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                           Before the
               Federal Communications Commission
                     Washington, D.C. 20554


In the Matters of

Federal-State Joint Board on
Universal Service;
Promoting Deployment and
Subscribership in Unserved
and Underserved Areas, Including
Tribal and Insular Areas

Western Wireless Corporation, Crow Reservation
in Montana

Smith Bagley, Inc.

Cheyenne River Sioux Tribe Telephone Authority

Western Wireless Corporation, Wyoming 

Cellco Partnership d/b/a/ Bell Atlantic Mobile,
Inc.

Petitions for Designation as an Eligible
Telecommunications Carrier and for Related
Waivers to Provide Universal Service
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CC Docket No. 96-45



                   TWELFTH REPORT AND ORDER,
               MEMORANDUM OPINION AND ORDER, and
             FURTHER NOTICE OF PROPOSED RULEMAKING

   Adopted:  June 8, 2000               Released:      June 30, 2000

Comments Due:  August 7, 2000
Reply Comments Due:  August 28, 2000

By the Commission:  Commissioners Ness and Tristani issuing separate statements; Commissioner Powell
approving in part, dissenting in part, and issuing a statement.

                       TABLE OF CONTENTS
                                               Paragraph Number
                                                     
                                      I.INTRODUCTION1
                               II.EXECUTIVE SUMMARY12
     
     III.                                                   low-income INITIATIVES to improve access to TELECOMMUNICATIONS
     services and subscribership on tribal lands. . . . . . . . . . 13
          A.                                                Overview . . . . .13
          B.                                                Definitions of "Indian Tribe" and "Tribal Lands" . . . . .15
               1.                                           Background. . . . . . .15
               2.                                           Discussion. . . . . . .16
          C.                                                Bases for Commission Action to Increase Subscribership on Tribal Lands . . . . . . 20
               1.                                           Authority to Take Action to Improve Access to Telecommunications Services
               and Subscribership on Tribal Lands . . . . . . . . . 20
               2.                                           Subscribership Levels on Tribal Lands . . . . . 24
          D.                                                Enhanced Federal Lifeline and Expanded Link Up Support for Qualifying Low-
          Income Consumers Living on Tribal Lands. . . . . . . . . .36
               1.                                           Background. . . . . . .36
               2.                                           Discussion. . . . . . .42
                    a.                                      Enhanced Lifeline Support for Qualifying Low-Income
                    Consumers  Living on Tribal Lands. . . . . . . .42
                    b.                                      Expanded Link Up . . . . . .59
                    c.                                      Implementation Issues Associated with Rule Changes to Provide
                    Enhanced Lifeline Support and Expanded Link Up Support to
                    Low-Income Consumers on Tribal Lands . . . . . .64
                    d.                                      Expanded Lifeline and Link Up Qualification Criteria for Low-
                    Income Consumers on Tribal Lands . . . . . . . .67
          E.                                                Requiring Eligible Telecommunications Carriers to Publicize the Availability of
          Lifeline and Link Up Support . . . . . . . . . . . . . . .75
               1.                                           Background. . . . . . .75
               2.                                           Discussion. . . . . . .76
          F.                                                Lifeline Jurisdictional Issues . . . . . . 81
               1.                                           Background. . . . . . .81
               2.                                           Discussion. . . . . . .85
     IV.                                                    designating eligible telecommunications carriers pursuant to section
     214(e)(6). . . . . . . . . . . . . . . . . . . . . . . . . . . 92
          A.                                                Overview . . . . .92
          B.                                                Background . . . . . . 97
               1.                                           The Act . . . . . 97
               2.                                           Further Notice. . . . . . .101
          C.                                                Discussion . . . . . .104
               1.                                           Scope of Section 214(e)(6). . . . . .104
               2.                                           Section 214(e)(6) Designation Process for Carriers Serving Non-Tribal Lands . . . . . .112
               3.                                           Section 214(e)(6) Designation Process for Carriers Serving Tribal Lands . . . . . 115
          

          D.                                                Pending Requests For Designation Pursuant To Section 214(e)(6) . . . . .128
           1.                                               Cellco Petition For Designation As An Eligible Telecommunications Carrier
           For Maryland and Delaware. . . . . . . . . . . . . . . .128
               2.                                           Western Wireless Petition For Designation As An Eligible
               Telecommunications Carrier For Wyoming . . . . . . .135
           3.                                               Western Wireless Petition To Be Designated As An Eligible
           Telecommunications Carrier For The Crow Reservation In Montana . . . . . . .138
           4.                                               Smith Bagley Petition To Be Designated As An Eligible Telecommunications
           Carrier in Arizona and New Mexico. . . . . . . . . . . .141
           5.                                               Cheyenne River Sioux Tribe Telephone Authority Petition For Designation
           As An Eligible Telecommunications Carrier. . . . . . . .145
     V.                                                     further notice of proposed rulemaking . . . . .151
     VI.                                                    procedural matters. . . . . . . 154
          A.                                                paperwork reduction Act . . . . . . .154
          B.                                                Final Regulatory Flexibility Analysis . . . . .155
           1.                                               Need for and Objectives of this Report and Order and the Rules Adopted
           Herein . . . . . . . . . . . . . . . . . . . . . . . . .156
           2.                                               Summary of Significant Issues Raised by Public Comments in Response to
           the IRFA . . . . . . . . . . . . . . . . . . . . . . . .157
           3.                                               Description and Estimate of the Number of Small Entities To Which Rules
           Will Apply . . . . . . . . . . . . . . . . . . . . . . .158
           4.                                               Description of Projected Reporting, Recordkeeping, and Other Compliance
           Requirements . . . . . . . . . . . . . . . . . . . . . .179
           5.                                               Steps Taken to Minimize Significant Economic Impact on Small Entities, and
           Significant Alternatives Considered. . . . . . . . . . .182
               6.                                           Report to Congress. . . . . . . 184
          C                                                 Effective Date of Final Rules . . . . . . 185
          D.                                                Initial Regulatory Flexibility Analysis . . . . . . 186
               1.                                           Need for and Objectives of the Proposed Rules . . . . . .187
               2.                                           Legal Basis . . . . . 188
           3.                                               Description and Estimate of the Number of Small Entities To Which Rules
           Will Apply . . . . . . . . . . . . . . . . . . . . . . .189
           4.                                               Description of Projected Reporting, Recordkeeping, and Other Compliance
           Requirements . . . . . . . . . . . . . . . . . . . . . .210
           5.                                               Steps Taken to Minimize Significant Economic Impact on Small Entities, and
           Significant Alternatives Considered. . . . . . . . . . .211
           6.                                               Federal Rules that May Duplicate, Overlap, or Conflict with the Proposed
           Rules. . . . . . . . . . . . . . . . . . . . . . . . . .212
          E.                                                Comment Dates and Filing Procedures . . . . . .213
     VII.                                                   ordering clauses. . . . . .217

     I.   introduction
1.     In this Order, we adopt measures to: (1) promote telecommunications subscribership and
infrastructure deployment within American Indian and Alaska Native tribal communities; (2) establish 




a framework for the resolution of eligible telecommunications carrier designation requests under section
214(e)(6) of the Communications Act of 1934, as amended (the Act); and (3) apply the framework to


pending petitions for designation as eligible telecommunications carriers filed by Cellco Partnership
d/b/a Bell Atlantic Mobile, Inc., Western Wireless Corporation, Smith Bagley, Inc., and the Cheyenne
River Sioux Tribe Telephone Authority. 
2.     An important goal of the Telecommunications Act of 1996 is to preserve and advance
universal service.  The 1996 Act provides that "[c]onsumers in all regions of the Nation, including low-
income consumers and those in rural, insular, and high[-]cost areas, should have access to
telecommunications and information services ."  In the Further Notice of this proceeding, we sought to
identify the impediments to increased telecommunications deployment and subscribership in unserved
and underserved regions of our Nation, including tribal lands and insular areas, and proposed particular
changes to our universal service rules to overcome these impediments.  Although approximately 94



percent of all households in the United States have telephone service today, penetration levels among
particular areas and populations are significantly below the national average.  For example, only 76.7
percent of rural households earning less than $5,000 have a telephone, and only 47 percent of Indian






tribal households on reservations and other tribal lands have a telephone.  These statistics demonstrate,



most notably, that existing universal service support mechanisms are not adequate to sustain telephone
subscribership on tribal lands.
3.     Central to the issues addressed in the Further Notice is the notion that basic
telecommunications services are a fundamental necessity in modern society.  As our society
increasingly relies on telecommunications technology for employment and access to public services,
such telecommunications services have become a practical necessity.  The absence of
telecommunications services within a home places its occupants at a disadvantage when seeking to
contact, or be contacted by, employers and potential employers.  The inability to contact police, fire
departments, and medical service providers in an emergency situation may have, and in some areas
routinely does have, life-threatening consequences.  In geographically remote areas, access to





telecommunications services can minimize health and safety risks associated with geographic isolation
by providing people access to critical information and services they may need.  Basic
telecommunications services also may provide a source of access to more advanced services.  For
example, voice telephone is currently the most common means of household access to the Internet, and
the same copper loop used to provide ordinary voice telephone service also may be used for broadband
services.  Thus, as use of advanced services among the general population increases, those without


basic telecommunications services may find themselves falling further behind in a number of ways.  In


its Falling Through the Net report, the U.S. Department of Commerce's National Telecommunications
and Information Administration (NTIA) found that, while "[o]verall . . . the number of Americans
connected to the nation's information infrastructure is soaring," the benefits of even basic
telecommunications services have not reached certain segments of our population.
4.     This Order, along with a companion Report and Order and Further Notice of Proposed
Rulemaking and Policy Statement that we adopt, represents the culmination of an ongoing




examination of the issues involved in providing access to telephone service for Indians on reservations. 
This process began when the Commission convened two meetings in April and July of 1998, which
brought Indian tribal leaders and senior representatives from other federal agencies to the Commission to
meet with FCC Commissioners and Commission staff.  The Commission then organized formal field

hearings in January 1999 at the Indian Pueblo Cultural Center in Albuquerque, New Mexico, and in
March 1999 at the Gila River Indian Community in Chandler, Arizona, at which Indian tribal leaders,
telecommunications service providers, local public officials, and consumer advocates testified on
numerous issues, including subscribership levels and the cost of delivering telecommunications services
to Indians on tribal lands, as well as jurisdictional and sovereignty issues associated with the provision of
telecommunications services on tribal lands.  Based on information and analysis provided during these
proceedings, the Commission initiated two rulemakings: one proposing changes to our universal service
rules to promote deployment of telecommunications infrastructure and subscribership on tribal lands,
and the other proposing changes to our wireless service rules to encourage the deployment of wireless
service on tribal lands.

5.     In this Order, we take the first in a series of steps to address the causes of low subscribership
within certain segments of our population.  The extent to which telephone penetration levels fall below
the national average on tribal lands underscores the need for immediate Commission action to promote
the deployment of telecommunications facilities in tribal areas and to provide the support necessary to
increase subscribership in these areas.  We adopt measures at this time to promote telecommunications
deployment and subscribership for the benefit of those living on federally-recognized American Indian
and Alaska Native tribal lands, based on the fact that American Indian and Alaska Native communities,
on average, have the lowest reported telephone subscribership levels in the country.  Toward this end, we
adopt amendments to our universal service rules and provide additional, targeted support under the
Commission's low-income programs to create financial incentives for eligible telecommunications
carriers to serve, and deploy telecommunications facilities in, areas that previously may have been
regarded as high risk and unprofitable.  By enhancing tribal communities' access to telecommunications
services, the measures we adopt are consistent with our obligations under the historic federal trust
relationship between the federal government and federally-recognized Indian tribes to encourage tribal
sovereignty and self-governance.  Specifically, by enhancing tribal communities' access to
telecommunications, including access to interexchange services, advanced telecommunications, and
information services, we increase their access to education, commerce, government, and public services. 
Furthermore, by helping to bridge the physical distances between low-income consumers on tribal lands
and the emergency, medical, employment, and other services that they may need, our actions ensure a
standard of livability for tribal communities.  To ensure their effectiveness in addressing the low
subscribership levels on tribal lands, we intend to monitor the impact of the enhanced federal support
measures and to adjust the measures as appropriate.
6.     In response to the requests of Indian tribal leaders, we have adopted a statement of policy
that recognizes the principles of tribal sovereignty and self-government inherent in the relationships
between federally-recognized Indian tribes and the federal government.  In conjunction with our efforts
to adopt policies that further tribal sovereignty and tribal self-determination, we note the Commission's
upcoming Indian Telecom Training Initiative, in which the Commission will bring together experts on
telecommunications law and technologies to provide information to tribal leaders and other interested
parties to promote telecommunications deployment and subscribership on tribal lands.  

