20110203Application.pdf

SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
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February 2, 2011
V¡V u --i - tC -01
VIA OVERNIGHT DELIVERY
Jean Jewell
Commission Secretary
Idaho Public Utilities Commission
472 West Washington
Boise, ID 83702
Re: Petition of Virgin Mobile USA for Limited Designation as an Eligible
Telecommunications Carier
Dear Ms. Jewell:
Enclosed please find an original and seven (7) copies of Virgin
Mobile USA's Petition for Limited Designation as an Eligible Telecommunications
Carier in the State of Idaho. Please date stamp the extra copy of the petition
included herein and retur it to me in the postage prepaid envelope.
If you have any questions, please do not hesitate to contact me at 202-
371-7392.
Respectfly (mitrd'
J~L~L
Counsel to Virgin Mobile USA, L.P.
Enclosures
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John M. Beah
Skadden, Ars, Slate, Meagher & Flom LLP
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Washington D.C. 20005
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19
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
In the Matter of the Petition of
Virgin Mobile USA, L.P. for
Limited Designation as an
Eligible Telecommunications Carier
Februar 2,2011
)
)
)
)
Case No. VM,LJ - T - il-cp'l
PETITION FOR LIMITED
DESIGNATION AS AN ELIGIBLE
TELECOMMUNICATIONS CARRER
TABLE OF CONTENTS
i. INTRODUCTION...............................................................................................................1
II. BACKGROUND.................................................................................................................2
A. Company Overview ................................................................................................ 2
B. Previous ETC Designations............. ........ .......... ....................................... .............. 3
C. The Commission Has the Authority to Perform ETC Designations.. ............. ........ 4
III. VIRGIN MOBILE REQUESTS ETC DESIGNATION IN ITS IDAHO
SERVICE AREA FOR PARTICIPATION IN THE LIFELINE PROGRAM................... 4
A. Virgin Mobile Requests ETC Designation for its Entire Service Territory............ 4
B. Virgin Mobile Requests ETC Designation for Paricipation in the
Lifeline Program..................................................................................................... 5
C. Description of Prepaid Lifeline Offering ................................................................ 6
D. Applicabilty of Forbearance Conditions ................................................................ 9
IV. VIRGIN MOBILE SATISFIES THE REQUIREMENTS FOR DESIGNATION
AS AN ETC ...................................................................................................................... 10
A. Virgin Mobile Is a Common Carier ..................................................................... 11
B. Virgin Mobile Wil Provide the Supported Services ............................................ 11
1. Voice Grade Access to the Public Switched Telephone Network ............ 11
2. Local Usage............................................................................................... 12
3. DTMF Signaling or its Functional Equivalent.......................................... 13
4. Single-Pary Service or its Functional Equivalent .................................... 13
5. Access to Emergency Services..................................................................13
6. Access to Operator Services...................................................................... 14
7. Access to Interexchange Services............................................................. 14
8. Access to Directory Assistace................................................................. 14
9. Toll Limitation .......................................................................................... 14
C. Functionality in Emergency Situations ...... ........................ .............................. ..... 15
D. Advertising of Supported Services............................. ........ ................. .................. 16
E. Commitment to Providing Supported Services ..................... .......................... ...... 16
F. Equal Access to LD Cariers ............. ...................... ............................... ............... 17
V. DESIGNATION OF VIRGIN MOBILE AS AN ETC WOULD PROMOTE
THE PUBLIC INTEREST ................................................................................................ 17
VI. ANTI-DRUG ABUSE CERTIFICATION ....................................................................... 20
VII. CONCLUSION ................................................................................................................. 21
SUMMARY
Virgin Mobile USA, L.P. ("Virgin Mobile" or the "Company"), a wholly owned
subsidiar of Sprint Nextel Corporation ("Sprint Nextel"), is seeking designation as an Eligible
Telecommunications Carrier ("ETC") in the State ofIdaho, pursuant to Section 214(e)(2) of the
Communications Act of 1934, as amended ("Act"), for puroses of offering prepaid wireless
services supported by the Universal Service Fund's ("USF") Lifeline program. As discussed
herein, Virgin Mobile meets all of the necessary requirements for ETC designation under
Section 214( e)( 1) of the Act to offer services supported by the Lifeline program. Designation
of the Company would promote the public interest because it would provide qualifying Idaho
customers with lower prices and higher quality wireless services. Many low-income customers
in Idaho have yet to benefit from the intensely competitive wireless market because of financial
constraints, poor credit history or intermittent employment, and many existing customers lose
access to wireless services when their financial position deteriorates as a consequence of losing
a job, a medical condition or any other adverse event-all unfortunately too common during a
challenging economic period. Virgin Mobile's prepaid Lifeline service offerings are ideally
suited to provide these customers with reliable wireless services. As an ETC, Virgin Mobile
would be able to provide affordable, and even free, services to these consumers-many of
whom are among the intended beneficiaries of USF support.
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
In the Matter of the Petition of
Virgin Mobile USA, L.P. for
Limited Designation as an
Eligible Telecommunications Carrier
)
)
)
)
PETITION FOR LIMITED
DESIGNATION AS AN ELIGIBLE
TELECOMMUNICATIONS CARRER
Case No.
i. INTRODUCTION
Virgin Mobile USA, L.P. ("Virgin Mobile" or the "Company"), by undersigned counsel, and
pursuant to Section 214(e)(2) of the Communications Act of 1934, as amended ("Act"), 47 U.S.C. §
214(e)(2), hereby petitions the Idaho Public Utilties Commission ("Commission") for designation as
an eligible telecommunications carier ("ETC") in the State of Idaho. Virgin Mobile seeks ETC
designation under the trade name "Assurance Wireless Brought to You By Virgin Mobile" only for
puroses of paricipation in the Universal Service Fund's ("USF") Lifeline program. The instant
request does not seek ETC designation to offer services supported by the high-cost program. As
discussed below, Virgin Mobile satisfies the requirements for designation as an ETC in the State of
Idaho. i Rapid approval of Virgin Mobile's request, moreover, would advance the public interest
because it would enable the Company to commence much needed Lifeline services to lower-income
Idaho residents as soon as possible. Accordingly, the Company respectfully requests that the
Commission expeditiously approve the instant petition.
See In the Matter of the Application ofWWC Holding Co., Inc. DBA Cellular-One Seeking Designation as an
Eligible Telecommunications Carrier That May Receive Federal Universal Service Support, Case No. WST-T-05-1,
Order No. 29841 at Appendix A (2005) (hereinafter "ETC Checklist').
1
II. BACKGROUND
A. Company Overview
Virgin Mobile was established as a joint venture between Sprint Nextel Corporation ("Sprint
Nextel") and Sir Richard Branson's Virgin Group to offer prepaid wireless services using the Virgin
Mobile brand and the Nationwide Sprint Network. On November 24,2009, Virgin Mobile became a
wholly owned subsidiary of Sprint Nextel upon completion of the companies' previously anounced
transaction. The Federal Communications Commission ("FCC") approved Sprint Nextel's
acquisition of Virgin Mobile effective September 11,2009.2
Unlike many wireless cariers, Virgin Mobile does not impose credit checks or long-term
service contracts as a prerequisite to obtaining service. Many customers are from lower-income
backgrounds and did not previously enjoy access to an attractive, comprehensive and high-quality
wireless service because of financial constraints or poor credit history. Virgin Mobile estimates that
approximately one-third of its present customers are new to wireless services and 35 percent have an
anual household income below $35,000. Many of these customers also use Virgin Mobile's
services sparingly, with a substantial percentage spending less than $10 per month. By marketing
and expanding the availabilty of appealing wireless services to consumers otherwse unable to afford
them, and those previously ignored by traditional cariers, Virgin Mobile has effectively expanded
access to wireless services. Unfortunately, during this challenging economic period, many existing
customers have to forgo access to wireless services entirely when their financial position deteriorates,
making it more difficult for prospective employers and dependent family members to reach them and
losing wireless access to emergency services.
See International Authorizations Granted, Public Notice, DA 09-2071 (reI. Sept. 17,2009).
2
B. Previous ETC Designations
In March 2009, the FCC designated Virgin Mobile as an ETC for puroses of offering
Lifeline services in the states of New York, North Carolina, Tennessee and Virginia.3 Because, at
that time, Virgin Mobile operated as a mobile virtual network operator that did not own any network
facilities, the 2009 Order also conditionally granted the Company's request for forbearance from
enforcement from the Section 214(e)(l)(A) facilities-based requirement for ETC designation. Based
on Virgin Mobile's status as a reseller, the FCC conditioned its grant of forbearance, as well as its
grant of ETC designation, on Virgin Mobile's compliance with certain obligations.
By Order dated December 29,2010, the FCC designated Virgin Mobile as an ETC in the
states of Alabama, Connecticut, Delaware, New Hampshire and Washington D.C. 4 In the 2010
Order, the FCC determined that Virgin Mobile now operates as a facilties-based carer for puroses
of Section 214 of the Act in light of its acquisition by Sprint NexteL. As discussed more fully below
in Section III.C., the FCC concluded that Virgin Mobile "no longer needs forbearance" from the
Section 214 facilties-based requirement and lifted certain forbearance conditions associated with
Virgin Mobile's prior status as a reseller.5
See Federal-State Joint Board on Universal Service; In the Matter of Virgin Mobile USA, L.P. Petitionfor
Forbearancefrom 47 u.s.c. § 214(e)(1)(A); Petitions for Designation as an Eligible Telecommunications Carrier in
the States of New York, North Carolina, Pennsylvania, Tennessee and Virginia, Order, FCC 09-18 (reI. March 5,
2009)("2009 Order").
4 See Federal-State Joint Board on Universal Service; In the Matter of Virgin Mobile USA, L.P. Petitionsfor
Designation as an Eligible Telecommunications Carrier in the States of Alabama, Connecticut, Delaware, New
Hampshire and Washington D.C., Order, DA 10-2433 (reI. Dec. 29, 2010) ("2010 Order").
See id. at ~ 15.
3
The public utilty commissions of the states of Florida, Indiana, Louisiana, Marland,
Michigan, Mississippi, New Jersey, Texas, Washington and West Virginia have also designated
Virgin Mobile as a facilities-based ETC without reliance on the 2009 Order.
C. The Commission Has the Authority to Perform ETC Designations
The Commission has the requisite authority to perform the limited ETC designation requested
herein. Section 21 4( e )(2) of the Act provides state public utilty commissions with the "primar
responsibilty" for the designation ofETCs.6 Pursuant to this authority, the Commission has
historically paricipated in determining whether to grant ETC status to an applying carer, including
any requesting wireless carier.7 Under the Act, a state public utilty commission with jursdictional
authority over ETC designations must designate a common carier as an ETC if the carier satisfies
the requirements of Section 214( e)(1). By offering all of the services supported by the federal USF
and advertising the availabilty of such services, Virgin Mobile currently meets all of the
requirements of Section 214 of the Act, waranting its designation as an ETC by the Commission.
III. VIRGIN MOBILE REQUESTS ETC DESIGNATION IN ITS IDAHO SERVICE AREA
FOR PARTICIPATION IN THE LIFELINE PROGRAM
A. Virgin Mobile Requests ETC Designation for its Entire Service Territory
As a non-rural carer, Virgin Mobile is required to describe the areas within which it requests
ETC designation. The Company requests ETC designation for its entire service area in Idaho.
8
Virgin Mobile understands that its service area overlaps with many rural carriers in Idaho, but
maintains that the public interest factors described below justify its designation in these cariers'
6 47 U.S.C. § 214(e)(2).
7 See In re: Petition of Edge Wireless, LLC for Designation as an Eligible Telecommunications Carrier Under 47
Us.c. § 214(e)(2), Order No. 30360, Case No. EDG-T-07-1 (2007).
