Rule-Making Notices (Hearing Notices)

The Public Service Commission of Wisconsin proposes an order to revise ch. PSC 160, relating to the provision of universal telecommunications service, administration of the universal service fund and related changes.

The Commission invites testimony and written comments about all of the proposed rule changes, and also about:

• Whether changes concerning Eligible Telecommunications Carrier (ETC) status are necessary or desirable pursuant to changes made to the federal ETC requirements by the Federal Communications Commission (FCC).1

1See, In Re: Federal-State Joint Board on Universal Service, “Report and Order," CC Docket No. 96-45; FCC 05-46, issued March 17, 2005. The Report and Order adopted certain recommendations made by the Federal-State Joint Board on Universal Service regarding minimum eligibility, certification, and reporting requirements for carriers wanting to be designated as an ETC by the FCC. The Report and Order encouraged states exercising jurisdiction over ETC designations pursuant to 47 U.S.C. § 214 (e) (2), to adopt the same requirements. In addition, the Report and Order permits states to extend generally applicable consumer protection requirements to all ETCs, including wireless carriers.

• Whether assessment of wireless providers should be resumed.

• Whether changes should be made to Wis. Admin. Code ss. PSC 160.031 and 160.035 to update the data transmission capability requirement. Possible approaches could be:

• Making no changes to the section.

• Raising the speed requirement for all voice grade lines to some other number, such as 28 kbs, or 56 kbps.

• Other options, such as allowing for the use of other, non-voice grade services to meet the requirement, allowing partnering with other providers, allowing phase-in periods or applying the requirement to a certain percentage of customers, allowing waivers if the company can demonstrate that meeting the requirement will not be profitable, or using Universal Service Fund (USF) money to allow companies to meet the requirement. These options are further described in the Commission Information Memo on Data Transmission.2

2 The Commission Information Memo is dated November 2, 2005, and is available on the Commission website, psc.wi.gov , under Telecommunications Major Cases.

Analysis Prepared by the Public Service Commission of Wisconsin

The analysis is set forth as Attachment A.

Initial Regulatory Flexibility Analysis

Existing USF rules may have an effect on small telecommunications utilities, which are small businesses under s. 196.216, Stats., for the purposes of s. 227.114, Stats. These small telecommunications utilities, like other telecommunications providers (both large and small), have obligations under the USF, including an obligation for payments to the USF. Additionally, this rule continues to allow the USF assessment of commercial mobile radio service (CMRS) providers, although the assessment has been suspended by the Commission pending the promulgation of this rule. The Commission may or may not end the suspension. Other requirements in the rule only apply to CMRS providers who voluntarily choose to become designated as eligible telecommunications carriers. Since the Commission does not regulate CMRS providers, its does not have records indicating how many of them are small businesses.

These proposed rules should have no particular impact on small businesses. The Commission already has established, in s. PSC 160.18 (1), an exemption from fund assessments to protect entry by and continued operation of small telecommunications providers as directed by statutory objectives. In s. PSC 160.01 (2) (b), the existing rules allow the Commission to give individual consideration to unusual situations and to adopt different requirements for particular telecommunications providers. Small businesses can request that the Commission provide an exception to a rule requirement. There are no new reporting or bookkeeping requirements created under these proposed rules.

The agency has considered the methods in s. 227.114 (2), Stats., for reducing the impact of the rules on small businesses. Accordingly, the agency has included provisions for exemption from assessments for small providers, and allowing requests for consideration of unusual circumstances, as noted above. Further application of these methods is not consistent with statutory objectives.

Fiscal Estimate

These rule changes have no fiscal impact. There is also no financial impact on the private sector.

Notice of Hearing

NOTICE IS GIVEN that pursuant to s. 227.16 (2) (b), Stats., the Commission will hold a public hearing on these proposed rule changes in the Amnicon Falls Hearing Room at the Public Service Commission Building, 610 North Whitney Way, Madison, Wisconsin, on Friday, July 14, 2006, at 9:30 a.m. This building is accessible to people in wheelchairs through the Whitney Way (lobby) entrance. Handicapped parking is available on the south side of the building.

Written Comments

Any person may submit written comments on these proposed rules. The hearing record will be open for written comments from the public, effective immediately, and until Friday, July 28, 2006, at noon (Thursday, July 27, 2006, at noon, if filed by fax). All written comments must include a reference on the filing to docket 1-AC-198. File by one mode only.

Industry: File comments using the Electronic Regulatory Filing system. This may be accessed from the Commission's website psc.wi.gov.

Members of the Public:

If filing electronically: Use the Public Comments system or the Electronic Regulatory Filing system. Both of these may be accessed from the Commission's website psc.wi.gov.

If filing by mail, courier, or hand delivery: Address as shown in the box on page 1.

If filing by fax: Send fax comments to [phone]. Fax filing cover sheet MUST state “Official Filing," the docket number 1-AC-198, and the number of pages (limited to 25 pages for fax comments).