7.     In this Order, we also offer guidance on those circumstances in which the Commission will
exercise its authority to designate eligible telecommunications carriers under section 214(e)(6) of the
Act.  We conclude that, consistent with the Act and the legislative history of section 214(e), state
commissions have the primary responsibility for the designation of eligible telecommunications carriers
under section 214(e)(2).  We direct carriers seeking designation as an eligible telecommunications carrier
for service provided on non-tribal lands to first consult with the state commission, even if the carrier
asserts that the state commission lacks jurisdiction.  We will act on a section 214(e)(6) designation
request from a carrier providing service on non-tribal lands only in those situations where the carrier can
provide the Commission with an affirmative statement from the state commission or a court of
competent jurisdiction that the carrier is not subject to the state commission's jurisdiction.
8.     We recognize, however, that a determination as to whether a state commission lacks
jurisdiction over carriers serving tribal lands involves a legally complex and fact-specific inquiry,
informed by principles of tribal sovereignty, treaties, federal Indian law, and state law.  Such
jurisdictional ambiguities may unnecessarily delay the designation of carriers on tribal lands.  In light of
the unique federal trust relationship between the federal government and Indian tribes and the low
subscribership levels on tribal lands, we establish a framework designed to streamline the eligibility
designation of carriers providing service on tribal lands.  Under this framework, carriers seeking a
designation of eligibility for service provided on tribal lands may petition the Commission for
designation under section 214(e)(6).  The Commission will proceed to a determination on the merits of
such a petition if the Commission determines that the carrier is not subject to the jurisdiction of a state
commission.  We apply the framework adopted in this Order to several pending requests for eligible
telecommunications carrier designation on tribal and non-tribal lands.
9.     We also recognize that excessive delay in the designation of competing providers may hinder
the development of competition and the availability of service in many high-cost areas.  We therefore
commit to resolve requests for designation for the provision of service on non-tribal lands that are
properly before us pursuant to section 214(e)(6) within six months of the date of filing.  Similarly, we
commit to resolve the merits of a request for designation for the provision of service on tribal lands
within six months of our determination that the carrier is not subject to the jurisdiction of a state
commission.  We encourage state commissions to act accordingly, and resolve designation requests filed
pursuant to section 214(e)(2) within six months.
10.    Finally, in the attached Further Notice of Proposed Rulemaking, we seek comment on the
adoption of a rule that would require designation requests filed under section 214(e), either with this
Commission or a state commission, to be resolved within six months of the filing date, or some shorter
period.  We also seek comment on alternative methods by which state commissions, tribal authorities,
and this Commission can work together to further facilitate the expeditious resolution of designation
requests from carriers serving tribal lands.  
11.    The Commission will take action in a further proceeding to address the remaining issues
raised in the Further Notice that are not addressed in this Order.  In particular, we will continue to
examine and address the causes of low subscribership in other areas and among other populations,
especially among low-income individuals in rural and insular areas.  In addition, in areas where the cost
to deploy telecommunications facilities is significantly above the national average, we anticipate that
additional action may be necessary to encourage such deployment.  Providing appropriate incentives for
the deployment of facilities in such locations will be central to the issues that we will address, in
consultation with the Federal-State Joint Board on Universal Service (Joint Board) in our consideration
of rules to implement section 214(e)(3) of the Act and in considering the recommendations of the Joint
Board for high-cost universal service reform for rural carriers.
     XII. EXECUTIVE SUMMARY
13.    In this Order, we adopt measures to:
  ·  Provide up to $25 per month in additional federal Lifeline Assistance (Lifeline) support to eligible
  telecommunications carriers serving qualifying low-income individuals living on American Indian
  and Alaska Native lands in order to substantially reduce the cost of basic telephone service for such
  individuals; 
  ·  Provide up to $70 per consumer in additional federal Lifeline Connection Assistance (Link Up)
  support to eligible telecommunications carriers initiating service to qualifying low-income
  individuals living on American Indian and Alaska Native lands to offset initial connection charges
  and line extension costs associated with the initiation of service on behalf of those individuals; 
  ·  Broaden our Lifeline and Link Up consumer qualification criteria for low-income consumers on
  tribal lands to include income-dependent eligibility criteria employed in means-tested programs in
  which such individuals may be more likely to participate and therefore are more suitable income
  proxies for such individuals.  These include the Bureau of Indian Affairs (BIA) general assistance
  program, tribally-administered Temporary Assistance for Needy Families, Head Start (only for those
  meeting its income-qualifying standard), and the National School Lunch Program's free lunch
  program; 
  ·  Require eligible telecommunications carriers to publicize the availability of Lifeline and Link Up
  support in a manner reasonably designed to reach those likely to qualify for those discounts;
  ·  Permit eligible telecommunications carriers that are not subject to rate regulation by a state
  commission to receive the $1.75 of second-tier Lifeline support without state commission approval;
  ·  Permit tribal authorities and eligible telecommunications carriers that are not subject to rate
  regulation by a state commission to provide the local matching funds necessary to receive third-tier
  federal Lifeline support;
  ·  Establish a framework for the resolution of eligible telecommunications carrier designation requests
  under section 214(e)(6) of the Act; and
  ·  Apply the framework adopted in this Order to pending section 214(e)(6) petitions for designation as
  eligible telecommunications carriers filed by Cellco, Western Wireless, Smith Bagley, Inc., and the
  Cheyenne River Sioux Tribe Telephone Authority.
     VIII.     low-income INITIATIVES to improve access to TELECOMMUNICATIONS
     services and subscribership on tribal lands
          A.   Overview
9.     In this section, we adopt several revisions to our universal service rules designed to increase
access to telecommunications services and subscribership among low-income individuals living on
American Indian and Alaska Native lands (referred to hereinafter as "tribal lands").  Specifically, we
create a fourth tier of federal Lifeline support available to eligible telecommunications carriers serving
qualifying low-income individuals living on tribal lands consisting of up to an additional $25 per month,
per primary residential connection for each such qualifying individual.  This amount, in conjunction with
the current first-tier baseline (which may increase to as much as $4.35 on July 1, 2000) and $1.75








second-tier "non-matching" federal support amounts, will entitle each qualifying low-income consumer
on tribal lands to a reduction in its basic local service bill of up to $31.10 per month.  In addition, we
revise our rules governing the Link Up program to provide up to $100 of federal support to reduce the
cost of both initial connection charges and line extension charges of qualifying low-income individuals
living on tribal lands.  To ensure their effectiveness in addressing the low subscribership levels on tribal
lands, we intend to monitor the impact of the enhanced federal support measures and to adjust the
measures as appropriate.
10.    We also broaden our federal consumer qualification default criteria to enable low-income
individuals on tribal lands to qualify for Lifeline and Link Up services by certifying their participation in
certain additional means-tested assistance programs.  Based on the widespread lack of awareness of the
Lifeline and Link Up programs among low-income subscribers, and within tribal communities in
particular, we require all eligible telecommunications carriers to publicize the availability of Lifeline and
Link Up services in a manner reasonably designed to reach those likely to qualify for these services. 
Finally, we modify our Lifeline rules to permit eligible telecommunications carriers that are not subject
to rate regulation by a state commission to (1) receive second-tier federal Lifeline support without state
commission approval and (2) provide the local matching funds necessary to receive third-tier federal
Lifeline support.
          A.   Definitions of "Indian Tribe" and "Tribal Lands"
               1.   Background
11.    The Further Notice referred to the definition of the term "Indian tribe" that is codified in the
Federally Recognized Indian Tribe List Act of 1994.  Under that definition, the term "Indian tribe"

includes "any Indian or Alaska Native tribe, band, pueblo, village or community that the Secretary of the
Interior acknowledges to exist as an Indian tribe."  For purposes of identifying those geographic areas


for which the Commission might consider modifications to its rules to provide targeted assistance to
Indians or Indian tribes, the Further Notice sought comment on how the Commission should define the
term "tribal lands."
               1.   Discussion
12.    For purposes of this Order, we define the terms "Indian tribe,"  "reservation," and "near
reservation" as those terms are defined in Subpart A of the regulations promulgated by the United States
Department of the Interior's Bureau of Indian Affairs (BIA).  In light of our decision below to adopt
rules to benefit low-income individuals living on Indian tribal lands, we use, for purposes of this Order,
the definition of "Indian tribe" contained in section 20.1(p) of the BIA regulations.  That definition
includes "any Indian tribe, band, nation, rancheria, pueblo, colony, or community, including any Alaska
Native village or regional or village corporation as defined in or established pursuant to the Alaska
Native Claims Settlement Act (85 Stat. 688) which is federally recognized as eligible by the U.S.
Government for the special programs and services provided by the Secretary [of the Interior] to Indians
because of their status as Indians."  Although there are minor variations between this definition and the
statutory definition of "Indian tribe" in section 479a(2) and cited in the Further Notice, the characteristic
common to both definitions that is relevant for our purposes is that both refer to the list of entities
compiled and published by the Secretary of the Interior. 
13.    For purposes of identifying the geographic areas within which the rule amendments set forth
below will apply, we define the term "tribal lands" to include the BIA definitions of "reservation" and
"near reservation" contained in sections 20.1(v) and 20.1(r) of the BIA regulations, respectively.  The
term "reservation" means "any federally recognized Indian tribe's reservation, Pueblo, or Colony,
including former reservations in Oklahoma, Alaska Native regions established pursuant to the Alaska
Native Claims Settlement Act (85 Stat. 688), and Indian allotments."  "Near reservation" means those
areas or communities adjacent or contiguous to reservations that are designated as such by the
Department of Interior's Commissioner of Indian Affairs, and whose designations are published in the
Federal Register.  










