Verizon and AT&T Customer Response Rate Prior To July 1, 2006⁸⁵

As shown in table below, Verizon reports that in 2003, it experienced nearly a 75% return on its recertification (aka verification) letters and notices (including those sent using bill messages and Asian direct mail). In 2004, Verizon claims that it repeated the 75% return. In 2005 however, it reported a return rates not as high as previous years, i.e. a 67% return. Verizon points to the absence of reminder signs in its retail stores as a reason for the 2005 implementation decrease. Verizon also contends that from January 1, 2006 to July 1, 2006, it achieved a response rate of 65%.

Verizon Verification Response Results

Verizon notes typically, in terms of daily form returns, the greatest response came from the second mailing (i.e. direct mail), beginning around the end of September through the middle of October. For the first mailing (mainly via bill message), the responses peaked around the end of July and stayed high through the third week of August. Verizon experienced a low response rate between those two peak periods.

As for reasons for high return rates throughout years prior to July 2006, Verizon hypothesizes that customers were accustomed to the recertification (now verification) process and to its timing each year. Verizon further adds that when it administered certification/verification of its customers, LifeLine customers were given ample time to respond during which time the customers were provided several different types of notifications. Without an independent study or otherwise factual proof regarding the carrier's hunch, Staff cannot corroborate this hypothesis.

AT&T on the other hand claims it did not track LifeLine data in the same manner (e.g., the rate of return of notifications sent). Therefore, it did not provide the rates of returns for each period and as such, it did not claim any particular reason for high rate of returns. However from the data provided by AT&T, Staff reasonably concludes that AT&T was able to get an average of just under 80% return on initial certification and close to an average of 74% for its annual recertification (verification) returns for the 18 month period prior to implementation of the new LifeLine procedures.

The table below is constructed from the AT&T data as provided to the Staff and demonstrates the response rates for that period.

AT&T Certification and Verification Response Results

Period	% of Initial Certification Responses	% of Annual Recertification (Verification) Responses
2005/01	63.32%	62.26%
2005/02	81.74%	80.02%
2005/03	91.93%	81.93%
2005/04	115.79%86	58.78%
2005/05	66.70%	69.82%
2005/06	82.92%	73.90%
2005/07	80.21%	75.04%
2005/08	68.95%	68.46%
2005/09	81.23%	83.44%
2005/10	76.91%	76.60%
2005/11	79.19%	80.61%
2005/12	68.52%	70.81%
2006/01	75.62%	51.37%
2006/02	84.96%	86.99%
2006/03	80.12%	78.64%
2006/04	81.76%	83.83%
2006/05	74.74%	72.99%
2006/06	74.31%	74.68%
Average	79.38%	73.90%

While the carrier does not explain the exceptional peaks and valleys occurring during the eighteen-month period (especially in April 2005 and Janurary 2006), it does not diminish the overwhelmingly consistent high rate of return that was on average above 70% for both measures.

Although the response rates for AT&T and Verizon methodologically differ, the data findings point to a high rate of return for the two major carriers in California who collectively account for around 90 percent of LifeLine customers. The data suggests an overall 70% rate of return for both certifications and recertifications (verifications) during the pre-2006 self-certification period.

Lessons Learned

Certain lessons can be learned from carriers' past processes:

1. Grace period: While carriers had to adhere to the provisions of the GO 153, they used some degree of business judgment to increase the response rates and avert regrading customers and dropping them from the LifeLine program. For instance, one carrier added a six-day grace period after the specified due date to allow receipt of late-filed LifeLine certifications and re-certifications (verifications) from customers.

2. Long lead-time: One carrier's customers enjoyed a lead-time of 3 to 4 months to respond since their recertification process would commence on a predetermined date (November 1st) each year. This carrier sent out LifeLine notices 3 to 4 months prior to the customers' anniversary date.

3. Direct contact: Seemingly, customers were accustomed to receiving LifeLine forms from their carriers and sending their responses to the carriers. There was no intermediary or third party. Customers did not need to remember to send to and receive from an independent party other than their carrier, the certification/verification forms and other communications. Staff survey of return rates in other states (see discussion that follows) suggests that some states may have sustained higher return rates by keeping Lifeline administration with the carriers.

4. Manual review: In some circumstances, (e.g., if a form was incomplete), carriers could manually handle the form to allow easier remedy of customer application problems.

5. Calling the Customer: Carrier representatives made calls to customers to clarify, correct, and complete the forms to prevent the customers from loosing LifeLine eligibility. Both AT&T and Verizon practiced this process.

6. Manual customer removal: One carrier practice was to remove each customer by a reviewer rather than automatically dropping the customer by a computerized process.

7. Redundant means: Customers were exposed to the same information on the need to certify-recertify through different media such as second notices in intervals, bill inserts, direct mailers, posting of reminder notices at retail stores, newspaper notices and articles.

8. Rechecking of undelivered mail: Attempts were made to check and re-send returned mail to LifeLine customers.

9. Staff additions: At peak return mail times, carriers added additional Staff to expedite the LifeLine review process.

10. Learning curve: Neither customers, nor the carriers, had to go through a steep and short learning curve because they were accustomed to the certification/recertification process in place for many years.

11. Carriers' incentive: Carriers had the responsibility of certification/recertification of their LifeLine customers. They had to inform the customers of upcoming certification or recertification deadlines, prepare forms, send them to customers, and make attempts to rectify problems to retain the customer. This was an all-inclusive process from initial customer interest to establish eligibility, to the enrollment process, and to send/receive of self-certification/recertification forms. To this end, carriers were accountable to the customers and ultimately to the Commission for LifeLine program success. They had an incentive to be proactive toward non-responses and incomplete forms in a manner that would not interrupt the LifeLine service to the customer.

b. Current Rates Are Less Than 50%

Since changing to the California LifeLine program to align with the new federal requirements, the LifeLine response rates have been low. As reported in the Novmeber 2006 ACR, CertA data indicated approximately a 29.43% verification response rate in August 2006.⁸⁷ The same data also indicated a certification response rate of about 31.64% for August 2006.⁸⁸

Current Solix data indicates that while California LifeLine response rates have increased, they are still below 50%. Between July 2006 and February 2007, Solix data indicates a cumulative certification response rate of about 46% and a cumulative verficiation response rate of about 49% (see table below).