Contact Person

Questions regarding this matter should be directed to Anita Sprenger, Universal Service Fund Manager at [phone]. Small business questions may be directed to Gary Evenson at [phone] or Gary.Evenson@psc. state.wi.us. Media questions should be directed to Linda Barth, Director of Governmental and Public Affairs at [phone]. Hearing or speech-impaired individuals may also use the Commission's TTY number, if calling from Wisconsin [phone], if calling from outside Wisconsin [phone].

The Commission does not discriminate on the basis of disability in the provision of programs, services, or employment. Any person with a disability who needs accommodations to participate in this proceeding or who needs to get this document in a different format should contact Anita Sprenger, as indicated in the previous paragraph, as soon as possible.

Analysis Prepared by the Public Service Commission of Wisconsin

Statutory authority: ss. 196.02 (3), 196.218 (5m), and 227.11 (2), Stats.

Statute interpreted: 196.218, Stats.

Objective of the Rule

The objective of this rulemaking is to revise the existing ch. PSC 160, Universal Service Support Funding and Programs. These rules were originally created in 1996, then revised in 2000. Minor changes are also made to Wis. Admin. Code chs. 161, 165, and 171. In the proposed rule, the Commission revises existing Universal Service programs that provide access to telecommunications service to all Wisconsin customers regardless of geographic location, income or disability, and to assist in the deployment of advanced services in all areas of the state. In this same chapter, are revisions to the mechanism for funding those programs and for administering the Universal Service Fund (USF).

The Commission is proposing the following revisions to its universal service rules to reflect its experience with administering and operating the programs included in this proposed rule. The revisions also reflect the evolution of the telecommunications market and telecommunications technology in Wisconsin, and also ensure that state universal service programs do not conflict with new federal programs and rules.

In preparation of these proposed rules, Commission staff worked closely with the Universal Service Fund Council (USFC). The USFC submitted its recommendations on rule changes to the Commission in January 2002. Since then, staff continued revising various sections of the rule. Many of the changes were minor and editorial, but some were substantive. On August 30, 2004, the USFC approved a revised draft of the rules that incorporated all of the changes staff had proposed to that point. Only a few changes to the proposed rule have been made since the USFC approved the draft in August 2004. Those sections are noted in the analysis below.

Statutory Authority to Promulgate the Proposed Rule

Section 196.218, Stats., defines and authorizes the USF. Specifically, s. 196.218 (5m), Stats., requires the Commission to periodically review and revise, as appropriate, the universal service rules.

Section-by-Section Analysis of the Proposed Revisions

A number of non-substantive changes have been made to update language to current drafting style. For example, uses of “shall not" have been changed to “may not."

PSC 160.01 Scope and Purpose

The only change is to the reference regarding services to programs since this chapter focuses on universal service programs.

PSC 160.02 Definitions

The modifications reflect updates in statutes and rules. The definition of “institutions" is removed since the institutions program no longer exists. A definition for “pay-per-call service" has been added as defined in statute. Cognitive impairment has been added to the definition of disability to address the needs of those individuals with cognitive impairments that need specialized telecommunications equipment to have access to essential telecommunications services. SeniorCare under s. 49.688, Stats., has been added as a program that enables a household to be defined as low-income. This will enable many of the senior citizens that currently qualify under the Wisconsin Homestead Tax Credit eligibility criteria to now qualify under SeniorCare. The verification process for SeniorCare is simpler and more efficient than the verification process for Homestead Tax Credit. The definition of “two-line hearing carryover" has been added.

PSC 160.03 Essential Telecommunications Services

Single party revertive calling is deleted from the list of essential telecommunication services with regard to the USF because it is already included as a basic utility obligation under Wis. Admin. Code s. PSC 165.081 (6). The description of toll blocking is changed so that rather than repeating the requirement here, it refers to the section of the rule relating to toll blocking.

The USFC recommended deleting the directory listing and annual directory distribution requirements from the list of essential services because at the time this was decided, another rulemaking would have made these sections redundant. That rule is not through the promulgation process, so the recommended changes to this rule have not been included in this rulemaking. They can be included in the next review of these rules.

PSC 160.035 Advanced Service Capabilities

This authorizes the Commission to use universal service support to enable a provider to use other sources, such as small diameter satellite dish system companies, to provide an equivalent to an advanced service when it is not reasonable to require a provider to offer a given advanced service capability.

PSC 160.04 Toll Blocking

The proposed revisions for this section include blocking of all pay-for-service calls, rather than specifying 900 and 976 calls as the current rule does. Clarification concerning the blocking of collect and certain other calls is added.

PSC 160.05 Universal Service Fund Programs

Reference to the “assistance to institutions" program is eliminated since this program no longer exists. Intralata toll provider of last resort is removed from the program list since the section it refers to is being deleted. Two-line voice carryover was expanded to also include two-line hearing carryover.

PSC 160.06 Eligibility for Low-Income Programs

This section is updated to expand eligibility to those who qualify for federal USF support as residents of tribal lands.

