Rule-Making Notices (Hearing Notices)

This lifeline provision clarifies the process for a provider to follow if it determines that an existing customer is no longer eligible for lifeline discounts.

PSC 160.062 (5m)

This section requires providers to file requests for compensation for lifeline credits in a timely manner. The provision strikes a balance: allowing providers sufficient time to file requests for compensation while not requiring the USF to budget for potential reimbursement claims filed years after occurrence.

PSC 160.063

The changes to this section clarify application procedures and provide flexibility for low-income outreach programs.

PSC 160.07

The provisions on special needs certification are moved into s. PSC 160.071.

PSC 160.071

This section addresses service and equipment for individuals with special needs and includes the Telecommunications Equipment Purchase Program (TEPP). Changes in the amount of reimbursement reflect changes to the costs and technologies used to provide the equipment necessary to allow customers with disabilities to use telecommunications services. Subsection (1m) (c) clarifies coverage of TEPP co-payments for low-income customers. Subsection (1m) (j) allows the commission to suspend vendors for cause and stops payments to suspended vendors. Subsection (1m) (L) 2. allows the program to cover the cost of computing equipment, if that is both required and the most cost-effective means of providing the assistance necessary for the customer to utilize telecommunications services. Sections (4), (5) and (6) continue to require providers to waive fees for operator service, directory assistance and custom calling services, when required by an individual with special needs. Providers may receive payment for such waivers. The section which provided for discounted long distance service is obsolete and has been removed. The draft also creates a filing deadline in sub. (7) to prevent providers from claiming reimbursement years after the fact.

PSC 160.073

The commission has ceased funding this public interest payphone program, so the language is being removed.

PSC 160.09

This section addresses high rate assistance credits, a program that reduces what customers are charged for essential services, when those charges exceed a threshold tied to median household income. The majority of the changes to this section clarify the sources of data used to calculate the credits, the various changes to what is considered part of essential service, and program procedures. Subsection 160.09 (1r) states when providers must recalculate those credits, and allows providers to avoid the expenses involved in such changes when those changes would be insignificant. The changes also set forth the procedure for providers to show what portion of a bundled rate covers essential service. The draft also creates a filing deadline in sub. (5) to prevent providers from claiming reimbursement years after the fact.

PSC 160.091

This section on qualifications for high rate assistance credits is eliminated and those requirements have been incorporated into ss. PSC 160.09 and PSC 160.13.

PSC 160.092

This section allows the commission to create alternative universal service protection plans on an experimental, temporary basis. The changes clarify the procedure to create such plans and specify what such plans could address. Subsection (4) is eliminated, as the program to which it refers is also being eliminated.

PSC 160.10

Rate Shock Mitigation applied only in cases where commission-ordered retail rate increases would negatively impact customers. Since the commission no longer has authority to order rate changes, the rate shock mitigation program is being eliminated.

PSC 160.11

The TEACH Program made this program for institutional assistance obsolete, so the language is being deleted.

PSC 160.125

The changes in this section promoting access to telecommunications services provide clarity, codify the procedures the commission is currently following and remove advanced services from the list of supportable services as required by 2011 Wisconsin Act 22.

PSC 160.13

This section on ETCs has been extensively revised to codify current practice and to incorporate changes in both federal rules and state statutes. Changes in this section also reflect the fact that the commission authorizes three different types of ETCs. Full ETCs are eligible for all state and federal funds, including high cost funding. Low-income-only ETCs are only eligible for lifeline support. Federal-only ETCs are wireless ETCs authorized under s. 196.218(4) (b), Stats. A provider may be both low-income and federal only, in which case the provider would only be eligible for federal lifeline support.

PSC 160.13(3)

This subsection lists the information and certifications providers must file as part of their initial applications for ETC status. The section incorporates federal filing requirements. The section requires a list of wire centers in which the provider seeks designation, a showing that the provider is certified to do business in Wisconsin, and the provision of contact information and so forth.

PSC 160.13(5)

This subsection covers periodic reporting requirements for ETCs. The state requirements generally mirror federal requirements and allow ETCs to meet most state requirements by filing copies of their federal filings with the commission.