A list of the wire centers for which Virgin Mobile requests ETC designation is attched hereto as Exhibit 2.
4
service areas, especially because it only seeks ETC designation for purposes of paricipating in the
Lifeline program.
B. Virgin Mobile Requests ETC Designation for Participation in the Lifeline Program
Virgin Mobile requests ETC designation in Idaho for the sole purose of participating in the
Lifeline program as a prepaid wireless carier. Virgin Mobile wil not seek to provide services
supported by the USF's high-cost program. As more fully described below, the instat request to
paricipate in the Lifeline program promotes the goals of universal service and offers many benefits
to low-income customers in the State of Idaho. The Lifeline services provided by Virgin Mobile wil
contain many features specifically designed for qualifying customers. Indeed, Virgin Mobile's
Lifeline plans wil provide affordable and convenient wireless services to qualifying Idaho customers,
many of whom are otherwise unable to afford wireless services.
Virgin Mobile's designation as an ETC solely for Lifeline puroses also would not unduly
burden the USF or otherwise reduce the amount of fuding available to other carriers. The secondar
role of Lifeline support with respect to overall USF expenditues is well documented. According to
the most recent monitoring report released by the Federal-State Joint Board on Universal Service,
Lifeline funding represented approximately 14% of total USF expenditures in 2009.9 The FCC,
itself, concluded that designation of Virgin Mobile as an ETC would result only in a "minimal"
increase in USF funding.
10
The nature by which Lifeline support is provided to wireless carers also obviates any
concerns that multiple ETC designations in Idaho would have a negative impact on the USF. Lifeline
9 See Universal Service Monitoring Report, CC Docket 98-202, Char 1. (fied Dec. 30, 2010).
10 See 2009 Order at ~ 24.
5
support is provided on a customer-specific basis, and only after a carer has acquired and begun to
serve an eligible customer does the carier receive Lifeline support for that customer. By tying
support to actual service of a customer, moreover, the Lifeline program ensures that USF support
only funds the carier that actually "wins" the customer's service.
C. Description of Prepaid Lifeline Offering
Virgin Mobile has branded its prepaid Lifeline service "Assurance Wireless Brought To You
By Virgin Mobile." The service wil provide customers with the same features and fuctionalities
enjoyed by all other Virgin Mobile prepaid customers, with one notable exception: prepaid Lifeline
services are available free of charge. Under the basic plan, eligible customers wil receive 250
anytime prepaid minutes per month at no charge with additional service priced at $0.1 O/minute and
$0. 1 O/text message. 1 1 Virgin Mobile has also recently implemented additional methods by
which Lifeline customers entirely at their option can purchase blocks of additional services.12 Under
the first option, Lifeline customers can add $5 to their account to purchase an additional 250 monthly
minutes, providing them with a total of 500 voice minutes in a month (250 free minutes plus 250
additional minutes). Under the second option, Lifeline customers can add $20 to their account to
purchase an additional 750 voice minutes, providing them with a total of 1,000 voice minutes (250
free minutes plus 750 additional minutes). Customers choosing this second option will also receive
1,000 monthly text messages. There is no obligation that customers purchase these additional
11 Virgin Mobile expects that the Company's Lifeline plan may change as the wireless market evolves. As such, the
Company requests that the Commission's grant of ETC designation provide it with the requisite authority to modify
the parameters of the offering as marketplace conditions develop.
12 A description of these service offerings is available on the Assurance Wireless website:
htt://www.assurancewireless.comlublic/MorePrograms.aspx.
6
offerings or add money to their accounts, and all eligible customers wil continue to receive 250 free
monthly minutes.
13
Eligible customers can select any option on a month-to-month basis without subscribing to a
long-term contract or incurring activation charges or connection fees. In the event that a customer
selecting either the $5/500 or $20/1000 minute plan does not have sufficient fuds in the Lifeline
account at the time the minutes are to be deposited in a paricular month, the customer would default
to the free 250-minute plan for that month. Consistent with the curent offerings, the rates for service
under all plans include all applicable taxes and fees, and customers can use their monthly minutes to
place calls statewide (or even nationwide) because none of the plans imposes a local callng area
requirement. 14 Finally, each service plan also includes voicemail, caller I.D. and call waiting services
at no additional charge.
To ensure that customers receive uninterrpted access to 911 emergency and customer care
services, Lifeline customers wil be able access 91 1 emergency and customer care services regardless
of whether they have any remaining minutes in their account. In addition, minutes used for calls
placed to 911 emergency services and Virgin Mobile/Assurance Wireless customer care are not
decremented from a customer's account. As a result, Lifeline customers wil receive free service so
long as they do not elect to exceed 250 minutes of voice service per month with no additional charges
for taxes or activation.
New customers may elect to receive a free Assurance Wireless-branded handset with E911
fuctionality. Curent Virgin Mobile customers wil be able to use their existing handsets to receive
13 Consistent with curent practice, minutes and text messages do not car forward from month-to-month. Customers
can stil purchase individual voice minutes and text messages for $0.10.
14 Customers may incur state sales tax and fees at the point of purchase should the customer choose to top-up their
account.
7
prepaid Lifeline services, or may elect to receive a free Assurance Wireless handset. The handset
provided free of charge to Lifeline customers is sold separately by the Company to its non-Lifeline
customers for $9.99 and marketed as the Kyocera Jax. By providing a wireless handset free of
charge, Virgin Mobile can ensure that Lifeline-eligible customers in Idaho will not incur any upfront
costs for access to the Company's Lifeline services.
To guard against potential fraudulent use of Lifeline service, applicants for Lifeline service
must provide a variety of information, including their name, residential address and relevant
eligibilty criteria. The enrollment form includes an applicant certification section where each
applicant must attest and sign under penalty of perjur that the applicant receives Lifeline-supported
service only from Virgin Mobile. The applicant must submit the signed enrollment form and all
supporting documentation as required by federal or state guidelines to the Company prior to
commencement of Lifeline service. As an additional protection against fraudulent use of the
Company's Lifeline services, Virgin Mobile tracks each applicant's primar residential address and
cross checks this information against internal databases to confirm that a Virgin Mobile Lifeline
account has not already been activated for that address or individuaL. If a name or address submitted
by a Lifeline applicant is associated with a customer who already receives Virgin Mobile Lifeline
service, or if the address provided is not a valid U.S. postal address, Virgin Mobile wil review the
application to ascertin whether the customer is attempting to activate multiple Virgin Mobile
Lifeline accounts and, if so, deny the application.
15
To ensure that USF fuds are received only for customers who actively use their Lifeline
services, Virgin Mobile wil implement a non-usage policy in Idaho. Under this policy, if a customer
is It is important to note that Virgin Mobile does not have access to the customer lists of other ETCs and, thus, cannot
cross-match its customer list against another ETC's list.
8
does not make a voice call or send a text message or otherwse demonstrate activity at least once
during any continuous 60-day period, Virgin Mobile wil promptly notify the customer that the
customer is no longer eligible for Lifeline service subject to a 30-day grace period. During the 30-
day grace period, the customer's account would remain active, and Virgin Mobile wil engage in
outreach efforts to determine whether the customer desires to remain on its Lifeline service. If the
customer's account does not show any customer-specific activity during the grace period (such as
making or receiving a voice call, receiving or sending a text message, downloading data or adding
money to the account), Virgin Mobile wil deactivate Lifeline services for that customer. In addition,
Virgin Mobile wil not recover a federal USF subsidy for the free minutes provided to the customer
during the grace period or thereafter report that customer on its USAC Form 497.
D. Applicabilty of Forbearance Conditions
In light of the FCC's recent decision to designate Virgin Mobile as a facilties-based ETC and
lift the requirements associated with its prior grant òf forbearance, Virgin Mobile respectfully
submits that the Commission similarly designate it as a facilties-based ETC. As the FCC noted in its
recent decision, Virgin Mobile is a facilities-based carrier for purposes of Section 214( e )(1) of the
Act, even though absolute, direct legal title to Virgin Mobile's wireless communications facilties lies
with its parent and sibling corporate enterprises that are par of the Sprint family.16 Consistent with
its prior decisions, the FCC rejected a formulistic interpretation of the term "own facilties" in
Section 214( e)( 1) and adopted a more flexible approach. 17 In these prior decisions, the Commission
determined that the Section 214(e)(1) concept of "own facilties" includes facilties for which a
16 See 2010 Order at~ 15-16.
17 See id
9
carier has beneficial use and over which it "does not hold absolute title," and that any contrary
,
interpretation would frstrate the goals of the Act and lead to absurd results.,,18
In recognizing Virgin Mobile as a facilties-based carier, the FCC explicitly rescinded the
forbearance condition that required Virgin Mobile, like other wireless resellers granted forbearance,
to seek certification from each public safety answering point ("PSAP") confirming that customers
have access to 911 and enhanced 91 1 ("E911 ") service - a condition not required of facilties-based
cariers. As the FCC recognized in its 2010 Order, requiring Virgin Mobile to obtain certifications
regarding its 91 lIE911 capabilties is unnecessary given that Virgin Mobile provides the same 911
and E91 1 services to its customers as any other Sprint wireless customer receives using Sprint's
existing 911 and E91 1 facilties and PSAP relationships. Indeed, all 911 emergency calls made by
Virgin Mobile customers are handled in the same fashion as calls made by any other Sprint customer.
When a Virgin Mobile customer calls 911, the call is received by Sprint Corporate Security, which
maintains responsibilty for routing to the appropriate PSAP, just as with any other 91 1 call made by
a Sprint customer. If a PSAP were required to directly contact the company because of a
disconnection, the call would be handled by Sprint Corporate Security, which has access to all Virgin
Mobile customer information-just as it does for all other Sprint operating subsidiares. Virgin
Mobile respectfully submits that it be subject to the same requirements as any other facilties-based
wireless ETC in Nebraska with respect to 911 and E91 1 issues.
IV. VIRGIN MOBILE SATISFIES THE REQUIREMENTS FOR DESIGNATION AS AN ETC
Section 214(e)(1) of the Act and Item A.2 of the ETC Checklist require that applicants for
ETC designation be common cariers that wil offer all of the services supported by the USF, either
IS In re Federal-State Joint Board on Universal Service, 12 FCC Rcd 8776, ~ 159-161 (1997).
10
using their own facilities or a combination of their own facilities and the resale of another carier's
services. Applicants must also commit to advertise the availabilty and rates of such services.
19 As
detailed below, Virgin Mobile satisfies each of the above-listed requirements.
A. Virgin Mobile Is a Common Carer
Section 153(10) of the Act defines a common carrier as "any person engaged as a common
carier for hire, in interstate or foreign communications by wire or radio ... ,,20 The FCC has
determined on numerous occasions that providers of mobile wireless services shall be tre,ated as
common carriers for regulatory puroses. As a provider of wireless telecommunications services,
therefore, Virgin Mobile is a common carier eligible for designation as an ETC as required by Item
A. 1 of the ETC Checklist.
B. Virgin Mobile Wil Provide the Supported Services
As described above, Virgin Mobile is a wholly owned subsidiar of Sprint Nextel.
Accordingly, Virgin Mobile is capable of, and currently provides, the supported services over an
existing network infrastructure in Idaho. Virgin Mobile's request for ETC designation complies with
Section 214(e)(I) of the Act because it provides all of the services and fuctionalities supported by
the universal service program as set forth in Section 54.101 of the FCC's regulations throughout its
service territory in the State ofIdaho. The Company, moreover, wil make these services and
fuctionalities available to any qualifying Idaho customer in the Company's service area.
1. Voice Grade Access to the Public Switched Telephone Network
19 See 47 U.S.C. § 214(e)(1) and 47 C.F.R. § 54.201(d).
20 47 U.S.C. § 153(10).