14.    We define the term "tribal lands" to include the BIA definitions of  "reservation" and "near
reservation" because these definitions appear to encompass the geographic areas in which the
Commission may adopt, consistent with principles of Indian sovereignty and the special trust
relationship, rule changes to benefit members of federally-recognized Indian tribes.  In particular, we
agree with commenters who argue that Alaska Native Statistical Areas and other lands conveyed
pursuant to the Alaska Native Claims Settlement Act, although not Indian reservations, should be
included within the definition of tribal lands insofar as these lands are federally-recognized lands that are
inhabited by Alaska Native tribes.  The BIA definition of "near reservation" includes lands adjacent or







contiguous to reservations that generally have been considered tribal lands for purposes of other federal
programs targeted to federally-recognized Indian tribes. Again, we conclude that such lands properly
should be included within our definition insofar as they are Indian lands on which principles of Indian
sovereignty and the special trust relationship apply.  To exclude the "near reservation" lands designated

by the Department of the Interior or lands on which tribal members in Alaska live, in our view, would
unfairly penalize tribal members who live in tribal communities, but for historic or other reasons, do not
live on an Indian reservation. 
15.    We believe that using the BIA regulations to define and identify the geographic areas to
which our rule amendments will apply offers significant advantages in the ease of its administration. 
Specifically, the BIA definitions of "reservation" and "near reservation"  provide a widely used and
readily verifiable standard by which tribes may establish and carriers may verify the eligibility of
individuals who qualify for the targeted assistance made available by this Order. We note that the

classification "on or near a reservation" is used by BIA in administration of its financial assistance and
social services programs for Indian tribes.  If BIA or Congress should modify these definitions in the

future, we intend such modifications to apply in equal measure to the classifications adopted in this
Order without further action on our part.  We believe that this action is consistent with our goal of using
a widely used and readily verifiable standard for defining these terms.
          A.   Bases for Commission Action to Increase Subscribership on Tribal Lands 
1    Authority to Take Action to Improve Access to Telecommunications Services and
Subscribership on Tribal Lands
1.     Section 254(b) of the Act sets forth the principles that guide the Commission in establishing
policies for the preservation and advancement of universal service.  Included among these is the
principle that "quality services should be available at just, reasonable, and affordable rates." Our
authority to take action to remedy the disproportionately lower levels of infrastructure deployment and
subscribership prevalent among tribal communities derives from sections 1, 4(i), 201, 205, as well as 254
of the Act.   As discussed more fully below, the record before us suggests that the disproportionately







lower-than-average subscribership levels on tribal lands are largely due to the lack of access to and/or
affordability of telecommunications services in these areas (as compared with cultural or individual
preferences that cause individuals to choose not to subscribe).  Along with depressed economic
conditions and low per capita incomes, commenters have identified the following factors as the primary






impediments to subscribership on tribal lands: (1) the cost of basic service in certain areas (as high as
$38 per month in some areas); (2) the cost of intrastate toll service (limited local calling areas); (3)






inadequate telecommunications infrastructure and the cost of line extensions and facilities deployment in
remote, sparsely populated areas; and (4) the lack of competitive service providers offering alternative

technologies.  We note that no tribal representative in this proceeding has suggested that cultural or

personal preference accounts for low subscribership levels within or among particular tribes.  Based on
the substantial Indian tribal participation in this proceeding and in the Commission's proceedings in WT
Docket No. 99-266 and BO Docket No. 99-11, we do not have any evidence to conclude that cultural or
personal factors generally explain low subscribership levels on tribal lands.






2.     We conclude that the unavailability or unaffordability of telecommunications service on
tribal lands is at odds with our statutory goal of ensuring access to such services to "[c]onsumers in all
regions of the Nation, including low-income consumers."  In addition, the lack of access to affordable
telecommunications services on tribal lands is inconsistent with our statutory directive "to make
available, so far as possible, to all the people of the United States, without discrimination on the basis of
race, color, religion, national origin, or sex, a rapid, efficient Nationwide . . . wire and radio
communication service, with adequate facilities at reasonable charges."  In the Universal Service
Order, the Commission stated that, where "necessary and appropriate," the Commission, working with
an affected state or U.S. territory or possession, will open an inquiry to address instances of low or
declining subscribership levels and take such action as is necessary to fulfill the requirements of section
254. 
3.     Our authority to alter our rules in ways targeted to benefit tribal communities also must be
informed by the principles of federal Indian law that arise from the unique trust relationship between the
federal government and Indian tribes.  That relationship has been characterized as "unlike that of any
other two people in existence," and "marked by peculiar and cardinal distinctions which exist no where
else."  The Supreme Court has repeatedly "recognized the distinctive obligation of trust incumbent
upon the [Federal] Government" in its dealings with Indian tribes.  Moreover, Congress and the courts




have recognized the federal government's responsibility to promote self-government among tribal
communities as an important facet of the federal trust relationship.  In Morton v. Mancari, for example,





the Supreme Court upheld a federal regulation establishing a hiring preference for members of Indian
tribes as consistent with the goal of promoting Indian self-government.  In that case, the Court noted


that "literally every piece of legislation dealing with Indian tribes and reservations. . . singles out for
special treatment a constituency of tribal Indians living on or near reservations."  
4.     By enhancing tribal communities' access to telecommunications services, the measures we
adopt today are consistent with our federal trust responsibility to encourage tribal sovereignty and self-
governance.  Specifically, by enhancing tribal communities' access to telecommunications, including


access to interexchange services, advanced telecommunications, and information services, we increase
tribal communities' access to education, commerce, government, and public services.  Furthermore, by




helping to bridge physical distances between low-income individuals living on tribal lands and the
emergency, medical, employment, and other services that they may need, our actions further our federal
trust responsibility to ensure a standard of livability for members of Indian tribes on tribal lands.


               1.   Subscribership Levels on Tribal Lands 
5.     Section 254(i) of the Act requires that the Commission and the states ensure that universal
service is available at rates that are just, reasonable, and affordable.  In the Universal Service Order, the
Commission adopted the finding of the Joint Board that subscribership levels provide relevant
information regarding whether consumers have the means to subscribe to universal service and, thus,
represent an important tool in evaluating the affordability of rates.  The Commission found that
subscribership levels alone, however, do not reveal whether consumers are spending a disproportionate
amount of income on telecommunications services or whether paying the rates charged for services
imposes a hardship for those who subscribe.  The Commission concurred in the recommendation of the
Joint Board that a determination of affordability take into consideration both rate levels and non-rate
factors, such as consumer income levels, that can be used to assess the financial burden subscribing to
universal service places on consumers.  The Commission also adopted the Joint Board's finding that the
scope of a local calling area "directly and significantly impacts affordability" of universal service.


6.     In the Further Notice, we expressed concern that, although approximately 94 percent of all
households in the United States have telephone service today, penetration levels among particular areas
and populations are significantly below the national average.  To better understand the dimensions of

the problem of low subscribership in particular areas, we sought information on subscribership levels and
impediments to subscribership generally and on tribal lands in particular.  The Further Notice defined
the term "penetration rate" (or subscribership level) to mean "the percentage of households within a
specified area that have telephone service in the housing unit."  We also asked commenters to provide

information pertaining to the total population, population density, average annual income, and average
unemployment rate for each area within which penetration rates were measured.  The Further Notice
noted the Commission's particular concern that Indians living on reservations, whose nationwide
subscribership level is only 46.6 percent, have less access to telecommunications services than other

Americans.  In the Further Notice, we sought comment on issues that may be affecting the availability
of universal service in tribal communities and on possible modifications to the federal universal service
support mechanisms that may be necessary to promote deployment and subscribership in these areas.
7.     Consistent with our statutory goal of preserving and advancing universal service and of
ensuring that consumers in all regions of the Nation have access to the services supported by federal
universal service support mechanisms, we modify our universal service rules, as set forth below, to

increase telecommunications infrastructure deployment and subscribership on tribal lands.  We take
action at this time primarily for the benefit of low-income individuals living on tribal lands, as that term
is defined above, because of the critically low telephone subscribership levels that are reported in these
areas.  Specifically, statistics demonstrate that, although approximately 94 percent of all Americans have
a telephone, only 47 percent of Indians on reservations and other tribal lands have a telephone. 



Similarly, an analysis of 1990 Census data found that Indians represent 89 percent of the Nation's
population in the one hundred zip codes with the lowest subscribership levels.  More recent studies of


subscribership levels for individual tribes suggest that subscribership levels for many tribes remain
significantly below the national average.      


8.     Consistent with recent research that demonstrates that telephone penetration correlates
directly with income, federal statistics reveal that tribal communities are among the poorest populations
in the United States.  For example, according to 1990 data published by the Bureau of the Census, the per
capita income of Native Americans living on tribal lands was only $4,478, as compared with the $14,420
per capita income in the United States as a whole.  At the time of the 1990 Census data collection,


almost 51 percent of American Indians residing on reservations and trust lands had incomes below the
poverty level, compared to 13 percent of United States residents nationwide with incomes below this

level.  Unemployment levels for a sample of 48 tribes averaged 42 percent as compared to the national
unemployment figure of 4.5 percent.  The record before us suggests that there is a correlation between


low subscribership levels and low incomes on tribal lands.  Indeed, the majority of commenters identify






low incomes or impoverishment as the key reason for low subscribership levels on tribal lands.   
9.     Based on our review of these statistics and the record before us,  and consistent with the
unique trust relationship between the federal government and members of Indian tribes, we conclude that
specific action is needed to address the impediments to subscribership on tribal lands and to ensure
affordable access to telecommunications services in these areas.  Specifically, the significantly lower-
than-average incomes and subscribership levels of members of federally-recognized Indian tribes
warrant our immediate action to increase subscribership and improve access to telecommunications on
tribal lands.  
10.    We conclude that the potential benefits to tribal members will only increase by extending to
non-Indians living on tribal lands, as well as Indians, the measures we adopt in Section III.D. of this
Order.  First, we believe that, by increasing the total number of individuals, both Indian and non-Indian,
who are connected to the network within a tribal community the value of the network for tribal members
in that community is greatly enhanced.  Implicit in our decision to extend the availability of enhanced
federal support to all low-income individuals living on tribal lands, is our recognition of the likelihood
that non-Indian, low-income households on tribal lands may face the same or similar economic and
geographic barriers as those faced by low-income Indian households.

11.    Second, we believe that increasing the total number of individuals, both Indian and non-
Indian, who are connected to the network within a tribal community will result in greater incentives for
eligible telecommunications carriers to serve in those areas.  We anticipate that the availability of
enhanced federal support for all low-income individuals living on tribal lands will maximize the number
of subscribers in such a community who can afford service and, therefore, make it a more attractive
community for carrier investment and deployment of telecommunications infrastructure.  As the number
of potential subscribers grows in tribal communities, carriers may achieve greater economies of scale and
scope when deploying facilities and providing service within a particular community.  
12.    Finally, we believe that, by extending the availability of enhanced federal support to all low-
income individuals residing on tribal lands, carriers will avoid the administrative burden associated with
distinguishing between low-income individuals who are members of federally-recognized tribes living
on tribal lands and all other low-income individuals living on tribal lands.  By reducing the possible




administrative burdens associated with implementation of the enhanced federal support, we intend to
eliminate a potential disincentive to providing service on tribal lands.        
13.    At this time, we do not adopt commenters' suggestions to apply the actions taken in this
Order more generally to all high-cost areas and all insular areas.  Although the record demonstrates that



subscribership levels are below the national average in low-income, rural areas and in certain insular
areas, the significant degree to which subscribership levels fall below the national average among tribal

communities underscores the need for immediate Commission intervention for the benefit of this
population.  The record before us does not permit a determination that the factors causing low
subscribership on tribal lands are the same factors causing low subscribership among other populations.
Indeed, the presence of certain additional factors on tribal lands that may not be present in non-tribal
areas, and which appear to create disincentives for carriers to provide service in these areas, suggests that
the identical strategy adopted in this Order to boost subscribership levels on tribal lands may not be
appropriate for increasing subscribership in other areas.  Specifically, the following combination of
factors may increase the cost of entry and reduce the profitability of providing service on tribal lands: (1)
the lack of basic infrastructure in many tribal communities; (2) a high concentration of low-income



individuals with few business subscribers; (3) cultural and language barriers where carriers serving a
tribal community may lack familiarity with the Native language and customs of that community; (4) the
process of obtaining access to rights-of-way on tribal lands where tribal authorities control such access;
and (5) jurisdictional issues that may arise where there are questions concerning whether a state may
assert jurisdiction over the provision of telecommunications services on tribal lands.
14.    We are concerned that to devise a remedy addressing  all low subscribership issues for all
unserved or underserved populations simultaneously might unnecessarily delay action on behalf of those
who are least served, i.e., tribal communities.  We do not believe that we should delay action to benefit
those who, based on national statistics and the record before us, comprise the most underserved segment
of our population.  We will, however, continue to examine and address the causes of low subscribership
in other areas and among other populations within the United States and, in conjunction with the release
of the 2000 Census data, we will take action as appropriate at that time to address low subscribership
among such other populations. 
15.    Several incumbent local exchange carriers serving tribal communities indicate that
subscribership levels among tribal communities within their service territories are higher than the
nationwide average penetration rate for Indians on reservations and other tribal lands.  These comments

do not lead us to alter our conclusion that Commission action is warranted to improve subscribership
levels for low-income individuals on tribal lands.  As an initial matter, we recognize that penetration
levels for particular tribal communities may exceed the 47 percent national average for Indians on tribal
lands, just as certain tribes may be below the national average of 47 percent.  This fact, however, is not
inconsistent with our decision to adopt measures to benefit tribal communities generally because we are
targeting our actions to low-income individuals on tribal lands, who we anticipate will have the lowest
subscribership levels in these areas.  Specifically, because research indicates that there is a correlation
between income and subscribership levels, we anticipate that our actions will benefit tribal communities
whose subscribership levels, as a function of low average per capita incomes, are closer to, or less than,
the 47 percent national average for Indians on reservations.
16.    Although we recognize the achievements of rural carriers serving tribal lands in improving
subscribership levels in these areas, the fact that carriers employ various methodologies when


measuring subscribership levels within their service territories limits the utility of particular statistics
beyond the specific service territories.  For example, statistics that measure the number or percentage of
homes passed within a carrier's total service territory on a reservation do not reveal the number or
percentage of households that, notwithstanding the fact that facilities are present, do not subscribe
because they cannot afford telephone service.  Even where subscribership statistics measure the number


or percentage of households within a carrier's territory that have telephone service, those statistics
provide no measure of reservation households outside of the carrier's service territory that have access to
facilities or take service.  Therefore, we conclude that nationwide and regional statistics that measure

actual subscribership throughout tribal areas provide a more complete picture than do statistics that
measure only the number of homes passed within particular service territories.    

