20151020Exhibit 7 WA ETC Renewal Order 5.29.14.pdf

BEFORE THE WASHINGTON
UTILITIES AND TRANSPORTATION COMMISSION

In the Matter of the Petition of

i-wireless, LLC

Petitioner,
For an Exemption from WAC 480-
123-030(1)(d), (f), and (g), and
Designation as an Eligible
Telecommunications Carrier
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DOCKET UT-101640

ORDER 02

ORDER RENEWING ELIGIBLE
TELECOMMUNICATIONS CARRIER
DESIGNATION AND EXEMPTION
FROM RULE WITH AMENDED
CONDITIONS
BACKGROUND

1 On August 20, 2013, i-wireless, LLC (i-wireless or Company) filed an application with
the Washington Utilities and Transportation Commission (Commission) to renew its
designation as an Eligible Telecommunications Carrier (ETC) under the Communications
Act of 19341 (Communications Act) and WAC 480-123.

2 The Commission originally designated i-wireless as an ETC on September 13, 2012,
allowing the Company to provide qualified Washington consumers with Lifeline support,
which is part of the federal Universal Service Fund (USF) supported services and
subsidizes qualified low-income household monthly charges for basic telephone services
and non-recurring connection charges.2 In that order, the Commission granted the
Company exemptions from the provisions of WAC 480-123-030 (1)(d), (f), and (g),
which require the company to file a substantive investment plan, digital map of wireless
facilities and coverage, and certification regarding back-up power requirements. The
Commission also imposed 21 conditions on i-wireless’s ETC designation, including a
requirement that the Company seek renewal of its ETC status within one year.

3 In support of its application, i-wireless states that it satisfied the requirements of WAC
480-123-030 in its original petition and that, except for provisions for which a waiver
was granted, its operations remain otherwise unchanged. The Company further states
that it has complied with all 21 conditions the Commission imposed on the Company in
Order 01 and provides a summary explanation of its compliance for each individual
condition. Finally, i-wireless affirms that the circumstances underlying the

1 47 U.S.C. § 214 (e)(2) (2012).
2 Order 01, Order Granting Exemption From Provisions of WAC 480-123-030(1)(d), (f), and (g),
and Designation as an Eligible Telecommunications Carrier (September 13, 2012).
DOCKET UT-101640 PAGE 2
ORDER 02

Commission’s grant of exemption from WAC 480-123-030(1)(d), (f), and (g) are
unchanged.

4 i-wireless states that its service continues to advance the purposes of universal service set
forth in 47 U.S.C. § 254. i-wireless states that its designation as an ETC remains in the
public interest because ETC service benefits low-income household in Washington.3

5 Commission Staff (Staff) agrees that i-wireless complied with the terms and conditions of
Order 01 and also complied with the new rules implemented by the FCC’s (Federal
Communication Commission) 2012 Lifeline and Link Up Reform Order,4 primarily
strengthening eligibility check and one-Lifeline-per-household policy, enforcing
deactivation upon 60 consecutive days of non-usage, certifying all its Lifeline customers
on an annual basis and providing results of annual recertification to the FCC and relevant
state commissions.

6 Staff supports i-wireless’s application with certain new or revised conditions that better
reflect rule changes at the federal level and the deletion of some previously imposed
conditions. Staff believes that monitoring and rule enforcement in the today’s Lifeline
market obviates the need for the commission’s one-year interim condition. The
Company agrees to these revised conditions on its ETC status, as enumerated in
Appendix A.

