20160212Comments.pdf

DAPHNE HUANG RECEIVED
DEPUTY ATTORNEY GENERAL
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IDAHO BAR NO. 8370
Street Address for Express Mail:
472 W . WASHINGTON
BOISE, IDAHO 83702-5918
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF I-WIRELESS, LLC'S )
APPLICATTON FOR DESIGNATION AS AN ) CASE NO. WrR-T-15-01
ELIGIBLE TELECOMMUNICATIONS )CARRIER. ) COMMENTS OF THE) COVTMISSION STAFF
)
COMES NOW the Staff of the Idaho Public Utilities Commission, by and through its
Attorney of record, Daphne Huang, Deputy Attorney General, and submits the following
comments.
BACKGROUND
On October 20,2015, i-wireless, LLC ("i-wireless" or "Company") filed an Application,
pursuant to 47 U.S.C. $ 214(e)(2), Sections 54.101 through 54.207 of the Rules of the Federal
Communications Commission (FCC), and the Idaho Public Utilities Commission's
(Commission) rules and regulations,l seeking designation as an eligible telecommunications
carrier (ETC) in Idaho to provide Lifeline service to qualifying Idaho consumers. On January 8,
2016, the Company filed a Letter with supplemental information, and on January l3,20l6,the
Company filed a Notice of Mailing to Tribes.
I See Case No. WST-T-05-01, Order No. 29841 (August 4, 2005).
STAFF COMMENTS 1 FEBRUARY T2,2016
THE APPLICATION
i-wireless provides "commercial mobile radio service" (CMRS) throughout the country
and operates as a Mobile Virtual Network Operator (M\INO). The Company offers prepaid
wireless telecommunications services using the Sprint Spectrum, L.P. network. Application at
2-3. The Company requests ETC status for service areas throughout Idaho, as set forth in
Exhibit 14 to the Company's Application. Id. at2l-22. The Company also asks that its
designation include authority to participate in and receive reimbursement from the Idaho
Telephone Service Assistance Program (ITSAP). January 8,2016 Letter. i-wireless notes that it
has been designated as an ETC in 37 states and the District of Columbia. Application at 3. The
Company also has five pending ETC Applications. Id. at3.
The Company contends that its request for ETC designation to participate in the Lifeline
program is consistent with the Commission's decisions designating TracFone and Virgin Mobile
as ETCs. See TracFone ETC Order No. 32550 and Virgin Mobile ETC Order No.32645.
i-wireless asserts it satisfies the requirements for designation as an ETC. Application at 16.
Specifically, the Company states that it: (1) is a common carrier; (2) commits and is able to
provide services supported by federal universal support mechanisms; (3) will advertise the
availability of supported services; (4) commits to provide service throughout its service area in
Idaho; (5) is capable of remaining functional in emergency situations; (6) is committed to
consumer protection and service; (7) describes its local usage plan, which it contends will meet
or exceed incumbent local exchange carrier (ILEC) plans; (8) will promote the public interest,
convenience and necessity; (9) will comply with requirements imposed by this Commission for
ETC status, including reporting requirements; and (10) has provided notice of its Application to
the affected tribal governments and tribal regulatory authorities. Id. at 18-28; Notice of Mailing
to Tribes. The Company also states it will comply with applicable ITSAP regulations, including
but not limited to required monthly reporting and execution of a Memorandum of Understanding
with the Department of Health and Welfare. January 8,2016letter.
The Company affirms that granting it ETC designation will "promote competition and
innovation, and spur other carriers to target low-income consumers," and o'help assure that
quality services are available at ojust, reasonable, and affordable rates"'as contemplated in the
Telecommunications Act. Application at 28. Granting it ETC designation will, the Company
STAFF COMMENTS FEBRUARY 12,2016
states, "further the public interest by providing Idaho consumers, especially low-income
consumers, with low prices and high quality services." Application at26.