11
Virgin Mobile provides voice grade access to the public switched telephone network
("PSTN") and offers its customers services at bandwidth rates between 300 and 3,000 MHz as
required by the FCC's regulations.21
2. Local Usage
As par of the voice grade access to the PSTN, an ETC must provide local callng services to
its customers. Neither the FCC's nor the Commission's regulations require ETCs to offer a specific
amount of local usage or mandate that ETCs provide a minimum number of free local calls or
minutes. Instead, an applicant for ETC designation must demonstrate that it offers a local usage plan
that is "comparable" to the plan offered by the ILEC in the relevant service territory.22 In analyzing
whether an ETC applicant's plan is comparable to the underlying ILEC's plan, the FCC has indicated
that it reviews all aspects of the plan on a case-by-case basis, including the natue of the supported
service, the size of the local callng area, the inclusion of additional services (~, caller I.D., etc.)
and the amount of local usage.23 The FCC has determined that a carrier satisfies the local usage
requirements when it offers customers rate plans containing varying amounts of local usage.24
Virgin Mobile's proposed Lifeline offering fully complies with the local usage requirements
established by the FCC and this Commission.2s Not only wil Virgin Mobile's offering be
comparable to the underlying ILEC plans, but it also wil exceed them in several respects. Contrar
21 See47U.S.C. § 54.101(a)(l).
22 47 C.F.R. § 54.202(a)(4).
23 See Federal-State Joint Board on Universal Service, Report and Order, 20 FCC Rcd 6371, 6385 (2005).
24 See e.g., Farmers Cellular, Inc., 18 FCC Rcd 3848, 3852 (2003); Pine Belt Cellular, Inc. and Pine Belt PCS, Inc., 17
FCC Rcd 9589, 9593 (2002); Western Wireless Corp., Petition for Designation as an Eligible Telecommunications
Carrier in the State of Wyoming, 16 FCC Rcd 48,52 (2000).
25 See ETC Checklist Item BA.
12
to the ILECs' plans, Virgin Mobile will offer customers a certain amount of service free of charge.
As discussed above, Virgin Mobile will provide its Lifeline customers with 250 anytime minutes per
month at no charge. Contrary to the ILEC plans, which contain relatively small local callng areas,
Virgin Mobile customers can use these free minutes to place calls statewide (or even nationwide)
because Virgin Mobile does not constrict customers' use by imposing a local callng area
requirement. In addition to free voice services, Virgin Mobile wil provide Lifeline customers with
access to a varety of other features at no cost, including voice mail, caller I.D., call waiting services
and E91 1 capabilties. Most important, Virgin Mobile's Lifeline service wil provide low-income
Idaho residents with the convenience and securty offered by wireless services without interrption-
even if their financial position deteriorates.
3. DTMF Signaling or its Functional Equivalent
Virgin Mobile provides dual tone multi-frequency ("DTMF") signaling to expedite the
transmission of call set up and call detail information throughout its network. All wireless handsets
offered for sale by the Company are DTMF-capable.
4. Single-Party Service or its Functional Equivalent
"Single-pary service" means that only one pary wil be served by a subscriber loop or
access line during a telephone transmission. Virgin Mobile provides the fuctional equivalent of
single-pary service to its wireless customers for the duration of each telephone call, and does not
provide multi-party (or "par-line") services.
5. Access to Emergency Services
Virgin Mobile provides nationwide access to 911 emergency services for all of its customers.
Virgin Mobile also complies with the FCC's regulations governing the deployment and availabilty of
E91 1 compatible handsets.
13
6. Access to Operator Services
Virgin Mobile provides all of its customers with access to operator services.
7. Access to Interexchange Services
Virgin Mobile's service provides its customers with the abilty to make interexchange, or long
distance, telephone calls. Domestic long distance capabilties are included in Virgin Mobile's service
with no additional charges because minutes for local or domestic long distance services are not biled
separately at different rates.
8. Access to Directory Assistance
All Virgin Mobile customers are able to dial "41 1" to reach directory assistance services from
their wireless handsets.
9. Toll Limitation
Toll limitation allows customers to either block the completion of outgoing long distace calls
or specify a certain amount of toll usage to prevent them from incurring significant long distance
charges and risking disconnection. As described above, Virgin Mobile provides its wireless service
on a prepaid, or "pay-as-you-go," basis. Virgin Mobile's service, moreover, is not offered on a
distance-sensitive basis and minutes are not charged separately for local or domestic long distance
services. Customers also must specifically authorize access for international services, for which
additional charges may apply. The FCC determined in its grants of ETC designation to the Company
that the nature of Virgin Mobile's service mitigates concerns that low-income customers will incur
significant charges for long distance calls, risking disconnection of their service?6
26 See 2009 Order at ir 34; 2010 Order at fn. 33.
14
C. Functionality in Emergency Situations
As a wholly owned subsidiar of Sprint Nextel, Virgin Mobile is able to remain fuctional in
emergency situations as required by Section 54.202(a)(2) of the FCC's regulations and Item B.2 of
the ETC Checklist?7 Sprint Nextel has established a variety of internal programs, policies and teams
dedicated to analyzing, assessing and responding to emergency situations. These programs, policies
and teams ensure the timely and effective deployment of Sprint Nextel's products and services to
allow the public and private sectors to fuction in emergency situations. Indeed, Sprint Nextel's
network is monitored 24 hours a day, 7 days a week, 365 days a year by its network monitoring
centers. Local switching offces staffed by trained technicians and management coordinate with
these larger operation centers, to ensure that Sprint's networks are properly maintained and network
performance is at expected levels.
In addition, Sprint has reasonable amounts of back-up power to ensure fuctionality without
an external power source, and has implemented reasonable practices to reroute traffic around
damaged facilities and manage traffc spikes resulting from emergency situations. Each cell site in
the Sprint network is equipped with two hours of battery back-up power. The company also is
capable of rerouting traffc around damaged facilties. Many cell sites in the Sprint network provide
overlapping coverage for neighboring areas, and such design redundancy ensures that coverage
continues in the event of damage to a paricular facilty. In the event of a major failure of a cell site,
neighboring sites could be adjusted to provide coverage to a wider service area. These practices
significantly reduce the chance that emergencies, fiber cuts or equipment failure will result in a loss
of service.
27 See 47 C.F.R. § 54.202(a)(2).
15
D. Advertising of Supported Services
Virgin Mobile wil advertise the availability and rates for the services described above using
media of general distribution in conformance with the FCC's regulations and Item A.3 of the ETC
Checklist.28 The Company advertises the availabilty of its non-Lifeline services through
newspapers, magazines, radio, the Internet, bilboards and television. Virgin Mobile's third-pary
retail parners also heavily promote its services. These advertising campaigns have been highly
effective in reaching low-income customers and promoting the availabilty of cost-effective wireless
services to this consumer segment.
Virgin Mobile will supplement these methods of communication to specifically advertise and
promote the availabilty of its Lifeline offerings to qualifying customers throughout the State of
Idaho. The Company also intends to promote these offerings to its existing customers-many of
whom may otherwise qualify for Lifeline.
E. Commitment to Providing Supported Services
As noted above, Virgin Mobile is seeking ETC designation in Idaho only in areas where the
Company currently offers service. Virgin Mobile is committed to providing service to all customers
in its service territory who make a reasonable request for service and to maintaining its network to
maximize service generally. Thus, though the Company submits that application of the network
improvement measures listed in Item B.1 of the ETC Checklist are more appropriate to carier
requests for ETC designation for high-cost puroses, Virgin Mobile will abide by the requirements
for its Lifeline services in Idaho. Specifically, the Company wil implement one or more of the
measures according to the terms of the FCC's Order adopting the requirements for potential
28 See 47 C.F.R. § 54.201.
16
customers who reside within the Company's existing service territory, but who are unable to access
the Company's network.29 Such measures wil ensure that the broadest number of requesting
customers within Virgin Mobile's designated service territory can receive Lifeline services from the
Company.
F. Equal Access to LD Cariers
Virgin Mobile certifies its acknowledgement that the Commission may require it to provide
equal access to long distance carers in the event that no other ETC is providing equal access within
the service area, as required by 47 C.F.R. § 54.202(a)(5).
V. DESIGNATION OF VIRGIN MOBILE AS AN ETC WOULD PROMOTE THE PUBLIC
INTEREST
One of the principal goals of the Act, as amended by the Telecommunications Act of 1996, is
"to secure lower prices and higher quality services for American telecommunications consumers and
encourage the rapid deployment of new telecommunications technologies" to all citizens, regardless
of geographic location or income.3o There is no question that designation of Virgin Mobile as an
ETC in Idaho wil further the public interest by providing Idaho consumers, especially low~income
consumers, with lower prices and higher quality services. Many lower-income customers in Idaho
have yet to reap the full benefits of the intensely competitive wireless market. Whether because of
financial constraints, poor credit history or intermittent employment, these consumers often lack the
countless choices available to most consumers. Designating Virgin Mobile as an ETC in Idaho,
29 Virgin Mobile notes that coverage within its estimated coverage area may var due to many factors, including but not
limited to the wireless device being used, strctues, buildings, weather, geography, and topography, as well as the
network and softare. The Company would also like to note that roaming is not available to Virgin Mobile
customers, including its Lifeline customers.
30 Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56.
17
therefore, wil enable it to expand the availabilty of affordable telecommunications services to
qualifying Idaho customers, and is consistent with the public interest, convenience and necessity,31
The instant request for ETC designation must be examined in light of the Act's goals of
providing low-income consumers with access to telecommunications services. The primar purose
of universal service is to ensure that consumers-especially low-income consumers-receive
affordable and comparable telecommunications services Given this context, designating Virgin
Mobile as an ETC would benefit Idaho consumers, especially its many low-income consumers
eligible for Lifeline services. The Company's paricipation in the Lifeline program also undoubtedly
would increase opportunities for it to serve Idaho customers with appealing and affordable service
offerings. Indeed, the FCC has determined that Virgin Mobile's Lifeline service offerings provide a
variety of benefits to Lifeline-eligible customers, including "increased consumer choice, high-quality
service offerings and mobilty.,,32
Designation of Virgin Mobile as an ETC would also promote competition and increase the
pressure on other carriers to target low-income consumers with service offerings tailored to their
needs, greatly benefiting this much ignored consumer segment. Virgin Mobile will bring the same
entrepreneurial spirit that has reinvigorated the wireless industry to the Idaho Lifeline market, helping
to redefine the wireless experience for many low-income consumers in the state. Other carriers,
therefore, will have the incentive to improve their existing service offerings and tailor service plans to
contain service terms and features appealing to lower-income customers. This competition would
represent a significant step towards ensuring that all low-income customers share in the many
31 See ETC Checklist Item A,4.
32 See 2010 Order at'r 19.
18
benefits associated with access to wireless services, which a study found to be a vital economic
resource for low-income consumers that leads to improved wage levels and personal safety.33
Virgin Mobile's Lifeline customers wil receive the same high-quality wireless services
provided to all Company customers. Virgin Mobile has emphasized customer service as an essential
pilar for its marketplace success since service launch. Indeed, the Company's success is testaent to
the principle that wireless cariers can provide lower-income customers with the same features,
functionalities and services demanded by higher-income consumers. This intense focus on customer
service has been rewarded and customers have responded accordingly. As evidence of its
commitment to high-quality service, Virgin Mobile has complied with the CTIA-The Wireless
Association(ß Consumer Code for Wireless Service ("Consumer Code") since its inception and will
continue to comply with the Consumer Code once designated as an ETC.34 Virgin Mobile anually
certifies its compliance with the Consumer Code, and the Commission and the FCC recognize the
value of such compliance.35 In prior years, the Company has also received numerous awards for its
high-quality customer service, including the prestigious J.D. Power award for providing "An
Outstanding Customer Service Experience" under J.D. Power's Certified Call Center Program.