Current California LifeLine Response Rates
Period	Certifications Sent	Certifications Returned	Certifications Response Rate	Verifications Sent	Verifications Returned	Verifications Response Rate
July 06 - Feb 07	921,211	427,423	46.40%	1,515,544	748,860	49.41%

c. Other State Response Rates Vary Widely

For comparative purposes, Staff queried other state regulatory agencies in regards to their experiences with implementing the FCC Lifeline Order and gathered information on Lifeline response rates and administration in other states.⁸⁹ States administer Lifeline programs in different ways. While California's program now includes both income-based and social assistance program-based eligibility components as well as use of a third party (CertA) in program administration, other states do not use all of those elements in their programs. The table below summarizes the differences in Lifeline program administration by other states.

State	Program-based eligibility	Income-based eligibility	Third-Party Administrator
Arizona
Florida
Georgia
Idaho
Indiana
Michigan
Missouri
Nebraska
New York
North Carolina
Ohio
Oregon
Pennsylvania
Tennessee
Texas
Washington

Synopsis of Response Rates in Other States

The table below summaries data on Lifeline response rates in other states. It also provides data on population and access lines for comparison with California. There is clearly a wide variety in response rates for the state's reporting data.

	Georgia	New York	Ohio	Texas
Population	9,072,576	19,306,183	11,478,006	23,507,783
Aggregate number of End-User Switched Access Lines Deployed	2,553,113	11,329,342	6,319,400	11,863,981
Current response rates for customers requiring verification	55.62%*	20-78%	31%	30-40%
Current response rates for customers requiring certification	Not Provided	Not Provided	Not Provided	Not Provided

*Georgia only provided data on program-based subscribers who returned their certification forms.

Key details from these state's Lifeline programs appears below.

Georgia

Georgia's Lifeline program is purely program-based. The 55.62% rate depicted above represents the number of subscribers audited for program-based eligibility who returned their verification paperwork. Georgia also reported an increased number of consumers receiving Lifeline discounts (from 66,285 to 72,373) after implementation of the FCC Lifeline Order.

New York

Beginning in 2005, Verizon (s New York's largest provider of Lifeline) completed its verification of existing Lifeline customers under the new FCC rules. Verizon sent out an initial mailing to its Lifeline customers indicating that they were in jeopardy of losing their discounted telephone service should they be unable to provide proof of eligibility; the response rate to the letter was marginal (20 %). A second notice was mailed to those Lifeline customers who had not responded to the first letter; the response rate rose slightly. Finally, a third letter (depicted in Attachment 4, as provided by the New York Public Service Commission) was sent to the remainder who had still not yet replied. In comparison to the previous two response rates, the increase in replies was significant (78%). Those customers who failed to respond with evidence that they were enrolled in a government assistance program or were otherwise income eligible were taken off the Lifeline rate. Consequently, Verizon's Lifeline enrollment decreased by about 75,000 customers after the verification process was complete. Moreover, approximately 38 small ILECs and CLECs that provide Lifeline successfully completed their verification via mailings to their respective Lifeline customers. The end result for the remaining carriers has been an overall decline in the Lifeline enrollment numbers by about 66,000 from 2005 to 2006. The total decline of about 150,000 customers small is relative to the number of access lines in the state.

Ohio

Like California, Ohio is experiencing a similar plight of low verification response rates. For example, of the 30,899 verification letters sent by Verizon Ohio between January and November 2006, only 9,428 or 31% of the customers returned the Lifeline forms. In December 2006, Verizon sent an additional 10,658 letters out, but the results have not yet been tabulated.

Texas

In Texas, the verification response rate for existing LifeLine customers ranges from 30% to 40%⁹⁰. Solix is the CertA for Texas and sends out one verification letter to each existing Lifeline customer and the customer has 60 days to respond. Those that do not reply for whatever reason are dropped from the program.

Synopsis of State Responses With No Reported Response Rate Data

In addition, Staff summarizes below information on Lifeline program administration in states that did not report Lifeline response rates when queried by Staff.

Arizona

According to Arizona Public Utilities Staff, certification and verification response issues have not emerged in Arizona.

Florida

Income-based certification and annual verification are completed by the Florida Office of Public Counsel (OPC). Response rates are not available from that office because the OPC does not track the number of forms mailed for certification and verification respectively.

Idaho

The Idaho Public Utilities Commission has virtually outsourced its entire Lifeline Program to a contracted third-party administrator, which handles the day-to-day activities for the Program, including Lifeline verifications. Idaho PUC Staff reports that the Idaho Lifeline Program is currently not experiencing any certification and verification issues akin to California.

Indiana

Indiana is in the process of implementing a state wide Lifeline Assistance program and thus, does not yet have response data available.

Michigan

Carriers in Michigan were verifying the income-based eligibility of Lifeline applicants prior to the recent FCC mandate. Hence, they were not negatively impacted by the new FCC's verification and certification requirements. In addition, because the carriers certify income-based eligibility for new customers applying the program and verify the continued income-based eligibility for existing customers, the Michigan Public Service Commission does not have access to customers' response rates.

Missouri

Missouri's Lifeline program is program-based only and, consequently, does not verify the income of program participants.

Nebraska

Nebraska did not provide any information regarding verification and certification response rates for income-based Lifeline customers.

North Carolina

North Carolina's Lifeline program is program-based only and consequently, response rates for income-based customers requiring certification and verification respectively do not apply.

Oregon

The State of Oregon already had processes established that complied with the recent FCC mandates. Additionally, the State has direct electronic access to the Department of Human Services which enables verification of customers' Lifeline eligibility on demand. As a result, Oregon does not address certification and verification response rates in the same manner as California.

Pennsylvania

Since verification for potential program-based and income-based consumers is a prerequisite for Pennsylvanians' enrollment in the State's Lifeline/Link-Up Program, the State does not track response rates. Additionally, because the carriers handle certification of new customers and verification of existing customers, the Pennsylvania Public Utility Commission does not have response data for those two elements.

Tennessee

The Tennessee Regulatory Authority (TRA) handles the certification of new customers while the carriers administer the verification process for existing Lifeline customers under the income-based eligibility criterion. Potential new customers must submit documentation demonstrating that they meet Tennessee's low-income thresholds before they are admitted into the program. Since the income of current customers is verified annually by carriers, the TRA does not track response rates.