          A.   Enhanced Federal Lifeline and Expanded Link Up Support for Qualifying Low-
          Income Consumers Living on Tribal Lands
1    Background
1.     Lifeline.  The Commission's Lifeline support program was designed to increase
subscribership by reducing qualifying low-income consumers' monthly basic local service charges. 
The Lifeline program provides three tiers of universal service support to eligible telecommunications
carriers that offer Lifeline service.  The support associated with each tier must be passed through by the
carrier to each qualifying low-income customer by an equivalent reduction in the customer's monthly
bill for telephone service.  The first tier currently provides carriers with a baseline support amount of
$3.50 per month per Lifeline customer in the form of a waiver of the federal subscriber line charge, but
this amount will increase to as much as $4.35 on July 1, 2000.  The second tier provides carriers with

an additional $1.75 per month per Lifeline customer if the relevant state commission approves an
equivalent reduction in the amount paid by Lifeline customers in that state.  Finally, the third tier
provides carriers with federal matching funds of 50 percent of the amount of state-provided Lifeline
support, up to a maximum of an additional $1.75 per month per Lifeline customer (50 percent of $3.50),
assuming that the entire amount is passed on to the carrier's Lifeline customers.  Although federal
Lifeline support under the existing Lifeline program may not exceed $7.85 per month as of July 1, 2000
under the Commission's rules, in a state that provides $3.50 of support per month, which is the level
needed to generate the full federal matching amount, a carrier currently may receive a total of $11.35 per
month per Lifeline customer in combined federal and state support.















2.     In the Further Notice, we sought comment on whether federal universal service support
mechanisms should provide additional support for low-income consumers living on tribal lands.  In
recognition of the fact that local calling areas for wireline carriers are established by the states, we
sought comment on what role, if any, the Commission is authorized to and should play in seeking to
address impediments caused by limited local calling areas.  The options proposed for addressing the issue
of limited local calling areas within tribal communities included the provision of federal universal
service support for: (1) intrastate toll calling; (2) calls outside of the local calling area that fall within
specified federally-designated support areas; and (3) a foreign exchange line service from the remote or
tribal area to the nearest metropolitan area or community of interest.  Finally, we sought comment on
whether the provision of service by terrestrial wireless or satellite providers would alleviate problems
associated with limited local calling areas.
3.     Link Up.  The Commission's Link Up program helps qualifying low-income consumers
initiate telephone service by paying half of the first $60 of service connection charges for a subscriber's
primary residential connection.  When a carrier offers eligible low-income customers a deferred
payment plan for connection charges, carriers may receive reimbursement of up to $200 under the Link
Up program for waiving interest on the deferred charges.  
4.     In the Further Notice, we sought comment on whether increasing federal support to offset
initial service connection charges may be necessary to increase subscribership on tribal lands.  We also



sought comment on whether to use federal support to address the problem of low subscribership in
underserved or unserved areas caused by prohibitively high costs associated with line extension or
facilities construction and the inability of low-income residents to obtain telecommunications service
because they cannot afford to pay the required line extension or construction costs.  We sought comment
on alternative options for addressing prohibitively expensive line extension costs.  Specifically, we asked
whether the provision of telecommunications service to remote areas using terrestrial wireless or satellite
technologies might allow service at lower cost compared to the cost of line extensions or construction of
wireline facilities, and how various proposals would avoid encouraging uneconomic investments in
relatively high-cost technologies.
5.     Consumer Eligibility under Lifeline and Link Up Programs.  In the Universal Service Order,
the Commission adopted the Joint Board's recommendation to maintain the basic framework for
administering the Lifeline program that existed prior to adoption of the Universal Service Order, under
which a state providing intrastate matching funds under the Lifeline program established the
qualification criteria governing customer participation in that state.  Thus, section 54.409(a) of our
rules provides that, in states that provide intrastate matching funds, a consumer must meet the criteria
established by the state commission to receive federal Lifeline support.  The Commission adopted the
Joint Board's additional recommendation, however, to require states to base such Lifeline criteria "solely
on income or factors directly related to income" in order to increase the availability of Lifeline support to
all low-income consumers.  We took this action in recognition of the fact that some states limited
Lifeline support availability to certain low-income consumers, such as the elderly, or did not participate
in the program.
6.     For states that do not provide intrastate matching Lifeline funds, the Commission adopted
the Joint Board's recommendation to establish federal default consumer qualification criteria.
Specifically, section 54.409(b) of our rules provides that, in states that do not provide state matching
funds (and thus do not establish the consumer qualifications for Lifeline participation), a consumer
seeking Lifeline support must certify his or her participation in one of the following Commission-
designated low-income assistance programs:  Medicaid; food stamps; Supplemental Security Income;
federal public housing assistance; or Low-Income Home Energy Assistance Program.  Section 54.415
incorporates the identical framework for purposes of establishing a consumer's eligibility under the
Commission's Link Up program.     
               1.   Discussion
1    Enhanced Lifeline Support for Qualifying Low-Income Consumers  Living on Tribal Lands
1.     In this Order, we create a fourth tier of federal Lifeline support available to eligible
telecommunications carriers serving qualifying low-income individuals living on tribal lands.  This
fourth tier of federal Lifeline support will consist of up to an additional $25 per month, per primary
residential connection for each qualifying low-income individual living on tribal lands.  This amount, in
conjunction with the first-tier baseline (ranging from $3.50 to $4.35 after July 1, 2000) and $1.75
second-tier "non-matching" federal support amounts, will entitle each qualifying low-income consumer
on tribal lands to a reduction in its basic local service bill of up to $31.10 per month.  In taking this


action, we follow the example of states such as New York and require all qualifying low-income
individuals on tribal lands to pay a minimum monthly Lifeline rate of $1.  As explained further below,






this enhanced Lifeline support should substantially reduce the Lifeline rate (i.e., the monthly basic
service rate) for all qualifying low-income consumers on tribal lands.
2.     Consistent with the requirement of section 54.403(a) of our rules, we condition the receipt of
this increased federal Lifeline support on carriers passing through the entire fourth-tier support amount to
each qualifying low-income individual living on tribal lands by an equivalent reduction in the
subscriber's monthly bill for local service.  Specifically, we require each eligible telecommunications
carrier to certify that it (1) will pass through the fourth-tier federal support amount to its qualifying low-
income subscribers, and (2) has received the necessary approval of any non-federal regulatory authority
authorized to regulate such carrier's rates that may be required to implement the required rate reduction. 
As discussed in greater detail below in Section III.D.2.c., an eligible telecommunications carrier seeking
to receive reimbursement during the calendar year 2000 for enhanced Lifeline and Link Up services
provided during the fourth quarter 2000 must make these certifications in a letter filed with the universal
service fund Administrator, the Universal Service Administrative Company (USAC), by September 1,
2000.  All carriers seeking reimbursement for enhanced Lifeline or Link Up services must make these
certifications in the FCC Form 497 (as revised).

3.     Our primary goal, in taking this action, is to reduce the monthly cost of telecommunications
services for qualifying low-income individuals on tribal lands, so as to encourage those without service
to initiate service and better enable those currently subscribed to maintain service.  In view of (1) the
extraordinarily low average per capita and household incomes in tribal areas, (2) the excessive toll





charges that many subscribers incur as a result of limited local calling areas on tribal lands, (3) the








disproportionately low subscribership levels in tribal areas, and (4) the apparent limited awareness of,

and participation in, the existing Lifeline program, we conclude that a substantial additional amount of





support is needed to have an impact on subscribership.  Our conclusion to provide up to an additional
$25 for all qualifying low-income individuals living on tribal lands is consistent with the actions of state
commissions that have instituted substantial rate reductions for their low-income residents.  In each of






these cases, substantial additional state funds have been made available to promote subscribership among
qualifying low-income consumers in those jurisdictions.  Our determination is informed by the
experience of these jurisdictions and the increased subscribership levels achieved following their
implementation of substantial Lifeline rate reductions.  For example, in the four years (1992-1996)
immediately following the District of Columbia Public Service Commission's (D.C. Commission)
adoption of a $1 Lifeline rate for low-income residents 65 years of age and older and a $3 Lifeline rate
for low-income residents under 65 years of age, the District of Columbia's overall subscribership levels
increased by more than 4 percent, as compared with a nationwide increase of only 0.1 percent for the
same time period.  Similarly, while only 8,850 low-income individuals previously lacking telephone




service initiated service in New York in the three years preceding the New York Public State Service
Commission's adoption of a $1 Lifeline rate, 171,536 low-income individuals initiated service in the
three years following adoption of the $1 Lifeline rate, an increase in new Lifeline subscribers of almost
2000 percent. 


4.     In adopting its $1 Lifeline program for low-income citizens in the District of Columbia, the
D.C. Commission determined that a substantial rate reduction, along with the removal of other regulatory
restrictions, was needed to stimulate interest among the low-income population generally, given its
history of low subscription and in light of the potential importance of phone service, particularly to
elderly residents, as a "Lifeline."  Subscribership levels on tribal lands, the multitude of obstacles to


increasing subscribership on tribal lands, and the critical health and safety function of a telephone to
persons in extremely remote locations suggest that tribal populations represent a similarly "at risk"
population.  Just as the D.C. Commission determined that an aggressive regulatory approach was needed
to raise the visibility of Lifeline and stimulate interest on the part of residents there, we believe that a
similarly aggressive, multi-faceted approach is needed to address the problem of low subscribership on
tribal lands.
5.     In combination with the "non-matching" federal first-tier Lifeline support of up to $4.35 and
second-tier support of $1.75 per month per Lifeline customer, the additional $25 in enhanced federal
Lifeline support for qualifying low-income individuals living on tribal lands would reduce the cost of the
most expensive basic service rates presented on the record (e.g., $38 per month in areas of Alaska and
$35 per month on the Wind River Reservation), to less than $10 per month.  The record before us



indicates that basic local service rates for subscribers living on or near reservations range from $5 to $38
per month, with most subscribers receiving rates of less than $20 per month.  Thus, with the enhanced



Lifeline support, low-income individuals on tribal lands whose local service rates are $32.10 or less per
month would pay a monthly local service rate of $1.   The enhanced support also would apply to any


monthly mileage or zonal charges imposed as a condition for receiving basic local service.  The
enhanced support would not apply to state or federal taxes, state or federal universal service fees, or
surcharges for 911 service that may appear as line items on a subscriber's bill for local service.  By
substantially reducing the monthly service costs for all qualifying low-income individuals on tribal lands,
we find that the additional targeted Lifeline support provided here should eliminate or diminish the effect
of unaffordability for those low-income individuals for whom it may be difficult to maintain telephone
service even where facilities are present. 






