. Id. at 8, fn. 12. Upon ETC designation in Idaho, TracFone asserts that
it will offer “all of the services and functionalities Sections 54.101(a) and 54.202(a) of the FCC’s
Rules (47 C.F.R. §§ 54.101(a), 54.202(a)) and ETC Checklist . . .” Id. at 11.
DECISION MEMORANDUM 3
TracFone states that it is seeking ETC designation solely to obtain USF funding to
provide Lifeline service to qualified low-income consumers and will not seek or accept high-cost
support. Id. at 18. TracFone noted that there is only one other wireless ETC, Syringa Wireless,
providing Lifeline service in Idaho to approximately 1,600 Lifeline customers. Id. at 22-23, fn.
37. Finally, the Company believes that granting ETC status will benefit low-income consumers,
low volume users, transient users and other types of consumers in Idaho “who either choose not
to enter into long-term service commitments or who are unable to meet the credit requirements
necessary to obtain service from other wireline or wireless carriers.” Id. at 28.
STAFF RECOMMENDATION
Staff has made a cursory review TracFone’s Amended Application. In its Answer to
TracFone’s Petition for Reconsideration, which was later obviated by TracFone’s decision to
withdraw its Petition, Staff recommended that the Amended Application be processed through
Modified Procedure with a 60-day comment period. This extended comment period is necessary
in order to allow Staff to submit and receive responses to its production requests regarding
TracFone’s Amended Application.
COMMISSION DECISION
Does the Commission wish to process TracFone’s Amended Application for
designation as an Eligible Telecommunications Carrier through Modified Procedure with a 60-
day comment period?

M:TFW-T-09-01_np