Washington

All Lifeline recipients are prequalified (i.e., income eligibility is verified prior to program enrollment). Hence, no modifications to the program were necessary to comport with the recent federal changes. Accordingly, Lifeline verification and certification response rates are not available.

Further details on the Lifeline programs in other states appear in Attachment 5 of this report.

VI. Conclusion

Through work with telecommunications carriers, the LifeLine Certifying Agent, consumer groups, and the public, CPUC Staff has identified numerous problems contributing to the low response rate in the California LifeLine program and related issues with enrolling of eligible consumers. Some program attrition appears reasonable as customers are now required to provide proof of their LifeLine eligibility pursuant to recent federal changes. Nonetheless, improvements can be made in current response rate levels and program enrollment. While no single solution can remedy the situation, the multifaceted approach Staff is taking to address identified problems is summarized below. This approach requires formal Commission action to affect changes to the general order and to clarify the permissible documentation customers may use to establish LifeLine eligibility. Formal Commission action may also be needed on the prequalification issue is examined in the long-term during a subsequent Phase II of the current docket.

Short-Term Strategies

_ General Order Changes and Decision Clarification: Formal Commission action to incorporate key contract amendment initiatives in GO 153 and clarify the documentation customers may utilize to establish LifeLine eligibility.

_ Contract Amendment Initiatives: Institute a $10.5 amendment to Solix's contract to allow better data reconciliation with carriers, improve LifeLine forms, envelopes, and letters materials provided by Solix to customers, allow customers added time to return LifeLine forms, and enhance outreach to customers through automated tools.

_ Outreach Efforts: Distribute outreach and education materials to CBOs and governmental agencies and increase carrier communications to LifeLine customers.

_ Solix-Carrier Interface Improvements: Institute on-going form processing enhancements and correction of database errors impacting LifeLine eligibility determinations.

_ Customer-Carrier Interface Upgrades: Implement measures to address customer billing issues and expedite customer appeal and complaint handling.

Long-Term Strategies

_ Improvements in Mail Delivery: Develop a mechanism to get LifeLine forms and correspondence to customers faster and on a guaranteed basis, including a possible second Solix contract amendment.

_ Outreach Efforts: Analyze efforts to rebrand the LifeLine program to increase customer response, provide more assistance to community based organizations, and enhance agency efforts targeting consumers that have been traditionally difficult to reach and educate about the program.

_ Refinements in Addressing Customer Responses: Develop process for Solix to review unscannable LifeLine forms and correspondence from customers. Assess the need to tailor LifeLine improvements to address specific needs of customers in specific groups.

_ Customer Pre-Qualification: Evaluate during a subsequent Phase II whether to delay LifeLine discounts to new customers while awaiting final determination of program eligibility and permit corresponding carrier payment arrangements.

_ Solix-Carier Interface Improvements: Provide a forum to resolve long-term issues such as improving accuracy of carrier data and enhancing capability of Solix systems.

_ Synergies with Other CPUC Programs: Develop mechanisms to increase LifeLine enrollment through links with other CPUC low income programs, such as the California Alternate Rates for Energy Program, etc.

_ Lessons from Other States: Evaluate strategies used by other states to improve LifeLine, such as automated online applications, automatic enrollment for customers with social assistance program-based eligibility, improved LifeLine notices, and digital verification.

_ LifeLine Appeal and Complaint Solutions: Develop options to augment staffing and streamline the CPUC LifeLine appeals and complaints process.

ATTACHMENT 1

GENERAL ORDER 153, APPENDIX E

CURRENT VERSION

New ULTS Customers (Certification)

· 5 days from the receipt of ULTS customer data records from carriers send partially completed Certification forms to new ULTS customers.

· 30 days for customers to return completed Certification forms.

· If Certification form is not returned within 15 days, CertA sends a reminder to the customer.

· 7 days for CertA to:

o finalize review;

o send letters of qualification or disqualification to customers; and

o send list of qualified and disqualified customers to carriers for appropriate billing.

· 15 days for disqualified customers to respond.

· 15 days for CertA to:

o finalize customers' appeals;

o send letters of qualification or disqualification to customers;

o send list of re-qualified customers to carriers for conversion back to ULTS services from the original ULTS service date.

· 15 days for disqualified customers to complain/appeal to the CPUC.

Existing ULTS Customers (Verification)

· 60 days prior to the customers' re-certification date send customers Verification forms.

· 30 days for customers to return completed Verification forms.

· 7 days for CertA to:

o finalize review;

o send letters of qualification or disqualification to customers;

o flag disqualified customers for possible 2^nd review and final determination;

o send list of qualified customers to carriers.

· 15 days for disqualified customers to respond.

· 7 days for CertA to:

o finalize customers' appeals;

o send letters of qualification or disqualification to customers; and

o send list of qualified and disqualified customers to carriers for appropriate billing (after 2^nd review).

· For service re-grade, rate change should begin in the next bill rendered to customers after notification from CertA.

· 15 days for disqualified customers to complain/appeal to the CPUC.

GENERAL ORDER 153, APPENDIX E

PROPOSED CHANGES

New ULTS Customers (Certification)

Form Mailing and Return

· 5 days from the receipt of ULTS customer data records from carriers, CertA sends a partially completed Certification form to each new ULTS customer and notifies the customer that the form has been sent.

· If Certification form is not returned within 21 days of mailing, CertA sends two reminders to the customer.

· 44 days for each customer to return the completed Certification form to the CertA.

· If the Certification form is not returned within 44 days, CertA allows an 8 day grace period for late receipt of the certification form.

Customer Response Processing

· 7 days for CertA to:

o finalize review;

o send letters of qualification or disqualification to customers; and

o send list of qualified and disqualified customers to carriers for appropriate billing.

· 22 days for disqualified customers to respond to CertA.

· 15 days for CertA to:

o finalize customers' appeals;

o send letters of qualification or disqualification to customers;

o send list of re-qualified customers to carriers for conversion back to ULTS services from the original ULTS service date.

· 15 days for disqualified customers to complain/appeal to the CPUC.