7 Staff notes that the FCC issued a Notice of Apparent Liability For Forfeiture (NAL) to i-
wireless, LLC on November 1, 2013.5 The NAL alleges that between October 2012 and
April 2013, i-wireless was reimbursed for 1,684 alleged intra-company duplicate
customer enrollments totaling $24,358 in overpayments from the Universal Service
Administrative Company, none of which involved the Company’s activities in the state of
Washington. The FCC proposed a forfeiture of over $8.8 million dollars. On January 10,
2014, i-wireless filed a response challenging the NAL findings and the matter is now
pending at the FCC.6 Staff suggests that because there is no reasonable estimate as to

3 i-wireless Application to Renew at 7.
4 In the Matter of Lifeline and Link Up Reform and Modernization, Lifeline and Link Up,
Federal-State Joint Board on Universal Service, Advancing Broadband Availability Through
Digital Literacy Training, WC Docket No. 11-42, WC Docket No. 03-109, CC Docket No. 96-
45, WC Docket No. 12-23, Report and Order and Further Notice of Proposed Rulemaking, FCC
12-11 (rel. Feb 6, 2012) (“Lifeline and Link Up Reform Order”).
5In the Matter of i-wireless, LLC., Notice of Apparent Liability for Forfeiture, File No.EB-IHD-
13-00010656, FCC 13-148 (rel. November 1, 2013).
6 i-wireless’ response to the FCC states that even if every alleged duplicate turned out to be an
actual duplicate, i-wireless still would have been 99.74% effective in screening for duplicates. i-
wireless, LLC’s Response to the Notice of Apparent Liability for Forfeiture, Corrected Public
Version, File No.EB-IHD-13-00010656 (January 10, 2014), p. 25.
DOCKET UT-101640 PAGE 3
ORDER 02

when the FCC will resolve the NAL, the commission should not wait on the result of the
NAL to decide on i-wireless’ ETC renewal. This issue does not change staff’s evaluation
of i-wireless’ ETC Renewal petition.

DISCUSSION

8 Common carriers receiving designation as ETCs under 47 U.S.C. § 214 are eligible to
receive subsidies from the federal Universal Service Fund. State utility commissions are
responsible for designating common carriers as ETCs for the purpose of receiving such
funds, and may impose conditions on a common carrier so designated. The Commission
will approve applications from carriers requesting ETC designation if the application
meets the requirements of WAC 480-123-030, the designation will advance some or all
of the purposes of universal service found in 47 U.S.C. § 254, and the designation is in
the public interest.7

9 The Commission agrees with Staff that the Company has demonstrated that it continues
to meet the criteria for designation as an ETC set forth in Order 01, including offering all
services supported by the federal universal service support mechanisms set forth in 47
U.S.C. § 254. i-wireless should also continue to be exempt from WAC 480-123-
030(1)(d),(f), and (g) because i-wireless is not a high cost fund recipient and because the
Company relies on other carrier facilities. i-wireless has also demonstrated compliance
with the 21 conditions set forth in Appendix B to Order 01.

10 The Commission also agrees with Commission Staff that the amended conditions set
forth in Appendix A to this order are appropriate, given the FCC’s recent order requiring
a forbearance compliance plan and adoption of more stringent requirements for the
federal Lifeline program.

11 The Commission concurs with Staff that the Company’s ETC renewal application should
not be delayed pending FCC resolution of the NAL. The Commission recognizes the
importance of accurate customer eligibility records and we are concerned that the
Company may have some issues with its current practices, although no such problems
have been identified in Washington. However, the Commission will consider i-wireless’
renewal petition on the record now before us. We may choose to revisit the Company’s
ETC status once the FCC finalizes this matter.

12 The Commission agrees with Commission Staff that the Company may continue to be
designated as an ETC and is entitled to continued exemptions from WAC 480-123-
030(1)(d),(f), and (g), subject to the amended conditions set forth in Appendix A to this
order.

7 WAC 480-123-040.
DOCKET UT-101640 PAGE 4
ORDER 02

FINDINGS AND CONCLUSIONS

13 (1) The Commission has jurisdiction over ETCs in Washington and the subject matter
of this order under 47 U.S.C. § 214(e)(2), 47 C.F.R. 54.201(b)-(c) and WAC 480-
123-040.

14 (2) i-wireless is a telecommunications company doing business in the state of
Washington as an Eligible Telecommunications Carrier. i-wireless has
demonstrated that it continues to meet the requirements for designation as an
ETC, subject to the conditions set out in Appendix A to this Order.

