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If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************** Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of ) ) Federal-State Joint Board on ) CC Docket No. 96-45 Universal Service ) ORDER Adopted: March 2, 1998 Released: March 2, 1998 By the Deputy Chief, Common Carrier Bureau: 1. On December 4, 1997, the Arizona Corporation Commission (Arizona Commission) requested a waiver of the Commission's rule requiring that, in order to receive federal universal service support for Lifeline, a state's consumer qualification criteria must be based solely on income or on factors directly related to income. On December 30, 1997, we issued an Order granting a temporary waiver of the rule so that current Lifeline consumers in Arizona would receive uninterrupted federal support pending legislative changes necessary to conform Arizona's eligibility criteria to our rules. On January 21, 1998, the Arizona Commission filed a letter with the Commission stating that actions it had taken while its petition was pending rendered its request for a waiver unnecessary. For the reasons set forth below, we find consumers in Arizona who meet the federal default consumer qualification criteria recently adopted by the Arizona Commission may receive $5.25 per month in federal Lifeline support retroactive to January 1, 1998. 2. On May 8, 1997, the Commission issued a Report and Order that revised our rules governing consumer qualification for federal Lifeline support and the federal Lifeline support amount. In revising these rules, the Commission sought generally to make Lifeline and Link Up available to low-income consumers in every state and territory in the nation. The revised rules specify that, in order for a consumer to receive federal Lifeline support in states that provide state Lifeline support, the consumer must meet the criteria established by the state and those criteria must be based solely on income or factors directly related to income. To qualify to receive federal Lifeline support in states that do not provide state Lifeline support, a consumer must certify that he or she participates in one of the following programs: Medicaid; food stamps; Supplemental Security Income; federal public housing assistance; or Low-Income Home Energy Assistance Program. The revised rules also provide for three forms of federal Lifeline support: (1) $3.50 per qualifying low-income consumer; (2) an additional $1.75 if the state commission approves a reduction of $1.75 in the intrastate rate paid by Lifeline consumers; and (3) additional support, subject to a $7.00 ceiling on the total amount of federal Lifeline support, if the state provides intrastate Lifeline support to customers based solely on income or factors directly related to income. 3. Arizona offers two low-income telephone assistance programs: the Arizona Low- Income Telephone Assistance Program (ALITAP) and the Telephone Assistance Program (TAP). Consumer qualification for ALITAP is based on income and age. Consumer qualification for TAP is based on income and medical disability. In a petition filed on December 4, 1997, the Arizona Commission requested a waiver of section 54.409(a) to allow the Arizona legislature time to conform the state eligibility criteria for these programs to be based solely on income or factors directly related to income, as set forth in section 54.409(a) of our rules. 4. In our December 30, 1997 Order, we found that good cause existed to waive our rule temporarily so that consumers in Arizona who are currently eligible to receive low-income assistance continue to benefit from the federal Lifeline support. The waiver extended until July 30, 1998, at which point all consumers who met Arizona's new consumer qualification criteria, if based solely on income or on factors directly related to income, would be eligible to receive federal Lifeline support. 5. In a letter filed with the Commission on January 21, 1998, the Arizona Commission stated that, in a series of orders issued in December 1997, the Arizona Commission adopted consumer qualification criteria that were based solely on income or factors directly related to income. Specifically, the Arizona Commission ordered carriers to apply the federal default criteria set forth in section 54.409(b) of our rules. The Arizona Commission stated the Arizona constitution authorizes the Arizona Commission to establish such criteria. Based on these actions, we find that the Arizona Commission has complied with section 54.409(a) of our rules and that the December 30th waiver is no longer necessary. Accordingly, based on the record before us, consumers in Arizona meeting the eligibility criteria adopted by the Arizona Commission are eligible to receive $5.25 in federal Lifeline universal service support per qualifying low-income consumer. Additional federal support, however, will not be provided unless the state provides support, pursuant to section 54.403(a) of our rules, to all consumers meeting the eligibility criteria adopted by the Arizona Commission. We reiterate that Arizona remains free to provide to the more limited class of consumers eligible for the state low-income assistance programs (e.g., low-income consumers who are also disabled) a state support amount that is higher than that offered to consumers who meet only income-based criteria. Because the actions taken by the Arizona Commission were effective as of January 1, 1998, we further conclude that consumers in Arizona who meet the criteria adopted by the Arizona Commission are eligible to receive federal Lifeline support retroactive to January 1, 1998. 6. It is THEREFORE ORDERED, pursuant to sections 4(i), 214, and 254 of the Communications Act of 1934, as amended, 47 U.S.C.  154(i), 214, and 254 and sections 0.91, 0.291, 1.3, and 54.409 of the Commission's rules, 47 C.F.R.  0.91, 0.291, 1.3, and 54.409 that the Arizona Commission's Lifeline program complies with section 54.409(a) of our rules and that a waiver is no longer necessary. FEDERAL COMMUNICATIONS COMMISSION James D. Schlichting Deputy Chief, Common Carrier Bureau