6.     By creating this enhanced Lifeline support, we have attempted to reduce to $1 per month the
basic service rate for the majority of income-eligible individuals residing on tribal lands.  There are,
however, some isolated instances where local telephone rates are high enough that, even with the
enhanced Lifeline support, monthly service rates will be greater than $1.  In addition, there are a myriad
of charges, which vary from state to state, that also affect customers' bills, such as taxes, surcharges, and
mileage charges.  So, while we have taken significant steps toward reducing the monthly local service
rates for low-income individuals on tribal lands with this program, we cannot assure each eligible
customer that his or her local service bill will be $1 per month.
7.     We have ample evidence that customer confusion and lack of awareness of Lifeline
discounts have contributed to low subscribership levels on tribal lands.  We encourage states to
consider ways in which local charges may be simplified, particularly for low-income customers eligible
to receive this enhanced Lifeline support, so as to make the Lifeline discounts easier to promote and
explain to qualifying customers.  We encourage the Joint Board to consider this issue in its review of
Lifeline service for all low-income consumers. 
8.     In determining the appropriate level of enhanced Lifeline support for qualifying low-income
individuals on tribal lands, we recognize that low-income individuals on tribal lands may spend a
significantly greater percentage of their household income on local and toll services than do most other
Americans as a result of the substantial toll charges they incur to place calls within their communities of
interest.  Based on data compiled by the Bureau of Labor Statistics, we observe that expenditures for
residential local and toll telephone services comprise approximately two percent of the average U.S.
household's annual expenditures.  Assuming average local service charges of approximately $20 per

month and toll charges of as much as $126 per month, a tribal member may spend as much as $1,752



per year on local and long distance telephone service.  Assuming an average household income of
$12,459 per year, a tribal household could spend approximately 14 percent of its annual income on

telephone service.  Given that an annual household income of $12,459 is unlikely to result in any
savings, we assume that all or most of this amount is dedicated to household expenditures.  
9.     Even if we were to use the lowest local service charge on the record of $5 per month and
assume intrastate toll charges of only $42 per month (or one-third of the $126 toll charge figure cited
above), total telephone services, excluding taxes and other charges, would cost $47 per month, or $564
per year.  A tribal household earning $12,459 per year would spend, in this example, approximately 5
percent of its annual income on telephone service.  Thus, in comparison to the two percent of household
expenditures dedicated to telecommunications services in the average U.S. household, it appears that
tribal members on average commit a substantially greater percentage of household resources to pay for
the same services.
10.    Finally, we are mindful that a low-income individual currently receiving and paying for
service without enhanced support will, upon adoption of these rules, receive a discounted rate for the
same service, when that individual arguably could continue to pay the current rate without any
enhancement.  Nonetheless, we believe that our decision is consistent with our responsibility to ensure
that our actions do not expand the federal universal service support mechanisms beyond that required to
achieve our statutory mandate to preserve and advance universal service.  As we noted in the Universal
Service Order, however, the fact that an individual is connected to the network does not, in itself, reveal
whether that individual is spending a disproportionate amount of income on telecommunications
services.  We have carefully examined the facts before us and structured the enhanced Lifeline support
in a manner that is precisely targeted to provide qualifying low-income individuals with access to
telecommunications services and to increase subscribership on tribal lands.  Given that: (1) tribal
members appear to spend a significantly higher proportion of their incomes on telecommunications
services than do other Americans; (2) low-income tribal members' services may be more likely to be
disconnected; (3) beneficiaries of enhanced support must be income eligible; and (4) qualifying
individuals can use only as much support as is needed to cover the cost of the individuals' basic service
rate less $1, we are persuaded that the level of support provided here does not exceed that required to
preserve and advance universal service.
11.    We also believe that our adoption of enhanced Lifeline support will encourage: (1) eligible
telecommunications carriers to construct telecommunications facilities on tribal lands that currently lack
such facilities;  (2) new entrants offering alternative technologies to seek eligible telecommunications
carrier status to serve tribal lands; and (3) tribes, eligible telecommunications carriers, and states to
address impediments to increased penetration that are caused by limited local calling areas.  We discuss
each of these in greater detail below. 
12.    Infrastructure Development.  By providing carriers with a predictable and secure revenue
source, the enhanced Lifeline support just discussed, in conjunction with the expanded support that we
provide under the Link Up program, is designed to create incentives for eligible telecommunications

carriers to deploy telecommunications facilities in areas that previously may have been regarded as high
risk and unprofitable. We note that, unlike in urban areas where there may be a greater concentration of
both residential and business customers, carriers may need additional incentives to serve tribal lands that,
due to their extreme geographic remoteness, are sparsely populated and have few businesses.  In
addition, given that the financial resources available to many tribal communities may be insufficient to
support the development of telecommunications infrastructure, we anticipate that the enhanced


Lifeline and expanded Link Up support will encourage such development by carriers.  In particular, the
additional support may enhance the ability of eligible telecommunications carriers to attract financing to
support facilities construction in unserved tribal areas.  Similarly, it may encourage the deployment of
such infrastructure by helping carriers to achieve economies of scale by aggregating demand for, and use
of, a common telecommunications infrastructure by qualifying low-income individuals living on tribal
lands.
13.    The enhanced Lifeline and Link Up support adopted here also may help to foster principles
of tribal sovereignty and tribal self-determination in two respects.  First, the availability of enhanced
federal support may provide additional incentives for tribes that wish to establish tribally-owned carriers
to do so by diminishing the financial risk associated with providing service to low-income customers on
tribal lands.  Second, to the extent that tribal leaders can aggregate service requests of large numbers of
qualifying individuals eligible for enhanced support, they may have more control in choosing the carriers
serving their communities and increased bargaining power in their negotiations with carriers seeking to
provide universal service on tribal lands.
14.    To the extent that the cost to extend facilities, due to the geographic remoteness of a location
or other geographic characteristics, is extraordinarily high, we recognize that the level of support


provided here, in combination with existing levels of universal service high-cost support, may not always
be sufficient to attract the necessary facilities investment.  Accordingly, although we anticipate that the
measures adopted in this Order will address a significant number of the obstacles to subscribership on
tribal lands identified on the record before us, we anticipate that additional regulatory steps may be
necessary to encourage the deployment of facilities in areas where the cost of deployment is
extraordinarily high.  We will address these issues, in consultation with the Joint Board, when we
consider reform of the rural high cost mechanism, and implementation of section 214(e)(3) of the Act. 










For this reason, we do not adopt additional measures at this time to address the problem of inadequate
facilities deployment in the most geographically remote tribal areas.     





15.    Competitive Service Providers.  By providing additional federal support targeted to low-
income individuals on tribal lands, without regard to the specific technology used to provide the
supported telecommunications services, we recognize that different technologies may offer solutions to
address low subscribership levels on tribal lands.  For example, commenters have suggested that wireless
service may represent a cost-effective alternative to wireline service in sparsely populated, remote
locations where the cost of line extensions is prohibitively expensive.  Moreover, as we discuss further
below, a wireless eligible telecommunications carrier service offering that features an expanded local
calling area along with a predetermined number of calls or minutes of calling within a tribal member's
community of interest, may represent a solution to the problem of limited local calling areas and
excessive toll charges in tribal areas.  The enhanced Lifeline support adopted in this Order is


competitively neutral because any carrier, including a wireless carrier, that receives designation as an
eligible telecommunications carrier and is permitted by tribal authorities to serve on tribal lands may
provide enhanced Lifeline service to qualifying low-income individuals on tribal lands.

16.    Limited Local Calling Areas.  As noted above, because the boundaries of local calling areas
for wireline carriers are established by the states, we recognize that we do not have the authority to
address the problem of limited local calling areas directly.  We find, however, that the enhanced Lifeline
support may help to alleviate the financial burden of the excessive toll charges that low-income
individuals on tribal lands incur when their local calling area does not encompass their community of
interest.  First, the availability of enhanced Lifeline support, by reducing local service rates by as much
as $25 per month, effectively "frees up" money formerly dedicated to local service charges that a
subscriber now may apply to the subscriber's toll charges.  Second, the enhanced Lifeline support may
spur competitive entry by non-wireline carriers whose calling plans offer an expanded local calling area.
Finally, our decision to increase the level of Lifeline support to reduce basic local service rates for
qualified, low-income individuals on tribal lands may encourage states to expand local calling areas for
subscribers whose local calling area does not encompass their community of interest.  Specifically, in
instances where the entire federal Lifeline support amount (up to $31.10 where no state matching funds
are provided) is not needed to offset a subscriber's local service rate because the rate is less than this
amount, the additional remaining support may provide states with incentives to examine and, where
appropriate, expand local calling areas on tribal lands.  By reducing the financial burden associated



with excessive toll charges and by reducing the number of calls subject to toll charges, we conclude that
the actions we take today will help low-income individuals on tribal lands to maintain their access to
telephone service.
17.    We decline at this time to adopt other proposals included in the Further Notice for offsetting
the cost of intrastate toll service, based on our expectation that the measures adopted in this Order,
although not providing support directly for intrastate toll charges, nevertheless will help to alleviate some
of the burden associated with high intrastate toll charges on tribal lands.  Because we find that the
provision of federal support to offset the cost of intrastate toll service would expand upon the definition
of supported services in section 254(c) of the Act, and would raise issues of competitive neutrality to the
extent that interexchange carriers would not be eligible to receive such enhanced Lifeline support, we do
not adopt our proposal to support intrastate toll service.  We ask the Joint Board, in connection with its




upcoming review of the definition of supported services, to issue a recommendation as to whether the
Commission should include intrastate or interstate toll services or expanded area service within the list of
supported services on tribal lands or in other areas.  Finally, in recognition of the states' traditional






jurisdiction and expertise in determining the appropriate size and scope of local calling areas, we concur
in the view expressed by NTIA and other parties that counsel against our direct involvement in this
area. 


                    a.   Expanded Link Up 
18.    In this Order, we provide up to $100 of federal support under the Link Up program to reduce
the initial connection charges and line extension charges of qualifying low-income individuals on tribal
lands.  Thus, in addition to the currently available Link Up support amount, i.e., half of the first $60 of a
qualifying subscriber's initial connection charges up to a maximum of $30, we will provide up to an
additional $70 of federal Link Up support to cover 100 percent of the remaining charges associated with
initiating service between $60 and $130, for a total maximum support amount of $100 per qualifying
low-income subscriber.  Adoption of this measure will provide up to $100 in federal Link Up support to
qualifying low-income individuals on tribal lands with initial connection or line extension costs of $130
or more.  Based on information and comment on the record pertaining to the costs associated with
initiating service in many tribal areas, we conclude that the existing $30 maximum level of Link Up
support is, in many cases, far short of the support amount needed to offset such charges.  A recent






study of American Indian and Alaska Native tribal communities on tribal lands found that average
household telephone installation charges for responding tribes was $78.  We note that all parties who
commented on the appropriate amount by which to increase the level of Link Up support recommend an
increase in the maximum level of support to $100 and that no party opposes this amount or proposes





an alternative amount. 
19.    As proposed in the Further Notice, we also expand the types of charges covered by the Link
Up program to include any standard charges imposed on qualifying low-income individuals on tribal
lands as a condition of initiating service, including both line extension and initial connection charges, up
to the $100 maximum.  Although the Link Up program traditionally has operated only to reduce
qualifying consumers' initial connection or initial installation charges (e.g., switch activation fees), we
conclude that the expanded Link Up support also should apply to reduce facilities-based charges
associated with the extension of lines or construction of facilities needed to initiate service to a
qualifying low-income individual on tribal lands.  We take this action in recognition of the fact that

many low-income individuals on tribal lands face as a result of their remote locations certain
supplementary charges for the installation of new lines and the initiation of service, in addition to the
typical switch activation fees.  For example, on Pueblo Picuris, in New Mexico, qualifying low-income