While Virgin Mobile has experienced success in deploying wireless services to low-income
consumers, internal Company analysis suggests that many low-income customers stil intermittently
discontinue service because of economic constraints. ETC designation in Idaho would enable Virgin
33 See Sullvan, "A Review of
Literatue and Data from Two New Sureys," April 2008.
34 Virgin Mobile's compliance with the Consumer Code also satisfies its obligations under the FCC's and the
Commission's regulations. See 47 C.F.R. § 54.202(a)(3); Item B.3 of the ETC Checklist.
35
See also Federal-State Joint Board on Universal Service Virginia Cellular, LLC Petition for Designation as an
Eligible Telecommunications Carrier In the Commonwealth of Virginia, Memorandum Opinion and Order, 19 FCC
Rcd 1563, 1576-77, wherein the FCC endorsed the Consumer Code by considering adherence to the Consumer Code
as a factor in the demonstration of a wireless carrier's qualifications to be an eligible telecommunications carrier.
19
Mobile to offer appealing and affordable service offerings to low-income Idaho customers to ensure
that they are able to afford wireless services on a consistent and uninterrpted basis. Without
question, prepaid wireless services have become essential for lower-income customers, providing
them with value for their money, access to emergency services on wireless devices, and a reliable
means of contact for prospective employers, social service agencies or dependents.36 Providing
Virgin Mobile with the authority necessar to offer discounted Lifeline services to those most in
danger of losing wireless service altogether undoubtedly promotes the public interest.
VI. ANTI-DRUG ABUSE CERTIFICATION
Virgin Mobile certifies that no pary to this Petition is subject to denial of federal benefits,
including FCC benefits, pursuant to Section 5301 of the Anti-Drug Abuse Act of 1988.
36 Indeed, a recent aggregate surey of Virgin Mobile customer usage patterns indicated that state and city welfare
agencies are among the most frequently contacted by customers.
20
VII. CONCLUSION
As discussed above, designation of Virgin Mobile as an ETC in the State of Idaho accords
with the requirements of Section 21 4( e )(2) of the Act and is in the public interest.
WHEREFORE, for all of the foregoing reasons, Virgin Mobile respectfully requests that the
Commission designate Virgin Mobile as an ETC in the State of Idaho solely for puroses of
paricipating in the Lifeline program.
Respectfully submitted,
VIRGIN MOBILE USA, L.P.
J-L L,l. .(
John M. Beah
Skadden, Ars, Slate, Meagher & Flom LLP
1440 New York Avenue, NW
Washington D.C. 20005
Tel: [phone]
john. beah(iskadden.com
Counsel to Virgin Mobile USA, L.P.
Elaine Divelbliss
Virgin Mobile USA, L.P.
10 Independence Blvd.
Waren, NJ 07059
Tel: [phone]
elaine.divelbliss(ivirginmobileusa.com
Februar 2, 2011
21
EXHIBIT 1
CERTIFICATION
Declaration of Virgin Mobile USA, L.P.
I, Elaine Divelbliss, do hereby declare under penalty of perjury as follows:
1. I am Senior Counsel for Virgin Mobile USA, L.P., a Delaware Limited
Parnership with its principal place of business at 10 Independence Blvd, Waren, NJ 07059.
2. I have read Virgin Mobile's Petition for Limited Designation as an Eligible
Telecommunications Carrier in the State of Idaho and confirm the information contained therein
to be true and correct to the best of my knowledge.
3. To the best of my knowledge, Virgin Mobile, including all officers, directors, or
persons holding five percent or more of the outstanding stock or shares (voting or non-voting) of
the Company, are not subject to denial of federal benefits, including FCC benefits, pursuant to
Section 5301 of the Anti-Drug Abuse Act of 1988,21 U.S.C. § 862.
4. I declare under penalty of perjury that the foregoing is true and correct to the best
of my knowledge.
Executed on Februar 2, 2011
r
Elaine M. Divelbliss
Senior Counsel
EXHIBIT 2
WIRE CENTERS
893053.01-D.C. Server 2A - MSW
ALBNIDXC ALBION ALBION TELEPHONE CO. D/B/A ATC
ARCOIDXC ARCO ALBION TELEPHONE CO. D/B/A ATC
HOWEIDXC ARCO-HOWE ALBION TELEPHONE CO. D/B/A ATC
MLCYIDXC MALAD ALBION TELEPHONE CO. D/B/A ATC
MALTIDXC MALTA ALBION TELEPHONE CO. D/B/A ATC
RFRVIDXC RAFTRNER ALBION TELEPHONE CO. D/B/A ATC
CNCLIDXC INDIANVLY CAMBRIGE TELEPHONE COMPANY
FRLDIDXX NUACRES CAMBRIGE TELEPHONE COMPANY, INC.
PYTTIDMA NUACRES CAMBRIGE TELEPHONE COMPANY, INC.
BRUNIDXC BRUNEAU CENTURYTEL OF THE GEM STATE, INC.
RCFDIDXC RICHFIELD CENTURYTEL OF THE GEM STATE, INC.
ABRDIDXC ABERDEEN CITIZENS TELECOM IDAHO
CSCDIDXC CASCADE CITIZENS TELECOM IDAHO
DNLYIDXC DONNELLY CITIZENS TELECOM IDAHO
HMLIDXC HOMEDALE CITIZENS TELECOM IDAHO
HRNIDXC HORSESHOE BEND CITIZENS TELECOM IDAHO
MRNGIDXC MARSING CITIZENS TELECOM IDAHO
MCCLIDXC MCCALL CITIZENS TELECOM IDAHO
NWMDIDXC NEW MEADOWS CITIZENS TELECOM IDAHO
PARMIDXC PARMA CITIZENS TELECOM IDAHO
SPFDIDXC SPRINGFIELD CITIZENS TELECOM IDAHO
SWETIDXC SWEET CITIZENS TELECOM IDAHO
WLDRIDXC WILDER CITIZENS TELECOM IDAHO
DRGSIDMA DRIGGS COLUMBINE TELCO D/B/A SILVER STAR
DIRCT COMMUICATIONS ROCKLAND,
PARSIDXC PARIS INC.
DIRCT COMMUICATIONS ROCKLAND,
RKDIDXC ROCKLAND INC.
NUARIXC NU ACRES FARMERS MUTUAL TELEPHONE CO.
FILRlAA FILER FILER MUTUAL TELEPHONE CO.
HLSTIDXC HOLLISTER FILER MUTUAL TELEPHONE CO.
STATIDMA ST ANTHONY-TETON FREMONT TELCOM CO
LENRIXA LENORE INLAND TELEPHONE CO.
STNLIDXC STANLEY MIDVALE TELEPHONE EXCHANGE, INC.
WRRIDAA WARRN MIDVALE TELEPHONE EXCHANGE, INC.
HAMRIXC HAMER MUD LAKE TELEPHONE COOPERATNE
TRTNIDXC TERRTON MUD LAKE TELEPHONE COOPERA TNE
SOMTIDXC SOUTHMT OREGON - IDAHO UTILITffS, INC.
TROYIDXX TROY POTLATCH TELEPHONE CO., INC.
PAULIDXC BURLEY PROJECT MUTUAL TEL. COOP. ASSN. INC.
PROJECT MUTUAL TELEPHONE COOP.
MNDKIDXC MINIDOKA ASSOC.
PROJECT MUTUAL TELEPHONE COOP.
NRLDIDXC NORLAND ASSOC.
PROJECT MUTUAL TELEPHONE COOP.
OKLYIDXC OAKLEY ASSOC.
1
PROJECT MUTUAL TELEPHONE COOP.
RPRTIDXC RUPERT ASSOC.
BLFTIDMA BLACKFOOT QWEST CORPORATION
RVSDIDMA BLACKFOOT -RIERSIDE QWEST CORPORATION
BOISIDNW BOISE QWEST CORPORATION
BOISIDSW BOISE QWEST CORPORATION
BOISIDWE BOISE QWEST CORPORATION
IDCYIDMA BOISE QWEST CORPORATION
EAGLIDNM BOISE-EAGLE QWEST CORPORATION
KUNAIDMA BOISE-MERIDIAN QWEST CORPORATION
MDTNIDMA BOISE-MERIDIAN QWEST CORPORATION
MRDNIDMA BOISE-MERIDIAN QWEST CORPORATION
STARINM BOISE-MERIDIAN QWEST CORPORATION
BRLYIDMA BURLEY QWEST CORPORATION
DECLIDMA BURLEY-DECLO QWEST CORPORATION
CLWLIDMA CALDWELL QWEST CORPORATION
CRGMIDOI CRAIGMONT QWEST CORPORATION
EMMTIDMA EMMETT QWEST CORPORATION
FRTHIDMA IDAHO FALLS QWEST CORPORATION
IDFLIDMA IDAHO FALLS QWEST CORPORATION
RIIIDMA IDAHO FALLS QWEST CORPORATION
RXBGIDMA IDAHO FALLS QWEST CORPORATION
SHLYIDMA IDAHO FALLS QWEST CORPORATION
HALYIDMA KETCHUM QWEST CORPORATION
KTCHIDMA KETCHUM QWEST CORPORATION
LAPWIDOI LAPWAI QWEST CORPORATION
LSTNIDSH LEWISTON QWEST CORPORATION
MELBIDMA MELBA QWEST CORPORATION
GLFYIDMA MOUNTAIN HOME QWEST CORPORATION
MTHOIDMA MOUNTAIN HOME QWEST CORPORATION
MTHOIDSO MOUNTAIN HOME SOUTH QWEST CORPORATION
MRTGIDMA MURTAUGH QWEST CORPORATION
NMPAIDMA NAMPA QWEST CORPORATION
NPMOIDMA NEW PLYMOUTH QWEST CORPORATION
AMFLIDMA POCATELLO QWEST CORPORATION
BNCRIDMA POCATELLO QWEST CORPORATION
DWNIDMA POCATELLO QWEST CORPORATION
DYTNIDMA POCATELLO QWEST CORPORATION
FKLNIDMA POCATELLO QWEST CORPORATION
INKMIDMA POCATELLO QWEST CORPORATION
LHSPIDMA POCATELLO QWEST CORPORATION
MCCMIDMA POCATELLO QWEST CORPORATION
MTPLIDMA POCATELLO QWEST CORPORATION
PCTLIDMA POCATELLO QWEST CORPORATION
PCTLIDNO POCATELLO QWEST CORPORATION
PSTNIDMA POCATELLO QWEST CORPORATION
LSMNIDMA RIGBY QWEST CORPORATION
RBRTIDMA RIGBY QWEST CORPORATION
2
RGBYIDMA RIGBY QWEST CORPORATION
BLSSIDMA TWIN FALLS QWEST CORPORATION
BUHLIDMA TWIN FALLS QWEST CORPORATION
CSFRIMA TWIN FALLS QWEST CORPORATION
EDHZIDMA TWIN FALLS QWEST CORPORATION
GDNGIDMA TWIN FALLS QWEST CORPORATION
HGMNIDMA TWIN FALLS QWEST CORPORATION
JERMIDNM TWIN FALLS QWEST CORPORATION
KMBRIMA TWIN FALLS QWEST CORPORATION
SHSHIDMA TWIN FALLS QWEST CORPORATION
WNDLIDMA TWIN FALLS QWEST CORPORATION
WESRIMA WEISER QWEST CORPORATION
BYVWIDXX BAYVIEW VERION NORTHWEST INC.-ID
PSFLIDXX BLUEBELL VERIZON NORTHWEST INC.-ID
CLFKIDXX CLARK FORK VERIZON NORTHWEST INC.-ID
GENSIDXX GENESEE VERIZON NORTHWEST INC.-ID
HRSNIDXA HARRSON VERION NORTHWEST INC.-ID
HYLKIDXX HAYDEN LAKE VERIZON NORTHWEST INC.-ID
HOPEIDXX HOPE VERION NORTHWST INC.-ID
PNHRXA KELLOGG VERION NORTHWEST INC.-ID
MSCWIDXX MOSCOW VERIZON NORTHWEST INC.-ID
PECKIDXX PECK VERION NORTHWEST INC.-ID
PLMRIXX PLUMMER-WORLEY VERIZON NORTHWEST INC.-ID
PTLTIDXX POTLATCH VERIZON NORTHWEST INC.-ID
PRRVIDXX PRIST RIER VERIZON NORTHWST INC.-ID
RTHDIDXX RATHDRUM VERIZON NORTHWEST INC.-ID
SNPNIDXX SANDPOINT VERIZON NORTHWEST INC.-ID
SPLKIDXX SPIRIT LAKE VERIZON NORTHWEST INC.-ID
3
EXHIBIT 3
2010 ORDER
Federal Communications Commission DA 10-2433
Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of )
)
Telecommunications Carriers Eligible for )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 for Designation )
as an Eligible Telecommunications Carrier )in the District of Columbia )
)
Virgin Mobile USA, L.P. Petition for Designation )
as an Eligible Telecommunications Carrer )
in the State of Delaware )
)
Virgin Mobile USA, L.P. Petition for Designation )
as an Eligible Telecommunications Carrier )
in the State of New Hampshire )
ORDER
Adopted: December 29, 2010
By the Chief, Wireline Competition Bureau:
WC Docket No. 09-197
Released: December 29, 2010
I. INTRODUCTION
1. This order addresses five petitions fied by Virgin Mobile USA, L.P. (Virgin Mobile)
pursuant to section 214(e)(6) of the Communications Act of 1934, as amended (the Act), and section
54.202 of the Commission's rules.! Virgin Mobile seeks designation as an eligible telecommunications
carrier (ETC) for the limited purose of receiving federal universal service Lifeline support in its licensed
service areas in Alabama, Connecticut, Delaware, New Hampshire, and the District of Columbia. As
i 47 U.S.C. § 214(e)(6); 47 C.F.R. § 54.202; see Petition of Virgin Mobile USA, L.P. for ETC Designation in the
State of Alabama, WC Docket No. 09-197 (fied Jan. 15,2010) (Virgin Mobile Alabama Petition); Petition of Virgin
Mobile USA, L.P. for ETC Designation in the State of Connecticut. WC Docket No. 09-197 (fied Feb. 17,2010)
(Virgin Mobile Connecticut Petition); Petition of Virgin Mobile USA, L.P. for ETC Designation in the State of
Delaware, WC Docket No. 09-197 (filed Feb. 17,2010) (Virgin Mobile Delaware Petition); Petition of Virgin
Mobile USA, L.P. for ETC Designation in the District of Columbia, WC Docket No. 09-197 (fied Feb. 17,2010)
(Virgin Mobile DC Petition); Petition of Virgin Mobile USA, L.P. for ETC Designation in the State of New
Hampshire, WC Docket No. 09- 1 97 (fied Feb. 17, 2010) (Virgin Mobile New Hampshire Petition) (collectively,
Virgin Mobile ETC Petitions).
