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Federal Communications Commission
Washington, D.C. 20554
In the Matter of )
Verizon Communications Inc. ) File No. EB-03-TC-125
MEMORANDUM OPINION AND ORDER
Adopted: March 1, 2005 Released: March 2, 2005
By the Chief, Enforcement Bureau:
1. In this Order, we admonish Verizon Communications
Inc. (``Verizon'') for violating Section 214(e)(1)(B) of the
Communications Act of 1934, as amended (``the Act''),1 and
Sections 54.405(b) and 54.411(d) of the Commission's rules,2 by
failing to publicize the availability of Lifeline or Link-Up
services ``in a manner reasonably designed to reach those likely
to qualify'' for the services. Specifically, Verizon failed
adequately to publicize Lifeline or Link-Up to low-income
residents of 11 tribes in its service area for a period of
approximately three years. While, as discussed below, we are
constrained from proposing a monetary sanction at this time, we
find that an admonishment is necessary to redress the statutory
and rule violations enumerated herein. Moreover, we believe it
is appropriate to inform Verizon of our specific concerns to
ensure future compliance. Finally, we require Verizon to file a
report with the Enforcement Bureau (``Bureau'') within 60 days
of this Order detailing its plans for future compliance with the
Act and the Commission's rules and orders in this area.
2. Section 214(e)(1)(B) of the Act provides the statutory
basis for the action we take here: ``A common carrier
designated as an eligible telecommunications carrier .
. . shall be eligible to receive universal service
support in accordance with Section 254 and shall,
throughout the service area for which the designation
is received advertise the availability of such services
and the charges therefore using media of general
distribution.''3 Lifeline and Link-Up are universal
service support mechanisms that provide for discounted
services to low-income consumers. Lifeline provides
low-income consumers with discounts on the monthly cost
of telephone service for a single telephone line in
their principle residence.4 Link-Up provides low-
income consumers with discounts on the initial costs of
installing telephone service.5 Recognizing the unique
needs and characteristics of tribal communities,
Lifeline and Link-Up provide qualifying low-income
individuals living on tribal lands with larger
discounts than any other group, i.e., up to $25 more in
monthly Lifeline support and $70 more in Link-Up
3. Verizon is an eligible telecommunications carrier
(``ETC'') in 14 states,7 i.e., a telephone company
eligible to receive universal service support in
accordance with Section 254 of the Act.8 Verizon
indicates that it serves 67 tribes in its 14-state
region.9 On October 7, 2003, based on concerns raised
informally with the Bureau by tribal leaders, the
Bureau sent a Letter of Inquiry (``LOI'') to Verizon10
to investigate whether Verizon was satisfying its
obligation under Sections 54.405(b) and 54.411(d) of
the Commission's rules to publicize the availability of
Lifeline and Link-Up services to low-income residents
on tribal lands ``in a manner reasonably designed to
reach those likely to qualify'' for those services.11
The LOI directed Verizon to describe actions it had
taken to satisfy Sections 54.405(b) and 54.411(d) and
to support its response with recordings or transcripts
of any radio or television advertisements, written
material, or narrative descriptions with accompanying
documentation of any other outreach, such as
coordination with social service agencies, contact with
tribes that administer any relevant government
assistance programs, or personal letters to eligible
customers. Based on Verizon's response, the Bureau
sent a second LOI to Verizon on April 6, 200412 and
later directed Verizon to clarify and supplement its
earlier LOI responses.13
4. The Commission's Lifeline and Link-Up outreach rules
give an ETC some flexibility in deciding the type and
frequency of outreach that is ``reasonably designed to
reach those likely to qualify'' for the services. In
applying the outreach rules to tribal lands, however,
the Commission stated that it was concerned that
eligible subscribers may not be aware of the
discounts.14 The Commission further expressed an
expectation that ETCs would have a system of evaluating
the need for and the most appropriate efforts of
outreach to tribal communities.15
5. Verizon states that it publicized Lifeline and Link-Up
to 11 tribes in six states in late 2000 through January
2001 via social service agencies, tribal newspapers,
and senior citizen centers.16 Verizon did not renew
its Lifeline or Link-Up outreach efforts to any of
these tribes again until December 2003 in Wisconsin,17
and February 2004 in the other fives states,18 which
came after the Bureau's first LOI in October 2003. In
sum, Verizon allowed more than two-and-a-half to three
years to elapse between outreach efforts directed to
these 11 tribes.
