Skip Navigation

Federal Communications Commission

English Display Options

Commission Document

FCC Forbears from Service Area Redefinition Rules for Lifeline ETCs

Download Options

Released: April 15, 2013

Federal Communications Commission

FCC 13-44

Before the

Federal Communications Commission

Washington, D.C. 20554

In the Matter of
)
)

Telecommunications Carriers Eligible for Support
)
WC Docket No. 09-197
)
Lifeline and Link Up Reform
)
WC Docket No. 11-42
)
Virgin Mobile USA, L.P.
)
Petition for Forbearance
)
)

Cox Communications, Inc.
)
Petition for Forbearance
)
)

Time Warner Cable, Inc.
)
Petition for Forbearance
)
)

i-wireless, LLC
)
Petition for Forbearance
)
)

Q Link Wireless, LLC
)
Petition for Forbearance
)
)

Global Connection Inc. of America
)
Petition for Forbearance
)

MEMORANDUM OPINION AND ORDER

Adopted: April 8, 2013

Released: April 15, 2013

By the Commission: Commissioner McDowell not participating.

I.

INTRODUCTION

1.
In this Order, pursuant to section 10 of the Communications Act of 1934, as amended
(the Act), we grant limited forbearance from the requirement of section 214(e)(5) of the Act and section
54.207(b) of the Commission’s rules that the service area of an eligible telecommunications carrier (ETC)
conform to the service area of any rural telephone company serving the same area.1 In particular, this


1 47 U.S.C. §§ 160, 214(e)(5); 47 C.F.R. § 54.207(b); see Lifeline and Link Up Reform and Modernization et al.,
WC Docket Nos. 11-42 and 03-109, CC Docket No. 96-45, Notice of Proposed Rulemaking, 26 FCC Rcd 2770,
2864, para. 309 (2011) (Lifeline and Link Up NPRM). Upon the effective date of this Order, we grant forbearance
from the service area conformance requirement of section 214(e)(5) of the Act and section 54.207(b) of the
Commission’s rules with respect to all carriers seeking to provide Lifeline-only service, including, but not limited to,
those carriers with petitions for forbearance from the service area conformance requirement of the Act pending with
the Commission: Virgin Mobile USA, L.P. (Virgin Mobile), Cox Communications, Inc. (Cox), Time Warner Cable,
Inc. (TWC), i-wireless, LLC (i-wireless), Q Link Wireless, LLC (Q Link) and Global Connection Inc. of America
(Global Connection). See Petition for Forbearance of Virgin Mobile USA, L.P., WC Docket No. 09-197 (filed Jan.
13, 2012) (Virgin Mobile Petition); Petition for Forbearance of Cox Communications, Inc., WC Docket No. 09-197
(continued...)

Federal Communications Commission

FCC 13-44

grant of forbearance applies to any ETC that has been designated by a state or the Commission, as well as
pending and future requests by telecommunications carriers that seek limited designation, as an ETC to
participate only in the Lifeline program (Lifeline-only ETC).2
2.
We conclude that forbearance furthers the Act’s and Commission’s goals of ensuring the
availability of voice service to low-income consumers.3 Moreover, we find that application of the
conformance requirements set forth in section 214(e)(5) of the Act and section 54.207(b) of the
Commission’s rules is not necessary to ensure that rates remain just and reasonable or to protect
consumers.4 We emphasize that the forbearance granted herein is limited to a carrier’s designation as a
Lifeline-only ETC.5 If any carrier petitions to become an ETC to receive high-cost support, this
forbearance order is inapplicable and such carrier must satisfy all of the statutory requirements applicable
to ETCs under the Act.

II.

BACKGROUND

3.
Congress directed the Commission to establish a universal service fund to help ensure
that “[q]uality services [are] available at just, reasonable, and affordable rates” for consumers throughout
the nation, “including low-income consumers.”6 The Commission’s Lifeline program furthers this goal
by reducing the price of monthly telephone service for low-income consumers.7 Section 254(e) of the Act
provides that only an entity designated as an ETC shall be eligible for universal service high-cost and
(Continued from previous page)