consumers are charged an initial connection charge of approximately $130 per consumer and other
consumers are charged approximately $160 per consumer, $113 of which represents a zonal charge to
cover the cost of expanding the capacity of existing facilities located near that community.  To the
extent that parties have identified line extension and construction costs as obstacles to subscribership on
tribal lands, this measure is designed to increase subscribership among qualifying low-income
individuals by minimizing certain of these up-front costs.  In addition, we conclude that several of the
justifications supporting our adoption of enhanced Lifeline support also support our adoption of
expanded Link Up support.  Specifically, by adopting the expanded Link Up support, we intend to create
incentives for (1) eligible telecommunications carriers to construct telecommunications facilities on
tribal lands that currently lack such facilities; and (2) new entrants offering alternative technologies to
seek eligible telecommunications carrier status to serve tribal lands. 
20.    We note that the expanded Link Up support for qualifying low-income individuals living on
tribal lands is competitively neutral in that it will apply to any eligible telecommunications carrier's
standard charges for initiating service to qualifying consumers on tribal lands.  For example, the
expanded Link Up support may be used to offset the charge associated with "activating service" for an
eligible telecommunications carrier that offers satellite telephone service.  We further note, however,
that the expanded Link Up support cannot be applied to customer premises equipment, i.e., equipment
that falls on the customer side of the network interface device boundary between customer and network
facilities.  We adopt this limitation in light of the fact that the federal universal service support



mechanisms generally support only the cost of facilities falling on the network side of the demarcation
point and because the Commission's definition of supported services does not include customer


premises equipment or inside wiring.  Expanded Link Up support would be available for qualifying
consumers on tribal lands to offset charges for facilities that are necessary to enable a non-wireline
eligible telecommunications carrier to provide service to the demarcation point.  For example, if the
provision of a fixed wireless or satellite service required the installation of a receiver on the roof of a
subscriber's premises to bring service to a demarcation point, i.e., a network interface device, expanded
Link Up support could be used to offset the cost of installing such facilities. To the extent that a non-
wireline carrier can isolate costs associated with the portion of a handset that receives wireless signals,
we conclude that those costs would be covered as costs on the network side of the network interface
device.
21.    With respect to GTE's concern that the use of expanded Link Up support to cover line
extension costs may not provide sufficient funding, we note that, as discussed above, where the cost to
extend facilities to a low-income individual's residence is extraordinarily high, additional regulatory
action may be necessary to encourage the deployment of facilities in such areas.  To the extent that
extraordinarily high costs pose a barrier to service in certain tribal areas, we will examine those issues in
a future order implementing section 214(e)(3) of the Act  and in connection with our consideration of
the Joint Board's recommendations regarding high-cost universal service reform for rural carriers.  We
likewise are not dissuaded by GTE's concern that the expanded Link Up support will encourage
inefficient investment in telecommunications infrastructure.  We do not anticipate that the expanded
Link Up support will encourage inefficient investment in telecommunications infrastructure because:  (1)
support for line extension or other construction costs is capped at $100 per qualifying low-income
individual on tribal lands; (2) the line extension or other construction costs in many tribal areas will
exceed the maximum amount covered under the expanded Link Up support; and (3) carriers therefore
may have to absorb certain costs in excess of the maximum expanded Link Up support amount in order
to induce low-income individuals to initiate service,.  Moreover, to the extent that a competitive




eligible telecommunications carrier offering an alternative to wireline technology can extend service to a
remote tribal area at a substantially lower cost than a wireline carrier, we believe that it is a more
economically efficient use of federal universal service funds to create incentives, in the first instance, for
the lower-cost provider to provide the service.  




22.    Our decision to apply the expanded Link Up support exclusively to low-income individuals
living on tribal lands at this time and further examine whether to extend this approach to other unserved
populations, is consistent with Bell Atlantic's suggestion that we adopt a means-tested approach to
funding line extensions and, before adopting such an approach, resolve whether it should be applied to
other unserved areas.  With respect to Bell Atlantic's further suggestion that we resolve, prior to taking
action, how much of an increase in expanded Link Up support is needed to have a significant impact on
penetration, we note that the actions we take are necessarily based on our best estimates of how much
support is needed to impact subscribership levels.  We intend that the measures we adopt in this Order
and their impact on subscribership levels will be subject to ongoing examination and possible refinement
as may be appropriate.
                    a.   Implementation Issues Associated with Rule Changes to Provide
                    Enhanced Lifeline Support and Expanded Link Up Support to Low-
                    Income Consumers on Tribal Lands
23.    We anticipate that carriers may require additional time, beyond the effective date of this
Order, to implement the tariff and billing system changes that may be necessary for eligible
telecommunications carriers to offer the enhanced Lifeline and expanded Link Up services we adopt in
this Order.  Accordingly, we have determined to extend until October 1, 2000 the date by which


eligible telecommunications carriers must comply with the new rule sections 54.403(a)(4) and
54.411(a)(3) adopted in this Order.  An eligible telecommunications carrier serving tribal lands must
make available, upon request by a qualifying low-income individual living on tribal lands, the enhanced
Lifeline and Link Up services adopted in this Order by no later than October 1, 2000.  Although we
encourage eligible telecommunications carriers to implement the necessary changes and offer the
expanded Lifeline and Link Up services prior to this date where possible, we believe that this date gives
carriers sufficient time to comply with these rule amendments. Because we find significant public


interest in not delaying the benefits of these rules beyond that required to enable carriers to comply with
them without undue burden, we decline to extend the deadline for their implementation beyond October
1, 2000.

24.    In order to receive reimbursement during the calendar year 2000 for enhanced Lifeline and
expanded Link Up services provided during the fourth quarter 2000, an eligible telecommunications
carrier must submit to USAC by no later than September 1, 2000, a letter from a corporate officer of the
carrier containing the following information and certifications:  (1) an estimate of (a) the number of
eligible low-income subscribers in each of the carrier's study areas that the carrier projects will receive
non-enhanced federal Lifeline or Link Up discounts in the fourth quarter of 2000 (i.e., number of eligible
subscribers on non-tribal lands), and (b) the number of eligible low-income subscribers in each of the
carrier's study areas that the carrier projects will receive enhanced Lifeline or expanded Link Up
discounts in the fourth quarter of 2000 as a result of actions taken in this Order (i.e., number of eligible
subscribers on tribal lands); (2) a statement of the corporate officer that the estimates provided are based
on the good-faith estimate of the corporate officer; (3) the carrier's monthly undiscounted service rates
for subscribers eligible to receive enhanced Lifeline support; (4) the monthly amount of additional
support for each low-income subscriber who the carrier projects will be eligible for enhanced Lifeline
support; (5) the number of low-income individuals on tribal lands for whom the carrier expects to initiate
service in the fourth quarter of 2000 and the number of other low-income individuals for whom the
carrier expects to initiate service in the fourth quarter of 2000; (6) the amount charged to initiate service
for low-income subscribers on tribal lands and the amount charged to initiate service for other low-
income subscribers; (7) an estimate of total federal Lifeline and Link Up support that the carrier
anticipates it will require in the fourth quarter of 2000; (8) a certification that the carrier will pass
through all federal Lifeline support amounts to its qualifying low-income subscribers; (9) a certification
that the carrier has received the necessary approval of any non-federal regulatory authority (e.g., a state
commission or tribal regulatory authority) that is authorized to regulate such carrier's rates that may be
necessary to implement the required rate reduction; and (10) a certification that the carrier is publicizing
the availability of Lifeline and Link Up services in a manner reasonably designed to reach those likely to
qualify for these services.  
25.    We emphasize that all eligible telecommunications carriers, including those that do not
submit to USAC by September 1, 2000 the letter described above, are required to make available the
Lifeline and Link Up discounts adopted in this Order to all qualifying low-income consumers not later
than October 1, 2000.  We also remind all eligible telecommunications carriers that, as a condition for
receiving federal Lifeline or Link Up support payments from USAC, they must submit to USAC at
regular intervals an FCC Form 497.  We direct the Common Carrier Bureau and USAC to revise the
FCC Form 497 Lifeline Worksheet as necessary to implement the decisions and rule changes adopted in
this Order.  We delegate to the Common Carrier Bureau the authority to modify the FCC Form 497,
along with any other forms that may be required to implement the decisions in this Order.
                    a.   Expanded Lifeline and Link Up Qualification Criteria for Low-
                    Income Consumers on Tribal Lands
                         (i)  Background
26.    In the Further Notice, we expressed concern that some state regulatory commissions and this
Commission have adopted Lifeline and Link Up qualification criteria that may inadvertently exclude
low-income consumers on tribal lands because the criteria do not include low-income assistance
programs that are specifically targeted to Indians living on tribal lands.  We asked whether we should
amend our rules to allow low-income individuals on tribal lands to qualify for Lifeline and Link Up
support by certifying their participation in alternative means tested assistance programs, such as
programs administered by BIA or Indian Health Services.  Finally, we sought comment on whether the
Commission could apply any new qualification criteria specifically targeted to low-income Indians living
on tribal lands both to states that do not provide matching funds and in states that do provide such
funds.
                         (i)  Discussion
27.    We amend section 54.409(b) of our rules to enable qualifying low-income individuals living
on tribal lands within a state that does not provide intrastate matching funds under the Lifeline program
(either for the benefit of the state's population generally or tribal members specifically), to qualify for
Lifeline and Linkup support by certifying their participation in certain alternative means-tested
assistance programs. Specifically, we expand the federal default qualification criteria for eligibility for


Lifeline and Link Up assistance, as set forth in section 54.409(b), to permit low-income individuals
living on tribal lands to establish their income eligibility by certifying their participation in one of the
following federal assistance programs:  (1) BIA general assistance; (2) Temporary Assistance for

Needy Families (TANF) tribally-administered block grant program; (3) Head Start Programs (under
income qualifying eligibility provision only); or (4) National School Lunch Program (free meals






program only).  Given that the household income thresholds for these newly added programs range


from 100-130 percent of the federal poverty level or incorporate state-determined poverty thresholds,
we conclude these income thresholds are consistent with those associated with the programs included in
our current federal default list.    




28.    We take this action based on evidence on the record before us that the existing federal
qualification criteria governing eligibility under the Commission's Lifeline and Link Up programs, to the
extent that these criteria do not include low-income programs specifically targeted to Indians, serve as a
barrier to participation in the Lifeline and Link Up programs by low-income members of Indian tribes.








A low-income tribal member effectively may be excluded from participation in Lifeline and Link Up in
instances where that individual receives assistance or benefits under a program other than one of the
programs listed in section 54.409(b) of our rules.  For example, a low-income tribal member who
receives cash assistance benefits under the BIA general assistance program, but receives no assistance or
benefits under any of the means-tested programs listed in section 54.409(b) of the Commission's rules,
would not be eligible today to receive Lifeline and Link Up support by virtue of the individual's non-
participation in any of the low-income programs listed under section 54.409(b).  Accordingly, we have
expanded the list of programs contained in section 54.409 to include means-tested programs in which,
according to commenters, low-income tribal members are more likely to participate and, therefore,
represent more suitable income proxies for low-income tribal members.  