Federal Communications Commission DA 10-2433
discussed more fully below, we conditionally grant Virgin Mobile's petitions for limited designation as an
ETC. In so doing, we find that while Virgin Mobile meets the eligibility requirements of section
214(e)(6) of the Act and the Commission's rules to be designated as an ETC, the public interest requires
that Virgin Mobile comply with specific conditions, including fulfillment of certain voluntar
commitments, designed to promote public safety among Lifeline customers and safeguard against waste,
fraud, and abuse in the Lifeline program.2
II. BACKGROUND
A. The Act
2. Section 254(e) of the Act provides that "only an eligible telecommunications carier
designated under section 214( e) shall be eligible to receive specific federal universal service support.',3
Pursuant to section 214(e)(l)(A) and (B), a common carrier designated as an ETC must offer and
advertise the services supported by the federal universal service support mechanisms either using its own
facilities or a combination of its own facilties and resale of another carrer's services throughout its
designated service area.4
3. Section 214(e)(2) of the Act gives state commissions the primary responsibilty for
designating ETCs in their states.s Section 214(e)(6) directs the Commission, upon request, to designate as
an ETC "a common carrer providing telephone exchange service and exchange access that is not subject
to the jurisdiction of a State commission."6 Under section 214(e)(6), the Commission may, with respect
to an area served by a rual telephone company, and shall, in all other cases, designate more than one
common carrier as an ETC for a designated service area, consistent with the public interest, convenience,
and necessity, so long as the requesting carrier meets the requirements of section 214(e)(I).7 Before
designating an additional ETC for an area served by a rual telephone company, the Commission must
determine that the designation is in the public interest.8 The Wireline Competition Bureau (Bureau) has
delegated authority to consider ETC designation requests.9
B. Commission Requirements for ETC Designation
4. An ETC petition must contain the following: (1) a certification and brief statement of
supporting facts demonstrating that the petitioner is "not subject to the jurisdiction of a state
commission"; (2) a certification that the petitioner offers all services designated for support by the
Commission pursuant to section 254(c) of the Act; (3) a certification that the petitioner offers the
supported services "either using its own facilities or a combination of its own facilities and resale of
another carrier's services"; (4) a description of how the petitioner "advertise(s) the availabilty of the
(supported) services and the charges therefor using media of general distribution"; and (5) if the petitioner
2 47 U.S.C. § 214(e)(6); 47 C.F.R. § 54.202.
347 U.S.C. § 254(e).
447 U.S.C. § 214(e)(l)(A), (B).
S 47 U.S.C. § 214(e)(2).
647 U.S.C. § 214(e)(6).
7 Id.
8 Id.
9 See Procedures for FCC Designation of Eligible Telecommunications Carriers Pursuant to Section 2I4(e)(6) of
the Communications Act, CC Docket No. 96-45, Public Notice, 12 FCC Rcd 22947,22948 (1997) (Section 214(e)(6)
Public Notice).
2
Federal Communications Commission DA 10-2433
is not a rural telephone company, a detailed description of the geographic service area for which it
requests an ETC designation from the Commission.10
5. In addition, an ETC applicant must demonstrate: (1) a commitment and ability to provide
service, including providing service to all customers within its proposed service area; (2) how it wil
remain functional in emergency situations; (3) that it wil satisfy consumer protection and service quality
standards; (4) that it offers local usage comparable to that offered by the incumbent local exchange carier
(LEe); and (5) an understanding that it may be required to provide equal access if all other ETCs in the
designated service area relinquish their designations pursuant to section 214(e)(4) of the ACt,11
6. Prior to designating an ETC pursuant to section 214(e)(6), the Commission must
determine whether such designation is in the public interest,12 In determining the public interest, the
Commission considers the benefits of increased consumer choice and the unique advantages and
disadvantages of the applicant's service offering.13 As the Commission noted in the ETC Designation
Order, the same factors may warrant a different outcome depending on the specifics of the proposed
service area and whether it is served by a rural or a non-rural telephone company.14 In particular, the
Commission limits its creamskimming analysis to designations in areas served by rural telephone
companies. 15
C. Federal Universal Service Lifeline Support
7. The federal universal service Lifeline program is designed to reduce the monthly cost of
telecommunications service for qualifying consumers. Lifeline provides low-income consumers with
io id.
11 See Federal-State Joint Board on Universal Service, CC Docket No. 95-45, Report and Order, 20 FCC Rcd 6371,
6380, para. 20 (2005) (ETC Designation Order) (citing Federal-State Joint Board on Universal Service, CC Docket
No. 96-45, Recommended Decision, 19 FCC Rcd 4259, 4261, para. 5 (Fed-State 11. Bd. 2004)). These requirements
are mandatory for all ETCs designated by the Commission. See 47 C.F.R. § 54.202(a), (b).
1247 U.S.C. § 214(e)(6); 47 C.F.R. § 54.202(c); see also ETC Designation Order, 20 FCC Rcd at 6388-96, paras.
40-57; Federal-State Joint Board on Universal Service; Virginia Cellular, LLC Petition for Designation as an
Eligible Telecommunications Carrier in Virginia, CC Docket No. 96-45, Memorandum Opinion and Order, 19 FCC
Rcd 1563, 1575, para. 27 (2005) (Virginia Cellular Order); Federal-State Joint Board on Universal Service;
flghland Cellular, inc. Petiion/or Designation as an Eligible Telecommunications Carrier for the Commonwealth
of Virginia, CC Docket No. 96-45, Memorandum Opinion and Order, 19 FCC Rcd 6422,6431-32, para. 21 (2004)
(Highland Cellular Order). The Commission places the burden on the ETC applicant to demonstrate that
designation wil serve the public interest. ETC Designation Order, 20 FCC Rcd at 6390, para. 44. The Commission
adopted a single set of criteria for evaluating the public interest for ETC designations for areas served by both rual
and non-rural carriers. id. at 6389-90, paras. 42-43; see also Virginia Cellular Order, 19 FCC Rcd at 1564, 1565,
1575-76, 1584-85, paras. 1,4,27,28,46; flghland Cellular Order, 19 FCC Rcd at 6422,6439--0, paras. 1,33.
1347 C.F.R. § 54.202(c).
14 ETC Designation Order, 20 FCC Rcd at 6390, para. 43. Section 3 of the Act defines the term "rual telephone
company." See 47 U.S.C. § 153(37).
IS ETC Designation Order, 20 FCC Rcd at 6389-90, paras. 42-43. The term "creamskimming" refers to an entity
offering service only to those customers who are the least expensive to serve. See Federal-State Joint Board on
Universal Service, CC Docket No. 96-45, Report and Order, 12 FCC Rcd 8776,8881-82, para. 189 (1997)
(subsequent history omitted) (Universal Service First Report and Order). If an ETC applicant seeks designation
below the study area level of a rural telephone company, the Commission conducts a creamskimming analysis to
compare the population density of the wire centers in which the ETC applicant seeks designation against that of the
wire centers in the study area in which the ETC applicant does not seek designation. ETC Designation Order, 20
FCC Rcd at 6392-95, paras. 48-53.
3
Federal Communications Commission DA 10-2433
discounts of up to $10.00 off of the monthly cost of telephone service.16 Enhanced Lifeline provides
qualifying low-income individuals living on tribal lands with up to $25.00 in additional discounts off the
monthly cost of telephone service. 17
D. Virgin Mobile Petitions
8. Virgin Mobile is a commercial mobile radio service (CMRS) provider of prepaid wireless
telecommunications services. In 2009, the Commission designated Virgin Mobile as a limited ETC,
eligible to receive only universal service Lifeline support in its licensed service areas in New York,
Virginia, North Carolina, and Tennessee.18 The Commission conditioned Virgin Mobile's limited ETC
designation for Lifeline support on Virgin Mobile's certification that it comply with any applicable 911
and enhanced 911 (E91 I) obligations, including obligations relating to the provision and support of 911
and E911 services.19
9. Because Virgin Mobile was a non-facilties-based CMRS provider, the Commission also
conditionally granted Virgin Mobile's request for forbearance from the statutory requirement that an ETC
serve its customers using its own facilities.2Q Among other things, the Commission conditionally granted
Virgin Mobile's forbearance request on its agreement to obtain a certification from each Public Safety
Answering Point (PSAP) where Virgin Mobile provides Lifeline service confirming that Virgin Mobile
provides its customers with 911 and E91 i access or, under certain conditions, self-certifying that it
provides such access.21 The Commission also required Virgin Mobile to fie a compliance plan, outlining
the measures that it would take to implement each condition.22 The Bureau approved Virgin Mobile's
compliance plan on October 29,2009.23
10. Virgin Mobile fied the instant petitions seeking designation as an ETC, eligible to
receive universal service Lifeline support for its entire service area in Alabama, Connecticut, Delaware,
16 See 47 C.F.R. § 54.401 (a); see also FCC, Lifeline Across America,
http://www.lifeline.gov/lifeline_Consumers.html (last visited Dec. 15,2010).
