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and 69 of the Commission's Rules  T$' !Vand Establishment of a Joint Board, Decision and Order, 50 Fed. Reg. 939, para. 6 (1985) (Lifeline  T{%'Order).M Half of the reduction comes from a 50 percent waiver of the  !charge; the other half comes from the participating state, which matches the federal contribution  !by an equal reduction in the local rate. Under this plan, subscribers who satisfy a state"10*r(r(q"ԫ !Mdetermined means test may receive assistance for a single telephone line in their principal  !residence. Of the 38 states and territories participating in Lifeline, only California still offers  Y4a Lifeline program under Plan 1._2 TK' Í Monitoring Report at 49._  Y4 ( "35.` ` Under Plan 2, which expands Plan 1 to provide for waiver of the entire SLC (up  Y4 !to the amount matched by the state), a subscriber's bill may be reduced by twice the SLC (or  Yz4 !more, if the state more than matches the value of the federal waiver).X3zj T ' !Ѝ MTS and WATS Market Structure; Amendment of Part 69 of the Commission's Rules and  Tm ' !Establishment of a Joint Board, Decision and Order, 51 Fed. Reg. 1371, paras. 46 (Dec. 1986) (Second  TG 'Lifeline Decision). X The state contribution  !may come from any intrastate source, including state assistance for basic local telephone service,  !Qconnection charges, or customer deposit requirements. Companies in 37 states or territories  Y54 !reported subscribers receiving Plan 2 Lifeline assistance as of April 1995.W45 T'ԍ Monitoring Report, Table 2.3, at 5960.W In 1994, about 4.4  !xmillion households received $123 million in federal Lifeline assistance through full or partial  Y 4 !owaiver of the SLC.35 ` T'ԍ Id.3 Under both plans, the interstate portion of Lifeline Assistance is billed to  Y 4interexchange carriers by the National Exchange Carrier Association, Inc. (NECA).   Y 4 ( #36.` ` We seek comment on ways we might modify the Lifeline program to bring more  !subscribers to the network. For example, some states use nonmeans tests, covering factors such  !Zas age and disability. We also seek comment on whether the Lifeline program should be extended to certain multiline entities such as schools and libraries.  XO4 B. Services Targeted for LowIncome Populations that are Highly Mobile   Y!4 ( $37.` ` Impermanent living situations, e.g., shortterm renting as opposed to home  !ownership, also correlate with nonsubscribership. A variety of studies confirm the common  Y4 !sense notion that a person in transit is less likely to have a telephone than a longterm resident.6  T'ԍ See, e.g., California Affordability Study, supra; Second Study and Report, supra.  !DOne recent study comparing telephone subscribers with nonsubscribers showed that despite  !similarities in education, income, age and marital status, nonsubscribers are twice as likely to  Y4 !have lived at their current address for less than one year.^7  T$'ԍ California Affordability Study, supra. at S2.^ Thus, these studies suggest that a  !critical characteristic determining whether many persons receive phone service is mobility.  !Highly mobile persons, however, may often have as much, if not greater, need for telephone service to reach emergency services quickly or to pursue employment opportunities. "iF 70*r(r(I"Ԍ Y4 ( Nԙ%38.` ` Lowcost services targeted to meet the needs of those with low incomes or non !permanent living arrangements, such as prepaid longdistance cards (debit cards), voice  Y4 !mailboxes,8b TK' !&Ѝ Voice mailboxes may be an effective tool to enable highly mobile individuals to take advantage  !pof employment opportunities. For example, during a job search a voice mailbox could provide the  T' !subscriber with many of the benefits of telephone service, i.e., a phone number and the ability to receive messages. personal identification numbers (PINs),9 Tu'ԍ PINs allow users to access certain services or private accounts on an individual basis. or highvolume, lowcost central calling  Y4 !facilities,: T ' !gЍ "Haven for Ship Workers Offers Comforts of Home," Miami Herald, Broward Edition, Feb. 20,  T '1995; "Sailors' Support of Call," Sun Sentinel (Fort Lauderdale, Fla.), Feb. 17, 1995. could help keep these populations connected to the public switched telephone network  !xwhen typical basic service connections are impracticable or unaffordable. For those moving  !frequently, current policies discounting installation charges may be inadequate to ensure  !7reconnection to the network. For example, in California, LECs offer installation to eligible  !customers for a reduced charge of $10; but eligible customers may receive this discounted  !7service only once during a year. We seek comment on how the marketplace can operate to  !7make these service available to highlymobile lowincome users. We also seek comment on  !whether Link Up assistance should be extended to some or all of these services to individuals that are not already telephone subscribers.  X 4   Y 4 (  &39.` ` We also invite the commenters to suggest other ways of addressing the telephone  !service needs of lowincome, mobile Americans and of increasing their level of connection to  !