(filed Aug. 14, 2012) (Cox Petition); Time Warner Cable, Inc. Petition for Forbearance, WC Docket No. 09-197
(filed Nov. 13, 2012) (TWC Petition); i-wireless, LLC Petition for Forbearance, WC Docket No. 09-197 (filed Dec.
10, 2012) (i-wireless Petition); Q Link Wireless, LLC Petition for Forbearance, WC Docket No. 09-197 (filed Dec.
21, 2012) (Q Link Petition); Global Connection Inc. of America Petition for Forbearance, WC Docket No. 09-197
(filed Jan. 31, 2013) (Global Connection Petition). Virgin Mobile, i-wireless, Q Link and Global Connection seek
forbearance with respect to those areas previously approved by the Commission, those areas where each carrier has
been previously approved by several states for Lifeline ETC status, those areas where each carrier has a petition for
Lifeline ETC status pending, and any remaining states where each carrier has not yet filed for Lifeline ETC status.
See Virgin Mobile Petition at 1; i-wireless Petition at 1-2; Q Link Petition at 1; Global Connection Petition at 1-2.
Cox and TWC seek forbearance with respect to those areas in which each company has pending ETC petitions or
will seek designation as an ETC from this Commission or the relevant state commission in the future. See Cox
Petition at 1; TWC Petition at 1.
2 We do not disturb the decision of any state commission or prior ETC designation via this grant of forbearance. A
carrier may petition the appropriate designating entity to adjust its service areas in accordance with this grant of
forbearance. If the designating authority defined the carrier’s service area as smaller than the rural telephone
company’s service area in its original ETC designation, then the carrier need not redefine or seek to amend its
service area definition, and the carrier may rely on the instant forbearance.
3 Lifeline and Link Up Reform and Modernization et al., WC Docket No.11-42 et al., Report and Order and Further
Notice of Proposed Rulemaking, 27 FCC Rcd 6656, 6671-72, paras. 27-30 (2012) (Lifeline Reform Order).
4 See 47 U.S.C. § 214(e)(5); 47 C.F.R. § 54.207(b).
5 Petitioners did not seek relief, nor do we grant forbearance, from the service area conformance requirement for
carriers seeking to offer Link Up.
6 47 U.S.C. § 254(b)(3).
7 Through the Lifeline program, low-income consumers may receive discounts off the monthly cost of telephone
service, with the federal program reimbursing the ETC up to $9.25 per subscriber each month. 47 C.F.R.
§ 54.403(a)(1). In Tribal areas, the federal program reimburses ETCs up to $25 per subscriber each month. 47
C.F.R. § 54.403(a)(2).
2

Federal Communications Commission

FCC 13-44

low-income support.8 Once designated as an ETC, a carrier must offer and advertise the services
supported by the federal universal service support mechanisms throughout its designated service area.9
4.
The Act and the Commission’s rules define the term “service area” and how each ETC’s
is established. An ETC’s “service area” is a geographic area within which an ETC has universal service
obligations and may receive universal service support.10 Although a carrier seeking to become an ETC
usually requests designation in a specific service area, it is the state commission (or the FCC in some
instances) designating that carrier—not the ETC itself—that establishes an ETC’s service area.11 When a
competitive ETC seeks to serve an area already served by a rural telephone company,12 section 214(e)(5)
of the Act imposes an additional requirement that the competitive ETC’s service area must conform to the
rural telephone company’s service area.13 Accordingly, if a commission seeks to designate a competitive
ETC for an area that differs from a rural telephone company’s existing service area, that rural carrier’s
service area must first be redefined under the process set forth in section 214 of the Act.14
5.
The Act defines the service area of each rural telephone company to be that “company’s
‘study area’ unless and until the Commission and the States, after taking into account recommendations of
a Federal-State Joint Board . . . establish a different definition of service area for such company.”15 The
Commission has interpreted this language to mean that “neither the Commission nor the states may act
alone to alter the definition of service areas served by rural carriers.”16 In reviewing a potential
redefinition of a rural service area in evaluating a request for ETC designation, the Commission and the
states have traditionally taken into account the three factors recommended by the Federal-State Joint
Board on Universal Service: creamskimming, the Act’s special treatment of rural telephone companies,
and the administrative burdens of redefinition.17 The Joint Board identified these factors in the context of
a carrier seeking ETC designation to receive both low-income and high-cost support, in particular, under
the identical support rule. The Commission’s rules set forth the procedures for considering redefinition


