Idaho Public Utilities Commission

Case No. TFW-T-09-01, Order No. 32358

September 21, 2011

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

Commission declines to reconsider telecommunications order

The Idaho Public Utilities Commission has affirmed its earlier denial of an application by TracFone Wireless, Inc., a prepaid wireless service provider, to be declared an Eligible Telecommunications Carrier in Idaho. ETC status would have qualified TracFone to receive money from federal and state low-income assistance programs.

The 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, Lifeline provides discounts that allow qualifying low-income households to retain basic telephone service. TracFone claims it cannot assess its customers the surcharge because it offers pre-paid wireless service rather than billing its customers, which would provide a mechanism for collecting 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 ruled.

After the commission’s July 29 denial, TracFone petitioned for reconsideration. This week the commission declined to reconsider. TracFone now has the option to appeal to the state Supreme Court.

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.

The commission said the fact that TracFone does not bill its customers does not justify violating Idaho statutes that require all telecommunications providers to contribute to E-911 and Lifeline. “TracFone has elected to pursue a business model that makes the collection of the fees more challenging than a more typical telecommunications provider ....” the commission said. “We find that TracFone’s selection of a business model does not render the relevant statutes inapplicable.”

In its earlier order, the commission noted TracFone’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.

TracFone further argued that denial of its application would be a “disservice” to low-income households in Idaho. “TracFone’s purported aim of increasing the Lifeline participation rate for Idaho households, however laudable, must be weighed against the company’s persistent refusal to contribute to programs that directly benefit many of those same households,” the commission said.

The commission’s order, along with other documents related to this case, can be accessed on the commission’s Website at www.puc.idaho.gov. Click on the telephone icon, then on “Open Telecom Cases,” and scroll down to Case No. TFW-T-09-01.

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