|the telephone network. We request that any such proposals identify the populations intended to  !be served, whether and where the service is currently available, its costs, and how we might  !inform potential recipients of its availability. We invite the commenters to address why  !Hsubsidization would facilitate increased linkage to the network. We also request proposals for  !developing new methods to track and measure the success of innovative service offerings. Current methods of measuring subscriber penetration do not take such services into account.  X4 C. Extending Telephone Service to Unserved Areas   Y4 ( '40.` ` We have also monitored the "availability" of telephone service since the early  !1980s. "Availability" measures or determines whether a telephone company can physically  !provide telephone service. Generally, availability is applied to households. An example of lack  !of availability is unserved geographic areas. For example, those living in remote locations,  !geographically rugged terrain or areas of low population density may not receive telephone  !service because of the high cost of constructing wire facilities to customer premises. In some  !cases, populations are so small that it may not be economically feasible to provide switched service to them. "  :0*r(r("Ԍ Y4 ( (41.` ` In one proceeding, we found that approximately 900,000 households do not have  !standard telephone service because the cost of bringing wire or cable to their remote locations  Y4 !is prohibitive.; TK' !"Ѝ See Basic Exchange Telecommunications Radio Service, CC Docket No. 86495, Report and  T%'Order, 3 FCC Rcd 214 (1988). To some extent, wireless technology may offer a less costly means of extending  !dservice to these areas. In this spirit, the Commission created Basic Exchange  !HTelecommunications Radio Service (BETRS) in 1988 so that LECs could offer service by way  Y4 !of wireless technology, thus supplementing the existing rural radio service.3<D T 'ԍ Id.3 Commenters  !should address whether BETRS has provided assistance to companies in extending service areas.  !We ask commenters to describe any newer wireless technologies that may also serve as  !reasonable surrogates for traditional wire loops. In particular, we are interested in the extent to which fixed cellular service is being used for this purpose.  X 4  III. SUBSCRIBERSHIP BARRIERS AND MEASUREMENTS   Y 4 (  c)42.` ` The most widely used measure of telephone subscribership is the percentage of  !^households with telephone service sometimes called a measure of telephone "penetration."  !Prior to the 1980s, precise measurements of telephone subscribership received little attention.  !Traditionally, we measured telephone penetration by dividing the number of residential telephone  !lines by the number of households. With some households adding second telephone lines and  !owith an increasing number of second homes, this approach became subject to a large margin of  !.error. By 1980, the traditional penetration measure (residential lines divided by the number of  !households) reached 96 percent while the number of households reporting that they had  Y4telephones in the 1980 census was 92.9 percent.O= T'ԍ Monitoring Report, at 12.O  Y4 ( *43. ` ` Since 1983, the Commission has analyzed telephone penetration statistics. The  !Commission issues quarterly reports of comprehensive data on telephone penetration statistics  !;collected by the Bureau of the Census under contract with the Commission. These data permit  !us to examine the aggregate effects of Commission actions on households' decisions to maintain,  !Uacquire or drop telephone service. According to penetration measurements since November of  !1983, household telephone subscribership in the United States has increased from approximately 91.4 percent to almost 94 percent.  Y74 ( +44.` ` We begin with the assumption that a 100 percent penetration level is not possible.  !There are individuals who make an informed choice not to be connected to the network, at least  !in a manner detectable by the methods we now use to track subscribership levels. For example,  !xsome may determine that all of their telecommunications needs may be met from their places  !of employment. We seek comment on these perceived "barriers" (or limitations) to increasing"=0*r(r(!"  !csubscribership levels. We also ask commenters to address other barriers to increasing subscribership levels.  Y4 ( ,45.` ` We invite comment on how to better measure subscribership. We seek comment  !bon whether there are other factors we should consider, such as whether individuals use cellular  !or wireless paging services in lieu of basic telephone service. We ask the commenters to specify  !alternative methods for measuring subscribership. While we presently rely on data gathered by  !the Bureau of the Census, we invite commenters to describe any other readily available data we might use to track a broader measure of subscribership.  Y 4  IV. CONSUMER AWARENESS ISSUES ă  Y 4 ( -46.` ` It appears that many nonsubscribers may be unaware of the availability of  Y 4 !