Proposed Lifeline Service Offerings
i-wireless will provide Lifeline service under the brand rulme 'oAccess Wireless" and will
offer three plans: (l) 250 Anytime Minutes Plan (non-tribal) with a free handset and 250
anytime minutes with unlimited text messaging per month; (2) Unlimited Talk and Text Plan
(tribal only) with a free handset and unlimited voice minutes plus unlimited text messages per
month; and (3) Retail Discount Plan that allows Lifeline eligible customers to choose from any i-
wireless monthly retail plan at a discount-up to $15.00 for non-tribal customers or up to $40.00
for tribal customers. Id. at 4-5. Minutes are credited to a customer's account at the beginning of
every 3O-day cycle. Lifeline customers will also have access to voice mail, caller identification,
and call waiting at no additional charge. Customers may place free calls to the i-wireless
customer service center and to 9l I centers, regardless of account balance or activation status. 1d.
at 5. Additional minutes in increments of $10.00, $25.00, $35.00, and $50.00 may be purchased
over the phone or online. Id. at 6.
The Federal Lifeline and Link Up Reform and Modernization Order
On February 6,2012, the FCC released a Report and Order ("the Order") to
comprehensively reform the low-income program of the Universal Service Fund ("USF"). The
Order substantially strengthens protection against waste, fraud, and abuse; improves program
administration and accountability; improves enrollment and consumer disclosures; initiates
modernization of the program for broadband; and constrains the growth of the program in order
to reduce the burden on all who contribute to the USF.2 The Order also establishes rigid
requirements for ETCs to obtain customer certifications to prevent duplication of lifeline
benefits.
i-wireless declares it will comply with the Order; will meet the certification and
verification requirements; will comply with all regulations imposed by the Commission to the
extent such provisions apply to a prepaid wireless provider; commits that l00Yo of federal
2 See 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,2T F.C.C.R. 6656, flfl 361-
83 (Feb. 6,2012) ("Lifeline and Link Up Reform Order").
STAFF COMMENTS 3 FEBRUARY 12,2016
universal service funds will flow through directly to Lifeline customers; and the Company will
comply with the reporting requirements adopted by the Commission. As the Company is not
seeking high-cost support for its wireless service, it requests a waiver of the two-year network
improvement and maintenance plan associated with the use of high-cost support. Order No.
29841, Section B.l.
Compliance Plan
Pursuant to the Order, the FCC approves compliance plans as a condition of obtaining
forbearance from the facilities requirement of the Communications Act of 1934, as amended, for
the provision of Lifeline service.3 In the Order, the FCC found that "a grant of blanket
forbearance of the facilities requirement, subject to certain public safety and compliance
obligations, is appropriate for carriers seeking to provide Lifeline-only service."a Therefore, the
FCC conditionally granted forbearance from the Act's facilities requirement to all
telecommunications carriers seeking Lifeline-only ETC designation, subject to the following
conditions: (l) compliance with certain 911 and enhanced 911 (E911) public safety
requirements; and (2) approval of a compliance plan by the FCC's Wireline Competition Bureau,
providing specific information regarding the carrier and its service offerings and outlining the
measures the carrier will take to implement the obligation contained in the Order. The FCC
approved i-wireless' revised compliance plan on October 2l,20ll.s
Notice of Apparent Liabilify
On November l, 2013, the FCC issued a notice of apparent liability (NAL) to i-wireless.6
The NAL alleges that between October 2012 and April 2013, i-wireless was reimbursed in eight
states for 1,684 intra-company duplicate customer enrollments totaling $24,358 in overpayment
from the Universal Service Administrative Company (USAC).7 For this alleged violation, the
FCC proposed a monetary forfeiture in the amount of $8,753,074.8 OnJanuary 10,2014,
i-wireless filed a response challenging the NAL findings and the matter is now pending before
the FCC. In the two years following response to the NAL, no further action has been
3 See Lifeline qnd Link L/p Reform Order,27 F.C.C.R. 6656, tTtT379-80.4 Lltireline Competition Bureau Approves Compliance Plans,27 F.C.C.R. 5776 at l-2 (May 25,2012).
s In the Matter of Federal-State Joint Board on (Jniversal Service,26 F.C.C.R. 14508 (Oct. 2l,20ll).
