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                                                                   DA 13-1435

                                                                June 25, 2013

                                              Enforcement Advisory No. 2013-4

                                LIFELINE PROGRAM



   The FCC's Enforcement Bureau reminds Eligible Telecommunications Carriers
   (ETCs) receiving federal universal service support from the Lifeline
   program that they are liable for any conduct by their agents, contractors,
   or representatives (acting within the scope of their employment) that
   violates the FCC's Lifeline rules. ETCs, therefore, should take all
   necessary steps to ensure that they and their agents, contractors, and
   representatives scrupulously adhere to the Lifeline rules. ETCs could face
   significant monetary penalties of up to $1.5 million for each failure to

   The Lifeline program helps low-income Americans access affordable phone
   service by providing discounts on basic monthly telephone service (either
   wireline or wireless) for qualified subscribers. The Enforcement Bureau is
   committed to rooting out waste, fraud and abuse in the Lifeline program,
   and it is particularly concerned that some ETCs are failing to ensure that
   their agents, contractors, and representatives adhere to the Lifeline
   rules. Accordingly, the Bureau is aggressively pursuing possible
   misconduct on the part of ETCs as well as their agents, contractors, and

   What Do The Lifeline Rules Require? The Commission's Lifeline rules impose
   detailed requirements on ETCs that offer Lifeline service, including
   (without limitation) obligations to:

     * implement policies and procedures to ensure subscribers are eligible
       to receive Lifeline service;^

     * confirm each subscriber's eligibility before activating Lifeline

     * confirm each subscriber's eligibility before seeking reimbursement
       from the Universal Service Fund for that subscriber;^

     * require applicants to certify under penalty of perjury that they are
       eligible and that their households do not already receive Lifeline

     * keep records detailing the documents or data source used to determine
       each subscriber's eligibility;^

     * provide Lifeline service only to qualified individuals who do not
       reside in households that already benefit from Lifeline service;^ and

     * explain to subscribers that Lifeline is a government assistance
       program and the service is non-transferable--that is, it may not be
       sold or given to any other party.

   We again emphasize that ETCs are liable for violations of these and other
   Lifeline rules--and their liability extends to violations on the part of
   their agents, contractors, and representatives.^ Therefore, if an ETC
   retains an agent, contractor or representative to check eligibility
   documentation, record details regarding the documentation applicants
   provide, obtain applicant certifications, or engage in any other work
   related to the Lifeline program, the ETC itself would be liable for any
   act, omission, or failure on the part of the agent, contractor, or
   representative that violates the Lifeline rules.

   What Specific Laws Apply?  The Communications Act, as amended, and the
   Commission's Lifeline Reform Order provide that ETCs are liable for the
   conduct of agents, contractors, and representatives in connection with the
   work they are retained to perform.

     * Section 217 of the Act provides generally that any "act, omission, or
       failure" of an agent acting within the scope of its employment by a
       common carrier "shall in every case be also deemed to be the act,
       omission, or failure of such carrier."^

     * Referring expressly to ETCs and their agents, the Lifeline Reform
       Order states that while ETCs may contract with agents and
       representatives in connection with providing Lifeline service, "the
       ETC remains liable for ensuring the agent's or representative's
       compliance with the Lifeline program rules."^

   What Are The Potential Penalties?  Violations of the Lifeline
   rules--whether committed by an ETC itself or its agents or
   representatives--may subject an ETC to monetary forfeitures of up to
   $150,000 for each violation or each day of a continuing violation, up to a
   maximum of $1,500,000 for any particular act or failure to act.^ Moreover,
   in egregious cases a carrier may face revocation of its ETC status (and
   thus its eligibility to participate and receive support in the federal
   Lifeline universal service program) and/or revocation of its Section 214
   authorization to operate as a carrier.^ In addition, false statements or
   misrepresentations to the Commission may result in additional forfeiture
   liability and may be punishable by fine or imprisonment under Title 18 of
   the U.S. Code.

   Need More Information?  For more information about enforcement of the
   Lifeline rules, please contact

   Mindy Littell, Attorney, Investigations and Hearings Division, Enforcement
   Bureau, at (202) 418-0789 or Media inquiries should
   be directed to Mark Wigfield at 202-418-0253 or

   To request materials in accessible formats for people with disabilities
   (Braille, large print, electronic files, audio format), send an e-mail to or call the Consumer & Governmental Affairs Bureau at
   202-418-0530 (voice), (202) 418-0432 (TTY). You may also contact the
   Enforcement Bureau on its TTY line at (202) 418-1148 for further
   information about this Enforcement Advisory, or the FCC on its TTY line at
   1-888-TELL-FCC (1-888-835-5322) for further information about Lifeline

                                  Issued by: Acting Chief, Enforcement Bureau


   ^ 47 C.F.R. S 54.410(a).

   ^ Lifeline and Link Up Modernization and Reform, WC Docket No. 11-42,
   Order, paras. 3-6 (WCB, rel. June 25, 2013).

   ^ Id. S 54.410(b)(1)(i), (c)(1)(i).

   ^ Id. S 54.410(d)(3)(vi).

   ^ Id. S 54.410(b)(1)(iii), (c)(1)(iii).

   ^ Id. SS 54.405(a), 54.409(c).

   ^  As noted in the Lifeline Reform Order, "[t]he Commission has
   consistently found that `[l]icensees and other Commission regulatees are
   responsible for the acts and omissions of their employees and independent
   contractors,' and has held the regulated party responsible for violations
   of the Commission's rules committed by agents." Lifeline and Link Up
   Reform and Modernization, Report and Order and Further Notice of Proposed
   Rulemaking, 27 FCC Rcd 6656, 6708-09, para. 110 (2012) (Lifeline Reform

   ^ 47 U.S.C. S 217.

   ^ Lifeline Reform Order, 27 FCC Rcd at 6708-09, para 110.

   ^ 47 U.S.C. S 503(b)(2)(B); 47 C.F.R. S 1.80(b)(2); Amendment of Section
   1.80(b) of the Commission's Rules, Adjustment of Forfeiture Maxima to
   Reflect Inflation, Order, 23 FCC Rcd 9845 (2008).

   ^ 47 U.S.C. S 214.


                                  Page 1 of 2

                            FCC ENFORCEMENT ADVISORY

   Federal Communications Commission

   445 12^th St., S.W.

   Washington, D.C. 20554

                                        News Media Information 202 / 418-0500


                                                          TTY: 1-888-835-5322