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                           Before the
                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:

I.          INTRODUCTION

            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.

II.  BACKGROUND

     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 
          discounts.6

     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  

III.   DISCUSSION

     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 
services.26  

            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 
(2000).
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 
serves.
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 
service).
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).