6 In the Matter of i-wireless, LLC., Notice of Apparent Liabilityfor Forfeiture,2S F.C.C.R. 15381 (Nov.7ld.,n9.
8Id.,nl.
STAFF COMMENTS FEBRUARY 2016
taken by the FCC, and none is expected. Staff believes the Company has sufficient safeguards in
place to adequately address the NAL and any associated public interest concerns. The
implementation of the National Lifeline Accountability Database (NLAD) will provide an
additional third party verification - a safeguard that was not in place during the timeframe of the
alleged duplicate enrollments by i-wireless.
STAFF ANALYSIS
Staff has reviewed the i-wireless' Application, including the approved Compliance Plan,
The FCC's Notice of Apparent Liability, and the Company's confidential response to the NAL.
In addition, Staff has conducted an analysis of the Company's fulfillment of the federal
Telecommunications Act of 1996, the Lifeline and Link Up Reform Order, and Commission
Order No. 29841. An analysis of the specific state and federal requirements for ETC designation
are examined in more detail below.
Public Interest Considerations
When applying the public interest test for ETC designation, Staff historically analyzes
two primary considerations. These are discussed as follows.
l. Contribution to the Idaho Telecommunications Service Assistance Program (ITSAP).
In a prior ETC Application case filed by TracFone, another MNVO pre-paid wireless service
provider, the Commission determined that it was in the public interest to require TracFone to
contribute to this fund.e See Order No. 32301 at 9. The ITSAP Administrator confirmed that i-
wireless remits to the ITSAP surcharge on a monthly basis. January 7,2016 email. Staff also
believes i-wireless demonstrates its intent to comply with all state and federal glllBgll
requirements. Application at 18. Staff; therefore, believes i-wireless meets this public interest
test.
2. "Cream Skimming" Analysis. In assessing possible disadvantages of granting an
ETC designation, the Commission considers if the designation is sought "for an area less than the
entire study area of a rural telephone company." Order No. 33226 at 3. "In such circumstances,
e The Commission also considered TracFone's contribution to the Idaho Emergency Communications Act QECA)*9111F;911" fund. Since the Tracfone case, the Idaho Legislature revised Idaho Statutes regarding the remittance of
E9 I I fees imposed on prepaid wireless service purchased through a retailer. Pursuant to the revised Statute, "[t]he
prepaid wireless E91 I fee shall be collected by the seller from the consumer" in the amount of 2.5o/o of the sales
price on each retail transaction. Idaho Code $ 3l-4813.
STAFF COMMENTS FEBRUARY 12,2016
known as 'cream skimming,' a company can avoid providing services throughout the rural study
area, which is contrary to the public interest." .Id
i-wireless requests ETC designation statewide, subject to the existence of its underlying
carrier's facilities and corresponding coverage. The Company states it "understands that its
service may overlap with rural carriers in Idaho, but maintains that the public interest factors
justiff its designation in these carriers' service areas, "because it seeks ETC designation solely to
utilize USF funding to provide Lifeline service to qualified low-income consumers. It does not
seek and will not accept Link Up or high cost support." Application at22.
Staff believes that the Company's exclusion of high-cost support in its Application makes
the cream skimming and the rural versus non-rural analysis moot. See Order No. 32645 at 3.
Staff, however, believes that i-wireless' ETC designation should not include the entire state, but
instead, the Company's ETC designation should be limited to those exchanges listed in Exhibit
t4.
Network Improvement Plan
The Idaho ETC Designation Order requires an ETC to provide a two-year network
improvement and progress report if the ETC receives high-cost support. See Order No. 29841 at
18. In considering another prior ETC Application, the Commission determined that a two-year
network improvement plan was not applicable to Lifeline-only ETCs and granted the requested
ETC designation along with an exemption from the network improvement plan. See Order No.
3250r.