PSC 160.13(9)

Both federal rules and statutes define the smallest area for which a provider can request ETC designation, but the FCC has granted waivers and forbearance of theses requirement in certain situations. The general rule states that the smallest allowable area for areas served by rural incumbent local exchange companies (ILECs) is, with certain exceptions, the entire ILEC service territory. The smallest allowable area for non-rural areas is the wire center.

PSC 160.13(10)

This subsection has been modified to conform with FCC directives that call for states to make a public interest finding in designating ETCs in both rural and non-rural areas, although the finding for non-rural areas requires a less detailed analysis.

PSC 160.13 (12)

This provision covers the procedures for ETCs to relinquish ETC status. The changes to this section are primarily grammatical, and to address the existence of low-income ETCs. Paragraph (c) incorporates the processes that were referred to in another section which is being eliminated in this rewrite, so that those references appear here. Paragraph (e) addresses the situation of a federal-only ETC which wishes to remain an ETC, but, because of technological change or for other reasons, no longer meets the requirements for federal-only status.

PSC 160.14

This section, which ensured customers had access to at least one long distance provider, is being repealed. With the market moving to all-distance pricing, specific protections targeted exclusively at long distance service are no longer necessary.

PSC 160.18 (9) (b)

This section clarifies timelines and procedures for providers that wish to object to universal service fund assessments.

PSC 160.18 (10)

This section prevents providers from making adjustments to current rates for over or under USF collections from periods long past.

PSC 160.19 (2)

The modifications to the composition of the universal service fund council reflect the changes to the industry which have occurred since this provision was last drafted. Long distance is no longer a separate nor an affected market segment, while wireless has clearly become significant.

Comparison with existing or proposed federal legislation

There is both a state USF and a federal USF. The state and federal funds and programs are complementary rather than duplicative.

“Eligible Telecommunications Carriers" (ETCs) are designated by the commission and are, thereafter, eligible for funding from the federal USF and for certain funding from the state USF. ETC status was created by the FCC, and codified in 47 U.S.C. § 214(e)(2). Under FCC rules, state commissions are responsible for designating eligible providers as ETCs. 47 U.S.C. §. 214(e)(2), 47 C.F.R. § 54.201(b).

Designation as an ETC is required if a provider is to receive federal USF funding. ETC designation is also required to receive funding from some, but not all, state universal service programs. The FCC established a set of minimum criteria that all ETCs must meet. These are codified in the federal rules. (47 U.S.C. § 214(e)(1), 47 C.F.R. § 54.101(a).) The 1996 Telecommunications Act states that, “A State may adopt regulations not inconsistent with the commission's rules to preserve and advance universal service." 47 U.S.C. § 254(f). A court upheld the states' right to impose additional conditions on ETCs in Texas Office of Public Utility Counsel v. FCC, 183 F.3d 393, 418 (5th Cir. 1999). Therefore, while states must examine the federal requirements, they are allowed to create additional requirements. Wisconsin has done so.

The federal USF provides funding to ETCs that are found to serve high-cost areas. That funding is to be used to help cover the costs of expanding infrastructure into those areas. Doing so should help ensure that rates in those areas stay lower since rates need not provide the funds for that expansion. The Wisconsin USF provides reimbursement to providers that offer credits to customers when rates are higher than as designated in s. PSC 160.09.

The federal USF also includes lifeline and link-up programs (on tribal lands only) to assist low-income customers. The Wisconsin lifeline program is structured to complement the federal program and to take advantage of the available federal lifeline funds.

The FCC is currently conducting trials around the country where the lifeline credit may apply to Internet access service. In these rules the Wisconsin lifeline program is adapted to address the needs of disabled individuals whose principal means of communication is not adequately supported by traditional voice telephony. It allows the lifeline credit to apply to Internet access where a certified disabled customer requires it as a substitute for regular essential telecommunications service.

The federal USF assessment applies to all carriers, including wireless carriers, and is assessed based on interstate revenues. The state USF assessment applies to all providers, including wireless providers, and is assessed based on intrastate revenues. Wisconsin exempts certain providers from assessment, such as those with under $200,000 in intrastate revenues.