8 47 U.S.C. § 254(e). An entity need not be an ETC to participate in the schools and libraries or rural health care
universal service programs. 47 U.S.C. § 254(h)(1)(A), (B)(ii); see Federal-State Joint Board on Universal Service,
CC Docket No. 96-45, Report and Order, 12 FCC Rcd 8776, 9015, para. 449 (1997) (Universal Service First Report
and Order
) (subsequent history omitted); Federal-State Joint Board on Universal Service, CC Docket No. 96-45,
Fourteenth Order on Reconsideration, 14 FCC Rcd 20106, 20114–15, para. 19 (1999).
9 47 U.S.C. § 214(e)(1); 47 C.F.R. § 54.201(d).
10 See 47 U.S.C. § 214(e)(5); 47 C.F.R. § 54.207(a).
11 See id.
12 See 47 U.S.C. § 153(44) (defining “rural telephone company”).
13 See 47 U.S.C. § 214(e)(5); see also 47 C.F.R. § 54.207(b).
14 47 U.S.C. § 214(e)(5); Federal-State Joint Board on Universal Service; Virginia Cellular, LLC Petition for
Designation as an Eligible Telecommunications Carrier in the Commonwealth of Virginia
, CC Docket No. 96-45,
Memorandum Opinion and Order, 19 FCC Rcd 1563, 1582, para. 41 (2004) (“In order to designate [a competitive
carrier] as an ETC in a service area that is smaller than the affected rural telephone company [service] areas, we
must redefine the service areas of the rural telephone companies in accordance with section 214(e)(5) of the Act”).
See also Federal-State Joint Board on Universal Service; Highland Cellular, Inc. Petition for Designation as an
Eligible Telecommunications Carrier in the Commonwealth of Virginia
, CC Docket No. 96-45, Memorandum
Opinion and Order, 19 FCC Rcd 6422, 6439, paras. 37–38 (2004) (Highland Cellular Order) (same).
15 47 U.S.C. § 214(e)(5); see also 47 C.F.R. § 54.207(b).
16 Universal Service First Report and Order, 12 FCC Rcd at 8880, para. 187.
17 Federal-State Joint Board on Universal Service, CC Docket No. 96-45, Recommended Decision, 12 FCC Rcd 87,
179–80, paras. 172–74 (Federal-State Joint Board 1996) (1996 Recommended Decision); see also Highland Cellular
Order
, 19 FCC Rcd at 6426, para. 9. A carrier “cream-skims” when it serves only those consumers that are least
expensive to serve. See Universal Service First Report and Order, 12 FCC Rcd at 8881–82, para. 189.
3

Federal Communications Commission

FCC 13-44

petitions and allow either the state commission or this Commission to propose to redefine a rural
telephone company’s service area.18 A proposed redefinition, however, does not take effect until this
Commission and the appropriate state commission agree upon a new definition.19
6.
In the Lifeline and Link Up NPRM, the Commission sought comment on whether it
should forbear from the Act’s redefinition process for low-income ETCs.20 The Commission has issued
two rulemaking orders in response to that NPRM but has not reached that issue. In determining whether
to grant blanket forbearance (i.e., forbearance for a class of carriers), the Commission also asked whether
it should adopt rules codifying any conditions it would impose on a grant of forbearance in order to
protect the public interest.21 Section 10 of the Act requires that the Commission forbear from applying
any regulation of any provision of the Act to telecommunications services or telecommunications carriers,
or classes thereof, in any or some of its or their geographic markets, if the Commission determines that
the three conditions set forth in section 10(a) are satisfied.22
7.
Previously, the Commission granted conditional forbearance from the application of the
definition of “service area” in section 214(e)(5) of the Act and section 54.207 of the Commission’s rules
to Cricket Communications, Inc. (Cricket) and NTCH, Inc. (NTCH), and subsequently designated each as
limited ETCs eligible to receive only Lifeline support.23 In the Cricket and NTCH Forbearance Order,
the Commission conditioned forbearance on carriers meeting several obligations related to preventing
waste, fraud, and abuse of universal service funding, and submitting compliance plans detailing how each
carrier plans to implement such obligations.24


18 See 47 C.F.R. § 54.207(c), (d).
19 See 47 C.F.R. § 54.207(c)(3), (d)(2).
20 Lifeline and Link Up NPRM, 26 FCC Rcd at 2864, para. 309 (“Should the Commission consider forbearing from
this process for a class of carriers, and if so, what rules and conditions would be necessary to protect the public
interest?”). No comments were received on the issue of forbearance from the redefinition requirement in this
proceeding. We note that the Commission has also forborne from applying the service area redefinition process to
conditional ETC designations for the limited purpose of participating in the Mobility Fund Phase I auction. See
Connect America Fund et al.
, WC Docket No. 10-90 et al., Second Report and Order, 27 FCC Rcd 7856 (2012).
21 See Lifeline and Link Up NPRM, 26 FCC Rcd at 2864, para. 309.
22 Specifically, section 10(a) provides that the Commission shall forbear from applying such provision or regulation
if the Commission determines that:
(1) enforcement of such regulation or provision is not necessary to ensure that the charges, practices,
classifications, or regulations by, for, or in connection with that telecommunications carrier or
telecommunications service are just and reasonable and are not unjustly or unreasonably discriminatory;
(2) enforcement of such regulation or provision is not necessary for the protection of consumers; and
(3) forbearance from applying such provision or regulation is consistent with the public interest.
47 U.S.C. § 160(a).
23 Telecommunications Carriers Eligible for Universal Service Support; NTCH, Inc. Petition for Forbearance from
47 U.S.C. § 214(e)(5) and 47 C.F.R. § 54.207(b); Cricket Communications, Inc. Petition for Forbearance
, WC
Docket No. 09-197, Order, 26 FCC Rcd 13723 (2011) (Cricket and NTCH Forbearance Order).
24 See id. at 13730-32, paras. 15-17. Cricket and NTCH are not eligible for either Link Up support or high-cost
support. See Telecommunications Carriers Eligible for Universal Service Support et al., WC Docket No. 09-197,
Order, 27 FCC Rcd 6263, 6272, para. 33 (Wireline Comp. Bur. 2012) (re. Cricket); Telecommunications Carriers
Eligible for Universal Service Support et al.
, WC Docket No. 09-197, Order, 27 FCC Rcd 9495, 9504, para. 32
(Wireline Comp. Bur. 2012) (re. NTCH).
4

Federal Communications Commission

FCC 13-44

III.

