4. Clarifications to D.10-11-033

As our staff has moved forward to implement our decision from last fall, a number of implementation ambiguities and inconsistencies have been identified. To enable our implementation efforts to conform to the intent of that decision, we adopt the changes explained below.

4.1. Definition of "Transition Period"

The term "transition period" is used throughout the decision and must be consistent because important events occur prior to, during, and at the completion of the "transition period." Most specifically, the decision is unclear which LifeLine rules should apply from the effective date of the decision to the date on which carriers begin receiving only the Specific Support Amount. Ordering Paragraph 15 defines the transition period as "From the effective date of this decision until January 1, 2013," and states that carrier compensation will be capped at the Specific Support Amount for this period, but then Ordering Paragraph 13 inconsistently states that the Specific Support Amount does not begin until July 1, 2011.

4.2. Implementation Date for the Specific Support Amount

Ordering Paragraph 5 begins by setting the effective date of the Specific Support Amount as July 1, 2013, but, as noted above, the Specific Support Amount is relevant during the transition period which begins well before July 1, 2013.

Ordering Paragraph 5 goes on to state that: "during the transition period, until January 1, 2010, non-ETCs may recover up to the Specific Support Amount (after deducting the set rate of up to $6.84 or the applicable EAS LifeLine rate) in addition to the amount that designated ETCs may obtain from the Federal LifeLine fund." However, the decision was adopted in November of 2010 so the completion date had already passed.

4.3. Carrier Compensation and GO 153 Revisions

Ordering Paragraph 13 states: "Beginning July 1, 2011, the Specific Support Amount will be $11.50." Ordering Paragraph 5, however, goes on to limit carriers to recovering only the Specific Support Amount. The limitation in Ordering Paragraph 5 appears inconsistent with the text found on page 101 which indicates that the Commission "will continue to pay the federal make-up charge for non-ETCs between July 1, 2011 and Dec. 31, 2012" which would be in addition to the Specific Support Amount.

We find that the decision is not clear about the date on which carriers would cease to be reimbursed pursuant to current GO 153 rules, and after that date exactly what reimbursement amounts carriers, receiving the federal ETC amounts as opposed to carriers not eligible for those amounts, would receive. All the current rules apply until the Specific Support Amount takes effect. Other forms of authorized reimbursements are not limited by GO 153 and Ordering Paragraph 5.

GO 153 contains a complex and detailed set of rules to implement the Moore Universal Service Act. To illustrate the level of detail in this General Order, we note that 60 separate phrases or terms are specially defined just for the General Order. These rules in some form or another have been in place for many years and cover all aspects of the LifeLine program. GO 153 sets out customer eligibility standards and documentation requirements, the specifications for LifeLine tariff rates and charges, and carrier costs and lost revenues that may be reimbursed by the LifeLine among numerous other program details. Many of the components of GO 153 interrelate and have more than one consequence for customers and/or carriers.

We have reviewed Ordering Paragraphs 5 and 13, as well as the text regarding non-ETC make up amounts in the context of the meticulous program set forth in GO 153 and we are unable to reliably clarify the directives found in our November decision. To avoid customer and carrier confusion, we find that specific revisions to GO 153 are necessary to implement the changes we adopted to the LifeLine program. Therefore, we will retain the current GO 153 carrier reimbursement practices and policies until the appropriate changes are developed by our staff, in consultation with the carriers and customers, and approved by this Commission.

We direct our staff to move diligently to complete the comprehensive revisions necessary to conform GO 153 to the November decision. Although we prescribed a detailed timetable for our staff to complete various workshops and prepare work products in the November decision, upon further review, we find that those timetables impose unnecessary constraints on creating the comprehensive revisions necessary to the LifeLine program and GO 153. We, therefore, authorize our staff to complete the tasks necessary on the shortest feasible timetable. When bringing forward the proposed revised GO 153, staff should include a realistic implementation plan that includes sufficient time for customer education.

4.4. LifeLine Measured Service

The decision is unclear as to whether the Commission changed the definition for LifeLine measured rate service or the elements eligible for lost revenue reimbursement for LifeLine measured rate service. AT&T asserts in its letter of January 21, 2011, for an extension of time to comply with the Decision that:

"In transitioning LifeLine to a SSA program, LifeLine participants will no longer have a different plan structure than non-LifeLine customers. The LifeLine benefit (SSA) will be applied to the monthly recurring charge for regular measured rate service (1MR) in the same manner as the SSA is applied to the regular flat-rate service (1FR). This means that, effective July 1, 2011, LifeLine shall not include a unique measured service as is designed in Rule 8.1.5. Rather, LifeLine participants will be purchasing regular measured rate service (1MR) and receive federal support of $3.50 and a SSA subsidy up to $11.50."

The current definition of LifeLine measured rate service is found in GO 153:

Sec. 8.1.5.2 LifeLine customers subscribing to LifeLine measured-rate service shall receive 60 untimed local calls per month. The utility shall charge $0.08 per call for each local call in excess of 60 per month.

Similarly, the current LifeLine claim form allows carriers that offer LifeLine measured rate service to collect lost revenues for:

a. the difference between the carriers regular measured basic service rate and the LifeLine Measured rate; and

b. the untimed local calls.

Currently carriers' measured rate service (1MR) offerings are not the same as the LifeLine measured rate service required by GO 153. For example, AT&T's 1MR offering includes a monthly call allowance based on per-minute usage charges. All calls are timed and charged based on the length of call.

In D.10-11-033, we did not fully consider the implementation mechanics for the Specific Support Amount and LifeLine measured rate service billings, either during the transition period or thereafter. AT&T appears to have concluded that we intended to do away with LifeLine measured rate service, which we can not confidently conclude at this point. We are acutely aware that Lifeline local measured service enables low income persons to have basic telephone service for a very modest sum - less than $3.00 a month. As a result, we are reluctant to alter this component of the LifeLine program without explicit analysis and clear direction. Therefore, we conclude that this aspect of the LifeLine program should not be altered pending revisions to GO 153.³

³ Consequently, we will deny AT&T's request as moot in light of today's decision.