|assistance or may have misconceptions about the costs of obtaining telephone service.M>  TO'ԍ Id. at S14, S16, 70 and 93.M Studies  ! indicate that lack of knowledge or misconceptions may contribute to nonsubscription even where  Y 4 !the availability of services is not an issue.Q? j  T'ԍ Id. at S16, S17, 106 and 117.Q We believe that, to assist users in managing their  !2 telephone usage and expenses, there could be a greater effort toward educating consumers. Such  !educational programs may make nonsubscribers aware of options (such as flat rate basic service with call blocking capabilities) and how these options can be used most effectively. ` `  Y54 (  .47.` ` We seek comment on whether this type of education should be the responsibility  !of the local telephone companies either working alone or in conjunction with state or local  !!governments. We note that the local telephone company is a primary beneficiary of expanded  ! subscribership. Increased subscribership gives local telephone company new sources of revenue.  !In addition, the value of the local network to subscribers is increased as subscribership grows,  !oand thus, is more valuable to the carrier. Moreover, because of its presence in the community,  !the local telephone company may be better positioned to respond to the specific educational  !needs of its subscribers and potential subscribers. For example, local telephone service  !Urepresentatives may be able to participate in community programs that make potential telephone  !subscribers aware of the options available to make telephone service more affordable. Some of  !^these consumer educational initiatives fall within the scope of the local telephone companies'  !normal marketing activities. These programs might also be coordinated with long distance  !providers to help reduce rates to subscribers. The coordinated efforts might in turn lead to an  !increase in subscribership as the consumers benefit from lower overall local and long distance rates.  Y 4 ( z /48.` ` State and local government may also want to participate in this educational  !process. These governments understand the needs of their local communities. State and local"!?0*r(r(#"  !governments are more effective if they can easily communicate with their constituency and if their constituents can easily reach them. ` `  Y4 ( r 049.` ` State and local governments could also establish joint programs with  !telecommunications firms to give service providers incentives to reconnect subscribers. In turn,  !the telecommunications providers might develop marketing programs to make the potential  !osubscribers aware of special reconnection programs and programs geared to make local service  !;as affordable as possible to those with low income. The coordinated efforts might in turn lead to an increase in subscribership.  Y 4 ( 150.` ` Education could play an important role in assisting subscribers to both control  !Utheir longdistance usage and to take full advantage of available discount plans and promotional  !offerings. We seek comment on what steps can be taken by the various players to effectively assist users in obtaining this information.  Y 4 (  251.` ` We seek comment regarding educational and marketing efforts needed to achieve  !% the goal of expanded telephone subscribership. Parties that support some funding or involvement  !oother than that already discussed above for educational or marketing efforts should provide full  !bdetails of their proposals. We also ask commenters what specifically the Commission might do to facilitate this educational process.  Y4 (  352.` ` Streamlined certification procedures to determine eligibility for assistance may  !encourage eligible persons to avail themselves of existing programs. The California Public  !Utilities Commission has approved such a procedure. The California program appears to be  Y4 !very successful in attracting eligible households to the Lifeline program.@< TQ' !&Ѝ A recent study commissioned by the California PUC estimated that only 20 percent of eligible  !households are not currently receiving Lifeline service. The same study found that 9.2 percent of those  T' !greceiving assistance failed to meet one or more of the eligibility criteria. SRI International, A Study to  !Assess Customer Eligibility and Recommend Outreach Activities for the Universal Lifeline Telephone  T'Service, Final Report, Executive Summary at ES1, ES2 (November 1993). We seek comment  !oon "streamlined" certification programs and whether and how they may be applied to programs  !directed at lowincome persons not connected to the network. We also invite commenters to suggest other methods that may reduce this barrier to obtaining telephone services.  Y|4  Ye4YC V. LEGAL AUTHORITY ă  Y84 ( #453.` ` As discussed, we are considering whether we should take additional steps to  !increase the level of telephone subscribership in the United States. We seek comment on our authority to implement the particular proposals contained herein. "@0*r(r( "Ԍ Y4K- yVI. PROCEDURAL MATTERS ׃  X4 A. Ex Parte   Y4 (  554.` ` This is a nonrestricted notice and comment rulemaking proceeding.  Ex parte  !ypresentations are permitted, except during the Sunshine Agenda period, provided they are disclosed as provided in the Commission's rules.  XK4 B. Regulatory Flexibility   Y 4 (  655.