Minnesota Telephone Assistance Plan (TAP) & Federal Lifeline

Program Overview

February 21, 2017Before the Governor’s Task Force on Broadband

Presented byMinnesota Public Utilities Commission

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Purpose Both the FCC’s Lifeline program and Minnesota’s Telephone

Assistance Plan (TAP) provide a discount/credit to the same pool of Minnesota households eligible for assistance

The Public Utilities Commission (PUC) and the Department of Commerce work together, collaborating with other agencies to: Inform eligible households about TAP and Lifeline Facilitate application processing Provide administrative oversight of TAP & the TAP Fund

mn.gov/puc 651-296-0406 1-800-657-3782

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Eligible HouseholdsLow-income threshold (135% of federal poverty

guidelines) or

A household member participating in one of several programs specified in law: Supplemental Nutrition Assistance Program (SNAP), was Food Stamps Medicaid Supplemental Security Income (SSI) Federal Public Housing Assistance (FPHA) or Section 8 Veterans Pension and Survivors Benefit – NEW Tribal Programs (live on federally-recognized Tribal lands)

mn.gov/puc 651-296-0406 1-800-657-3782

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One Application

Households use a single application to apply for both programs

Service providers process a single application to determine eligibility for discount/credit through both programs

Households and service providers are both supported by the Commission’s Consumer Affairs Office (CAO)

mn.gov/puc 651-296-0406 1-800-657-3782

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Federal Lifeline Program Provides monthly service discounts per household for voice service and (as

of December 2, 2016) for broadband service

One of 4 programs the non-profit Universal Service Administration Company (USAC) administers for the FCC along with the $10 billion Universal Service Fund (USF)

The USF is funded through fees paid by telecommunications carriers based on an assessment of their interstate and international end-user revenues Wireline companies Wireless companies Interconnected Voice over Internet Protocol (VoIP) providers, including cable

companies that provide voice service

mn.gov/puc 651-296-0406 1-800-657-3782

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Federal Lifeline ProgramThe Lifeline discount is $9.25/month per household

Lifeline may be used for both mobile and fixed broadband as of December 2, 2016

Support for both mobile and fixed voice-only service will gradually decrease to zero over the next five years

mn.gov/puc 651-296-0406 1-800-657-3782

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FCC Orders Lifeline Reform & Modernization

In June 2015, the FCC made changes to the Lifeline Program in the Lifeline Reform Order

In March 2016, the FCC made substantial additional program changes in the Lifeline Modernization Order

Newly appointed FCC Chair has indicated his intent to revisit the Lifeline Orders, but made no further announcements

mn.gov/puc 651-296-0406 1-800-657-3782

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Lifeline Modernization OrderBroadband included

Fixed and mobile voice-only phased out by end of 2021

Minimum service standardsNational Verifier SystemEligibility and other changes

mn.gov/puc 651-296-0406 1-800-657-3782

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Telephone Assistance Plan (TAP) The Public Utilities Commission’s five Commissioners administer the

TAP program, reimbursing local service providers for credits issued to subscribers and for reasonable administrative expenses (Minn. Stat. §§ 237.69–71)

The Commission determines both the amount of the credits and the amount of the surcharge, subject to statutory maximums (Minn. Stat. § 237.70, subd. 7 (d) (1) and (2))

Commission rules require it to examine credit and surcharge levels at least annually (See Minn. Rules 7817.0500) and authorize it to adjust those levels at any point on 30 days’ notice (Minn. Rules 7817.0700)

mn.gov/puc 651-296-0406 1-800-657-3782

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Telephone Assistance Plan (TAP)Established in 1988TAP offers a monthly credit for eligible telephone

subscribers, currently $3.50 per month

The monthly TAP credit may not exceed the Federal Lifeline Program credit or exceed 50 percent of the local exchange rate charged

mn.gov/puc 651-296-0406 1-800-657-3782

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Telephone Assistance Plan (TAP) TAP is funded through a monthly surcharge, currently $0.03

per month per access line Surcharge has a statutory maximum of $0.10 per access line

(Minn. Stat. § 237.70, Subd. 6) Local service providers remit surcharge revenues to the

Department of Public Safety, along with 911 and Telecommunications Access Minnesota (TAM) fees

DPS deposits the TAP surcharges into the state TAP Fund

The TAP Fund’s target operating balance is $395K

mn.gov/puc 651-296-0406 1-800-657-3782

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Telephone Assistance Plan (TAP) Unlike the Federal Lifeline Program, statutes do not allow

TAP to support broadband services - it is a voice-only program

Under the previous administration, the FCC planned to lower the voice-only Lifeline discount each of 5 years until it was zero, effectively lowering the TAP credits allowed

The new FCC chair has indicated his intent to revisit recent Lifeline program changes but offered no further guidance

mn.gov/puc 651-296-0406 1-800-657-3782

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TAP Fund Oversight 234 telephone companies submit reports regarding

1,727,935 lines (June 2016)

26,913 telephone subscribers receive TAP credits (June 2016)