Existing ULTS Customers (Verification)

Form Mailing and Return

· 104 days prior to each customer's re-certification date, CertA sends the ULTS customer a Verification form and notifies the customer that the form has been sent.

· If Verification form is not returned within 21 days of mailing, CertA sends a reminder to the customer.

· A completed Verification form from each customer is due to CertA 44 days after the form was mailed to customers.

· If Verification form is not returned by the due date, CertA sends customer a soft denial letter and a 2^nd Verification form to customer.

· 21 days for the customer to return the 2^nd Verification form to CertA.

Customer Response Processing

· 7 days for CertA to:

o finalize review;

o send letters of qualification or disqualification to customers;

o flag disqualified customers for possible 2^nd review and final determination;

o send list of qualified customers to carriers.

· 22 days for disqualified customers to respond to CertA.

· 7 days for CertA to:

o finalize customers' appeals;

o send letters of qualification or disqualification to customers; and

o send list of qualified and disqualified customers to carriers for appropriate billing (after 2^nd review).

· For service re-grade, rate change should begin in the next bill rendered to customers after notification from CertA.

15 days for disqualified customers to complain/appeal to the CPUC.

ATTACHMENT 2
LifeLine Data Interface Improvements
As of 02/15/07
Issue	Solution
1) Illegible signature on LifeLine forms	Deny only obviously incorrect name match.  Illegible signature in the signature box will be considered meeting the requirement. Example:  if the applicant is John Smith and the signature clearly reads Joan Smith, deny.
2) Applicant not printing his/her name on the form	If the applicant signed the form but did not print his/her name on Part D, accept
3) IVR inaccessible to customers with rotary phones	IVR modification implemented to make it accessible to rotary phone customers by including a timeout feature
4) Customers having difficulty requesting new forms; IVR instructions too complicated, prompt for ordering forms too far down the IVR phone tree	IVR modified by placing ordering prompt as one of the first menu selection and adding new prompts to make it easier for customers to order forms; this has already been implanted and is not dependent on the contract amendment
5) Rejections due to Name not matching within the same carrier (same telephone number) Example: Misspelling correction such as "Allison Doe" to "Allyson Doe" or name changes from "Sue Smith" to "Sue Smith c/o John Smith Jr."   (Same person, but now she is living with her son but wanted to keep her phone number)	Accept name corrections and updates
6) Denials due to Multiple name entries: Carrier signs up John and Mary Smith or John Smith and Mary Smith. Solix database only captures one of the names, i.e. John Smith. When Mary Smith submits and signs the form, it is rejected.	Name field in Solix database has been expanded to accommodate both names and eligibility evaluation done based on the submission of form/documents by any one of the two listed names
7) Correctable letter not clear that the customer needs to fill up a new form in its entirety, and resubmit the form	Revised the correctable form letter

LifeLine Data Interface Improvements (As of 02/15/07)
Issue	Solution
8) Customer is unable to obtain information on the status of his applicationin the IVR as soon as the customer is denied LifeLine participation	Customer information on denials will be available 15 days after the deadline for certification and verification
9) Transfer of LifeLine eligibility Customers are unable to transfer their LifeLine eligibility to a new carrier using the same telephone number because existing carriers either fail to provide or fail to provide in a timely manner to the CertA customer updated records reflecting disconnect or regrade	Letter sent to carriers on October 5, 2006 reminding them of GO 153 section: 6.3.1.1: All carriers must provide the CertA with their ULTS customer activities before the end of the next business day after the in-service date of the customer's service order. 6.3.1.2: All carriers must provide the CertA with their LifeLine customer activities initiated by the carriers before the end of the next business day from the time such actions were taken. On January 12, 2007, Solix implemented a database protocol change defaulting the LifeLine discount to the carrier that the customer is transferring to. Solis also sends affected customers a letter notifying them that the LifeLine forms have been processed in favor of the most recent carrier.
10) Carriers fail to comply with customer's eligibility transfer notification requirement a) Transfer of ULTS eligibility from Carrier A to Carrier B with the same phone number, i.e. Porting Number b) Transfer of eligibility from Carrier A to Carrier B with a different phone number	Letter sent to carriers on October 5 reminding carriers to observe Part 1 of GO 168 - Consumer Bill of Rights and Sections 6.3.1.1 and 6.3.1.2 of G. O. 153
11) Customer Compliance with Certification Procedures Significant number of rejections due to failure of the customer to: return form, complete form, sign form, etc.	Letter sent to carriers on October 5 reminding carriers to remind customers to: 1. look for the form in the mail; 2. complete the form by selecting one of the qualifying criteria; 3. sign form according to the name as it appears on the form; and return form in a timely manner.
12) Call Center screen does not provide enough customer information to enable CAB to resolve complaints and provide information to customers	Improvements on the call center screen have been made such as there is no limitation on the number of days a record can be viewed and displaying all customer records, among others

ATTACHMENT 3

Summary of California's Lifeline Requirements Following the FCC Order

Adoption of Documented Certification Process for Income-based Eligibility

The CPUC adopted the income-certification process as required by the FCC.⁹¹ The Commission also concluded that it would apply the certification process to new LifeLine customers only.⁹²

Under the new process as spelled out in GO 153, if a new customer verbally certifies to the utility that he/she meets the LifeLine income limit and has income documentation, the utility shall immediately enroll the customer in LifeLine. Subsequently the customer will receive a certification form by mail which the customer must fill-out and send to the certifying agent, along with documentation of household income. Customers must self-certify, under penalty of perjury, as to the number of individuals in their household, that they meet the LifeLine income guidelines, and that the presented documentation accurately represents their annual household income. The income documentation must be reviewed by the certifying entity.⁹³ The new income certification program applies to both ETCs and non-ETCs.⁹⁴

The Commission adopted the document list developed by the FCC as acceptable documentation of income eligibility⁹⁵:

_ Prior year's state, federal, or tribal tax return,

_ Current income statement from an employer or paycheck stub for three consecutive months worth of the same type of statements within the last 12 months,

_ Statement of benefits from Social Security, Veterans Administration,

_ Statement of benefits from retirement/pension, Unemployment/Workmen's Compensation,

_ Federal or tribal notice letter of participation in Bureau of Indian Affairs General Assistance,

_ A divorce decree,

_ Child support document, or

_ Other official documents.