There are parts of the federal USF (e.g., the E-Rate program for schools) that do not have a counterpart in the state USF rules. Likewise, some of the state USF rules (e.g., the program to assist persons with disabilities — s. PSC 160.071) address matters not included in the federal USF law or rules.

Comparison with similar rules in surrounding states

The following discussion focuses on areas where significant changes are being made to the USF rules.

Many state USF programs, both in Wisconsin and in other states, are intertwined with federal universal service programs. As a result, there is a certain amount of similarity among state programs. For example, each of the surrounding states has lifeline type programs. (Lifeline helps pay the monthly cost of telephone service. Link-up helps pay the cost of service installation.) As required under federal law, each has income-based eligibility criteria although the specifics vary somewhat. The level of credits to customers and the resulting reimbursements to providers are similar, due in part to the federal matching dollars attached to credit/reimbursement levels. A difference in lifeline programs is that the four other states only have a set figure for the lifeline credit/reimbursement amount (although in Michigan that amount may vary depending on which company is involved). Wisconsin has a standard lifeline credit if the base rate is $25 or below, although, it has a variable component. (The “base rate" is the monthly residential rate including applicable in-state fees, touch-tone service, 911 charges on the telephone bill, the federal subscriber line charge, access recovery charge and 120 local calls.) If the base rate is $25 or above, the reimbursement/credit is the lesser of:

1. Whatever is necessary to bring that rate down to $15.

2. The amount available under the federal USF plus $9.25.

In this way, low-income customers in higher cost (generally rural) areas receive a credit sufficient to bring the base rate to a reasonably affordable level and providers are on a fairly “level playing field."

The provision in these rules that allows the lifeline credit to apply to Internet access where a certified disabled customer requires it as a substitute for regular essential telecommunications service is unique within the region.

Wisconsin also has a program (TEPP) that helps provide access to telecommunications service for persons with hearing, speech and/or mobility disabilities. TEPP provides vouchers to help persons with disabilities that impair their ability to use standard telecommunications equipment for accessing telecommunications service to obtain equipment that will assist them in doing so. Iowa, Illinois, and Minnesota each have similar programs although the specifics vary. For example, Illinois' program is limited to those with hearing or speech disabilities, and in Minnesota the equipment belongs to the state and must be returned if the customer leaves the state or loses his/her telephone line.

Wisconsin also has a program to help lower the monthly cost of telephone service in areas of the state where rates are high. In determining whether assistance under this “high rate assistance" program is required, the program looks both at the rate for basic service and what percentage of a county's median household income that rate entails. Although its commission must vote to activate it, Michigan statutes provide for a similar program that would provide a subsidy to customers of the difference between an affordable rate and the company's forward looking economic cost of providing service (should the latter be higher than the former). Illinois has a high-cost program that provides support to small telecommunications providers if the economic costs of providing certain services exceed the affordable rate set for those services.

Surrounding states have taken a variety of approaches to certification and reporting requirements for ETCs including: adoption of formal rules, orders applicable to either new or all ETCs, and case-by-case determinations.

The Minnesota Public Utilities Commission (docket P999/M-05-741) adopted the FCC's exact language for annual certification requirements, with a couple of modifications. The two main modifications are (1) filing 2-year service quality improvement plans instead of the federal five year requirement, and (2) filing information on a service-area basis instead of a wire-center basis. The new requirements are applied to both new and existing ETCs, and to both landline and wireless providers.

The Michigan Public Service Commission basically adopted the exact language of the FCC's rules unchanged, including the 5-year quality improvement plans. Michigan has service quality and financial reporting rules for wireline companies that do not apply to wireless ETCs, but all ETCs, both existing and new, are required to meet all of the standards and obligations contained in the FCC's ETC rules, FCC 05-46 and 47 U.S.C. § 214. The one exception to this is ETCs receiving only low-income support; they have lesser reporting requirements. There are no standards for what types of reporting on quality of service issues meet the adopted FCC requirements.

