There is a state USF and a federal USF program. The state and federal funds and programs are complementary rather than duplicative. The federal and the state USF programs rely on the designation of Eligible Telecommunications Carriers (ETCs) to carry out some programs.
The Commission designates Eligible Telecommunications Carriers (ETCs). Therefore, ETCs are eligible for funding from the federal USF program and certain funding from the state USF program. 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.
Designation as an ETC is required for a provider 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 criteria are codified in the federal rules. The 1996 Telecommunications Act states that, “A State may adopt regulations not inconsistent with the commission’s rules to preserve and advance universal service.” 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 chose to create additional requirements. The complementary state and federal USF programs are as follows:
Federal High Cost Fund and the Wisconsin High Rate Assistance Credit Program
The federal USF program provides funding to ETCs that serve high-cost areas. That funding is used to help cover the costs of expanding infrastructure into those areas. This helps top ensure that rates in those areas stay lower since rates need not provide the funds for that expansion. The federal program also funds broadband deployment across the country through the Connect American Fund (CAF I and II), Alternative Connect America Cost Model (A-CAM I and II), and the Rural Digital Opportunity Fund (RDOF).
The Wisconsin USF program provides reimbursement to providers that offer credits to customers when rates are higher than as designated in Wis. Stat. § PSC 160.09. The Wisconsin USF partially funds the Broadband Expansion Grant Appropriation pursuant to Wis. Stat. § 196.218(3)(a)2s. with an annual funding requirement of $2 million. Federal and Wisconsin Lifeline and Link-Up Programs
Under the federal Lifeline program, the USF provides funding to ETCs to discount telecommunications bills for low-income customers. The discount may be applied to a wide-range of technologies, as provided in 47 CFR § 54.401(a). Program eligibility is determined via the National Verifier (NV) and non-duplication of benefit is administered via the National Lifeline Accountability Database (NLAD). Under Link-up, the federal USF defrays connection costs and discounts phone bills—using the same tools as Lifeline—for tribal customers. Wisconsin’s Lifeline program funding to ETCs provides additional credits for customers also receiving the federal Lifeline benefit to achieve a telecommunications bill of about $15. Under the Commission Order (PSC REF#: 338212) issued February 15, 2018, the state discount may be applied to the same technologies designated in 47 CFR § 54.401(a). Program eligibility is determined via the NV, with the added benefit of connection to the Wisconsin Department of Health Services and Wisconsin Department of Revenue databases allowing for real-time program- and income-qualification determinations without additional documentation, in most cases. The non-duplication of benefits is administered via the NLAD. Wisconsin does not offer a corollary to Link-Up, but tribal customers are able to access the Wisconsin Lifeline benefit. Federal E-Rate Program and Wisconsin USF Programs at the Department of Public Instruction, Department of Administration, and at the University of Wisconsin System
This federal USF program provides funding to connect schools and libraries to affordable, high-speed internet.
The state USF program assesses funding for programs at the Department of Public Instruction addressing access for schools and libraries, along with technology accessibility for people with disabilities. The state USF program funds telecommunications at the UW System, and for the TEACH program at the Department of Administration, which also supports school connectivity. In 2018, $44 million of federal USF E-Rate dollars were used to fund Wisconsin’s Broadband Expansion Grant Program.
Federal Rural Health Care Program and the Wisconsin Telemedicine Equipment Program
The federal USF program provides funding to eligible rural health care providers for broadband and telecommunications services needed to provide health care. Wisconsin’s program funds equipment purchases by Non-Profit Medical Clinics and Public Health Agencies to provide telehealth services.
The federal USF program assessment applies to all carriers, including wireless carriers, and is assessed based on interstate revenues. The state USF program 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 less than $200,000 in intrastate revenues.
There are additional state USF programs that do not have a corollary to federal programs, such as the Telecommunications Equipment Purchase Program (TEPP).
F. Comparison with Similar Rules in Surrounding States
Lifeline
Many state USF programs have a version of Lifeline that applies federal rules alongside state-specific rules. The following compares Wisconsin’s Lifeline program with Illinois, Minnesota, and Michigan using the following characteristics: adoption of 47 CFR § 49.409, the use and amount of state Lifeline credits, and the adoption of eligible technologies identified in 47 CFR § 54.401(a). Wisconsin adopted the eligibility rules in 47 CFR § 49.409 in its interim Order (PSC REF#: 338212). Illinois and Minnesota rules directly reference 47 CFR § 54.409. In Michigan, the 47 CFR § 54.409 is referenced for all subscribers after January 1, 2020; for those subscribers enrolled before January 1, 2020, there are broader eligibility guidelines in place. The amount of the state discount varies by state. In Wisconsin, the discount is variable based on the ETC base rate and is applied in addition to the federal discount up to a maximum reimbursement of $9.25 per customer, per month. Like Wisconsin, Minnesota and Michigan provide a state discount in addition to the federal discount. In Minnesota, the discount is $7 per customer, per month, and in Michigan, the discount varies by age: those under age 65 receive a discount of $8.25-to-$11.25 per customer, per month, depending on the service provider, while those age 65 or older receive a minimum discount of $12.35 per customer, per month. Illinois provides no state discount.