` ` We certify that the Regulatory Flexibility Act of 1980 does not apply to this  !rulemaking proceeding because, if the proposals in this proceeding are adopted, there will not  !Hbe a significant impact on a substantial number of small business entities, as defined by Section  !601(3) of the Regulatory Flexibility Act. These proposals concern methods that can be  !implemented by LECs and interexchange carriers to increase telephone subscribership. These  !|entities are generally large corporations or affiliates of large corporations, are dominant in their  !fields of operation, and are not "small entities" as defined by the Act. The Secretary shall send  !|a copy of this Notice of Proposed Rulemaking, including the certification, to the Chief Counsel  !for Advocacy of the Small Business Administration in accordance with Section 605(b) of the Act.  X 4 C. Comment Dates   Y4 (  756.` ` We invite comment on the proposals and tentative conclusions set forth above.  !Pursuant to applicable procedures set forth in Sections 1.415 and 1.419 of the Commission's  Y4 !Rules,NA T='ԍ 47 C.F.R.  1.415 and 1.419.N interested parties may file comments on or before September 27, 1995, and reply  !comments on or before October 27, 1995. To file formally in this proceeding, you must file  !an original and four copies of all comments, reply comments, and supporting comments. If you  !want each Commissioner to receive a personal copy of your comments, you must file an original  !plus nine copies. You should send comments and reply comments to Office of the Secretary,  !bFederal Communications Commission, Washington, D.C. 20554. A courtesy copy should also  !be sent to Ernestine Creech, Accounting and Audits Division, 2000 L Street, N.W.,  !HWashington, D.C. 20554. Parties should also provide one copy of any documents filed in this  !proceeding to the Commission's copy contractor, International Transcription Service (ITS), 2100  !M Street, N.W., Suite 140, Washington, D.C., 20037. Comments and reply comments will be  !available for inspection during regular business hours in the FCC Reference Center, Room 239, 1919 M Street, N.W., Washington, D.C. 20554." hA0*r(r(""Ԍ X4yřA8 VII. ORDERING CLAUSE אc  Y4 ( l 857.` ` Accordingly, IT IS ORDERED that, pursuant to Sections 1, 2, 4(i), 201205, 218 !220, and 403 of the Communications Act of 1934, as amended, 47 U.S.C.  151, 152, 154(i),  !201205, 218220, and 403, NOTICE IS HEREBY GIVEN of the proposals in this Notice of Proposed Rulemaking.  Y_4 ` `  ,hh]FEDERAL COMMUNICATIONS COMMISSION ` `  ,hh]William F. Caton ` `  ,hh]Acting Secretary y"A0*r(r(p"  Y4Q- APPENDIX BIBLIOGRAPHY ׃  Y4 !Affordability of Telephone Service A Survey of Customers and NonCustomers, conducted by Field Research Corporation, 1993.  Y4 !Belinfante, A Dynamic Analysis of Telephone Penetration, Industry Analysis Division, FCC, (1990).  YM4Dordick and Fife, "Universal Service in PostDivestiture USA,"   Y64Telecommunications Policy, April 1991.  Y 4 !FCC, Com. Car. Bur., Industry Analysis Div., Monitoring Report, CC Docket No. 87339, (May 1995).  Y 4 !s Garbacz, Assessing the Impact of FCC Lifeline and Link Up Programs on Telephone Penetration,  !paper, Rutgers Advanced Workshop in Regulation and Public Utility Economics, Eighth Annual Western Conference (July 1995)(advance copy).  !Hausman, Tardiff, Belinfante, "The Effects of the Breakup of AT&T on Telephone Penetration in the United States," AEA Papers and Proceedings, Vol. 83, No. 2, May 1993.  Y(4 !"Haven for Ship Workers Offers Comforts of Home,"  Miami Herald, Broward Edition,  W4February 20, 1995.  !? "Households Without a Telephone," Office of Telecommunications (United Kingdom), December 1994.  Y4 !7Lande, Reference Book: Rates, Price Indexes, and Household Expenditures for Telephone  Y4Service, Industry Analysis Division, FCC (July 1994).  !cMakarewicz, "The Effectiveness of Lowincome Telephone Assistance Programmes," Telecommunications Policy, June 1991.  W4 ! Matter of MTS and WATS Market Structure; Amendment of Part 36 of the Commission's Rules  !Hand Establishment of a Joint Board; Establishment of a Program to Monitor the Impact of Joint  Y4 !% Board Decision, CC Docket Nos. 7872, 80286, 87339, FCC 89J3, Second Study and Report, par. 24 at 15 (1989).  Y"4 ! Mueller and Schement, Universal Service From the Bottom Up: A Profile of Telecommunications  Y#4Access in Camden, New Jersey, Rutgers University Project on Information Policy (1995).  !HNadel, "Issues Concerning Current Mechanisms for Providing Universal Service in the USA,"  WQ&4Analysys Publications, 1995 ":'A0*r(r(})"Ԍ Y4 !ZNew York City Household Telephone Penetration Study, New York City Department of Telecommunications and Energy, 1993.  !Rubin, "Telephone Penetration Rates for Renters in Pennsylvania," Pennsylvania Office of Consumer Advocate, 1993.  Yx4"Sailors' Support of Call," Sun Sentinel (Fort Lauderdale, Florida), February 17, 1995.  Y54 !USchement, Belinfante and Povich, Telephone Penetration 19841994, 199"The Chesapeake and  ! Potomac Telephone Company's Submission of Telephone Penetration Studies," Formal Case No. 850, filed Oct. 4, 1993, at 2, and attached survey reports.  Y 4  Y 4 ! Walter, "Assessing the Residential Rate Assistance Programs in Furthering the Goal of Universal  Y 4Service," Proceedings of the Eighth Biennial Regulatory Information Conference (June 1992).