Idaho Public Utilities Commission

Case No. TFW-T-09-01, Order No. 32301

August 1, 2011

Contact: Gene Fadness (208) 334-0339, 890-2712

Commission denies ETC designation to pre-paid wireless service

State regulators have denied an application from TracFone Wireless, Inc., a prepaid wireless service provider, to be declared an Eligible Telecommunications Carrier in Idaho. The designation would have qualified TracFone to receive money from federal and state low-income assistance programs.

The Idaho Public Utilities Commission’s denial is due primarily to TracFone’s refusal to contribute to a combined federal and state program called Lifeline, funded by a 6-cent surcharge on each residential, business and wireless phone line in the state. Because TracFone offers pre-paid wireless service, it does not bill its customers and, therefore, claimed it has no means to collect the surcharge. TracFone also said it would not contribute to Idaho’s Emergency-911 fund. Not doing so is a violation of the Idaho Emergency Communications Act.

The commission noted the company’s testimony that it has the ability to track the usage rate of its customers and calculate the amount that would be due in low-income and E-911 surcharges. “The plain and unambiguous language of these laws requires all telecommunications carriers – including pre-paid wireless carriers – to remit fees established under those statutes,” the commission stated. “TracFone will not be allowed to escape the duty to remit the surcharges simply because it chooses not to bill its customers on a monthly basis.”

TracFone already offers pre-paid wireless service in Idaho, but sought ETC designation so it could provide service to low-income customers under the name SafeLink Wireless. Qualifying customers would receive a free handset and up to 67 minutes of free time. For use beyond 67 minutes, customers would purchase a pre-paid card at 20 cents per minute. SafeLink offers service to low-income, low-volume users and transient users who either choose not to enter into long-term service commitments or are unable to meet the credit requirements necessary to obtain service from other carriers.

TracFone argued that the issues regarding payment of fees to Lifeline or to the Emergency 911 fund can be addressed in separate proceedings and that ruling in favor the ETC designation now would make its service immediately available to many low-income households in Idaho.