The FCC, in the USF/ICC Transformation Order, amended section 54.202 to clarify that
a common carrier seeking designation as a Lifeline-only ETC is not required to submit a five-
year network improvement plan as part of its application for designation as an ETC. Because
Lifeline-only ETCs are not receiving funds to improve or extend its networks, the FCC stated
that it "saw little purpose in requiring such plans as part of the ETC designation process."lO i-
wireless' Application seeks only low-income USF support. Thus, Staff believes i-wireless is
exempt from Idaho's two-year network improvement plan requirement.
to See Lifeline and Link Up Reform Order,27 F.C.C.R. 6656, fl 386.
STAFF COMMENTS FEBRUARY 12,2016
Ability to Remain Functional in Emergencies
i-wireless states that it has the ability to remain functional in emergency situations in
accordance with the Idaho ETC Order and Section 5a.202(a)(2) of the FCC's Rules, 47 C.F.R.
$ 5a.202(a)(2). The Company confirms that it provides the same ability to remain functional in
emergency situations as currently provided by the ILECS to their own customers, such as access
to a reasonable amount of back-up power to ensure functionality without an extemal power
source, the ability to reroute traffic around damaged facilities, and the capability of managing
traffic spikes resulting from emergency situations. Application at22. Staff believes i-wireless
meets this requirement.
Other ETC Designation Requirements
Additional requirements for ETC designation are enumerated in Appendix 1 of Order No.
29841and are discussed below.
l. Common Carrier Status. i-wireless is a commercial mobile radio service provider and
is a common carrier as defined in the federal Telecommunications Act. Id. at 18.
2. Provide the Universal Services. i-wireless states it will provide each of the supported
services identified in Section 54.101 and Section 54.202(a). Id. at 16.
3. Advertising. i-wireless also states it will comply with the requirements set forth
the Lifeline and Link Up Reform Order,27 F.C.C.R. 6656. Id. at20.
4. The Commitment and Ability to Provide Supported Services. i-wireless further
indicates it will provide services consistent with the FCC's grant of forbearance from Section
214's facilities requirements. Id. at 17.
5. A commitment to Consumer Protection and Service. i-wireless commits to satisfying
all such applicable state and federal requirements related to consumer protection and service
quality standards. The Company will comply with the Cellular Telecommunications and Internet
Association's (CTIA) Consumer Code for Wireless Service. Id. at23.
6. Description of the Local Usage Plan. i-wireless states that an Applicant for ETC
designation is no longer required to demonstrate that it offers a local usage plan that is
"comparable" to the plan offered by the ILEC in the relevant service territory. Id., citing Lifeline
and Link Up Reform Order,27 F.C.C.R. 6656 at208. 'Nevertheless, not only will the
Company's offering be comparable to the underlying ILEC plans, but it also will exceed them in
several respects." Id. at23.
STAFF COMMENTS FEBRUARY 12,2016
7 . Tribal Notification. The Company has filed a Notice of Mailing to Tribes with the
Commission. See Notice of Mailing to Tribes.
Staff believes i-wireless meets the aforementioned ETC designation requirements where
applicable for a Lifeline-only ETC designation.
RECOMMENDATION
Staff has reviewed the Application of i-wireless, LLC for designation as an ETC. Staff
believes the Application demonstrates the Company's technical, financial and managerial
expertise as well as the commitment to fulfill the obligations of an ETC in Idaho. The Company
satisfactorily addresses the FCC's NAL; will provide all universal services supported by the
federal USF throughout its underlying carrier's service territory; answers the public interest
questions that accompany an ETC Application; has an FCC-approved compliance plan; and
meets all requirements established by the Commission in Order No. 29841.
Staff believes i-wireless' Application for designation as an ETC is in the public interest
and recommends approval for those wire centers listed in Exhibit 14. Staff also recommends that
the Commission approve the waiver of the two-year network improvement plan.
Respectfully submitted this I *day of Febru ary 2016.
Technical Staff: Grace Seaman
i:umisc:comments/wirt I 5. I djhgs comments
Deputy Attorney General
STAFF COMMENTS FEBRUARY 12,2016
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