DISCUSSION

8.
We conclude that forbearing from the conformance requirement of section 214(e)(5) of
the Act and section 54.207(b) of the Commission’s rules is appropriate and in the public interest for
carriers seeking designation, or already designated, as Lifeline-only ETCs.25 For the reasons explained
below, we find that all three prongs of section 10(a) are satisfied. As a result, if a commission designates
a carrier as a limited, Lifeline-only ETC in part of a rural service area, that designation will not require
redefinition of the rural telephone company’s service area. Because forbearance would apply only to
designations for the purpose of becoming a limited ETC to participate in the Commission’s Lifeline
program, we examine the conformance requirement in light of the statutory goal of providing low-income
consumers with access to telecommunications services as it relates to the Commission’s Lifeline
program.26
9.
Given that designating authorities may have already designated carriers as Lifeline-only
ETCs in partial rural service areas without seeking redefinition, the Commission will not enforce the
conformance requirement for those previously granted ETC designations. Such ETCs need not amend
their service area and may rely on this forbearance to continue serving partial rural service areas. If the
designating authority required Lifeline-only ETCs to follow the conformance requirement in its
designation, the ETCs must abide by its designation order. We emphasize, however, that if any carrier
seeks designation to be an ETC to receive high-cost support in part of a service area served by a rural
telephone company, we do not forbear from the redefinition process that is required by the Act.
10.
Just and Reasonable. Section 10(a)(1) of the Act requires that we consider whether
enforcement of the provisions from which forbearance is sought is necessary to ensure that the charges,
practices, classifications, or regulations by, for, or in connection with the carriers or services at issue are
just and reasonable and not unjustly or unreasonably discriminatory.27 We conclude that compliance with
the conformance requirement of section 214(e)(5) of the Act and section 54.207(b) of the Commission’s
rules is not necessary to ensure that a Lifeline-only carrier’s charges, practices, and classifications are just
and reasonable and not unjustly or unreasonably discriminatory where it is providing Lifeline service
only.28 Lifeline support, designed to reduce the monthly cost of telecommunications services for eligible
consumers, is distributed on a per-subscriber basis and is directly reflected in the price that the eligible
subscriber pays.29 As discussed below, we find that the factors traditionally taken into account by the
Commission and the states when reviewing a potential redefinition of a rural service area pursuant to
section 214(e)(5) of the Act do not apply in the context of conditionally designating ETCs in areas
eligible for Lifeline support.30 Furthermore, forbearance from the service area conformance requirement
would not prevent the Commission from enforcing sections 201 or 202 of the Act, which require all
carriers to charge just, reasonable, and non-discriminatory rates.31 The Lifeline offerings of carriers
subject to this forbearance will compete, at a minimum, with the Lifeline offerings of the incumbent


25 See 47 U.S.C. § 214(e)(5); 47 C.F.R. § 54.207. See also Cricket and NTCH Forbearance Order, 26 FCC Rcd at
13727-30, paras. 10-14.
26 47 U.S.C. § 254(b)(3).
27 47 U.S.C. § 160(a)(1).
28 A provision or regulation is “necessary” if there is a strong connection between the requirement and regulatory
goal. See CTIA v. FCC, 330 F.3d 502, 512 (D.C. Cir. 2003).
29 47 C.F.R. §§ 54.401, 54.403, 54.407.
30 See infra paras. 11-13 (finding that service area conformance in these limited circumstances is not essential to
protect the ability of rural telephone companies to continue to provide service nor will forbearance harm competitive
market conditions).
31 See 47 U.S.C. §§ 201, 202.
5