29.    We also make available the expanded eligibility criteria enumerated above to all low-income
individuals living on tribal lands.  This action is consistent with our rationale discussed in Section III.C.
above for extending the benefits of the enhanced Lifeline and expanded Link Up support to all qualifying
low-income individuals on tribal lands, as opposed to limiting these benefits solely to qualifying low-
income tribal members on tribal lands.  We believe that, by increasing the total number of individuals,
both Indian and non-Indian, who are connected to the network within a tribal community the value of the
network for tribal members in that community is greatly enhanced.  We also anticipate that reducing
barriers to participation in the Commission's Lifeline and Link Up programs for all low-income
individuals residing on tribal lands will help to increase the number of subscribers in a tribal community
who can afford service and, thereby, provide greater incentive for carriers to invest and deploy
telecommunications infrastructure on tribal lands.  In addition, making the identical set of eligibility
criteria available to all low-income individuals on tribal lands should make it administratively less
burdensome for an eligible telecommunications carrier serving tribal lands to provide Lifeline and Link
Up services in those areas.  In particular, we believe that it will be less burdensome for a carrier to verify
the income eligibility of all potential Lifeline and Link Up subscribers in a tribal area using the same set
of eligibility criteria.
30.    We decline to expand our federal default qualification criteria to include participation in
services provided by the Indian Health Service of the U.S. Department of Health and Human Services
given that such services are available to Indian tribal members generally, rather than exclusively to low-
income tribal members, and therefore are inappropriate qualification criteria for our purposes.  In
addition to proposing the addition of certain of the means-tested programs that we adopt here, one
commenter suggests that we include the Low Income Home Energy Assistance Program (LIHEAP), Aid
to Families with Dependent Children (AFDC), and Tribal Work Experience Program (TWEP).  We
note that LIHEAP is included currently in the federal default qualification criteria listed in section
54.409(b) of our rules.  In light of our understanding that TANF has superseded the AFDC program, we
do not include the AFDC program, but we do include the tribally-administered TANF block grant
program.  In addition, we do not include TWEP insofar as it appears that participation in BIA general
assistance is a prerequisite to participation in TWEP and, given that our expanded default qualification
criteria now include participation in the BIA general assistance program, TWEP participants need only
certify their participation in the BIA general assistance program.
31.    At this time, we also do not adopt a qualification procedure by which low-income
individuals on tribal lands could establish their income eligibility by self-certifying that their income is
below a particular level, such as that set by the Federal Poverty Guidelines, as one commenter has
suggested.  Because we believe, however, that this approach may reach more low-income consumers,
including low-income tribal members, than the current method of conditioning eligibility on participation
in particular low-income assistance programs, we will further examine, in consultation with the Joint
Board, possible revisions to section 54.409 of the Commission's rules to provide for self-certification
based solely on income level.     
32.    For qualifying low-income individuals who live on tribal lands in states that do provide
intrastate matching funds under the Lifeline program and therefore are subject to state-created eligibility
criteria, we adopt the suggestion of the Wisconsin Public Service Commission and revise our eligibility
guidelines under section 54.409(a).  Specifically, in addition to establishing qualification criteria under
section 54.409(a) that are based "solely on income or factors directly related to income," we conclude
that a state containing any tribal lands, as defined in Section III.B. above, also must ensure that its
qualification criteria are reasonably designed to apply to low-income tribal populations within that state.
We conclude that this modification to section 54.409(a), as reflected in Appendix A of this Order, is
preferable to an alternative approach under which we would require states to adopt the identical
expanded qualification criteria as those adopted above for purposes of the federal default qualification
criteria.  Our decision today will give a state whose eligibility criteria inadvertently exclude low-income
tribal populations impetus to take corrective action, while giving the state flexibility to adopt eligibility
criteria best-suited to the tribal populations within that state. Consistent with the Joint Board's goal of
increasing low-income subscribership and ensuring that the availability of Lifeline and Link Up is not
limited to particular populations, we conclude that this approach will help to ensure that all qualifying
residents on tribal lands will receive the intended benefits of the federal Lifeline and Link Up programs. 
33.    We will permit, however, a low-income individual who lives on tribal lands and who is
excluded from participation in the Lifeline and Link Up programs because the individual is not enrolled
in any of the programs listed in a state's qualification criteria to qualify for federal Lifeline and Link Up
support by certifying his or her eligibility under one of the means-tested programs listed in section
54.409, as revised herein.  We conclude that this action is necessary to hasten the process of bringing
telecommunications services to unserved and underserved tribal lands and in recognition of the time
needed for states to revise their qualification criteria where those criteria limit participation in Lifeline
and Link Up to individuals who receive benefits under one or more low-income assistance programs in
which low-income tribal members typically do not participate.  For example, in a state where Lifeline
and Link Up eligibility hinges on enrollment in the Medicaid program, a low-income tribal member who
receives health services through the Indian Health Services and does not participate in Medicaid would
not be eligible for Lifeline and Link Up support (state or federal) in that state by virtue of that state's
qualification criteria.  This measure recognizes the unique barriers facing low-income tribal members


living on tribal lands who may have been excluded inadvertently from participation in Lifeline and Link
Up as a result of a state's qualification criteria.  This action is consistent with the Commission's
statement in the Universal Service Order that, where a state provides matching funds under the Lifeline
program, the state's qualification criteria should apply.  Conversely, if a low-income individual living
on tribal lands is excluded from participation in the Lifeline and Link Up programs because that
individual participates in none of the programs used as income proxies in a state's qualification criteria
and such individual agrees to forgo state matching funds, then we find that the justification for applying
state qualification criteria in that circumstance no longer applies.
          A.   Requiring Eligible Telecommunications Carriers to Publicize the Availability of
          Lifeline and Link Up Support
1    Background
1.     Section 214(e)(1)(B) of the Act requires an eligible telecommunications carrier to "advertise
the availability of" the services supported by federal universal service support mechanisms "and the
charges therefor using media of general distribution."  In the Universal Service Order, the Commission
noted that "eligible telecommunications carriers will be required to advertise the availability of, and
charges for, Lifeline pursuant to their obligations under section 214(e)(1)."  In the Further Notice, we
expressed the concern that, although the Commission's Lifeline and Link Up programs have been
providing universal service support to qualifying low-income customers for more than a decade, carriers
may have failed to publicize the programs in some areas, particularly on Indian reservations.  We
noted that, in markets where carriers find it unprofitable to provide service, carriers lack incentive to
publicize the availability of Lifeline and Link Up services.  Accordingly, we sought comment on whether
the Commission should play a role in ensuring the wide dissemination of information on tribal lands, or
in other low-income, underserved areas, about the availability of low-income support.  We tentatively
concluded that a lack of such information may contribute to the significantly low penetration levels on
tribal lands.  We sought comment on options to promote awareness of low-income support
mechanisms on tribal lands and, in particular, on whether we should amend our rules to require all
eligible telecommunications carriers to publicize the availability of the Lifeline and Link Up programs in
a manner reasonably designed to reach those likely to qualify for these services.
               1.   Discussion
2.     In codifying section 214(e)(1)(B), Congress recognized that merely providing a service is not
enough to ensure that the needed support is received.  Rather, it imposed an obligation to advertise the
availability of the supported services and the charges for those services. There is evidence in the record
that the lack of information concerning the availability of Lifeline and Link Up services contributes to
low penetration rates.  We are concerned that eligible telecommunications carriers are not advertising


the availability of Lifeline and Link Up services or, if they are, that such efforts are not reasonably
designed to reach those likely to qualify for the service.  Based on the apparent lack of awareness of the
availability of Lifeline and Link Up services in many rural, low-income communities and to remove


any confusion concerning eligible telecommunications carriers' obligation to publicize the availability of
these services, we conclude that this obligation should be codified in our rules. 
3.     We recognize, as pointed out by United Utilities, Inc. (UUI), the limitations of traditional
advertising media in promoting awareness of low-income support mechanisms within particular low-
income populations.  Specifically, UUI, a Native-owned eligible telecommunications carrier serving
"predominantly Alaskan native villages," describes how it achieved significant increases in both
penetration rates and Lifeline subscribership through an intensive outreach effort in 26 native villages.
As part of its outreach effort, UUI waived "service order and hook-up fees," identified and contacted
each household that did not have service, and often spoke in its customers' Native language to inform
them of the Lifeline program and toll blocking.  According to UUI, as a result of this effort, the
household penetration level in these 26 villages increased by 4.9 percent, and Lifeline subscribership
increased from 395 to 1,263 subscribers.  In its comments, UUI states that: 
          [R]egional advertising media generate very limited results, as does the
          placing locally of posters. Placing ads in regional publications and
          placing posters can be ineffective when carriers do not make special
          efforts, as did UUI, to contact low income households in person, to
          speak to them in their own language, and to adequately explain the
          Lifeline program and toll blocking options.  UUI would take the position
          that a lack of information does   contribute to the significantly low
          penetration rates on tribal lands.      
We commend these efforts and encourage other carriers to undertake similar efforts to comply with the
rule amendments that we adopt in this Order.
4.     We amend sections 54.405 and 54.411 of our rules, as reflected in Appendix A of this Order,
to require eligible telecommunications carriers to publicize the availability of Lifeline and Link Up
services in a manner reasonably designed to reach those likely to qualify for those services.  We
emphasize that these rule amendments shall apply to all eligible telecommunications carriers and not
merely to those serving tribal lands.  We take this action based on evidence in the record that the lack of
awareness of the Lifeline and Link Up programs contributes to low penetration rates and to eliminate any
confusion concerning eligible telecommunications carriers' obligation to publicize the availability of
these services.
5.     We recognize that a method that is reasonably designed to reach qualifying low-income
subscribers in one location may not be effective in reaching qualifying low-income subscribers in
another location.  For that reason, we do not prescribe in this Order specific, uniform methods by which
eligible telecommunications carriers must publicize the availability of Lifeline and Link Up support.  We
do, however, require an eligible telecommunications carrier to identify communities with the lowest
subscribership levels within its service territory and make appropriate efforts to reach qualifying
individuals within those communities.  For example, we would expect a carrier to take into consideration
the cultural and linguistic characteristics of low-income communities within its service territory as well
as the efficacy of particular methods in reaching the greatest number of qualifying low-income
individuals within those communities.  In addition, we require an eligible telecommunications carrier to
provide to qualifying low-income individuals, through whatever public awareness method it selects,
consumer information on the availability of toll blocking and toll limitation services for the purpose of
enabling the subscriber to control the amount of toll charges that he or she may incur. 
6.     If we determine that eligible telecommunications carriers are not adopting methods
reasonably designed to reach qualifying low-income individuals, additional action may be needed to
increase public awareness among such individuals.  To that end, we may address in a Further Notice of
Proposed Rulemaking more specific methods by which eligible telecommunications carriers must
publicize the availability of Lifeline and Link Up services.  Finally, we note that the Commission's
upcoming Indian telecommunications training initiative will be devoted, in part, to familiarizing carriers
and tribal representatives with the Lifeline and Link Up programs generally, and the changes made to
those programs by this Order, in particular.

          A.   Lifeline Jurisdictional Issues
1    Background
1.     State Approval Requirement for Second-Tier Support.  In the Further Notice, we noted that
certain eligible telecommunications carriers not subject to the jurisdiction of a state commission had
sought a waiver of the requirement of state commission consent prior to our making available the $1.75
second tier of federal Lifeline support.  We stated that, in adopting section 54.403(a), we did not intend



to require carriers not subject to state commission jurisdiction to seek either state commission action or a
Commission waiver in order to receive the additional $1.75 of second-tier federal Lifeline support. 
Rather, the requirement of state consent prior to making available the second tier of federal Lifeline
support was "intended to reflect deference to the states in such areas of traditional state expertise and
authority."  Accordingly, the Further Notice proposed to modify our rules to provide that an additional
$1.75 per qualifying low-income consumer will be available to an eligible telecommunications carrier
where the additional support will result in an equivalent reduction in the monthly bill of each qualifying
low-income consumer.
2.     Following release of the Further Notice, the Commission's Common Carrier Bureau
(Bureau) released the Gila River Order granting a temporary waiver of section 54.403(a) of our rules in
response to the petition for waiver filed by several tribally-owned carriers.  In that order, the Bureau

found the petitioners eligible for second-tier federal Lifeline support on the condition that the carriers in
question were not subject to the jurisdiction of a state commission "subject to future Commission action
in the pending Unserved Areas proceeding."  The Bureau noted that the tribal authorities in each case
had approved, or were in the process of approving, the carriers' plans to pass on the $1.75 per month in
lower Lifeline rates.  Because these tribal authorities represent the non-federal entities that could prevent
petitioners from providing the additional $1.75 per month discounts, their approval and the lack of any
opposition to the petition convinced the Bureau that granting this waiver was in the public interest. 
3.     State Matching for Third-Tier Lifeline Support.  In the Further Notice, we sought comment
on whether to modify section 54.403(a) of our rules to provide that carriers serving tribal lands may
receive the third tier of federal Lifeline support, a maximum of $1.75 per month per qualifying low-
income consumer, without any requirement that the state provide matching funds.   We explained that,
unlike in other areas, this federal support amount would not be contingent upon the state in which the
tribal lands are located providing support.  The Further Notice suggested that we would take this action
"in light of [the federal government's] trust relationship with Indian tribes."
4.     As noted previously, in the Gila River Order, the Bureau granted temporary waivers of
section 54.403(a) of our rules in response to a petition for waiver filed by several tribally-owned
carriers.  In that order, the Bureau concluded, inter alia, that it would serve the public interest to grant,