In Wisconsin, the Commission in its interim Order adopted all technologies outlined in 47 CFR § 54.401 (PSC REF#: 338212). In Illinois, Minnesota, and Michigan the federal discount applies to all technologies; the state discount in Minnesota and Michigan applies to landlines only. Telecommunications Equipment Purchase Program (TEPP)
TEPP is an equipment distribution program that provides access to telecommunications for people with hearing, speech, hearing and low vision, and/or mobility disabilities. TEPP provides vouchers to purchase specialized telecommunications equipment from authorized vendors, who are reimbursed for the cost of the equipment, up to the value of the voucher. Voucher amounts vary depending on the disability category, and broadly reflect the cost of equipment used to access telecommunications by people in that category.
The following compares Wisconsin’s Lifeline program with Iowa, Illinois, and Minnesota using the following characteristics: the ultimate equipment owner, the costs covered by the program, and the types of disabilities eligible under the program. .
In Wisconsin, Iowa, and Illinois, the ultimate equipment owner is the customer while in Minnesota, the equipment is loaned to customers who may swap out equipment. The program in Wisconsin covers costs equal to, or less than, the amount of the equipment voucher. A $100 co-pay is required for all categories except hard of hearing. In Iowa, Illinois, and Minnesota, the program covers 95-to-100 percent of the equipment cost. Wisconsin’s program covers people with hearing, speech, hearing and low vision, and mobility disabilities. In Iowa, Illinois, and Minnesota, customers with hearing and speech disabilities are eligible, while Minnesota also includes people with physical disabilities.
G. Summary of factual data and analytical methodologies
No factual data or methodologies were relied upon. The proposed rule changes align Wis. Admin Code ch. PSC 160 with FCC federal standards and clarify other provisions of PSC 160 pertaining to Telecommunications Equipment Purchase Program (TEPP) vouchers. H. Analysis and supporting documents used to determine effect on small business
The Commission’s fiscal estimate and economic impact analysis determined that the proposed rules will not have an economic effect on small businesses. The Commission sought input from the Universal Service Fund (USF) Council, comprised of members of the telecommunications industry, solicited public comments from telecommunications carriers and all community-based and public agencies working with stakeholder groups, including W-2 agencies, Aging and Disability Resource Centers, and county and Tribal health agencies.
I. Effect on Small Business
These proposed rules will not have an economic impact on small businesses. There are no new reporting or bookkeeping requirements created under the proposed rules.
Existing Universal Service Fund (USF) rules may have an effect on small telecommunications utilities, which are small businesses under Wis. Stat. § 196.216 for the purposes of Wis. Stat. § 227.114. For the current USF rules, the Commission has already established exemptions and exceptions from the components of Wis. Admin. Code ch. PSC 160 which may have an effect on small business, which include the following exemptions and exceptions described below.
USF Assessment Obligations
The Commission assesses providers operating in Wisconsin for the USF based on intrastate revenues. In Wis. Admin Code § PSC 160.18(1) the Commission established an exemption from fund assessments to protect entry by, and continued operation of, small telecommunications providers as directed by statutory objectives. Under Wis. Admin. Code § PSC 160.01(2)(b), the Commission may give individual consideration to unusual situations and may adopt different requirements for particular telecommunications providers. Small businesses can request that the Commission provide an exception to a rule requirement. Additionally, while assessment obligations present an apparent cost, assessment charges are paid by customers, collected by the provider, and paid to the state USF program through a monthly invoicing process. The cost to the business is primarily realized through staff time and facility costs, which are not impacted by the proposed rule changes.
ETC Participation in the Lifeline program
The businesses primarily impacted by the changes in the proposed rule revision are providers who voluntarily apply to be designated as ETCs. The rule revision aligns Wis. Admin. Code ch. PSC 160 with rules established by the Federal Communications Commission in 2016. The changes in the proposed rules codify existing practices without an associated financial impact. Additionally, as the hallmark of the Lifeline program, the USF programs fully reimburse ETCs for discounts provided to customers.
TEPP
Specialized equipment vendors may be small businesses under Wis. Stat. § 196.216 for the purposes of Wis. Stat. §. 227.114. Vendors who participate in TEPP work with customers to identify and purchase the appropriate equipment, and the rules authorize them to add an additional 15 percent to the cost of the equipment to cover business costs. This rulemaking proposes an administrative efficiency that recognizes the ubiquity of specialized telecommunications equipment to access the internet of the Deaf, and does not impose additional reporting or other requirements on vendors. Therefore, there are no anticipated impacts on these small businesses. FISCAL ESTIMATE