Federal Communications Commission

FCC 13-44

wireline carrier, as well as other wireline and wireless providers, in any given geographic area.32 We also
expect that this competition will spur innovation among carriers in their Lifeline offerings, expanding the
choice of Lifeline products for eligible consumers.33 The resulting competition is likely to help ensure
just, reasonable, and nondiscriminatory offerings of services. For these reasons, we find that the first
prong of section 10(a) is met.
11.
Consumer Protection. Section 10(a)(2) requires that we consider whether applying the
conformance requirement to a voice service provider that has previously received designation, or will
seek a Lifeline-only ETC designation through a pending designation request or at some time in the future,
is necessary for the protection of consumers. Carriers designated as Lifeline-only ETCs offer Lifeline-
eligible consumers an additional choice of providers for discounted telecommunications services.
Forbearance from the conformance requirement for Lifeline-only support may provide additional
competitive choices to many low-income consumers who cannot afford non-discounted offerings.34
Moreover, there is no evidence that forbearance from the conformance requirement for the limited
purpose of being a Lifeline-only ETC would harm consumers currently served by the rural telephone
companies in the relevant service areas. Finally, every ETC, including any carrier receiving Lifeline-only
support, must certify that it will satisfy applicable consumer protection and service quality standards in its
service area.35 For these reasons, we find that the second prong of section 10(a) is met.
12.
Public Interest. Section 10(a)(3) requires that we consider whether forbearing from the
conformance requirement to carriers that have previously received designation, have pending designation
requests or will seek ETC designation for Lifeline support only in the future is in the public interest. We
find that forbearance from the service area conformance requirement in these limited circumstances will
promote competitive market conditions for the Lifeline program.36 Requiring carriers to conform their
service areas to those of the rural carriers in the states they seek to participate only in the Lifeline program
could result in numerous redefinition proceedings, which could delay their entry into those markets, make
it more difficult to market to potential Lifeline consumers on a statewide basis, and deprive low-income
consumers in areas where the incumbent wireline provider is a rural telephone company of an additional
choice of service provider.37 For example, carriers state that the redefinition process for Lifeline-only
offerings may take years to resolve and, as such, wastes resources of both carriers and regulators.38


32 See 47 C.F.R. § 54.405(a)–(c) (requiring ETCs to offer and publicize the availability of Lifeline services).
33 See, e.g., Federal-State Joint Board on Universal Service; Petition of TracFone Wireless, Inc. for Forbearance
from 47 U.S.C. § 214(e)(1)(A) and 47 C.F.R. § 54.201(i)
, CC Docket No. 96-45, Order, 20 FCC Rcd 15095, 15101,
para. 13 (2005); Virgin Mobile USA, L.P. Petition for Forbearance from 47 U.S.C. § 214(e)(1)(A); Petition for
Designation as an Eligible Telecommunications Carrier in the State of New York; Petition for Designation as an
Eligible Telecommunications Carrier in the Commonwealth of Virginia; Petition for Designation as an Eligible
Telecommunications Carrier in the State of Pennsylvania; Petition for Limited Designation as an Eligible
Telecommunications Carrier in the State of North Carolina; Petition for Limited Designation as an Eligible
Telecommunications Carrier in the State of Tennessee
, CC Docket No. 96-45, Order, 24 FCC Rcd 3381, 3389, para.
19 (2009); Federal-State Joint Board on Universal Service; Telecommunications Carriers Eligible for Universal
Service Support; i-wireless, LLC Petition for Forbearance from 47 U.S.C. § 214(e)(1)(A)
, CC Docket No. 96-45,
WC Docket No. 09-197, Order, 25 FCC Rcd 8784, 8787, para. 9 (2010); Cricket and NTCH Forbearance Order, 26
FCC Rcd at 13728, para. 10.
34 See Cricket and NTCH Forbearance Order, 26 FCC Rcd at 13728, para. 11.
35 47 C.F.R. §§ 54.202(a)(3), 54.422(b)(3) (requiring federally designated Lifeline-only ETCs to certify they comply
with applicable consumer protection rules).
36 See 47 U.S.C. §§ 160(b), 254(b). See also Cricket and NTCH Forbearance Order, 26 FCC Rcd at 13728, para.
11.
37 See Cricket and NTCH Forbearance Order, 26 FCC Rcd at 13729, para. 12.
38 Cox Petition at 4; Cricket and NTCH Forbearance Order, 26 FCC Rcd at 13729, para. 12.
6

Federal Communications Commission

FCC 13-44

Additionally, to avoid disruption of service to low-income consumers served by existing Lifeline-only
ETCs that were previously designated by state designating authorities or the Commission that defined
carriers’ service areas as part of a rural service area in its original ETC designation, those ETCs need not
amend their service areas and may rely on this forbearance to continue serving partial rural service
areas.39 We find that applying the conformance requirement to Lifeline-only ETCs would not be in the
public interest when balanced against the benefits of maintaining or introducing a competitive alternative
Lifeline provider to low-income consumers.40
13.
We disagree with assertions that granting forbearance from the conformance requirement
for Lifeline-only ETC designation will have a detrimental effect on rural telephone companies.41 In
response to the Cox Petition, the Atlas Telephone Company expresses concerns that granting forbearance
from the conformance requirement and redefinition process could cause a rural telephone company to
suffer the same adverse effects from losing customers to other Lifeline providers, as observed under
traditional creamskimming analysis, specifically arguing that as a rural telephone company’s low-income
consumers migrate to other Lifeline providers, the number of lines served by the rural telephone company
declines, causing its cost per line to increase.42 As the Commission previously explained, the amount of
Lifeline support is not tied to the cost of serving an area.43 Rather, Lifeline support is a fixed, per-line
amount nationwide, and ETCs are required to pass through the Lifeline support they receive to the benefit
of their subscribers.44 Any creamskimming concerns in an area of a rural telephone company are not
relevant in considering the designation of a Lifeline-only ETC. Creamskimming is not a public-interest
consideration in the Lifeline context, whether the competing carrier is offering wireline or wireless
service.45 We find that the Act contains safeguards to address any concerns raised by Atlas or any other
rural telephone company that questions whether the designation of a carrier as a Lifeline-only ETC is in
the public interest. The Act already requires designating commissions to affirmatively determine that
designating a carrier as an ETC within a rural service area is in the public interest and that determination
is not affected by this grant of forbearance.46 As a result, any concerns raised by a rural telephone
company will be evaluated by the designating authority when considering designating a limited, Lifeline-
only ETC.
14.
We also disagree with the argument that granting forbearance from the conformance
requirement will eliminate the role of states in ETC designations and redefinition.47 Forbearance in these
limited circumstances merely removes the conformance requirement for previously designated ETCs
receiving Lifeline-only support and carriers with pending or future ETC designation requests for Lifeline-