Service providers with 100 subscribers or more submit TAP reports on a monthly or quarterly basis (93 % of lines; 98% of subscribers)

Others report annually

mn.gov/puc 651-296-0406 1-800-657-3782

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TAP Administrator Administers operations including program compliance with governing law

and the creation and update of program web content

Ensures filing compliance by 234 companies

Compiles company reports of subscriber lines, surcharge payments, and credit reimbursement

Tracks revenue transfer from DPS to the TAP Fund

Tracks disbursements to companies from the TAP Fund

Helps present fund activity, fund balance and surcharge/credit recommendations to the Commissioners for review and decision at least annually

mn.gov/puc 651-296-0406 1-800-657-3782

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Consumer Affairs Office (CAO)Part of the Minnesota Public Utilities

CommissionPrepares web and printed program information Conducts outreach activitiesResponds to phone and email inquiries from

the public, service providers and other agencies

mn.gov/puc 651-296-0406 1-800-657-3782

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Collaborative HubThe CAO is a collaborative hub among:

Staff at the PUC and at the Department of Commerce

Other state agencies working with potentially eligible households (such as Human Services)

Federal entities, such as the FCC and USAC Service providers, such as the Minnesota

Telecom Alliance and individual companies

mn.gov/puc 651-296-0406 1-800-657-3782

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Outreach ActivitiesTAP and LifelineCold Weather RuleGas Affordability ProgramsLow Income Electric Discount ProgramsUtility Customer Protections

mn.gov/puc 651-296-0406 1-800-657-3782

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Outreach Activities State and federal elected officials (211) County Human Services Departments (87) Community Action Agencies (24) Long term care facilities (400) Industry groups (telecom, energy) Salvation Army Distribute 20,000 brochures each year

mn.gov/puc 651-296-0406 1-800-657-3782

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Lifeline Changes & UncertaintyThe FCC anticipates revisiting the previous

administration’s Lifeline orders but has provided no further clarification at this time

The following highlights from the FCC’s 2016 order remain in place

mn.gov/puc 651-296-0406 1-800-657-3782

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Support Level PhasedownLifeline Modernization Order

mn.gov/puc 651-296-0406 1-800-657-3782

Date Mobile Voice-Only

Fixed Voice-Only

Mobile Broadband

Fixed Broadband

December 2, 2016 $9.25 $9.25 $9.25 $9.25

December 1, 2017 $9.25 $9.25 $9.25 $9.25

December 1, 2018 $9.25 $9.25 $9.25 $9.25

December 1, 2019 $7.25 $7.25 $9.25 $9.25

December 1, 2020 $5.25 $5.25 $9.25 $9.25

December 1, 2021 0* 0* $9.25 $9.25

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Minimum Service StandardsLifeline Modernization Order

Date Mobile Voice

Mobile Broadband

Fixed Broadband

12/2/2016 500 Minutes

500 MB Speed: 10/1 MbpsUsage Allowance: 150 GB

12/1/2017 750 Minutes

1 GB Speed: Updating Mechanism Usage Allowance: CAF Standard or Bureau

Determination 12/1/2018 1000

Minutes 2 GB Speed: Updating Mechanism

Usage Allowance: CAF Standard or Bureau Determination

12/1/2019 1000 Minutes

Updating Mechanism

Speed: Updating Mechanism Usage Allowance: CAF Standard or Bureau

Determination 12/1/2020 1000

Minutes Updating

Mechanism Speed: Updating Mechanism

Usage Allowance: CAF Standard or Bureau Determination

12/1/2021 1000 Minutes

Updating Mechanism

Speed: Updating Mechanism Usage Allowance: CAF Standard or Bureau

Determination

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National VerifierEnvisions consolidating Lifeline application

and recertification processes into one central organization for all 50 states

Discussions on this large effort are underway

The Commission and Department of Commerce are taking part in these discussions

mn.gov/puc 651-296-0406 1-800-657-3782

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Staff & Resources PUC Telecom & Energy Manager, Michelle Rebholz, manages TAP

administration and support of customer applications for TAP and Lifeline

PUC TAP Administrator, Theresa Staples, administers programmatic and financial aspects of TAP

PUC Utility Analyst, Mike McCarthy, administers TAP/Lifeline related dockets before the Commission, typically with supporting information submitted by the Department of Commerce

PUC Programs Coordinator, Tracy Smetana, addresses customer and service provider inquiries, creates outreach materials and coordinates with other agencies

Department of Commerce Telecom Manager, Greg Doyle, supervises staff providing analysis and filings in Commission dockets and coordinates TAP/Lifeline issues with DHS and with NARUC

mn.gov/puc 651-296-0406 1-800-657-3782

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Questions?Mike McCarthyUtility AnalystPublic Utilities CommissionMichael.McCarthy@state.mn.us651-201-2208

Tracy SmetanaPrograms CoordinatorPublic Utilities CommissionTracy.Smetana@state.mn.us651-296-0406

mn.gov/puc 651-296-0406 1-800-657-3782