As 2014 draws to a close, many ETCs are now finalizing the process of annually re-certifying their Lifeline subscriber bases, as required by FCC rules.  We have learned that USAC is taking the position that (1) all subscribers who fail to re-certify must be de-enrolled from the Lifeline program by December 31 and (2) ETCs also must update the NLAD to reflect these de-enrollments by December 31.  As detailed below, these positions appear to conflict with FCC rules.  ETCs, however, should be aware of the potential risk associated with extending these processes into the first week of 2015.

While a subscriber’s failure to re-certify for Lifeline benefits necessarily leads to his or her de-enrollment from the program, the two processes are distinct and sequential, and the FCC rules and public statements made by its Wireline Competition Bureau ("Bureau") expressly assign them different deadlines.  The rule governing the re-certification process, 47 C.F.R. § 54.410(f), requires ETCs to annually re-certify the eligibility of each Lifeline subscriber but does not establish a deadline to finalize that process.  In 2012 and 2013, the Bureau clarified in public notices that the re-certification process must be complete by December 31.

There is a deadline in FCC rules, however, that governs when ETCs must de-enroll subscribers for failure to re-certify.  Section 54.410(f)(5) of the rules provides that if the ETC is unable to re-certify a subscriber by the end of the re-certification period, the ETC must de-enroll the subscriber within five business days.  Specifically, the language of Section 54.405(e)(4) specifies that this de-enrollment is to take place “within five business days after the expiration of the subscriber’s time to respond to the re-certification efforts” (emphasis added).  Moreover, a Public Notice issued in 2012 by the Bureau explains that this de-enrollment process was to be initiated by December 31, 2012.  Taken together, the rules and guidance from the Bureau indicate that ETCs have until December 31 to finalize their efforts to obtain responses from subscribers, at which point the countdown to the five-day business day deadline to de-enroll begins.

USAC nonetheless has maintained for sometime, based on a selective reading of the 2012 Public Notice, that the re-certification process is not complete until the ETC has de-enrolled all subscribers and this process must be completed by December 31.  ETCs therefore should be aware that de-enrolling subscribers beyond December 31 is not without risk despite the lack of an explicit requirement to do so, particularly in light of the FCC’s current enforcement environment.

More troubling for this year’s re-certification process, however, is that USAC also is taking the position that ETCs must update the NLAD to reflect any change in status as a result of re-certification for all subscribers by December 31, which has been a surprise to many in the industry.  We see no basis for this position in any FCC rules or orders and have sought clarification from the FCC and USAC.

Once the re-certification process is complete, ETCs will summarize the results in their FCC Form 555 reports.  Last week, the Bureau announced that it has opened a new docket (WC Docket No. 14-171) for ETCs to file Form 555 in 2015 and future years.  The Bureau stated that its intent in opening the docket was to “enable the public to more easily access carrier filings.”  The forms can be filed using either the FCC’s Electronic Comment Filing System or by filing paper copies.

The Form 555, which was recently revised, is available on forms page of the USAC website, along with instructions for its completion.  The Form 555 is normally due on January 31, but because that date falls on a Saturday in 2015, FCC staff has confirmed that the due date will be Monday, February 2, 2015.  The forms also must be filed by February 2 with USAC, as well as with state commissions, which set their own filing deadlines.

We will update this entry as more information becomes available.  In the meantime, please contact us if you have questions.