17 See 47 C.F.R. § 54.405(a)(4).
18 See Virgin Mobile USA, L.P. Petitionfor Forbearancefrom 47 US.c. § 214(e)(1)(A); Petitonsfor Designation
as an Eligible Telecommimications Carrier in the States of New York, North Carolina, Pennsylvania, Tennessee and
Virginia, CC Docket No. 96-45, Order, 24 FCC Rcd 3381 (2009) (Virgin Mobile Forbearance/ETC Order).
19 ¡d. at 3395, para. 39.
20 ld. at 3386, para. 12.
2! ¡d. at 3390-91, para. 22. The Commission also required Virgin Mobile to: (1) provide its Lifeline customers with
911 and E911 access regardless of activation status and availability of prepaid minutes; (2) provide its Lifeline
customers with E911-compliant handsets and replace, at no additional charge to the customer, non-compliant
handsets of existing customers who obtain Lifeline-supported service; (3) comply with conditions (1) and (2) as of
the date it provides Lifeline service; (4) require its customers to self-certify at time of service activation and
annually thereafter that they are the head of household and receive Lifeline-supported service only from Virgin
Mobile; (5) establish safeguards to prevent its customers from receiving multiple Virgin Mobile Lifeline subsidies at
the same address; and (6) deal directly with customers to certify and verify the customer's Lifeline eligibility. See
id. at 3386-87,3390-93, paras. 12,21-28.
221d. at 3387, 3397, paras. 12,23.
23 See Federal-State Joint Board on Universal Service; Virgin Mobile USA, L.P. Petiton for Forbearance from 47
Us.c. § 214(e)(I)(A); Petition for Designation as an Eligible Telecommunications Carrier in the States of New
York, North Carolina, Pennsylvania, Tennessee and Virginia, CC Docket No. 96-45, Order, 24 FCC Rcd 13413
(2009) (Virgin Mobile Compliance Plan Order).
4
Federal Communications Commission DA 10-2433
New Hampshire, and the District ofColumbia.24 Virgin Mobile states that it wil offer Lifeline customers
prepaid Lifeline services free of charge.25 In its petitions, Virgin Mobile maintains that it satisfies all the
statutory and regulatory requirements for designation as a limited ETC in these areas. On November 24,
2009, Virgin Mobile became a wholly owned subsidiary of Sprint Nextel Corporation (Sprint Nextel), a
facilities-based wireless provider. 26 Virgin Mobile asserts that, with this acquisition, it is no longer a
reseller of telecommunications services and therefore does not need forbearance from the facilities
requirement. Virgin Mobile also asserts that as a facilties-based provider, it should not be required to
obtain certification from each PSAP where it provides Lifeline service.27
II. On December 14, 2010, Virgin Mobile fied a letter in which it voluntarily commits to
implement procedures to combat the potential for waste, fraud, and abuse with respect to its provision of
Lifeline services throughout the United States. Specifically, Virgin Mobile commits to implementing a
non-usage policy (i.e., a policy for discontinuance of service in the event of non-usage), to work with
state commissions to combat duplicative support for households that receive Lifeline service from more
than one ETC, and to work with the Commission to develop industr-wide procedures that effectively
curil waste, fraud, and abuse.28 Virgin Mobile requests that the Commission incorporate these
procedures into the compliance plan previously approved by the Bureau and agrees to be bound by its
commitments in all states where it provides Lifeline services.i9
III. DISCUSSION
A. Commission Authority to Perform the ETC Designation
12. Virgin Mobile provided an "affrmative statement" from the Public Service Commission
of the District of Columbia (DC Commission) and each of the relevant state commissions providing that
each commission lacks jurisdiction to perform the requested ETC designation and that the Commission
24 See Virgin Mobile Alabama Petiton; Virgin Mobile Connecticut Petition; Virgin Mobile Delaware Petition;
Virgin Mobile DC Petition; Virgin Mobile New Hampshire Petition. The Bureau released public notices seeking
comment on each of Virgin Mobile ETC Petitions. Comment Sought on Petition 0/ Virgin Mobile/or Limited
Designation as an Eligible Telecommunications Carrier in Alabama, WC Docket No. 09- i 97, Public Notice, 25
FCC Rcd 965 (Wireline Compo Bur. 2010); Comment Sought on Petition o/Virgin Mobilefor Limited Designation
as an Eligible Telecommunications Carrier in Connecticut, Delaware. New Hampshire, and the District of
Columbia, WC Docket No. 09-197, Public Notice, 25 FCC Red 1981 (Wireline Compo Bur. 2010). A list of
commenters is provided in Appendix A of this order.
25 Virgin Mobile states that through its branded prepaid Lifeline service, "Assurance Wireless Brought to You by
Virgin Mobile," it will offer free voice services and a variety of other standard features such as voicemail and call
waiting services. Virgin Mobile indicates that new customers may elect to receive a free Assurance Wireless-
branded handset with E9l1 functionality. See Virgin Mobile Alabama Petition at 8; Virgin Mobile Connecticut
Petition at 8; Virgin Mobile Delaware Petition at 7-8; Virgin Mobile DC Petition at 7-8; Virgin Mobile New
Hampshire Petition at 8; see also Virgin Mobile Compliance Plan Order, 24 FCC Rcd at 13418, para. 11 & n.33
(reminding Virgin Mobile that all Lifeline customers must have E9l1-compliant handsets if Virgin Mobile is to be
eligible to receive support).
26 Virgin Mobile Alabama Petition at 2 n.2; Virgin Mobile Connecticut Petition at 2 n.2; Virgin Mobile Delaware
Petition at 2 n.2; Virgin Mobile DC Petition at 2 n.2; Virgin Mobile New Hampshire Petition at 2 n.2.
27 Virgin Mobile Alabama Petition at 9; Virgin Mobile Connecticut Petition at 9; Virgin Mobile Delaware Petition at
8-9; Virgin Mobile DC Petition at 8-9; Virgin Mobile New Hampshire Petition at 9.
28 Virgin Mobile December 14 l!x Parte Letter at 2-3.
29 ¡d. at 1-2.
5
Federal Communications Commission DA 10-2433
has authority to consider Virgin Mobile's petition under section 214(e)(6) of the ACt,30 Virgin Mobile
therefore has demonstrated that it is not subject to the jurisdiction of the Alabama Public Servce
Commission (Alabama Commission), Connecticut Departent of Public Utility Control (Connecticut
Commission), Delaware Public Service Commission (Delaware Commission), New Hampshire Public
Utilities Commission (New Hampshire Commission), or the DC Commission. Accordingly, we find that
the commissions lack jurisdiction to designate Virgin Mobile as an ETC and this Commission has
authority to perform the requested ETC designations.31
ß, Analysis of Eligibilty Requirements
13. Oßèring the Services Designatedfor Support. Virgin Mobile has demonstrated through
its filing and certifications that it now offers or will offer upon designation as a limited ETC, the services
supported by the Lifeline program.32 Virgin Mobile states that it now provides the services and
functionalities enumerated in section 54.101(a) of the Commission's rules throughout its licensed service
areas.33
14. With respect to providing access to emergency services, Virgin Mobile states that it
provides nationwide access to 911 emergency services for all of its customers.34 Virgin Mobile also states
that it complies with the Commission's regulations governing the deployment and availabilty ofE911
compatible handsets.35 Given the natue of Virgin Mobile's service offering, as well as the possibility
that Virgin Mobile's Lifeline supported service wil be the customer's only means of accessing
emergency personnel, we require Virgin Mobile (1) to provide its Lifeline customers with 911 and E911
access regardless of activation status and availability of prepaid minutes and (2) to provide E911-
compliant handsets to all of its Lifeline customers, and to replace, at no charge to the customer, any non-
compliant handset of an existing customer that obtains Lifeline-supported services with an E911-
compliant handset, consistent with prior determinations by the Commission.36 We find that continuing to
require Virgin Mobile to comply with these additional requirements promotes public safety among
Lifeline customers.
30 Virgin Mobile Alabama Petition at 5-6, Exh. I; Virgin Mobile Connecticut Petition at 5-6, Exh. 1; Virgin Mobile
Delaware Pctition at 5-6, Exh. I; Virgin Mobile DC Petition at 5-6, Exh. 1; Virgin Mobilc New Hampshire Pctitionat 5-6, Exh.l. '
3147 U.S.C. § 214(e)(6).
32 See Virgin Mobile Alabama Petition at 12-14; Virgin Mobile Connecticut Petition at 10-13; Virgin Mobile
Delaware Petition at 10-12; Virgin Mobile DC Petition at 10-12; Virgin Mobile New Hampshire Petition at 10-13.
33 Specifically, Virgin Mobile certifies that it provides voice grade access to the public switched telephone network,
local usage, dual-tone multi-frequency (DTMF) signaling, access to 911 emergency services, the functional
cquivalent of single-part service, access to operator services, access to interexchange services, and access to
directory assistance for qualifying low-income customers. See Virgin Mobilc Alabama Petition at 11; Virgin
Mobile Connecticut Petition at 10; Virgin Mobile Delaware Petition at 10; Virgin Mobile DC Petition at 10; Virgin
Mobile New Hampshire Petition at 10. The Commission previously found that the prepaid nature of Virgin
Mobile's Lifeline offering essentially functions as a toll control feature, which is required under the Act and the
Commission's rules. See Virgin Mobile Forbearance/ETC Order, 24 FCC Rcd at 3394, para. 34. Virgin Mobile
also states that it commits to complying with (1) any minimum local usage requires adopted by the Commission; and
(2) the Commission's regulations governing the deployment and availability ofE91 i compatible handsets. See
Virgin Mobile Alabama Petition at 10-13; Virgin Mobile Connecticut Petition at 10-13; Virgin Mobile Delaware
Petition at 10-12; Virgin Mobile DC Petition at 10-12; Virgin Mobile New Hampshire Petition at 10-13
34 Virgin Mobile Alabama Petition at 12; Virgin Mobile Connecticut Petition at 12; Virgin Mobile Delaware Petition
at 11; Virgin Mobile DC Petition at 11; Virgin Mobile New Hampshire Petition at 12.
35 ¡d.