The Commission also ordered that if a customer chooses to proffer any document other than a previous year's tribal, federal, or state income tax return as evidence of income, such as current pay stubs, the consumer must present three consecutive months worth of the same type of statements within the calendar year. If a customer provides a divorce decree or child support document, that person must certify that he or she receives no other income.⁹⁶

In D.05-12-013, the CPUC adopted new Section 5.4.5 to G.O. 153, which provides for portability of certification among California utilities.⁹⁷

LifeLine Eligibility Expanded to Include Program-Based Eligibility Option

The Commission adopted a program-based criteria, to be used at the consumer's option, in lieu of income-based certification for participation in the LifeLine program. Similar to the FCC's rules, LifeLine eligibility will be based on participation in various means-tested programs. Eligibility for LifeLine under the program-based option is not subject to the FCC's income documentation requirements, however, to officially enroll in the program, customers must complete a certification form and send it to the certifying agency subsequent to the initial call to the utility.⁹⁸ In order to be eligible for LifeLine assistance a consumer must self-certify, under penalty of perjury, that he/she or a member of the household participates in at least one of the following programs⁹⁹:

_ Medicaid/Medi-Cal

_ Food Stamps

_ SSI

_ Federal Public Housing Assistance (Section 8)

_ Low Income Home Energy Assistance Program (LIHEAP)

_ Temporary Assistance for Needy Families (TANF)

_ National School Lunch's free lunch program (NSL)

_ Tribal TANF

_ Bureau of Indian Affairs General Assistance

_ Tribal Head Start

_ Healthy Families Category A

_ Women, Infant and Children (WIC)

Annual Verification Process Adopted

The Commission adopted annual self-certification as the means of verifying continued eligibility for the LifeLine program, for both income-based and program-based criteria.¹⁰⁰ In D.05-12-013, the Commission adopted new section 5.5.5 to G.O. 153, that clarified that customers who fail to verify their continued eligibility in a timely fashion will be treated as new customers, and will be subject to a conversion charge.¹⁰¹

ATTACHMENT 4

Sample LifeLine Letter from New York Public Service Commission

The following sample LifeLine letter is used by the New York Public Service Commission and contributed to improvement in that state's LifeLine response rates.

"Final Draft of Follow-up letter" VERIZON IMPORTANT NOTICE TO VERIZON LIFELINE CUSTOMERS IN ORDER TO CONTINUE RECEIVING VERIZON LIFELINE SERVICE, YOU MUST SEND BACK PROOF OF ELIGIBILITY WITHIN 14 DAYS NAME Tel# ADDRES Dear (Name) In a recent letter, we requested that you provide proof of eligibility so that you may continue to receive Verizon Lifeline telephone service. Government regulations require Verizon to revalidate the eligibility status of each Lifeline customer on an annual basis. As of the date of this letter, we have not received your Lifeline Eligibility Form and proof of eligibility such as a photocopy of your benefit card. Please review the following eligibility information and return the attached form to us within 14 days. If we do not receive this information within that timeframe, your telephone service will be switched to regular service. This means that you will not receive the discount on basic service that you currently enjoy. The saving amounts to at least $11.96 a month on your Verizon bill. The programs that entitle you to Verizon Lifeline service include: · Medicaid (MA) · Food Stamps (FS) · Safety Net Assistance · Family Assistance · Supplementary Security Income (SSI) · Veteran's Disability Pension (DP) (non-service related) · Veteran's Surviving Spouse Pension (SSP) (non-service related) · Home Energy Assistance Program (HEAP) · Income Eligible (IE) for government program but not receiving benefits If you are still receiving benefits from one of the above programs or are income eligible to receive benefits, you are entitled to receive Lifeline telephone service. Please act promptly by filling out the enclosed Lifeline Eligibility Form and returning it to us within 14 days LIFELINE ELIGIBILITY FORM NAME Tel # ADDRESS To ensure continued participation in Verizon's Lifeline program, please complete and mail this form. Please include a photocopy of your benefit card or other proof that you are receiving benefits and provide your Social Security Number and/or Client Identification Number. For Income Eligible status, please forward a copy of your current W-2 form or your most recent Federal tax return. Do not send original documents or other correspondence with this form. Revalidation transactions will be conducted only by mail. 1. Place a check mark next to each program in which you are currently enrolled: ( ) Medicaid ( ) Food Stamps ( ) Safety Net Assistance ( ) Family Assistance ( ) Supplemental Security Income ( ) Veteran's Disability Pension (DP) (non-service related) ( ) Veteran's Surviving Spouse Pension (SSP) (non service related) ( ) Home Energy Program (HEAP) ( ) Income Eligible (attach a current W-2 or recent tax return) 2. ( ) I am enclosing a copy of my benefit card or other proof that I am eligible to receive benefits 3. My Social Security Number is ___________________________ 4. My Client Identification Number is __________________________ 5. Signature_______________________________________Date:____________ Mail this form to Verizon in the enclosed envelope to: Verizon Service Response Center C/O ICT 800 Town Center Drive Langhorne, PA 19047 All of the information provided by customers in this form will be treated as confidential, and will be used by Verizon solely to administer its Lifeline program. If you have any questions, please call us, toll-free, on 1-800-799-6874.

ATTACHMENT 5

LifeLine Program Administration in Other States

Arizona

Certification and verification response issues have not surfaced in Arizona.

Florida

For Florida LifeLine applicants to be eligible for LifeLine telephone discount, they must pass one of the two-prong tests. That is, they must show that they qualify under the program-based prong or the income-based prong.

In order for potential LifeLine users to become eligible for program-based enrollment, they must self-certify that they are enlisted in any one of the following: Temporary Assistance to Needy Families (TANF), Supplemental Security Income (SSI), Food Stamps, Medicaid, Federal Public Housing Assistance (Section 8), Low-Income Home Energy Assistance Plan (LIHEAP), National School Lunch (NSL) Program's Free Lunch Program, or Bureau of Indian Affairs Programs. Moreover, Florida Eligible Telecommunications Carriers (ETCs) perform an annual verification to determine if LifeLine users on the Program are still qualified. Additionally, ETCs must provide the Florida Public Service Commission (FPSC) with a copy of the certification letter submitted to the FCC demonstrating that the ETC conducted its annual LifeLine verification. 