39 See Virgin Mobile Petition at 6; i-wireless Petition at 7-8; Q Link Petition at 7.
40 See Cricket and NTCH Forbearance Order, 26 FCC Rcd at 13729, para. 12.
41 See generally Comments of Atlas Telephone Company et al., WC Docket 09-197 (filed Sept. 26, 2012) (Atlas
Comments).
42 See id. at 9; see also Reply Comments of the South Carolina Telephone Coalition, WC Docket 09-197 (filed Jan.
14, 2013) (South Carolina Coalition Comments) (claiming that TWC’s Petition will increase the likelihood of
cream-skimming in rural telephone areas).
43 See Cricket and NTCH Forbearance Order, 26 FCC Rcd at 13729, para. 13.
44 See 47 C.F.R. §§ 54.401, 54.407, 54.504; see also supra n.17 (explaining how a carrier “cream skims” when it
serves only those consumers that are least expensive to serve).
45 See Cricket and NTCH Forbearance Order, 26 FCC Rcd at 13729, para. 13; see also TWC Reply Comments, WC
Docket No. 09-197, at 12-13 (filed January 14, 2013) (TWC Reply Comments) (rebutting the Telecommunications
Association of Maine Comments by stating that nothing about the Cricket and NTCH Forbearance Order turned on
whether the Lifeline-only ETC was offering wireline or wireless services).
46 See 47 U.S.C. § 214(e)(2).
47 See Atlas Comments at 1-8.
7

Federal Communications Commission

FCC 13-44

only support, so that states, which have jurisdiction over most ETCs, may now designate Lifeline-only
ETCs in a portion of a rural service area without requiring redefinition of that rural service area. State
commissions are still required to consider the public interest, convenience and necessity of designating
carriers as a competitive ETC in a rural area already served by a rural telephone company.48 Our decision
here to grant forbearance for Lifeline-only designations does not disturb the roles of state commissions
and this Commission in the ETC designation process or in the redefinition process in other circumstances
when redefinition is required.49
15.
For pending and future Lifeline-only designation requests, carriers’ service area will no
longer be required to conform to the service area of the rural telephone companies serving the same area.
The Commission recognizes all of the important issues raised by commenters in determining whether a
particular carrier has met the requirements to become an ETC for the limited purpose of receiving Lifeline
support, all of which will be addressed by the designating authority when a carrier submits an application
requesting designation.50 Designating authorities will continue to make an independent assessment as to
whether designating a carrier as an ETC within a rural service area is in the public interest.51
16.
Our decision here to forbear from the service area conformance requirement does not
affect the findings of any prior ETC designation. Virgin Mobile, i-wireless, Q Link and Global
Connection seek forbearance with respect to those areas previously designated by state designating
agencies and the Commission.52 For previously designated Lifeline-only ETCs serving partial rural areas,
the designating authorities have already determined that designating such carriers as ETCs is in the public
interest. Any carrier that has already been designated as an ETC must comply with the obligations of
their ETC designation orders.
17.
The Commission has made clear its commitment to improve accountability for providers
receiving universal service support in its continued effort to fight waste, fraud, and abuse.53 In the
Commission’s prior grant of forbearance from the service area conformance requirement, it conditioned
forbearance on the carriers submitting, and having the Wireline Competition Bureau approve, a plan to
comply with several obligations imposed in that order before it could begin providing service in
accordance with its grant of forbearance.54 The Commission has since adopted numerous conditions in