PSC 160.061 (1)

Changes to this section allow residences with more than one telephone line to qualify for LinkUp for one of the lines. (Currently residences with more than one line are not eligible for any LinkUp assistance.) This modification allows more flexibility for participants in the program, particularly in situations where a separate telephone line is needed by a low-income resident of a household where multiple families or unrelated roommates share an address. With this change, the rule would be consistent with the Federal Communications Commission (FCC) rule which now allows Lifeline to cover one line in residences with more than one line.

PSC 160.061 (5)

Language is added to clarify when a customer becomes eligible for LinkUp benefits, if eligibility cannot be verified at the time the service order is issued. Specifically, a provision is added relating to customers who are eligible for federal universal service fund support as residents of tribal lands.

PSC 160.061 (6)

This change corrects an anomaly that could result in certain eligible telecommunications carriers (ETCs) receiving less USF support for LinkUp than non-ETCs with the same charges. This is due to the interplay between state and federal USF support for ETCs. This rule revision ensures that ETCs and non-ETCs receive the same total amount of USF support for LinkUp.

PSC 160.061 (7)

This section is added so that local service providers file timely requests for reimbursements and so charges to the universal fund cannot be accumulated over several years.

PSC 160.062 (1), (2) and (3)

The first change in this section clarifies the intent to have providers offer a lifeline discount on any rate or package the customer chooses. This change would enable customers to select the local rate or service package that will best meet the needs of their household and have the lifeline discount package applied to that rate or package.

The second change in this section enables residences with more than one line to potentially qualify for Lifeline for one of the lines. This allows more flexibility for the program particularly in situations where a separate telephone line is needed by a low-income resident of a household where multiple families or unrelated roommates share an address. This is consistent with the FCC rule, which now allows Lifeline to cover one line in residences with more than one line.

PSC 160.062 (4) (Changes in this section were made after the Council approved the draft rules)

The changes to this section clarify how to determine what the lifeline discount will be under several scenarios. This section is added because of the changing telecommunications market where many customers purchase local service as part of a larger telecommunications service package and it can be unclear as to how to determine what level lifeline discount to apply.

This section also addresses when and how a commercial mobile radio (wireless) service provider establishes its lifeline base rate, from which the monthly lifeline rate adjustment is calculated.

PSC 160.062 (5) (Changes in this section were made after the Council approved the draft rules)

This section includes changes in how the reimbursement level for providers is determined in certain situations, so that changes at the federal level can be accommodated without Commission action. Generally, state USF dollars are not affected, and this change will allow the federal contribution to the lifeline adjustment to be provided to customers automatically. The current rules require an exception from the Commission before providers can increase Lifeline credits in order to match FCC ordered increases in the federal Subscriber Line Charge – even when the FCC increases its reimbursements to cover those increases. Finally, this section changes the calculation of lifeline adjustments.

PSC 160.062 (6)

This section adds provisions related to customers who are eligible for federal USF support as residents of tribal lands.

PSC 160.062 (9) (Changes in this section were made after the Council approved the draft rules)

This section adds provisions that require customer notification before ending lifeline assistance. This gives customers who no longer qualify as low-income under one criteria, but who still qualify under a different criteria, time to show that they qualify under that different criteria. These changes are based on changes adopted by the FCC.

PSC 160.062 (11)

This section is added so that local service providers file timely requests for reimbursements and so charges to the universal fund are not able to accumulate over several years.

PSC 160.063

In this section, the program is changed from a Request for Proposal (RFP) process to a biennial grant program. Offering the grant program will be determined by availability of funding. The grant program will be managed similarly to the other two grant programs in PSC 160, except that this program would be offered biennially. This will simplify the process for this program and will enable organizations that are focused on serving low-income customers to more easily apply for funding.

PSC 163.07

The requirement for a written medical description of special needs has been changed to allow such descriptions to be prepared by medical professionals rather than just by doctors. This change makes the language consistent with similar provisions elsewhere in the rules.

PSC 160.071

Service and Equipment Pricing for Individuals with Special Needs

Some minor editing changes and minor rule changes are made to improve program operation such as requiring eligible equipment lists and identifying processes to modify that list and to handle objections to the equipment lists and eligibility determinations. Specific program changes are discussed below.

PSC 160.071 (1) (b)

The voucher amount for the hard of hearing category is reduced from $200 to $125. This change reflects a determination made by the Commission on September 23, 2004, to reduce the hard of hearing voucher to $125 because the Telecommunications Equipment Purchase Program (TEPP) exceeded its budget in FY04 and FY05.

The Commission based its decision to reduce the voucher maximum for the hard of hearing category on program data from the previous two fiscal years. If program changes were not made and the rate at which the program was growing continued at the pace it was in September 2004, the projected program expenditure was over $4 million while the program budget was $2.3 million. The hard of hearing disability category had experienced the most growth seeing more than a doubling of applications over two years (from 4,110 applications in FY 2003 to 8,274 in FY 2004).

PSC 160.071 (1) (c)