Conversely, whereas the carriers handle the verification process for program-based customers, the Florida Office of Public Counsel (OPC; State Consumer Advocate) certifies enrollment and performs verifications under the income-based enlistment process. In other words, income-based LifeLine certification and verification is administered by the OPC.

Since income verification has been an established practice in Florida prior to the FCC Order and Report No. 04-87, the State hence has not encountered the low response rates that afflict California. Nevertheless, Florida has instituted various measures to streamline and augment their LifeLine enrollment procedures and Program constituency respectively. For example, one of the actions the Florida Public Service Commission (FPSC) took was to simplify the certification process for enrollment in program-based LifeLine. The process entailed allowing LifeLine eligible customers to simply check a box on the application form indicating which eligible program they participate in, and submit the form via mail or fax to the appropriate ETC to be enrolled in LifeLine. On August 7, 2006, the FPSC expanded the simplified certification enrollment process to include all ETCs in Florida.

Another action their Commission engaged in was the creation of the LifeLine Automated Online Application Process. On October 13, 2006, the FPSC launched an electronic enrollment one-step process on their Commission's Web site which eliminates the need for an applicant to print, fill out, and mail or fax a request for the benefit. Electronic enrollment makes the application process easier and faster for both eligible consumers and organizations assisting in the enrollment effort. The consumer simply completes the application and hits the submit button. Once the applicant clicks on submit, an automatic e-mail is sent to the appropriate ETC notifying it that a Link-Up and LifeLine application is ready to be retrieved from the secure Commission Web site. The ETC then simply retrieves the application and enrolls the applicant in LifeLine. All 19 designated Florida ETCs, including three wireless ETCs, participate in this process. At the two month anniversary date, December 13, 2006, 340 customers were enrolled in LifeLine through the Automated Online Application Process.

Lastly, the FPSC is in the process of developing a LifeLine Automatic Enrollment Process whereby potential LifeLine customers certified through a Florida Department of Children and Families (DCF) program are placed on a list which is then forwarded to their Commission. Once their Commission receives the list, the list would be sorted by the applicant's telephone company, and then the sorted lists would be sent to the appropriate telephone company for enrollment in the LifeLine program. The FPSC expects the new process to be in place by early 2007.

Georgia

Georgia's LifeLine program is purely program-based but apparently, there were inconsistencies in terms of which programs were qualifying programs. However, in June 2005, the Georgia Public Service Commission (GPUC) ordered all ETCs to adopt a consistent qualifying criteria, namely, participation in any of the following programs:  Temporary Assistance to Needy Families (TANF), Supplemental Security Income (SSI), Food Stamps, Medicaid, Federal Public Housing Assistance (Section 8), Low-Income Home Energy Assistance Plan (LIHEAP), or the senior citizen low-income discount plan offered by the local gas or power company.  Participants in the senior citizen low-income discount program must self-certify under penalty of perjury that they meet the income criteria for the program. Further, in May 2006, their Commission ordered that ETCs conduct annual audits and report the number of subscribers biannually on June 30^th and December 31^st.

To expand the universe of Lifeline/Link-Up users in Georgia, the State added to the FCC list of qualifying programs other existing low-income programs such as LIHEAP and Senior Citizens Discount gas/electric. This increased the number of reachable low-income individuals that are eligible for Lifeline/Link-Up discount.

Idaho

The Idaho Public Utilities Commission has virtually outsourced its entire LifeLine Program to a contracted third-party administrator, which handles the day-to-day activities for the Program, including LifeLine verifications. Idaho is currently not experiencing any certification and verification issues akin to California.

Indiana

At the moment, the carriers in Indiana individually administer LifeLine and, as a result, have tailored the Program to suit the needs of their respective client-base. Recently however, the State is in the process of rolling-out a state-wide LifeLine Assistance program. As such, strategies to execute the Program, and other pertinent LifeLine issues are presently under consideration in Docket 43082 of the Indiana Regulatory Utility Commission (IRUC).

As far as securing federal funding by complying with certification and verification requirements promulgated by FCC Order and Report No. 04-87, their Commission relies upon information provided by their ETCs. In addition, carriers are required to a file statistical report to the IRUC on an annual basis for purposes of subscribership trend analysis. These reports however, only display the aggregate number of LifeLine subscribers for a given month(s) or year-no data pertaining to certification and verification response rates.

Moreover, their Commission has experienced problems with ETCs exceeding requirements of the FCC mandate. For example, some companies require proof of program participation when self-certification is deemed adequate by the FCC. These carriers interpret the April 2004 FCC Order to read that although LECs are not required to obtain proof of program participation, they are not precluded from doing so.  These ETCs engage in such procedures in an effort to minimize fraud.

Michigan

Carriers in Michigan are responsible for verifying the income-based eligibility of LifeLine applicants. ETCs receiving Lifeline/Link-Up funds are further responsible for keeping the necessary records showing that the ETC is in compliance with all federal and state regulations set forth for the Program.

Missouri

Of all the states with a LifeLine program of some sort, Missouri's LifeLine program, which they refer to as a low-income program, was implemented most recently, particularly in 2005. To elaborate, Missouri's low-income eligibility is based on participation in means-tested programs. A consumer must certify, under penalty of perjury, that he/she participates in at least one of the following federal programs: (1) Medicaid (2) Food stamps (3) Supplemental Security Income (SSI) (4) Federal Public housing Assistance (Section 8) (5) Low Income Home Energy Assistance Program (LIHEAP) (6) Temporary assistance to Needy Families (TANF) (7) National School Lunch. Missouri added the new programs (numbers 6 and 7 above) consistent with those proposed by the FCC for low-income and Link-up assistance in FCC No. 04-87.

Further, the Missouri low-income fund is administered by the Missouri Universal Service Board (USB), which consists of six individuals (five commissioners from their Commission and one member from the office of Public Counsel). QSI Consulting was hired as an independent, neutral fund administrator by the Missouri USB to assist in administering the program.

In terms of verification issues, the Missouri Public Service Commission recently contacted all of the State's ILECs and a few CLECs with regard to verification procedures. Their reconnaissance revealed that most carriers require their customers to self-certify, and indicate that LifeLine assistance will cease if X days have elapsed and the verification form is not received. To that end, the ETCs have not reported any problems, such as a significant drop in verifications, in receiving the annual verification forms.