on a temporary basis, the petitioners' requests for waiver of the third-tier support matching requirement
in section 54.403(a) of our rules.  The Bureau found that a temporary waiver of the rule was further
justified by the low penetration and income levels on reservations, the lack of any opposition to the
petition, and the Commission's policy of fostering access to the public telephone network for those most
in need.
               1.   Discussion
5.     State Approval Requirement for Second-Tier Support.  We modify section 54.403(a) of our
rules to make second-tier federal Lifeline support available to an eligible telecommunications carrier that
is not subject to state rate regulation on the condition that the carrier certifies that it: (1) will pass through
the second-tier $1.75 federal support amount to its qualifying low-income subscribers, and (2) has
received the necessary approval of any non-federal regulatory authority that is authorized to regulate
such carrier's rates that may be required to implement the required rate reduction (e.g., a tribal regulatory
authority).  To the extent that an eligible telecommunications carrier is not subject to rate regulation by



any non-federal regulatory authority, then the carrier need only certify for this purpose that it: (1) will
pass through the second-tier $1.75 federal support amount to its qualifying low-income subscribers, and
(2) is not subject to rate regulation by any non-federal regulatory authority.  As discussed in greater
detail above in Section III.D.2.c., an eligible telecommunications carrier seeking to receive
reimbursement during the calendar year 2000 for enhanced Lifeline and Link Up services provided
during the fourth quarter 2000 must make these certifications in a letter filed with USAC by September
1, 2000.  All carriers seeking reimbursement for enhanced Lifeline or Link Up services must make these
certifications in the FCC Form 497 (as revised).

6.     By eliminating the need for eligible telecommunications carriers not subject to state rate
regulation to obtain state action or seek a Commission waiver in order to receive second-tier federal
Lifeline support, this revision to section 54.403(a) of our rules ensures that no category of carriers is
subjected to more burdensome administrative requirements than are imposed on all other eligible
telecommunications carriers seeking second-tier federal Lifeline support.  We conclude that this



amendment maintains appropriate deference to tribal regulatory authorities because second-tier support
will not be disbursed where a tribal regulatory authority that regulates the rates of an eligible
telecommunications carrier does not permit an equivalent reduction in consumers' bills.  In addition, by
requiring eligible telecommunications carriers to certify that they are not subject to state rate regulation
before we make available second-tier federal Lifeline support, this result is consistent with our overall
deference to the states in areas of traditional state ratemaking.
7.     Third-Tier Lifeline Support.  In light of our determination, as discussed in Section III.D.2.
above, to provide enhanced federal Lifeline support of up to $25 for low-income individuals living on
tribal lands through the creation of a fourth tier of the Lifeline program, we do not adopt our proposal in
the Further Notice to provide the third tier of federal Lifeline support to carriers serving tribal lands
where no intrastate matching funds are provided.  In granting a temporary waiver of the matching
requirement for third-tier federal Lifeline support in the Gila River Order, the Bureau was aware that,
absent a waiver, a tribal carrier not subject to the jurisdiction of a state commission, such as Gila River
Telecommunications, Inc., could receive only first-tier Lifeline support in the amount of $3.50 per
qualifying low-income subscriber.  Central to the Bureau's determination to grant a temporary waiver of
the second-tier state approval requirement and the third-tier state matching requirement, was the
recognition that, in light of the "low penetration and income levels on reservations," providing tribal
carriers with only $3.50 per qualifying low-income subscriber was inconsistent with the "Commission's
policy of fostering access to the public telephone network for those most in need."
8.     We note that, because we modify the state approval requirement of section 54.403(a) for the
provision of second-tier Lifeline support and adopt enhanced Lifeline support for qualifying low-income
individuals, eligible telecommunications carriers will be entitled to receive nonmatching federal support
of up to $31.10 per month, per qualifying low-income subscriber.  We conclude that it is not necessary to
waive the third-tier state matching requirement because we anticipate the enhanced Lifeline amount of
$31.10 per month per qualifying low income subscriber will constitute a sufficient level of support, even
on tribal lands where no intrastate support is generated.  We further believe that the enhanced Lifeline
will increase qualifying low-income individuals' access to the public telephone network more effectively
than would our proposal in the Further Notice to waive the third-tier matching requirement, which would
yield a maximum additional level of support of only $1.75 per qualifying subscriber.  Given that all
parties who commented on this issue supported our proposal to waive the third-tier state matching
requirement in section 54.403(a) as a means to direct additional federal Lifeline support to low-income
individuals on tribal lands, we conclude that our decision to accomplish this result through the creation
of a fourth tier of the Lifeline program, in lieu of waiving the third-tier state matching requirement, is not
inconsistent with the comments addressing this issue.
9.     We revise section 54.403(a), however, to permit a carrier that is not subject to state rate
regulation to satisfy the third-tier intrastate matching requirement of section 54.403(a) by generating its
own matching funds, independently of the actions of the state in which it operates.  Although we
recognize that many tribes and tribal carriers may not have adequate resources to generate the matching
funds necessary to receive third-tier federal support, we find that the level of nonmatching federal
Lifeline support that will be available for qualifying low-income individuals on tribal lands provides an
adequate level of support.  If a tribe or a carrier, including a wireless carrier, that is not subject to state
rate regulation nevertheless wishes to provide matching funds in order to receive third-tier federal
Lifeline support and reduce local rates further, we do not want to preclude such a result.  Accordingly,
we modify section 54.403(a) of our rules to provide third-tier federal Lifeline support, up to a maximum
of $1.75 per qualifying low-income customer as calculated in section 54.403(a), to an eligible
telecommunications carrier that certifies that it: (1) is not subject to state rate regulation, and (2) will
pass through the total amount of third-tier support (intrastate and federal) to its qualifying low-income
subscribers by an equivalent reduction in those subscribers' monthly bill for local telephone service. As
discussed in greater detail above in Section III.D.2.c., an eligible telecommunications carrier seeking to
receive reimbursement during the calendar year 2000 for enhanced Lifeline and Link Up services
provided during the fourth quarter 2000 must make these certifications in a letter filed with USAC by
September 1, 2000.  All carriers seeking reimbursement for enhanced Lifeline or Link Up services must
make these certifications in the FCC Form 497 (as revised).

10.    By maintaining the matching requirement of section 54.403(a) as a condition for receiving
third-tier federal Lifeline support, we leave undisturbed a primary goal underlying the Commission's
adoption of third-tier support, namely, the creation of an incentive for states (or tribal authorities, tribal
carriers, or wireless carriers, as the case may be) to reduce local rates even further.  In the Universal
Service Order, the Commission determined that $5.25 represented a sufficient level of baseline federal
Lifeline support.  The Commission established the additional third tier of federal Lifeline support,
which entitles an eligible telecommunications carrier to receive up to $1.75 of federal Lifeline support
per qualifying low-income consumer in a state that generates support from the intrastate jurisdiction, in
order to preserve states' incentive to reduce local rates beyond that achieved under the first and second
tiers of Lifeline support, as deemed appropriate by the state.  Accordingly, a carrier that is not subject to
state rate regulation, but that certifies that it will pass through to its qualifying low-income subscribers a
rate reduction equivalent to both the intrastate and federal third-tier support amounts, will be entitled to
receive third-tier federal Lifeline support.  For the foregoing reasons, however, we maintain the matching
requirement of section 54.403(a) as a condition for receiving third-tier federal Lifeline support.  
11.    Filing of Federal Lifeline Plan.  Finally, we observe that section 54.401(d) of the
Commission's rules currently does not apply to an eligible telecommunications carrier that is not subject
to the rate regulatory authority of a state commission.  That section directs a state commission to file, or
requires a state commission to direct an eligible telecommunications carrier to file, with USAC
information demonstrating that the carrier's Lifeline plan meets the requirements of Subpart E of the
Commission's rules.  We amend section 54.401(d) to require eligible telecommunications carriers not
subject to the rate regulatory authority of a state commission to file with USAC information
demonstrating that the carrier's Lifeline plan meets the requirements of Subpart E of the Commission's
rules.






     XII. designating eligible telecommunications carriers pursuant to section 214(e)(6)
1              Overview 
1.     Section 254(e) of the Act provides that only an "eligible telecommunications carrier" as
designated under section 214(e) shall be eligible to receive federal universal service support.  Section
214(e)(2) directs the state commissions to perform the designation, and section 214(e)(6) directs the
Commission to perform the designation in those instances where the state commission lacks jurisdiction
to perform the designation.  The statute does not address the issue of whether the state or the
Commission makes the threshold determination of which governmental entity has jurisdiction to make
the designation.  In the sections that follow, we provide a roadmap detailing the procedures that carriers
seeking eligible telecommunications carrier status should follow, and describe the circumstances in
which the Commission will exercise its authority to designate eligible telecommunications carriers under
section 214(e)(6).
2.     We conclude that, consistent with the Act and the legislative history of section 214(e), state
commissions have the primary responsibility for the designation of eligible telecommunications carriers
under section 214(e)(2).  Accordingly, we direct carriers seeking designation as eligible
telecommunications carriers for service provided on non-tribal lands to consult with the state
commission, even if the carrier asserts that the state commission lacks jurisdiction over the carrier.  We
will act on a section 214(e)(6) designation request from a carrier providing service on non-tribal lands
only in those situations where the carrier can provide the Commission with an affirmative statement from
the state commission or a court of competent jurisdiction that the carrier is not subject to the state
commission's jurisdiction.  
3.     We are concerned, however, that excessive delay in the designation of competing providers
may hinder the development of competition and the availability of service in many high-cost areas.  We
therefore commit to resolve within six months of their filing at this Commission designation requests for
services provided on non-tribal lands that are properly before us pursuant to section 214(e)(6).  We also
strongly encourage state commissions to resolve requests under section 214(e)(2) within the same time
frame.  In the attached Further Notice of Proposed Rulemaking, we seek comment on whether we should
adopt a rule that would require all petitions for designation under section 214(e), whether filed with the
state or this Commission, to be resolved within six months, or some shorter period.
4.     With regard to tribal lands, however, we recognize that a determination as to whether a state
commission lacks jurisdiction over carriers serving tribal lands involves a legally complex and fact-
specific inquiry, informed by principles of tribal sovereignty, federal Indian law, treaties, as well as state
law.  Such jurisdictional ambiguities may unnecessarily delay the designation of carriers on tribal lands. 
In light of the unique federal trust relationship between the federal government and members of
federally-recognized Indian tribes and the low penetration rates on tribal lands, we conclude that this
Commission may make the threshold determination of which entity   the state or this Commission   has
jurisdiction to make the eligibility designation of carriers providing service on tribal lands.  Under this
framework, carriers seeking a designation of eligibility for service provided on tribal lands may petition
the Commission directly for designation under section 214(e)(6).  A carrier seeking designation from this
Commission for the provision of service on tribal lands must demonstrate, based upon a fact-specific
showing, that the state commission does not have jurisdiction over the carrier seeking designation.  The
state commission will have an opportunity, during the notice and comment period, to respond to the
assertion that it lacks jurisdiction.  In the event the Commission determines that the state commission
lacks jurisdiction to make the designation and the petition is properly before the Commission under
section 214(e)(6), the Commission will decide the merits of the request within six months of release of
an order resolving the jurisdictional issue.
5.     As described more fully below, this streamlined framework respects the sovereignty of the
tribes while providing the state commission the opportunity to establish the basis for its assertion of
juris