36 See Virgin Mobile Forbearance/ETC Order, 24 FCC Rcd at 3391, para. 23.
6
Federal Communications Commission DA 10-2433
15. Ojjèring the Supported Services Using a Carrier's Own Facilites. We also find that
Virgin Mobile, a wholly owned affiiate of Sprint Nextel, "owns" Sprint Nextel's facilties for purposes of
the facilties requirement in section 214(e) ofthe Act. Prior to Sprint Nextel's acquisition of Virgin
Mobile, Sprint Nextel provided the ni;tionwide wireless backbone, including all network infrastructue
and wireless transmission facilities for Virgin Mobile's service.37 Virgin Mobile purchased wireless
network services on a wholesale basis from Sprint NexteL. With Sprint Nextels acquisition of Virgin
Mobile, the wholesaler-reseller relationship changed such that Virgin Mobile now enjoys "beneficial use
of Sprint's wireless facilties" without arm's length transactions or purchase of service from Sprint,38
Based on these facts, we find that Virgin Mobile has its "own facilities" for the purposes of the section
214( e)( 1) facilities requirement. Accordingly, we find that Virgin Mobile no longer needs forbearance
and need not comply with the obligations imposed as conditions of forbearance from the Act's facilities
requirement, except as otherwise specified herein, before receiving universal service support. Instead, as
with other facilties-based carrers, Virgin Mobile must offer the supported services using its own
facilities or a combination of its own facilties and the resale of another carrier's services.39
16. We disagree with comments suggesting that Virgin Mobile cannot treat its parent's
facilities as its own because the two are distinct legal entities or because Virgin Mobile has a distinct
brand and customer base from Sprint,40 The Commission has previously rejected a formalistic definition
of what constitutes a carrier's "own facilties" under section 214( e) in favor of a more flexible approach
that meets the goals of universal service.41 We also disagree with the suggestions of some that the
definitions of "facilities-based carrier" or "reseller" found elsewhere in federal law must apply here.42 As
the Commission noted in the Universal Service First Report and Order, the section 214(e) facilties
requirement must be constred in light of the goals of the Act,43 Thus, while we may look to the
definitions used in other contexts, those definitions do not bind or constrict our interpretation.
17. Advertising Supported Services. Virgin Mobile has committed to advertise the
availability of the supported services using media of general distribution.44 In addition, Virgin Mobile has
37 See Virgin Mobile USA L.P. Petition for Forbearance, CC Docket No. 96-45 (filed Dec. 5, 2007).
38 Letter from Antoinette Cook Bush, Counsel, Virgin Mobile USA, L.P., to Marlene H. Dortch, Secretary, FCC, at
2 & 3 n.7 (June 9, 2009) (Virgin Mobile June 9 Ex Parte Letter). The Commission previously concluded that
entities "enjoying the beneficial use of propert" may consider that propert their "own." See Universal Service
First Report and Order, 12 FCC Rcd at 8865, para. 158.
39 Our decision here does not modify the previously established conditions for Virgin Mobile's limited ETC
designation in New York, North Carolina, Tennessee, and Virginia. Virgin Mobile is obligated to comply with all
the conditions in the Virgin Mobile ForbearancelETC Order in those states. See Virgin Mobile Reply at 7 n.9
(acknowledging continuing conditions). We also emphasize that our decision here does not limit the Commission's
ability in the future to condition ETC designation of a prepaid wireless service provider on compliance with
obligations designed to protect the public interest.
40 See AUA Comments at 4-5.
41 See Universal Service First Report and Order, 12 FCC Rcd at 8865-66, paras. 158-61.
42 See Supplemental information submitted by Sheila Stickel, President and Executive Director, Advocates for
Universal Access, LLC, at 2 n.3 (fied Apr. 30,2010) (citing a definition of "facilities-based carrier" found in 18
U.S.C. § 1829); Virgin Mobile June 9 Ex Parte Letter at 3 (citing a definition of "reseller" found in a Commission
report).
43 See Universal Service First Report and Order, 12 FCC Rcd at 8866, para. 161.
44 Virgin Mobile Alabama Petition at 5-6, Exh. 1; Virgin Mobile Connecticut Petition 14; Virgin Mobile New
Hampshire Petition at 14; Virgin Mobile Delaware Petition at 14; Virgin Mobile DC Petition at 14.
7
Federal Communications Commission DA 10-2433
committed to advertising and promoting the availabilty of Lifeline services in a manner reasonably
designed to reach those likely to qualify for Lifeline.45
18. Additonal Eligibilty Requirements. Virgin Mobile also satisfies the eligibilty
requirements set forth in the ETC Designation Order, described above, or must make such showings in its
first annual reports under section 54.209 ofthe Commission's rules.46
C. Public Interest Analysis
19. We find that Virgin Mobile's universal service offering wil provide a variety of benefits
to Lifeline-eligible consumers including increased consumer choice, high-quality service offerings, and
mobility. In addition, Virgin Mobile's prepaid feature may be attractive to Lifeline-eligible consumers
who might otherwise be reluctant to subscribe to telephone service because of concerns about usage
charges and long-term contracts. We note that we do not need to perform a creamskimming analysis
because Virgin Mobile is eligible for Lifeline support only.47
20. Consistent with previous findings of the Commission and the goals of promoting the
public interest and safeguarding the Lifeline fund, we condition Virgin Mobile's limited ETC designation
in Alabama, Connecticut, Delaware, New Hampshire, and the District of Columbia on Virgin Mobile:
(a) requiring each customer to self-certify at time of service activation and annually thereafter that he or
she is the head of household and receives Lifeline-supported service only from that carrer;
(b) establishing safeguards to prevent its customers from receiving multiple Lifeline subsidies from that
carier at the same address; (c) dealing directly with the customer to certify and verify the customer's
Lifeline eligibility; (d) certifying that it is in full compliance with any applicable 911Æ911 obligations,
including obligations relating to the provision, and support, of911 and E911 service for each state in
which we designate it as a limited ETC.48
21. The Commission has recognized that the potential for more than one Lifeline-supported
service per eligible consumer is an industry-wide problem.49 To help alleviate this concern as it relates to
Virgin Mobile customers, Virgin Mobile must require its Lifeline customers to self-certify under penalty
of perjury upon service activation, and then annually thereafter, that they are the head of household and
only receive Lifeline-supported services from Virgin Mobile. Virgin Mobile must ensure that the penalty
for perjury is clearly stated on the certification form. Virgin Mobile must also track its Lifeline
customer's primary residential address and prohibit more than one supported Virgin Mobile service at
each residential address. Additionally, Virgin Mobile must maintain the self-certification and provide the
documentation to the Commission upon request.
22. In order to ensure that Virgin Mobile complies with the conditions and requirements
herein, Virgin Mobile must distribute its Lifeline service directly to its Lifeline customers. Customers
may purchase handsets at Virgin Mobile's retail stores, but Virgin Mobile must deal directly with the
45 ld.
46 See supra para. 5; ETC Designation Order, 23 FCC Rcd at 6380, para. 20; 47 C.F.R. §§ 54.202(a), 54.209; see
Virgin Mobile ETC Petitions.
47 Federal-State Joint Board on Universal Service; TracFone Wireless, Inc. Petition for Designation as an Eligible
Telecommunications Carrier in the State of New York et al., CC Docket No. 96-45, Order, 23 FCC Rcd 6206, 6213
n.47 (2008) (TracFone ETC Designation Order).
48 See Virgin Mobile Forbearance/ETC Order, 24 FCC Rcd at 3392,3395, paras. 25-26, 39.
49 See id. at 3392, para. 25; TracFone Forbearance Order, 20 FCC Rcd at 15103, para. 18; see also infra para. 24.
8
Federal Communications Commission DA 10-2433
customer to certify and verify the customer's Lifeline eligibilty. When establishing initial and continued
eligibility, Virgin Mobile must have direct contact with the Lifeline customer.
50
23. We also find that requiring Virgin Mobile to comply with state-level 911 and E911
requirements as a condition to its limited ETC designation serves the public interest.51 We therefore
condition Virgin Mobile's designations as an ETC eligible for Lifeline support in each state on its
certification that it is in full compliance with any applicable 911 and E911 obligations, including
obligations relating to the provision and support of 911 and E911 services.
24. As previously noted, Virgin Mobile has voluntarily committed to implementing certin
procedures to guard against waste, fraud, and abuse of its Lifeline service. In support of efforts to combat
duplicative support in the Lifeline program, Virgin Mobile has voluntarily committed to providing state
commissions with data that wil enable the states to track whether some consumers are enrolled in more
than one Lifeline program. Specifically, Virgin Mobile agrees (a) to "make available state-specific
customer data, including name and address, to each state PUC where it operates for the purose of
permitting the PUC to determine whether an existing Assurance Wireless Lifeline customer receives
Lifeline service from another carrier," (b) to "promptly investigate any notification that it receives from a
state PUC that one of its customers already receives Lifeline service from another carrier," and (c) to
"immediately deactivate the customer's Lifeline service and Virgin Mobile wil no longer report that
customer on USAC Form 497" if Virgin Mobile's "investigation concluders) that the customer receives
Lifeline services from another carrier in violation of the Commission's regulations.,,52 To guard against
waste in the Lifeline program, Virgin Mobile also voluntarily commits to implementing a non-usage
policy in all states where it provides Lifeline service. Virgin Mobile's non-usage policy would require
Virgin Mobile to identify customers that have not used its Lifeline service for 60 days and not seek
support for such customers if they do not actively use the Lifeline service during a 30-day grace period.
53
Virgin Mobile promises to comply with these commitments within 30 days of the effective date of this
order.54
25. We find it appropriate and in the public interest to accept Virgin Mobile's voluntary
commitments, as described above, and condition Virgin Mobile designation as a limited ETC in Alabama,
Connecticut, Delaware, New Hampshire, and the Distrct of Columbia, as well as its continued ETC
50 Direct contact may include telephone, fax, Internet, in-person consultation or otherwse, but may not include
"point of sale procedures" that allow the Lifeline customers to submit qualifYing information to the retail vendor.
See Virgin Mobile ForbearancelETC Order, 24 FCC Rcd at 3392, para. 26; TracFone Forbearance Order, 20 FCC
Rcd at i 5 i 04, para. 19.
5J See Virgin Mobile ForbearancelETC Order, 24 FCC Rcd at 3395, para. 39; TracFone ETC Designation Order, 23
FCC Rcd at i 5 i 04, para. i 6.
52 Virgin Mobile December 14 Ex Parte Letter at 2.
53 See id. ("Virgin Mobile wil implement a 60-day inactivity policy in all states where it provides Lifeline services,
unless directed otherwise by a state public utility commission ('PUC'). Under this policy, if no usage appears on a
Virgin Mobile Lifeline customer's account during any continuous 60-day period, Virgin Mobile wil promptly notifY
the customer that the customer is no longer eligible for Virgin Mobile Lifeline service subject to a 30-day grace
period. During the 30-day grace period, the customer's account wil remain active, but Virgin Mobile wil engage in
outreach efforts to determine whether the customer desires to remain on Virgin Mobile's Lifeline service. If the
customer's account does not show any customer-specific activity during the grace period (such as making or
receiving a voice call, receiving or sending a text message, downloading data or adding money to the account),
Virgin Mobile will deactivate Lifeline services for that customer. In addition, the Company wil not seek to recover
a federal Universal Service Fund subsidy for the free minutes provided to the customer during the grace period or
thereafter report that customer on its USAC Form 497.").
54 fd.
9
Federal Communications Commission DA 10-2433
designation in New York, North Carolina, Tennessee, and Virginia, on the company's fulfillment of these
commitments.
26. In sum, subject to the above stated conditions, we find that designating Virgin Mobile as
an ETC eligible only to receive Lifeline support is in the public interest.
D, Designated Service Areas
27. Based on the foregoing, we designate Virgin Mobile as a limited ETC, eligible only for
Lifeline support, in its licensed service area in Alabama, Connecticut, Delaware, the District of Columbia,
and New Hampshire as provided in Appendices Band C of this order.
E. Regulatory Oversight
28. Under section 254(e) of the Act, Virgin Mobile is required to use the specific universal
service support it receives "only for the provision, maintenance, and upgrading of facilties and services
for which the support is intended. ,,55 An ETC receiving Lifeline support uses that support as intended
when it reduces the price of its telecommunications services by the amount of the support for the eligible
consumer.56 Lifeline assistance shall be made available to qualifying low-income consumers after the
Universal Service Administrative Company (USAC) confirms that Virgin Mobile complies with the
conditions imposed in this order.57
29. Virgin Mobile must meet and continue to meet each of the criteria required by the ETC
Designation Order, and must submit information detailing how it has satisfied the criteria annually.