Nebraska

The Nebraska Public Service Commission (NPSC) is currently designing a system for Lifeline/Link-Up verification where their Commission electronically communicates with the State Department of Health and Human Services (DHHS). Under this system, the NPSC will verify a particular social security number with the DHHS to determine whether or not a specific individual is on the eligibility list for Lifeline/Link-Up, and when a match occurs, the consumer is automatically renewed. For those queries that are rejected by the system, the NPSC distributes a contingency letter, essentially alerting the customer that they are at risk of discount service termination should they fail to appeal within a 60 day period. And should the consumer not respond on or prior to 60 days, a rejection letter is sent to the customer indicating that they have been disconnected, if they have any questions, or believe that they are eligible, they need to respond by submitting a new application with proof of eligibility.

New York

New York's LifeLine program can be likened to California's in that they have also adopted program-based and income-based eligibility standards. Additionally, the State has also witnessed a marked drop in LifeLine subscribers, particularly a 141,000 decrease. In an effort to mitigate further decline in Program subscribership and to propagate its customer base, the New York Public Service Commission (NYPSC) undertook various measures including, but not limited to, automated enrollment and a web-based solution. Parenthetically, these actions to curb the adverse response rates were carried out concomitantly to Verizon's mailing of verification notices to LifeLife customers, with the final notice generating positive results.

To elaborate, the automatic enlistment process entails reconciling information from New York's social services agency to Verizon's database on a monthly basis. Customers are enrolled and dropped from the LifeLine program in accordance with the database pairing. With regard to the web-based solution, a generic LifeLine application was created and is available for download at the NYPSC consumer website and is also available in hardcopy as a tear-off sheet from their Commission's LifeLine brochure. Further, the NYPSC is currently working with their Department of Social Services to arrange for HEAP (Home Energy Assistance Program) recipients to be enlisted automatically.

North Carolina

Similar to Missouri's Low-Income Program, North Carolina's Lifeline/Link-Up Program is also program-based. In contrast however, North Carolina has taken a proactive, exploratory approach towards implementing the FCC Order 04-87. For instance, on April 18, 2005, the North Carolina Lifeline/Link-Up Task Force filed its Report and Recommendations addressing the FCC's April 29, 2004 Order (FCC Docket No. WC 03-109).  On August 4, 2005, the Commission issued its Order Requesting Further Study to Adopt Lifeline/Link-Up Program Expansion (Docket No. P-100, Sub 133F) wherein the Commission found as follows:

1. That the Task Force shall further study methods to streamline the enrollment process between the public benefits agencies and the telephone service providers, as well as expansion of the Lifeline/Link-Up Program to include adoption of the NSL program and an income-based standard as eligibility criteria.  The Task Force shall file semi-annual reports on June 30th and December 31st, outlining its findings and recommendations.

2. That the telephone service providers shall continue to file with the Commission reports semi-annually, specifically by or on June 30th and December 31st, the number of Lineline/Link-Up Program participants served by their respective company.

3. That, until further notice, the Task Force shall continue to address Lifeline/Link-Up Program enhancements. 

Moreover, North Carolina does not presently have an income verification test.  However, in the Task Force's most recent Report, filed on January 16, 2007, it is stated that, "The Task Force has previously discussed the FCC's recommendation that the National School Lunch program (NSL) and an income test be added as eligibility criteria for Lifeline/Link-Up, but has not made a specific recommendation to the Commission.  In October, the Chair appointed a sub-committee to study the feasibility of adding these two criteria and to report its findings to the Task Force in about six months.  The goal is to make a recommendation to the Commission on these two eligibility criteria in the Task Force's semi-annual report on July 15, 2007."

Ohio

Apparently, the carriers in Ohio are charged with the responsibility of recertifying existing LifeLine customers. The process that the ETC's follow to verify the eligibility of current Program users is to send verification forms to consumers to fill out and return. Unfortunately, the present return rates for the verification forms could be described as marginal at best. However, in an attempt to combat the adverse response rate, pre-recorded messages were sent to LifeLine consumers, notifying them of the new verification requirements. The impact of the pre-recorded messages on increasing the verification form return rates thus far were negligible.

Oregon

The Oregon Public Utility Commission (OPUC) directly administers the LifeLine income verification process and already has existing processes in place that complies with the 2004 FCC mandate. The OPUC's procedures for verifying customers' LifeLine eligibility monthly is stringent and efficient for controlling costs. In particular, their Commission has direct electronic access to their Department of Human Service's (DHS) database such that they can verify customers' LifeLine eligibility at any given time.  Once approved, the OPUC generates an electronic match with the DHS database to determine if customers are still eligible.

However, one shortcoming of the monthly verification process is that additional time is required for their Staff to accommodate customers whose DHS benefits were temporarily closed.  The temporary closure of heir benefits removes them from the LifeLine Program.  Therefore, OPUC Staff must research the DHS database to determine if their eligibility was active during the "timeframe of ineligibility" and offers back credit. 

Pennsylvania

In Pennsylvania, prior to the April 2004 FCC Order, verification for potential program-based and income-based consumers was a prerequisite for Pennsylvanians' enrollment in the State's Lifeline/Link-Up Program. For verification of program-based customers, carriers contact the Pennsylvania Department of Public Welfare (DPW) and access the DPW's automated voice response system to validate customer participation in a qualifying program. For verification of income-based consumers, the State's Department of Revenue (DOR) reviews the income tax records of potential customers to ascertain whether or not a particular individual is qualified.

For purposes of tracking the Program's progress, Pennsylvania ETCs are required to provide the Pennsylvania Public Utility Commission (PPUC) with an annual LifeLine Tracking Report. The report details the total number of LifeLine enrollments, disconnections, and installations, among other particulars involving the previously-mentioned. It is critical to note, however, that the data presented in these reports will differ from those contained in the FCC reports. This is attributed mainly to the fact that Verizon, the largest ETC in PA, utilizes a disparate data source to calculate its enrollment statistics for Verizon PA and Verizon North respectively.