The Illinois Commerce Commission has not officially adopted the FCC rules, but uses them as a base for its ETC decisions, which so far have been on a case-by-case basis. The requirements are not applied to existing ETCs. There have been requests for ETC status where the Illinois Commerce Commission has required wireless ETCs to do more than is spelled out by the FCC, holding that the FCC's requirements are “the minimum requirements." The primary areas where wireless ETCs have been subjected to more scrutiny involve consumer protection, service quality standards, and the public interest analysis. As to telephone directories, wireless providers have been required to provide written disclosure to customers that directories will not be provided and numbers will not be published. The FCC's 5-year plan is retained.

The Iowa Utility Board's (IUB) ETC rules incorporate the FCC rules with some modifications. Similar to these proposed rules, IUB requires maps of signal coverage depicting signal strength (although IUB ILECs may refer to maps already on file with the commission.) IUB adopted service quality standards for ETCs although, again like these proposed rules, they differ for landline and wireless. Rolling one year network improvement and maintenance plans are required. The rules are applied to both new and existing ETCs.

The Indiana Regulatory Commission (case 41052-ETC-47) adopted the FCC's exact language in a proceeding involving an individual ETC applicant, but made that decision applicable to all ETCs, both landline and wireless.

Effect on Small Business

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), may have obligations under the USF, including an obligation for payments to the USF, which is required under statute. Other requirements in the rule only apply to wireless providers who voluntarily choose to become designated as eligible telecommunications carriers. Since the Commission does not regulate wireless providers, it 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. Also, most of the requirements in the proposed rules only apply to providers who voluntarily choose to be designated as ETCs.

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.

Initial Regulatory Flexibility Analysis

Existing Universal Service Fund (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), may have obligations under the USF, including an obligation for payments to the USF.

These rules should have no significant 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. Finally, Eligible Telecommunications Carrier status, which is the trigger for most USF obligations, is voluntary.

Fiscal Estimate

These rule changes have no fiscal impact. An Economic Impact Analysis is attached.

Contact Person

Questions regarding this matter should be directed to Jeff Richter, USF Director, at [phone] or [e-mail]. Small business questions may be directed to Gary Evenson at [phone] or [e-mail]. Media questions should be directed to Nathan Conrad, Communications Director, 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].

Text Of The Rules

SECTION 1. PSC 160.01 (1), (2) (b) and (4) are amended to read:

PSC 160.01 Scope and purpose. (1) Purpose. Chapter PSC 160 is designed to effectuate and implement s. 196.218, Stats., 47 USC 254, 47 CFR 54 and parts of other sections of the Wisconsin and federal statutes, authorizing the commission to establish and operate a universal service fund and programs to further the goal of providing a basic set of essential telecommunications services and access to advanced service capabilities to all customers of in the state.

(2) (b) Nothing in this chapter shall preclude the commission from giving special and individual consideration being given to exceptional or unusual situations and, upon due investigation of the facts and circumstances involved, the adoption of from adopting requirements as to individual providers or services programs that may be lesser, greater, other or different than those provided in this chapter.

(4) Enforcement. The manner of enforcing ch. PSC 160 is prescribed in ss. 196.218, 196.499 (17) and 196.66, Stats., and includes such any other means as provided in statutory sections administered by the commission.

SECTION 2. PSC 160.01 (5) is renumbered 160.01 (5) (intro.), and amended to read:

PSC 160.01 (5) (intro.) Orders. The commission may issue orders it deems considers necessary to assist in the implementation or interpretation of this chapter. Except for declaratory rulings under s. 227.41, Stats., which require the opportunity for a hearing, and commission determinations not subject to judicial review under ss. 227.52 and 227.53, Stats., orders shall be issued The commission shall issue orders only after notice and an opportunity for comment by interested parties including the universal service fund council. , except in the following circumstances:

SECTION 3. PSC 160.01 (5) (a) to (c) are created to read:

PSC 160.01 (5) (a) The commission issues a determination not subject to judicial review under ss. 227.52 and 227.53, Stats.

(b) The commission receives a request for a declaratory ruling under s. 227.41, Stats., which requires the opportunity for a hearing.

(c) As otherwise provided in this chapter.