6. Although the Commission's rules do not include a
specific statement specifying how frequently carriers
must conduct Lifeline and Link-Up outreach, we
nevertheless conclude that a delay of approximately
three years in providing outreach to these 11 tribes
does not fulfill Verizon's obligation to publicize
Lifeline and Link-Up ``in a manner reasonably designed
to reach those likely to qualify.'' Several factors
support our conclusion. First, as the Commission
recently noted, only one-third of eligible low-income
residents subscribe to Lifeline and Link-Up.19 Thus,
regular outreach is necessary to reach the substantial
portion of eligible subscribers who do not currently
take advantage of the discounts. Second, eligibility
criteria20 and individual income levels change
regularly such that persons who may not qualify in one
year may qualify the next. Third, eligible individuals
may move onto tribal lands and, absent regular
outreach, may not be aware that they qualify for the
unique discounts available to residents on those lands.
Thus, a reasonably designed outreach program must be
ongoing and frequent to ensure that new and existing
eligible consumers are aware of the benefits of the
discount programs.21 Verizon's lack of outreach for
these 11 tribes left potential beneficiaries without
Lifeline and Link-Up information for a significant
period of time and is therefore not reasonable under
the Act and the rules.
7. Our finding is supported by Verizon's apparent ad-hoc
approach to compliance. After its initial outreach to
the 11 tribes in six states in late 2000 and early
2001, which came shortly after the Commission's
outreach rules took effect, the record indicates that
Verizon's next action with respect to these tribes came
only after the Bureau's initial LOI in October 2003.
It appears that Verizon did not have any system or
procedure for monitoring outreach needs and taking
appropriate action for these tribal lands and states.
In the future, we expect Verizon and other ETCs to take
a proactive rather than reactive approach to complying
with Section 214(e)(1)(B) of the Act, and Sections
54.405(b) and 54.411(d) of the Commission's rules.
8. Notwithstanding Verizon's violations of the Act and the
Commission's rules, we do not propose a forfeiture at
this time. Section 503(b)(6) specifies that a proposed
forfeiture must be issued against a common carrier for
violations of the Act or the Commission's rules within
one year of the occurrence of the violation.22 Because
Verizon undertook renewed outreach efforts in these six
states within the last year, we are constrained from
pursuing a proposed forfeiture at this time.
Nevertheless, we will closely monitor Verizon's
outreach efforts to ensure future compliance with the
Act and the Commission's rules.
IV. CONCLUSION AND ORDERING CLAUSES
9. After reviewing the record, we find that Verizon's
failure to publicize Lifeline and Link-Up for approximately three
years for 11 tribes in its service area violates Section
214(e)(1)(B) of the Act, and Sections 54.405(b) and 54.411(d) of
the Commission's rules.23 Accordingly, IT IS ORDERED THAT,
Verizon IS ADMONISHED for failing adequately to publicize
Lifeline and Link-Up for 11 tribes in its service area in
violation of Section 214(e)(1)(B) of the Act,24 and Sections
54.405(b) and 54.411(d) of the Commissions rules.25
10. It is further ordered that Verizon shall file a report
with the Enforcement Bureau within 60 days of this Order
detailing its plans for future compliance with the Act and the
Commission's rules and orders regarding the obligation to
advertise the availability of Lifeline and Link-Up ``in a manner
reasonably designed to reach those likely to qualify'' for the
11. IT IS FURTHER ORDERED that a copy of this
Memorandum Opinion and Order shall be sent by Certified Mail
Return Receipt Requested to Kathleen Grillo, Vice President,
Federal Regulatory Advocacy, Verizon, 1300 I Street NW, Suite 400
West, Washington, DC, 20005.