Furthermore, the PPUC emphasizes the need for all parties with a vested interest in the viability of their respective LifeLine program to work cohesively to carry out their respective Programs. For instance, the Pennsylvania Telephone Association, Office of Consumer Advocate, Pennsylvania Utility Law Project, the DOR, the DPW, and their Commission's law, communications, and consumer services Staff met to discuss how to implement an automatic notification program for DPW clients. As a result of these meetings, they were able to develop a generic LifeLine brochure, draft an application form for DPW clients, update verification options and procedures, and compile company contact information.

Tennessee

Admission into Tennessee's LifeLine program is possible through a program-based or an income-based qualification. The carriers in Tennessee are responsible for administering the government assistance verification program (i.e., verifying that the applicant is on SSI, Food Stamps, etc.). For income-based eligibility, the Tennessee Regulatory Authority (TRA) has certified Lifeline/Link-Up participants based upon income prior to April 2004, before FCC No. 04-87. Responsibility for verification of existing income-based customers though, falls on the carriers. Additionally, in response to the FCC mandate, the TRA modified the income verification process to include annual verifications.

Texas

Texas is virtually a mirror image of California in that the State utilizes Solix as its CertA of LifeLine and consumers can qualify for the Program under a program-based or an income-based criterion. For potential customers that are eligible due to participation in select, federally-approved low-income programs, they are automatically enrolled in LifeLine. In contrast, income-based applicants and existing users must go through Solix for admission or renewal into the Program.

Washington

The Washington Telephone Assistance Program (WTAP) is administered jointly by the Department of Social and Health Services (DSHS), Department of Revenue (DOR), Washington Utilities and Transportation Commission (WUTC), and Department of Community, Trade and Economic Development (DCTED). DSHS provides overall program administration and WTAP fund management, DOR is responsible for excise tax collection, WUTC is responsible for rate setting, and DCTED provides contractor oversight for the CSVM component.

In addition, WTAP has been certifying and verifying customers' eligibilities since 1987 and thus, have already been in compliance with the FCC 2004 LifeLine and Link-Up Mandate. Currently, qualification for WTAP/Lifeline/Link-Up is based on active participation in other income-based programs administered by the Department of Social and Health Services such as Basic Food, Medicaid, and TANF.

Once consumers are deemed eligible for WTAP, they are immediately sent a notification letter with an accompanying brochure in English, Spanish, Cambodian, Chinese, Korean, Laotian, Russian, and Vietnamese languages. When the customer chooses to enroll, they call the local carrier, informing the carrier they are eligible for WTAP. Using a three-way call while the customer is on the phone, the local carrier calls WTAP using a dedicated toll-free number and verifies eligibility before providing the customer with the WTAP discount. Verification includes correct name of person who is eligible, client identification number, benefit start date, customer eligibility for the connection fee, monthly discount, and waiver of deposit for local service.

The customer also has the option of calling the WTAP client toll-free line if they need assistance with calling the carrier (for example: translators, elderly not able to navigate phone company automated phone menus).

Advantages to up-front verification method:

· Allows customers to know whether they can afford phone service before starting service with the phone company. (When verifications are not done up front, customers start service, then find out they are not eligible. Since they can't pay the subsequent bill, their accounts become delinquent, or go to collections. The resulting bad credit jeopardizes the customer's ability to gain self-sufficiency or get phone service in the future).

· Allows corrections such as name and client identification numbers to be made while the customer is on the line (reducing the number of billing errors later, and the time needed to make such corrections).

· Allows customers with no phone number or contact information to enroll right away. (When these types of accounts need further clarifications or corrections, it is almost impossible to contact the customer in a timely manner otherwise).

Moreover, the following are current practices of regarding the implementation of WTAP:

· The regular contact with customers provides an excellent feedback loop of how the application process and program is working. Telephone company policy and procedural obstacles can generally be identified down to the operator level.

· Telephone companies bill WTAP monthly for every discounted account. The data is used to re-verify eligibility as well as tracking WTAP participation and tracking duplication of services across carriers.

· WTAP supports community voice mail. Community voice mail provides free voice mail to customers who are not able to get a traditional phone. When the customer finds permanent housing, they can transition to getting traditional phone services with the WTAP discount.

· WTAP multi-language posters and brochures are provided to community based organizations such as community action agencies, HUD agencies and food banks. The offices often refer customers to WTAP.

· WTAP provides a toll-free client line with access to translators so that customers can communicate in their native language.

ATTACHMENT 6

General Order 153, Section 4.1.3 (Proposed Amendment)

Section 4.1.3 Utilities shall send a confirmation notice to all new customers enrolled in ULTS informing them of the arrival of application forms from the California LifeLine program and the requirement to return the completed forms with all required documentation to continue discounted telephone service. The notice shall also inform ULTS customers that failure to return the forms and eligibility documentation will result in the loss of discounted telephone service and the requirement to pay back prior discounts.

(END OF ATTACHMENT)

⁸⁵ Verizon and AT&T requested their raw data be treated as confidential; thus, only percentages are presented here.

⁸⁶ According to AT&T, the response rate is over 100% for April 2005 due to the manner in which it tracked the certification response data. The data for that month likely includes information attributable to previous periods.

⁸⁷ This data was based on CertA invoices to the CPUC for administration of the LifeLine certification and verification processes.

⁸⁸ Id.

⁸⁹ Research methodologies included informal email queries, a survey with questions that pertained to certification and verification response rates as well as best practices, insights, observations, and/or lessons learned from states' implementation of the FCC Lifeline Order. It also included independent research via exploring websites and obtaining anecdotal reports from utility regulatory bodies of other states.

⁹⁰ Solix reports lower response rates than the regulatory entity. Namely, it reports response rates between 20 and 30% between 2004 and 2006.

⁹¹ D.05-04-026 at p. 12.

⁹² Id. at p.25.

⁹³ G.O. 153, Section 4.2.1.2.2.

⁹⁴ D.05-04-026 at p. 11.

⁹⁵ Id. at pp. 12-13. See also G.O.153, Section 5.1.4.5.

⁹⁶ D.05-04-026 at p. 14.

⁹⁷ D.05-12-013 at p.11.

⁹⁸ G.O.153, Section 4.2.1.2.1.

⁹⁹ G.O.153, Section 5.1.5.

¹⁰⁰ Id at Section 5.5.

¹⁰¹ D.05-12-013 at p.28.