15 (3) i-wireless’s continued designation as an ETC will advance the purpose of
universal service because the Company will offer voice telephony services, which
facilitate universal service.

16 (4) i-wireless has also demonstrated that its designation as an ETC is in the public
interest because its services will benefit low-income customers.

17 (5) This matter came before the Commission at its regularly scheduled meeting on
May 29, 2014.

O R D E R

THE COMMISSION ORDERS:

18 (1) i-wireless, LLC's request for continued designation as an ETC in service areas
specified in Appendix B is hereby GRANTED, subject to the conditions set forth
in Appendix A.

19 (2) i-wireless LLC’s request for continued exemption from WAC 480-123-
030(1)(d),(f) and (g) is hereby GRANTED, subject to the conditions set forth in
Appendix A.

20 (3) The Commission retains jurisdiction over this matter for purposes of effectuating
this order.

DOCKET UT-101640 PAGE 5
ORDER 02

DATED at Olympia, Washington, and effective May 29, 2014.

WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION

DAVID W. DANNER, Chairman

JEFFREY D. GOLTZ, Commissioner

DOCKET UT-101640 PAGE 6
ORDER 02

APPENDIX A

Washington State Conditions on Designation of i-wireless, LLC
as an Eligible Telecommunications Carrier

1. i-wireless, LLC (i-wireless or Company) shall utilize federal default eligibility criteria
only, i.e., not utilizing Washington Telephone Assistance Program eligibility criteria
that are not on the federal list.

2. i-wireless shall file with the Commission any future changes to its rates, terms,
conditions or Lifeline customer application form at least one day prior to the effective
date of the change.

3. The information on i-wireless’s rates, key terms and conditions, e.g., return policy,
usage definition, refill methods, annual recertification requirement, and customer
service contact, shall be provided in a package sent or given to Lifeline customers
after enrollment in i-wireless’s Lifeline program, as well as at i-wireless’s official
Lifeline website.

4. For the rate plans free of charge to customers, i-wireless must offer at least one plan
with a minimum of 250 minutes per month. The Company may invoke Condition No.
2 only for the purpose of increasing the number of minutes or enhancing the features
in the Lifeline plan, but not decreasing the number of minutes.

5. i-wireless shall deactivate a Lifeline account if the customer has no usage for 60
consecutive days pursuant to 47 C.F.R. § 54.407(c)(2). No fewer than eight business
days before deactivation, i-wireless shall send the customer a written notice by mail
about the potential deactivation and ways to avoid unwanted deactivation. The
customer shall have a 30 day grace period from the deactivation date to reactivate the
Lifeline account by incurring “usage” as defined in 47 C.F.R. § 54.407(c)(2). When a
customer reactivates the account, i-wireless must deposit the minutes the customer is
entitled to for the grace period.

6. On a quarterly basis, i-wireless shall provide the number of Lifeline customers that it
enrolls each month. i-wireless shall also report the number of deactivated Lifeline
customers each month by service plan and the reasons for deactivation, e.g., no usage
for 60 consecutive days, annual verification unsuccessful, or voluntary exit. Quarterly
reports shall be filed with the Commission no later than 30 days after the end of each
quarter.

7. i-wireless shall respond within 30 days to Commission Staff’s information requests
on i-wireless’s Lifeline operations, including but not limited to Lifeline customers’
usage patterns and Lifeline customer records.
DOCKET UT-101640 PAGE 7
ORDER 02

8. i-wireless shall cooperate with the commission and the Department of Social and
Health Services (DSHS) to work out a procedure to verify i-wireless Lifeline
customers’ eligibility. i-wireless shall maintain access to DSHS’s online query
database to verify the eligibility of Lifeline applicants who qualify based on their
participation in Medicaid, Supplemental Nutrition Assistance Program, Supplemental
Security Income and Temporary Assistance for Needy Families. This condition shall
be required until the national Lifeline eligibility database is fully functional.

9. i-wireless must not deduct airtime minutes for calls to customer care made from the
customer’s handset by dialing 611. i-wireless shall explicitly state the policy of free
611 calls in its Lifeline service agreements. i-wireless may require the customer to
call the toll-free customer care number from another phone if necessary to resolve
technical issues related to the handset or its programming.

