VI. Preliminary Scoping Memo

The Lifeline/Link-Up Order requires states to document the income eligibility of qualifying households. If the California Public Utilities Commission (Commission) does not adopt the new federal certification guidelines, California could lose over $330 million of annual Federal Lifeline/Link-Up support. This OIR focuses primarily on the narrow issue of revising our income eligibility criteria to conform to the Lifeline/Link-Up Order in order to preserve the federal funding. To this end, we propose the following rule changes:¹²

· Certification occurs when an individual is applying to enroll in ULTS.¹³ At certification, customers must self-certify, under penalty of perjury, as to the number of individuals in their household, that they meet the ULTS income guidelines, and that the presented documentation accurately represents their annual household income. The income documentation must be reviewed by the certifying entity.

· Verification occurs annually after a customer has already been certified and enrolled in ULTS. The process verifies a customer's continued eligibility for ULTS.¹⁴ At verification, customers must self-certify, under penalty of perjury, as to the number of individuals in their household and that they meet the ULTS income guidelines.

To implement the above rule changes, we also propose that:

· The Commission's Telecommunications Division (TD) will designate a certifying agent to perform the functions of certification and verification statewide.

The FCC's Order specifies that a certifying agent is to be responsible for certifying customers' eligibility to participate in ULTS based on customers' self-certifications supported by income documents. As such, the certifying agent plays a crucial role in shaping ULTS enrollment. We believe that a single entity should perform the certification/verification functions statewide. This way we can ensure that proper documents are received, review of income documentation is consistent, customers' sensitive and personal data are kept confidential, and our rules and procedures are properly followed. Having a single certifying entity, under the direction of TD, would alleviate our concerns and minimize fraud and abuse of the program. Furthermore, this independent third-party arrangement would allow ULTS customers to move or to change service provider within California without re-certification. However, any party that believes that the carriers that provide ULTS service should serve as certifying agents should explain why they believe that approach is preferable to using an outside certifying entity.

In addition, we would like to explore the possibility of implementing automatic enrollment. Parties should explore the models adopted in other states, as well as other models.

In this OIR, we seek comments on the following:

· Should the Commission adopt a certification process as outlined above in conformance with the FCC's income documentation requirement in order to continue to receive federal Lifeline/Link-up funding?

· If yes, what should constitute acceptable income documents?¹⁵

· If California does not conform to the FCC's income documentation requirement and is no longer eligible for continued federal funding, how should the Commission cover the shortfall caused by the loss of federal Lifeline/Link-Up support? Also, what safeguards should the Commission implement to minimize fraud and abuse of the program?¹⁶

· Should the Commission adopt the verification process outlined above in conformance with the FCC's verification requirement in order to continue to receive federal Lifeline/Link-up funding?

· Alternatively, should the Commission adopt other verification measures such as random beneficiary audits and/or periodic submission of documents?

· Should the Commission designate a single entity as certifying agent?

· Alternatively, instead of designating a single entity as certifying agent should each carrier serve as certifying agent for its customers?

· Should the Commission adopt some sort of automatic enrollment for the Lifeline/Link-Up program? If so, please give specific information on how the program has been implemented in other states and how it would work in California.

We recognize that our proposed rule changes will likely result in excluding low-income households with no income documentation. Therefore, we also request parties to comment on how ULTS should serve low-income households that are unable to provide appropriate income verification.¹⁷

Parties that propose that ULTS should continue to provide assistance to low-income households that attest they would otherwise qualify but are unable to provide income documentation should provide the Commission with detailed proposals including an estimate of the cost of their proposed recommendation. Parties should also recommend safeguards that the Commission should implement to minimize fraud and abuse of the program. In their comments, parties should also identify the number of households that could be adversely affected by a policy that limits ULTS support to only those households that are able to provide the required income documentation.