48 47 U.S.C. § 214(e)(2); 47 C.F.R. § 54.201(c).
49 The redefinition process is still required for ETCs to receive federal universal service high-cost support and
nothing in this Order alters the redefinition process for ETCs seeking federal universal service high-cost support.
50 See TWC Reply Comments at 4-6 (rebutting New York State Telecommunications Association, Inc. (NYSTA)
Comments regarding the timing of the forbearance request by explaining how grant of this forbearance still
preserves the role of state commissions’ authority in designating ETCs). Some commenters have also raised
concerns with TWC’s forbearance petition for future designation requests because they claim it is unclear whether
TWC’s services will be classified as “telecommunications services,” whether its Lifeline rates are just and
reasonable, and whether TWC is required to hold out all subsidiaries that will become ETCs at some point in the
future, which are issues that will be addressed by the designating authority. See, e.g., National Telecommunications
Cooperative Association Comments, WC Docket No. 09-197, at 2-4 (filed Jan. 14, 2013); South Carolina Coalition
Comments at 2-4; Comments of NYSTA, WC Docket No. 09-197, at 3-8 (filed Dec. 31, 2012). But whether TWC
qualifies as a Lifeline-only ETC will be determined by the designating commission, and need not be decided here.
All that is before us is the question of whether to forbear from applying the conformance requirement to Lifeline-
only ETCs. Because section 10 expressly applies to telecommunications carriers, see 47 U.S.C. § 160(a), and ETCs
are by definition telecommunications carriers, see 47 U.S.C. § 214(e)(1); § 153(51), we may and do conclude that
section 10’s forbearance shall apply to a subset of ETCs, i.e., Lifeline-only ETCs.
51 See 47 U.S.C. § 214(e)(1), (2).
52 See Virgin Mobile Petition at 1; i-wireless Petition at 1-2; Q Link Petition at 1; Global Connection Petition at 1-2.
53 Lifeline Reform Order, 27 FCC Rcd at 6659-60, paras. 2-3.
54 See Cricket and NTCH Forbearance Order, 26 FCC Rcd at 13730-32, paras. 15-17.
8

Federal Communications Commission

FCC 13-44

the Lifeline Reform Order to reduce waste, fraud and abuse in the Lifeline program, and thus, eliminated
the need to impose additional conditions in the context of forbearance from the service area conformance
requirement.55 Although carriers may now be designated a Lifeline-only ETC by either a state
commission or this Commission in partial rural service areas, no carrier seeking to avail itself of this
limited forbearance grant may be designated in a part of a rural service area to receive federal high-cost
support without first seeking redefinition of the underlying rural telephone company’s study area.
18.
For the reasons stated herein, we find that the statutory requirements for forbearance
pursuant to section 10 of the Act are met and that granting blanket forbearance from the conformance
requirement for Lifeline-only ETC designations will further the statutory goals of providing low-income
subscribers access to telecommunications and emergency services and promoting more competitive
options for low-income consumers while protecting the universal service fund against waste, fraud, and
abuse. We also note that state commissions and this Commission are still required to make an
independent assessment as to whether granting a carrier ETC designation is in the public interest before
including any part of a rural service area in such carrier’s service area.56 Furthermore, forbearance from
the conformance requirement stated herein does not apply if any carrier seeks ETC designation to receive
high-cost support; in that instance, such carrier must conform its service area to that of the rural telephone
company or else seek redefinition of the service area pursuant to section 54.207 of the Commission’s
rules.

IV.

PROCEDURAL MATTERS

A.

Paperwork Reduction Act

19.
The Memorandum Opinion and Order does not contain new or modified information
collection(s) subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. In addition,
therefore, it does not contain any new or modified information collection burden for small business
concerns with fewer than 25 employees, pursuant to the Small Business Paperwork Relief Act of 2002.57

B.

Final Regulatory Flexibility Act Certification

20.
The Regulatory Flexibility Act (“RFA”)58 requires that agencies prepare a regulatory
flexibility analysis for notice-and-comment rulemaking proceedings, unless the agency certifies that “the
rule will not have a significant economic impact on a substantial number of small entities.59 The RFA
generally defines “small entity” as having the same meaning as the terms “small business,” “small
organization,” and “small governmental jurisdiction.”60 In addition, the term “small business” has the
same meaning as the term “small business concern” under the Small Business Act.61 A small business


55 We note that carriers seeking to avail themselves of the blanket forbearance from the facilities requirement must
continue to file a compliance plan with, and have it approved by, the Wireline Competition Bureau before a state or
the Commission may act on an ETC designation petition. Lifeline Reform Order, 27 FCC Rcd at 6816-17, paras.
379-80.
56 47 U.S.C. § 214(e)(2), (e)(6).
57 Public Law 107-198, see 44 U.S.C. § 3506(c)(4).
58 See 5 U.S.C. § 601 et seq. The RFA has been amended by the Small Business Regulatory Enforcement Fairness
Act of 1996, Pub. L. No. 104-121, Title II, 110 Stat. 857.
59 5 U.S.C. § 605(b).
60 5 U.S.C. § 601(6).
61 5 U.S.C. § 601(3) (incorporating by reference the definition of “small business concern” in the Small Business
Act, 15 U.S.C. § 632). Pursuant to 5 U.S.C. § 601(3), the statutory definition of a small business applies “unless an
agency, after consultation with the Office of Advocacy of the Small Business Administration and after opportunity
(continued...)
9