10. i-wireless shall have DSHS audit its Washington Lifeline customers’ eligibility
(including program eligibility and duplication with other Lifeline providers) at least
once a year. By January 31 of each year, i-wireless shall provide DSHS the complete
record of its Washington Lifeline customers who qualify based on their participation
in Medicaid, Supplemental Nutrition Assistance Program, Supplemental Security
Income and Temporary Assistance for Needy Families in the prior calendar year. The
records must have all the necessary information and be in an electronic format
required by DSHS. After DSHS notifies i-wireless of the results of the review, i-
wireless must take appropriate measures to either correct the customer records or stop
providing services to ineligible customers and report the resolutions to the
commission and DSHS within 60 days of the DSHS notice. This condition shall be
required until the national database for Lifeline customer eligibility is fully
functional.

11. i-wireless shall provide the commission a copy of its annual Lifeline Re-certification
results within 30 days it files with the Universal Service Administration Company
(USAC) each year.

12. i-wireless shall file with the commission, by March 31 of each year, a report on the
number of complaints, categorized by the different nature of complaints that it
received from Washington Lifeline customers during the prior calendar year, e.g.,
billing disputes and service quality complaints. This report shall include complaints
filed with i-wireless, the commission’s Consumer Protection and Communications
Section, the Washington State Office of the Attorney General, and the Federal
Communications Commission (FCC). This report shall not include calls from
customers with regard to general inquiries such as account balance, additional
purchases, service availability or technical support. The Commission reserves the
DOCKET UT-101640 PAGE 8
ORDER 02

right to revoke i-wireless’s ETC designation if i-wireless fails to provide reasonable
quality of service.

13. i-wireless shall cooperate with the Washington State Enhanced 911 Program (E911)
and all Public Safety Answering Points on E911 issues and shall, upon request,
designate a representative to serve as a member or alternate member of the
Washington State E911 Advisory Committee or its Communications Sub-committee.

14. i-wireless shall comply with rules on cessation of business as specified in WAC 480-
120-083.

a. Prior to cessation of business, i-wireless shall make arrangements with its
underlying carriers to provide minutes already sold to customers under the
same terms and conditions it has with the customers, or provide refunds to the
existing customers.

b. i-wireless shall provide written notice to the following persons at least 30 days
in advance of cessation of service:

i. The Commission;
ii. The state 911 program;
iii. Each of its customers;
iv. The national number administrator.

c. The notice to the Commission and the state 911 program must include the
same information required by WAC 480-120-083(3).

d. The notice to the customers must include the same information required by
WAC 480-120-083(4).

e. The notice to the national number administrator must include the same
information required by WAC 480-120-083(7).

f. i-wireless shall file with the Commission at least 30 days in advance of its
cessation of business and request the relinquishment of its ETC designation in
Washington.

15. i-wireless shall collect and maintain necessary records and documentation to ensure
its compliance with the applicable FCC and Commission requirements, including
existing requirements and any future modifications. The records and documentation
shall be provided to Commission Staff upon request.

DOCKET UT-101640 PAGE 9
ORDER 02

16. i-wireless shall cooperate with Commission Staff on phone number conservation
issues and shall comply with 47 C.F.R. § 52.

17. i-wireless shall comply with all applicable federal and Washington state statutes and
regulations, including E911 tax contributions.

18. i-wireless shall file with the Commission of the results of any audits (including in-
depth data validations) or investigations on the Company’s Lifeline operation in any
states or jurisdictions conducted by the FCC or USAC within 14 calendar days from
the receipt of results. The Company must also notify the Commission of any ongoing
investigation that has resulted in monetary or administrative penalty (e.g., suspension
of Universal Service Fund reimbursement, suspension of Lifeline program operation)
within 14 calendar days of the occurrence of such events. To the extent the Company
deems the above information confidential, the Company may submit the notification
on a confidential basis consistent with Commission rules.