IX. Auto Enrollment

In its Order, the FCC encourages all states to adopt automatic enrollment as a means of certifying that consumers are eligible for Lifeline/Link-Up. The FCC made this suggestion on the basis of a recommendation by the Federal-State Joint Board on Universal Service (Joint Board). Automatic enrollment is accomplished through an electronic interface between a state agency and the carrier that allows low-income individuals to automatically enroll in ULTS following enrollment in a qualifying public assistance program. Automatic enrollment is premised on program-based eligibility, not income-based eligibility.

The FCC recognizes the benefits of automatic enrollment, but also recognizes that requiring automatic enrollment may deter ETCs from participating in the Lifeline/Link-Up program because of the technical requirements associated with interfacing with government agencies or third party administrators. In its Lifeline Order, the FCC declines to require states to adopt automatic enrollment, but encourages those states that currently do not employ automatic enrollment to consider states that operate automatic enrollment as a model for future implementation.

In our OIR, we asked parties to provide information on how automatic enrollment works in other states and to comment on whether it is feasible to implement automatic enrollment in California.

Most parties are opposed to instituting auto enrollment in the short term and urge the Commission to defer the issue to a later phase of this proceeding, or to a separate new proceeding.

Verizon asserts that automatic enrollment reaches non-subscribers only with considerable additional effort. Verizon sees the process of matching information from state agencies with its customer files as labor-intensive and time-consuming. Matching also becomes difficult if the PG&E bill is in the name of one consumer at an address, while the telephone bill is in his spouse's name. Verizon adds that some customers may be socially self-conscious about being automatically enrolled in a government subsidy program because of their limited income.

Verizon also sees that auto enrollment is not necessary since California provides many opportunities for consumers to learn about ULTS, including the marketing program, annual ULTS notification requirements, and information in telephone directories.

SBC states that one drawback to an auto enrollment program is that the customer is not given the option of registering for ULTS benefits. The qualified customer is simply notified by the carrier of his enrollment in the program. The burden is then placed on the customer to contact the carrier and cancel participation if he is not interested. Auto enrollment is also criticized on the grounds that it may violate privacy rights. SBC stresses that auto enrollment may also be considerably more expensive to implement due to information technology costs. The TPA will be required to develop and maintain software programs that could compare the carriers' databases to government lists.

ORA and SBC assert that implementing program-based eligibility obviates the need for an auto enrollment system. The simple program-based option avoids the technical and confidentiality concerns while accomplishing the same results automatic enrollment has achieved in other states, but with significantly lower cost to the program.

Two parties that support implementation in the short-term of automatic enrollment are DRA and NECA. NECA, which references its own experience with auto enrollment, states that auto enrollment has been successful in Texas. To qualify for Lifeline service in Texas, residents must have either an income at or below 125% of the federal poverty guidelines or receive benefits from one of six federal programs.

The Texas Health and Human Services Commission (HHCS) maintains electronic records about residents receiving benefits under the six Lifeline-eligible programs. Each month, HHSC provides NECA with electronic files that identify all their residential customers. NECA matches the HHCS records to ETC records, using specialized software that handles the complexities of name and addresses standardization. Upon completion of the records-matching process, NECA notifies each ETC of its Lifeline-eligible customers by posting this information on a secure site. The data are encrypted during transfer, and each ETC has password access to information for its own customers, only.

NECA and DRA both stress that automatic enrollment would augment the conventional program and income eligibility processes that allow consumers to submit applications to the certifying agent.

DRA states that auto enrollment that relies on program-based eligibility may address some of the difficulties for disabled Californians who are ill-equipped to deal with the enrollment process. DRA states that the TPA can receive data from the administrators of low income assistance programs and match this information with a database of subscribers from eligible carriers. DRA asserts that this model has been used by other states, including Massachusetts, New Jersey and Texas, which have found automatic enrollment to be an efficient way to increase enrollment in their lifeline programs.

AT&T, Surewest, the Small LECs and SBC support incorporating program-based enrollment, without auto enrollment. AT&T sees any form of auto enrollment as being difficult and "extraordinarily expensive"²⁶ to implement. They all see auto enrollment as unnecessary, if customers are offered what SBC describes as a "hybrid eligibility program" that accepts income and program based criteria.

We will not adopt automatic enrollment at this time. We are making significant changes to the program, and we need to implement those before making further changes to the program. We need to see if the adoption of program-based eligibility does make it unnecessary to implement any form of auto enrollment. We will not know that until these new rules are fully implemented and we have an opportunity to evaluate their impact. We will defer the issue of auto enrollment to be addressed in the anticipated Commission proceeding to take a comprehensive look at our universal service program.