IGA State & Local Government Webinar May 2, 2012 Kim Scardino, Deputy Division Chief Telecommunications Access Policy Division Wireline Competition Bureau Federal Communications Commission

2 Lifeline Program The Lifeline Program is part of the Universal Service Fund and provides discounts to eligible qualifying low-income consumers on voice telephony service Monthly discounts: average of $9.25 on non-Tribal lands and up to an additional $25 on Tribal lands Support limited to Eligible Telecommunications Carriers (ETCs), which includes both wireline and wireless providers. The Universal Service Administrative Company (USAC) distributes the funds to ETCs On January 31, 2012, the Commission adopted the Lifeline Reform Order & Further Notice of Proposed Rulemaking (released 2/6/12) which comprehensively reforms and begins to modernize the Lifeline program

3 Highlights of Lifeline Reform Order Uniform Eligibility -135% or below of federal poverty guidelines -Participate in at least one federal assistance program (e.g., Medicaid, Food Stamps, Free School Lunch, etc..) -States are permitted to add additional eligibility criteria based on income One-per-household rule -Household defined as an “economic unit.” -“Economic unit consists of all adult individuals contributing to and sharing in the income and expenses of a household” Initial Enrollment & Annual Certification Procedures Reforms to eliminate waste, fraud and abuse in the program, including eliminating Link Up on non-Tribal lands National Lifeline Accountability Database -Will prevent multiple carriers from receiving support for the same subscriber (duplicates database) 2012 Savings Target of $200 million Broadband: broadband goal, optional application of Lifeline discount to bundling, and Broadband Pilot

4 Broadband Pilot Program This week, the Wireline Competition Bureau issued a Public Notice launching the Broadband Adoption Pilot Program. Applications due July 2, 2012 Overview of Broadband Pilot -Allocates $25 million derived from savings from other reforms -Purpose of Pilot is to test the necessary amount and length of broadband support -18 Month Pilot (3 months to implement back-office functions, a period of 12 months of subsidized broadband service and three months to finalize data collection and analysis) -Support will go to ETCs for either stand alone or bundled broadband service and preference will be given to ETCs who partner with third parties that have existing adoption programs in place (e.g., BTOP/BIP grantees) -Preference will be given to projects that offer at least speeds of 4Mbps/1Mbps -Projects should address other challenges to broadband adoption, including the cost of devices and digital literacy training -ETCs are expected to participate in data collection; Order encourages use of control/treatment groups to enable Commission to gather high-quality diverse data to determine effective approaches to structure future Lifeline program Order directs Bureau to select a small number of projects, and at least one Pilot will be selected on Tribal lands

5 Further Notice of Proposed Rulemaking FNRPM seeks comment on: -Eligibility Database -Using Universal Service Funds to Support Digital Literacy -Limits on Resale of Lifeline Supported Service -Lifeline Support Amount for Voice Service -Tribal Lands Lifeline and Link Up Support -Adding Women, Infants, and Children Program to Eligibility Criteria -Establishing Eligibility for Homeless Veterans -Mandatory Application of Lifeline Discount to Bundled Service Offerings -“Own Facilities” Requirements of Section 214(e)(1)(A) of Act -ETC Requirements Going Forward -Record Retention Requirements

6 Process for Filing Comments on FNPRM All comments should be filed in WC Docket Nos , , and CC Docket No (see March 6, 2012 Public Notice with details) Questions: Contact Kim Scardino at