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Rulemaking on the Commission's Own Motion to Review the Telecommunications Public Policy Programs.

Rulemaking 06-05-028

(Filed May 25, 2006)

1. Summary

· "De-links" California LifeLine from the AT&T basic rate structure in order to ensure ongoing compliance with Section 874 of the Public Utilities Code, and determines that a Specific Support Amount methodology is the best option to continue to meet the goals of the Moore Act and our overall universal service goals.

· Sets a Specific Support Amount at 55 percent of the highest basic rate of the State's URF carriers of last resort. Each carrier will receive the Specific Support Amount (with some exceptions), and the initial Specific Support amount shall be set at $11.50, effective July 1, 2011.

· Each carrier's LifeLine rate will be capped at no more than 50 percent of its basic service rate.

· Each carrier may reset its LifeLine rate on an annual basis. Each carrier's LifeLine rate will be calculated by subtracting the Specific Support amount and any applicable Federal Lifeline and Linkup subsidy from its basic rate.

· Caps the current California LifeLine rate at $6.84 for the next two years for most customers.

· Eliminates the current price floor and allows carriers to charge customers less than AT&T's 2006 basic service rates. However, this decision also requires carriers offering LifeLine to charge LifeLine customers at least $5 per month (exclusive of tribal customers receiving federal Tier 4 subsidy).

· Expands the LifeLine program to include data services for consumers that receive wireless equipment through the CPUC's Deaf and Disabled Telecommunications Program (DDTP).

· Allows non-traditional carriers, such as wireless carriers and voice over internet protocol (VoIP) companies, to participate in the California LifeLine program consistent with current requirements. This decision establishes a separate phase to consider implementation changes needed to facilitate participation in LifeLine for non-traditional carriers, including data services for DDTP - eligible consumers, wireless carriers, and other non-traditional carriers.

· Eliminates excess payments to carriers for administration, bad debt, and to make up for forgone Federal support.

1 The formal name specified in Pub. Util. Code § 871 for the program which has come to be known as the "California LifeLine Program."

2 The entire program is established in Pub. Util. Code §§ 871-884.

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