FEDERAL COMMUNICATIONS COMMISSION
David H. Solomon
Chief, Enforcement Bureau
147 U.S.C. § 214(e)(1)(B).
247 C.F.R. §§ 54.405(b), 54.411(d).
347 U.S.C § 214(e)(1)(B).
447 C.F.R. § 54.401(a)(2); In the Matter of Federal-State Joint
Board on Universal Service, CC Docket No. 96-45, Report and
Order, 12 FCC Rcd 8776, 8957, ¶ 341(1997), affirmed in part,
reversed in part and remanded in part sub nom. Texas Office of
Public Utility Counsel v. FCC, 183 F.3d 393 (5th Cir. 1999),
cert. denied, 530 U.S. 1210 (2000), cert. dismissed, 531 U.S. 975
547 C.F.R. § 54.411(a)(1).
647 C.F.R. §§ 54.403(a)(4), 54.411(a)(3). ``Tier four'' support
provides eligible subscribers living on tribal lands up to an
additional $25 per month towards reducing basic local service
rates, but this discount can not bring the subscriber's cost for
basic local service to less than $1. See 47 C.F.R. § 54.403.
7Verizon has been an ETC in the following 14 states since 1998:
Arizona, California, Florida, Idaho, Maine, Massachusetts,
Michigan, Nevada, New York, North Carolina, Oregon, Rhode Island,
Washington and Wisconsin. See Letter from Kathleen Grillo, Vice
President, Federal Regulatory Advocacy, Verizon, to Cynthia
Bryant, Attorney, FCC (Apr. 27, 2004) (``Second LOI Response'').
847 U.S.C. § 254.
9 Second LOI Response at Exhibit 1.
10See Letter of Inquiry from Colleen Heitkamp, Chief,
Telecommunications Consumers Division, Enforcement Bureau, to
Suzanne Carmel, Verizon (Oct. 7, 2003) (``First LOI'').
1147 C.F.R. §§ 54.405(b), 54.411(d). Based on concerns that low-
income residents on tribal lands may not be aware of the benefits
of Lifeline and Link-Up, the scope of the investigation was
limited to Verizon's efforts to publicize Lifeline and Link-Up to
eligible residents on tribal lands.
12See Letter of Inquiry from Colleen Heitkamp, Chief,
Telecommunications Consumers Division, Enforcement Bureau, to
Suzanne Carmel, Verizon (April 6, 2004) (``Second LOI'').
13See Email from Cynthia Bryant, Attorney, FCC, to Kathleen
Grillo, Vice President, Federal Regulatory Advocacy, Verizon
(Nov. 30, 2004).
14See In the Matter of Federal-State Joint Board on Universal
Service, CC Docket No. 96-45, Twelfth Report and Order, 15 FCC
Rcd 12208, 12249, ¶ 76 (2000) (``Twelfth Report and Order'').
15Id. at 12250, ¶ 79.
16Letter from Sara Cole, Associate Director, Federal Regulatory
Advocacy, Verizon, to Lynn Vermillera, Attorney, FCC (Nov. 24,
2003) (``First LOI Response'') at VZ-FCC 0493. The six states
are Idaho, Michigan, North Carolina, Nevada, Oregon, and
Wisconsin. This admonishment applies only to Verizon's lack of
outreach to the 11 tribes in these states. We make no finding
regarding Verizon's outreach to the remaining 56 tribes it
17First LOI Response at VZ-FCC 0519.
18See Second LOI Response at VZ-FCC 2192-99, 2101-2305, 2310-24;
see also email from Kathleen Grillo, Vice President, Federal
Regulatory Advocacy, Verizon, to Cynthia Bryant, Attorney, FCC
(Dec. 10, 2003) at Exhibit 1.
19See In the Matter of Lifeline and Link-Up, WC Docket No. 03-
109, Report and Order and Further Notice of Proposed Rulemaking,
19 FCC Rcd 8302, 8305, ¶ 1 (2004).
20 See, e.g., id. at 8308-09, ¶ 10 (changing the federal default
eligibility criteria for Lifeline and Link-Up to 135% of the
Federal Poverty Guidelines, among other things).
21The Commission recently provided examples of effective frequent
outreach. See e.g., id. at 8327-28, ¶ 46 (stating that carriers,
among other things, ``may wish to send regular mailings'' as a
means of reaching households that do not currently have telephone
22 47 U.S.C. § 503(b)(6).
2347 C.F.R. §§ 54.405(b), 54.411(d).
2447 U.S.C. § 214(e)(1)(B).
2547 C.F.R. §§ 54.405(b), 54.411(d).
26See 47 C.F.R. §§ 54.405(b), 54.411(d).