IV. Program-based Eligibility

We have adopted income certification for our ULTS program, but a number of parties raise concern that the net result will be that many eligible customers will not be able to qualify for the program. DRA and SBC point to the disabled with their special needs, and the difficulties for them in gathering income documentation.

At the same time, LIF, TURN, Blue Casa, La Curacao and Greenlining point out that many low-income people, particularly undocumented immigrants, live in a cash economy, and they have no proof of income. LIF asserts that many employers pay day workers, gardeners and domestic workers in cash, and thus, the workers have no payroll stubs, social security records or other paperwork. Other immigrants come from countries where they have a basic distrust of the government and would be unwilling to supply personal income information to the phone company, which in many countries is a government entity.

While DRA acknowledges that people with disabilities constitute only a fraction of the population that is eligible to participate in the ULTS program, DRA states that effectively meeting the needs of people with disabilities can be complex. With program-based eligibility, people with disabilities who receive Supplemental Security Income (SSI) benefits or Medicaid or who participate in any other program will automatically be eligible for ULTS and can self-certify. According to DRA, this will reduce the barriers to participation in the ULTS program by the disabled.

We will examine how adoption of program-based eligibility, in conjunction with the income certification that we have adopted, could meet the needs of these constituencies. First, we examine how the FCC addresses program-based eligibility.

A. Program-based Eligibility in the FCC's Order

The FCC employs program-based criteria in the federal default states. Under the FCC's rules, Lifeline/Link-Up eligibility is based on participation in various means-tested programs. In order to be eligible for Lifeline/Link-Up assistance under the federal default eligibility criteria for federal default states, a consumer must certify, under penalty of perjury, that he/she participates in at least one of the following federal programs:

· Medicaid¹¹

· Food Stamps

· SSI

· Federal Public Housing Assistance (Section 8) (FPHA)

· 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 NSL

· Tribal Head Start

The FCC asserts that in states that have their own Lifeline/Link-Up programs, the consumer must meet the eligibility criteria established by the state, consistent with §§ 54.409 and 54.415 of the Commission's rules.¹² Clearly, the FCC's order supports the adoption of program-based criteria, to be used at the consumer's option, in lieu of income-based certification.

B. The Need for Program-based Eligibility

No commenter in the proceeding opposed the adoption of program-based criteria. In fact, TURN points out that allowing low-income households to qualify for ULTS based on program eligibility would mirror the FCC's approach to eligibility for the default states.¹³

A number of parties made compelling arguments supporting program-based criteria. Several parties¹⁴ point out that program-based eligibility would offer another avenue for customers to qualify for ULTS and would eliminate the need for many ULTS customers to submit income documents. SBC supports what it calls a hybrid certification program that utilizes both income and program-based eligibility criteria for certifying new customers. SBC sees a certification process that incorporates these two criteria is the best approach for sustaining the program's present telephone subscribership rate. According to SBC, providing consumers a second eligibility criterion should significantly reduce the number of customers who may be inappropriately excluded from the program due to their inability to prove their income level through one of the approved document categories. SBC indicates that consumers tend to qualify under program-based criteria when given the choice. In Ohio, for instance, only 20% of all Lifeline/Link-Up customers qualified via income in 2003.¹⁵

DRA notes that program-based eligibility would simplify or eliminate income documentation for many ULTS participants and could substantially reduce the workload for the certifying agent by reducing the number of participants that must provide actual income documentation. DRA also states that this will result in benefits for people with disabilities, who will likely be able to take part in a more streamlined program-based eligibility system.

DRA points out that the Lifeline Order is clear that self-certification is permitted for states that receive and distribute federal funding on a program eligibility basis. (Lifeline Order at ¶ 27.) The order notes that the ease of self-certification encourages consumers to participate, and that participation in needs-based programs is easy to verify.

While acknowledging that people with disabilities constitute only a fraction of the population that is eligible to participate in the ULTS program, DRA states that access for people with disabilities will be simpler in a program-based eligibility system.

TURN sees program eligibility coupled with self-certification is a critical means of minimizing the barriers to enrollment.

We find that adopting a hybrid program of income certification or program-based eligibility would best meet the needs of California's consumers. It is important that this approach is consistent with the FCC's Order. Providing consumers an alternative eligibility criterion should reduce the number of customers who are inappropriately excluded from participating in the ULTS program. Program-based eligibility will give a second avenue for consumers to establish eligibility.

The FCC allows for self-certification under its program-based eligibility track, and we adopt self-certification as well. As the FCC says, it is easy to verify participation in need-based programs.