These records and documentation must be fied with the Commission and USAC on October 1 of each
year. 58 Virgin Mobile has also committed to providing applicable consumer protection and service
quality standards.
59 In addition, Virgin Mobile must report certain information to the Commission and to
USAC pursuant to section 54.209 of the Commission's rules.60
30. We find that reliance on Virgin Mobile's commitments to meet these requirements is
reasonable and consistent with the public interest and the Act. We conclude that these additional
reporting requirements wil furher the Commission's goal of ensuring that Virgin Mobile satisfies its
obligation under section 214(e) of the Act to provide the services supported by the Lifeline program
throughout its designated service area.61
5547 U.S.C. § 254(e). Because Virgin Mobile is not eligible to receive high-cost support, we do not require it to
provide high-cost certifications under sections 54.313 and 54.314 of our rules. See 47 C.F.R. §§ 54.313, 54.314.
56 See TracFone Forbearance Order, 20 FCC Rcd at 15105-06, para. 26.
57 See 47 C.F.R. §54.401(d). As noted above, we find that Virgin Mobile's service offering meets the criteria for
service and functionality contained in our rules. See supra paras. 13-14.
58 See ETC Designation Order, 20 FCC Rcd at 6401-02, paras. 68-69.
59 See Virgin Mobile Alabama Petition at 15-16; Virgin Mobile Connecticut Petition at 15-17; Virgin Mobile
Delaware Petition at 15-17; Virgin Mobile DC Petition at 15-17; Virgin Mobile New Hampshire Petition at 16-17.
60 See 47 C.F.R. § 54.209(a) (specifying the information to be included in the annual reports submitted by ETCs);
ETC Designation Order, 20 FCC Rcd at 6400-02, paras. 68-69; see also Virginia Cellular Order, 19 FCC Rcd at
1584, para. 46 & n.140 (anticipating that annual submissions wil encompass only the ETC's designated service
areas). Because Virgin Mobile will only be eligible for Lifeline support, we do not require Virgin Mobile to report
on network build-out and improvements or to certify that it acknowledges that the Commission may require it to
provide equal access to long distance carriers in the event that no other eligible telecommunications carrer is
providing equal access within the service area. See 47 C.F.R. § 54.209(a)(1), (8).
6147 U.S.C. § 214(e).
10
Federal Communications Commission DA 10-2433
31 . As previously noted, Virgin Mobile has an approved compliance plan that curently
governs Virgin Mobile provision of Lifeline service in other states.62 In providing Lifeline services
pursuant to the conditional ETC designations granted herein, Virgin Mobile must comply with the
measures described in its existing compliance plan, as they relate to the conditions imposed herein and
modified to reflect the additional voluntary commitments described in this order.63
32. We note that the Commission may institute an inquiry on its own motion to examine
Virgin Mobile's records and documentation to ensure that the universal service support it receives is
being used for the purpose for which it was intended.64 Virgin Mobile is required to provide such records
and documentation to the Commission and USAC upon request. We further emphasize that, if Virgin
Mobile fails to fulfill the requirements of the Act, the Commission's rules, or the terms of this order after
it begins receiving universal service support, the Commission may exercise its authority to revoke Virgin
Mobile's ETC designation.65 The Commission also may assess forfeitues for violations of Commission
rules and orders.66
iV. ANTI-DRUG ABUSE ACT CERTIFICATION
33. Pursuant to section 5301 of the Anti-Drug Abuse Act of 1988, no applicant is eligible for
any new, modified, or renewed instrument of authorization from the Commission, including
authorizations issued pursuant to section 214 of the Act, unless the applicant certifies that neither it, nor
any part to its application, is subject to a denial of federal benefits, including Commission benefits.67
Virgin Mobile has provided a certification consistent with the requirements of the Anti-Drug Abuse Act
of 1988.68 We find that Virgin Mobile's certification satisfies the requirements of the Anti-Drug Abuse
Act of 1988, as codified in sections 1.2001-1.2003 of the Commission's rules.
62 See supra para. 9; see also Virgin Mobile USA, L.P. Compliance Plan, CC Docket No. 96-45 (fied Apr. 3, 2009);
Virgin Mobile Compliance Plan Order, 24 FCC Rcd at 13413, para. 1 (approving that plan).
63 We note that by accepting Virgin Mobile's voluntary commitments to implement a non-usage requirement in all
states and to work with states to combat duplicative Lifeline service, we incorporate into the existing compliance
plan Virgin Mobile's explanation of how it wil comply with those commitments. See Virgin Mobile December 14
Ex Parte Letter at 1-2 (requesting the Commission to incorporate its description of how it wil fulfill its voluntary
commitments into its compliance plan as necessary). As such, Virgin Mobile may continue to receive support in
New York, North Carolina, Tennessee, and Virginia so long as it complies with these commitments in those states
within 30 days of the release of this order.
6447 U.S.C. §§ 220,403.
65 See Federal-State Joint Board on Universal Service; Western Wireless Corp. Petition for Preemption of an Order
of the South Dakota Public Utilities Commission, CC Docket No. 96-45, Declaratory Ruling, 15 FCC Rcd 15168,
15174, para. 15 (2000); see also 47 U.S.C. § 254(e).
66 See 47 U.S.C. § 503(b).
6721 U.S.C. § 862; 47 C.F.R. § L.2002(a). Section l.002(b) provides that a "part to the application" shall include:
"(1) If the applicant is an individual, that individual; (2) If the applicant is a corporation or unincorporated
association, all offcers, directors, or persons holding 5% or more of the outstanding stock or shares (voting/and or
non-voting) of the petitioner; and (3) If the applicant is a partership, all non-limited partners and any limited
partners holding a 5% or more interest in the partnership." 47 C.F.R. § L.2002(b); see Section 214(e)(6) Public
Notice, 12 FCC Rcd at 22949.
68 See Virgin Mobile Alabama Petition at 17, Exh. 2; Virgin Mobile Connecticut Petition at 18, Exh. 2; Virgin
Mobile Delaware Petition at 17, Exh. 2; Virgin Mobile DC Petition at 18, Exh. 2; Virgin Mobile New Hampshire
Petition at 18, Exh. 2.
11
Federal Communications Commission DA 10-2433
V, ORDERING CLAUSES
34. ACCORDINGLY, IT is ORDERED that, pursuant to the authority contained in section
214(e)(6) of the Communications Act of 1934, 47 U.S.C. § 214(e)(6), and pursuant to authority delegated
in sections 0.91, 0.291,1.3, and 54.722(a) of the Commission's rules, 47 C.F.R. §§ 0.91, 0.291,1.3,
54.722(a), Virgin Mobile USA, L.P. is DESIGNATED AN ELIGffLE TELECOMMUNICATIONS
CARRIER eligible only for Lifeline support for portions of its licensed service areas in Alabama,
Connecticut, the District of Columbia, Delaware, and New Hampshire, to the extent described in this
order and subject to the conditions set forth herein.
35. IT is FURTHER ORDERED that, pursuant to the authority contained in section
214(e)(6) of the Communications Act of 1934,47 U.S.C. § 214(e)(6), and pursuant to authority delegated
in sections 0.91, 0.291,1.3, and 54.722(a) of the Commission's rules, 47 C.F.R. §§ 0.91, 0.291,1.3,
54.722(a), Virgin Mobile USA, L.P.'s designation as an eligible telecommunications carrer eligible only
for Lifeline support in New York, North Carolina, Tennessee, and Virginia is CONDITIONED on its
implementation of the voluntary commitments in those states as described herein.
36. IT is FURTHER ORDERED that Virgin Mobile USA, L.P. SHALL SUBMIT additional
information pursuantto section 54.209 of the Commission's rules, 47 C.F.R. § 54.209, no later than
October 1,2011, as part of its annual reporting requirements.
37. IT is FURTHER ORDERED that a copy of this order SHALL BE TRANSMITTED by
the Wireline Competition Bureau to the Alabama Public Service Commission, Connecticut Deparment of
Public Utility Control Delaware Public Service Commission, Public Service Commission of the Distrct
of Columbia, New Hampshire Public Utilties Commission, and the Universal Service Administrative
Company.
38. IT is FURTHER ORDERED that pursuant to section 1.02 of the Commission's rules,
47 C.F. R. § 1.102, this Order SHALL BE EFFECTIVE upon release.
FEDERAL COMMUCATIONS COMMISSION
Sharon E. Gilett
Chief
Wireline Competition Bureau
12
Federal Communications Commission DA 10-2433
APPENDIX A
List of Commenters
Comment Sought on Petition of Virgin Mobile for Limited Designation as an Eligible
Telecommunications Carrier in Alabama, WC Docket No, 09-197, Public Notice, 25 FCC Rcd 965
(Wireline Compo Bur. 2010)
Commenter
National Consumers League
National Emergency Number Association
TracFone Wireless, Inc.
Abbreviation
NCL/Grange
NENA
TracFone
Reply Commenter
Virgin Mobile USA, L.P.
Abbreviation
Virgin Mobile
Comment Sought on Petition of Virgin Mobile for Limited Designation as an Eligible
Telecommunications Carrier in Connecticut, Delaware, New Hampshire, and the District of Columbia,
WC Docket No, 09-197, Public Notice, 25 FCC Rcd 1981 (Wireline Compo Bur. 2010)
Commenter
Advocates for Universal Access, LLC
TracFone Wireless, Inc.
Abbreviation
AUA
TracFone
Reply Commenter
Virgin Mobile USA, L.P.
Abbreviation
Virgin Mobile
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Federal Communications Commission DA 10-2433
APPENDIXB
Non-Rural Telephone Company Study Areas for Inclusion in Virgin Mobile's ETC Service Area
Alabama
BellSouth Telecommunications, Inc.
CenturyTel of Alabama, LLC (d//a CenturyLink)
Connecticut
AT&T Connecticut
Verizon Connecticut
District of Columbia
Verizon Washington, D.C., Inc.
Delaware
Verizon Delaware Inc.
New Hampshire
FairPoint Communications, Inc.
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Federal Communications Commission DA 10-2433
APPENDIXC
Rural Telephone Company Study Areas for Inclusion in Virgin Mobile's ETC Service Area
Alabama
Alltel Alabama, Inc.
Ardmore Telephone Co.
B1ountsvi1e Telephone Co. (Otelco)
Brindlee Mountain Telephone Co. (Otelco)
Butler Telephone Co.
Castleberr Telephone Co.
Farmers Telephone Coop.
Frontier Communications of Lamar County, LLC
Frontier Communications of Alabama, LLC
Frontier Communications of the South, LLC
Graceba Total Communications, Inc.
GTC, Inc.
Gulf Telephone Co.
Haynevi1e Telephone Co.
Hopper Telecommunications Company, Inc. (Otelco)
Interstate Telephone Co.
Mi1ry Telephone Co.
Mon-Cre Telephone Co.
National Telephone Co. of Alabama
New Hope Telephone Cooperative
Oakman Telephone Co.
Otelco Telephone, LLC
Peoples Telephone Co.
Pine Belt Telephone Co.
Ragland Telephone Co.
Roanoke Telephone Co.
Union Springs Telephone Co.
Valley Telephone Company, LLC
Connecticut
Woodbury Telephone Company
New Hampshire
Bretton Woods Telephone Co.
Dixvi1e Telephone Co.
Dunbarton Telephone Co.
Granite State Telephone Inc.
Holls Telephone Co. d//a TDS Telecom
Kearsarge Telephone Co. d//a TDS Telecom
Merrimack County Telephone Co d//a TDS Telecom
Northland Telephone Co. Union Telephone Co. Verizon
Wilton Telephone Co. d//a TDS Telecom
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