Federal Communications Commission

FCC 13-44

concern is one which (1) is independently owned and operated; (2) is not dominant in its field of
operation; and (3) satisfies any additional criteria established by the Small Business Administration
(SBA).62
21.
We hereby certify that the forbearance decision in this Memorandum Opinion and Order
will not have a significant economic impact on a substantial number of small entities. In this
Memorandum Opinion and Order, the Commission eases the regulatory compliance burden on Lifeline-
only ETCs by forbearing from the requirement that the service area of a Lifeline-only ETC conform to the
service area of any rural telephone company serving the same area. This Memorandum Opinion and
Order does not modify any of our reporting requirements. The Commission will send a copy of this
Memorandum Opinion and Order, including this certification, to the Chief Counsel for Advocacy of the
SBA.63 In addition, the Memorandum Opinion and Order (or a summary thereof) and certification will be
published in the Federal Register.64

C.

Congressional Review Act

22.
The Commission will send a copy of this Memorandum Opinion and Order to Congress
and the Government Accountability Office pursuant to the Congressional Review Act.65

V.

ORDERING CLAUSES

23.
IT IS ORDERED that, pursuant to the authority contained in sections 4(i), 4(j), 10, 201,
214, and 254 of the Communications Act of 1934, as amended, 47 U.S.C. §§ 154(i), 154(j), 160, 201,
214, 254, we FORBEAR from applying the conformance requirement of section 214(e)(5) of the
Communications Act of 1934, as amended, 47 U.S.C. § 214(e)(5), and section 54.207(b) of the
Commission’s rules, 47 C.F.R. § 54.207(b), to the extent discussed herein.
24.
IT IS FURTHER ORDERED that, pursuant to the authority contained in sections 4(i),
4(j), 10, 201, 214, and 254 of the Communications Act of 1934, as amended, 47 U.S.C. §§ 154(i), 154(j),
160, 201, 214, 254, the petitions for forbearance filed by VIRGIN MOBILE USA, L.P., COX
COMMUNICATIONS, INC., TIME WARNER CABLE, INC., I-WIRELESS, LLC, Q LINK
WIRELESS, LLC and GLOBAL CONNECTION INC. OF AMERICA ARE GRANTED to the extent
discussed herein, effective upon release.
25. IT IS FURTHER ORDERED that, except as provided in paragraph 24 above, this Order
SHALL BE EFFECTIVE 30 days after publication in the Federal Register.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Secretary
(Continued from previous page)


for public comment, establishes one or more definitions of such term which are appropriate to the activities of the
agency and publishes such definition(s) in the Federal Register.”
62 Small Business Act, 15 U.S.C. § 632.
63 Id.
64 Id.
65 See 5 U.S.C. § 801(a)(1)(A).
10

Federal Communications Commission

FCC 13-44

APPENDIX A

List of Commenters

Comment Sought on Cox Communications, Inc.’s Petition For Forbearance From Eligible
Telecommunications Carrier Service Area Requirement

,

WC Docket No. 09-197, Public Notice, 27
FCC Rcd 10246 (Wireline Comp. Bur. 2012)

Commenter

Abbreviation

Atlas Telephone Company, Et Al.
Atlas Telephone

Reply Commenter

Cox Communications, Inc.
Cox
11

Federal Communications Commission

FCC 13-44

APPENDIX B

List of Commenters

Comment Sought on Time Warner Cable, Inc.’s Petition For Forbearance From Eligible
Telecommunications Carrier Service Area Requirement

,

WC Docket No. 09-197, Public Notice, 27
FCC Rcd 14915 (Wireline Comp. Bur. 2012)

Commenter

Abbreviation

New York State Telecommunications Association, Inc.
NYSTA
Telecommunications Association of Maine
TAM

Reply Commenter

Abbreviation

National Telecommunications Cooperative Association
NTCA
South Carolina Telephone Coalition
South Carolina Coalition
Telecommunications Association of Maine
TAM
Time Warner Cable, Inc.
TWC
12

Note: We are currently transitioning our documents into web compatible formats for easier reading. We have done our best to supply this content to you in a presentable form, but there may be some formatting issues while we improve the technology. The original version of the document is available as a PDF, Word Document, or as plain text.

close
FCC

You are leaving the FCC website

You are about to leave the FCC website and visit a third-party, non-governmental website that the FCC does not maintain or control. The FCC does not endorse any product or service, and is not responsible for, nor can it guarantee the validity or timeliness of the content on the page you are about to visit. Additionally, the privacy policies of this third-party page may differ from those of the FCC.