In addition, it will reduce the costs of the TPA to have a hybrid system. The program-based eligibility is much less labor-intensive than the income certification process in which TPA employees need to review and approve the income documentation submitted by the customer.

C. When Does Certification Occur?

Several parties point out that the FCC's Order requires consumers qualifying under an income-based criterion to present documentation of their household income prior to enrollment in the ULTS program. This is contrary to the current process employed in California, where customers are signed up for the ULTS program, pending their completion of the proper paperwork. Several parties urge the Commission to change its rule to bring it into compliance with the FCC's new requirement.

The only party with a differing opinion is SBC. SBC cites paragraphs 29 and 30 in the FCC's Order in support of its position that federal rules governing the Lifeline/Link-Up program do not prohibit non-default states from applying ULTS discounts at the time of enrollment contingent on certification. According to SBC, while Report 04-87 explicitly requires consumers in default states to provide documentation of income eligibility at enrollment, it offers non-default states wide latitude in developing its certification procedures as long as the program is not compromised.

Following recent staff-level discussions with the FCC, we have determined that the state has more latitude in this area than we originally thought. Section 54.410(a) reads as follows:

Certification of Income. Consumers qualifying under an income-based criterion must present documentation of their household income prior to enrollment in Lifeline.

That section does not require that the documentation be approved prior to enrollment in the program, simply that the documentation be presented. Therefore, customers should be able to be enrolled in the ULTS program at the time they present their income documentation. The ULTS customer will be eligible for reduced service establishment charges, and will not have to pay a deposit before initiating service. However, if the TPA later makes a determination that the customer is not eligible for ULTS, the customer will be back-billed at regular rates.

We support this interpretation of the FCC's rule because it simplifies the process and allows those who enroll in the program to be eligible for the ULTS discount from the time they sign up for service and present their income documents. It also allows us to have the same rules for customers applying under the program-based criteria.

Therefore, we find that there is no need to submit Petitions for Clarification or Waiver with the FCC on this issue.

D. List of Programs

ORA states the Commission should base its list of appropriate "partner programs" on those allowed under federal Universal Service regulations, possibly with the addition of some state programs. ORA recommends that the Commission discuss specific potential partner programs in a workshop setting.

SBC expresses concern that the government assistance programs used for program-based criteria should be as inclusive as possible to reach the greater population.

Verizon expresses concern about the potential for a mismatch between the qualification requirements for various public programs and the income and household size criteria for ULTS eligibility. According to Verizon, only if the income limit for a public program is equal to or below the California ULTS income limit for each household size, would all participants in that program be eligible for ULTS. Verizon also points out that some programs will not meet the FCC Lifeline Order requirements. For example, LIF suggests that those in the California Alternates Rates for Energy (CARE) program be automatically enrolled in ULTS, but the CARE program has higher income limits and different household size definition than ULTS. Verizon cautions against allowing programs with higher income limits, saying that it would expand the ULTS program requirements and participation inadvertently.

However, we determine that the FCC's rules do not preclude inclusion of programs with higher income limits:

To qualify to receive Lifeline service in a state that does not mandate state Lifeline support, a consumer's income, as defined in § 54.400(f), must be at or below 135% of the Federal Poverty Guidelines or a consumer must participate in one of the following federal assistance programs: Medicaid; Food Stamps; Supplemental Security Income; Federal Public Housing Assistance (Section 8); Low-Income Home Energy Assistance Program; National School Lunch Program's free lunch program; or Temporary Assistance for Needy Families.¹⁶

In other words, eligibility under the program-based option is not subject to the FCC's income requirements.

TURN and LIF mention other possible state programs that could be added to the list. LIF states that the important point about the Women, Infants and Children program (WIC) and the Free School Lunch program is that undocumented persons are eligible for them, which they are not for the other programs listed in the DD. LIF asserts that WIC is a critical program to reach a large group of persons who are ineligible for all the other adult programs designated in the DD. We agree and will include both the Free School Lunch program and WIC on our list of means-tested programs.

LIF also suggests that we add the Healthy Families program. Under that program we could reach families where the children meet citizenship/immigration rules, whether or not the parents do.

However, while the Category A Healthy Families sets eligibility at 140% of Federal Poverty Guidelines (FPG), Healthy Family Category B is 233% of FPG. Therefore, we will include only Healthy Families Category A.

We have included three programs: NSL Free Lunch program, WIC and Healthy Families Category A, in an effort to provide methods for undocumented persons and those who are part of the cash economy and have no way to document their income, to be eligible for the ULTS program. In the upcoming workshops, parties should address whether there may be other programs that should be added to the list to facilitate the participation of persons without immigration documents and those who live in a cash economy.