Lance J.M. Steinhart, P.C. Attorneys at Law 1725 Windward Concourse Suite 150 Alpharetta, Georgia 30005

Lance J.M. Steinhart, P.C. Attorneys At Law 1725 Windward Concourse Suite 150 Alpharetta, Georgia 30005

Also Admitted in New York Telephone: (770) 232-9200 Email: [email protected] Facsimile: (770) 232-9208

April 6, 2020

VIA ELECTRONIC FILING

Secretary to the Commission New York State Public Service Commission Empire State Plaza Agency Building 3 Albany, New York 12223-1350 (518) 474-2500

Re: Case 20-C-______: Petition of Sage Telecom Communications, LLC Pursuant to Public Service Law 92-h to Participate in the New York State Targeted Accessibility Fund and for Establishment of Distribution

Dear Sir/Madam:

Attached please find for filing the Petition of Sage Telecom Communications, LLC Pursuant to Public Service Law 92-h to Participate in the New York State Targeted Accessibility Fund and for Establishment of Distribution.

If you have any questions or if I may provide you with additional information, please contact me at the above address or telephone number. Thank you for your attention to this matter.

Respectfully submitted,

/s/ Lance J.M. Steinhart

Lance J.M. Steinhart, Esq. Managing Attorney Lance J.M. Steinhart, P.C. Attorneys for Sage Telecom Communications, LLC

BEFORE THE NEW YORK STATE PUBLIC SERVICE COMMISSION

______

Petition of Sage Telecom Communications, LLC ) Pursuant to ) Public Service Law 92-h to Participate in the ) Case 20-C-______New York State Targeted Accessibility Fund ) and for Establishment of Distribution ) ______

PETITION

Lance J.M. Steinhart, Esq. Managing Attorney Lance J.M. Steinhart, P.C. 1725 Windward Concourse, Suite 150 Alpharetta, Georgia 30005 (770) 232-9200 (Phone) (770) 232-9208 (Fax) [email protected] (E-Mail)

Attorneys for Sage Telecom Communications, LLC

BEFORE THE NEW YORK STATE PUBLIC SERVICE COMMISSION

______

PETITION

Pursuant to New York Public Service Law § 92-h (“Section 92-h”),1 Sage Telecom

Communications, LLC d/b/a TruConnect (“TruConnect” or “Company”) respectfully requests

that the New York State Public Service Commission (“Commission”): (1) recognize

TruConnect as a provider of wireless Lifeline service pursuant to New York State’s Lifeline

program; and (2) authorize TruConnect to receive distributions from the Targeted Accessibility

Fund (“TAF”) in the amount of $11.05 per household per month in order to fund TruConnect’s

enhanced service offering. TruConnect is eager to launch this enhanced service offering in order

to benefit low-income New Yorkers as soon as possible.

TruConnect currently offers Lifeline service in New York State, with funding limited to federal Universal Service Fund (“USF”) support of $9.25 per household per month.

TruConnect had 2,379 New York customers as of April 1, 2010. TruConnect provides affordable telecommunications service to consumers to whom wireless service is otherwise unavailable or impracticable. With this Petition, TruConnect proposes to expand its service

1 N.Y. PUB. SERV. LAW § 92-h (McKinney 2017). 2 offering in New York State by substantially increasing voice and data usage allowances to eligible households in the state. TruConnect will become a contributor to the TAF once

TruConnect is approved to receive New York State Lifeline funds from TAF. As demonstrated herein, TruConnect meets all statutory requirements for participation in the New York State

Lifeline program and the receipt of funds from TAF. TruConnect respectfully requests that the

Commission approve this Petition expeditiously so that TruConnect may begin providing enhanced Lifeline services to New York households at the earliest possible time.

I. DESCRIPTION OF THE COMPANY

The Commission issued an Order Designation TruConnect as an Eligible Telecommunications Carrier in Case No. 19-C-0363 issued and effective March 19, 2020. TruConnect is a Texas Limited Liability

Company, with its principal office located at 1149 S. Hill Street, Suite H-400, Los Angeles, California 90015.

Sage Telecom Communications, LLC is a subsidiary of TSC Acquisition Corporation (“TSC”) and was formerly known as Sage Telecom, Inc. before a corporate restructuring in 2012. TSC also owns TruConnect

Communications, Inc., formerly Telscape Communications, Inc., and the owners of TSC separately own

TruConnect Mobile, LLC, which sells mobile hotspot devices and low-cost monthly data plans, as well as

TruConnect Technologies, LLC, a mobile data analytics company that develops data intelligence products and services for wireless carriers, cable operators, content providers, and application developers.

TruConnect provides prepaid wireless telecommunications services to consumers by using the underlying wireless networks of Sprint Spectrum, L.P. (“Sprint”), Verizon Wireless (“Verizon”), and/or

T-Mobile USA, Inc. (“T-Mobile”) (collectively, “Underlying Carriers”) on a wholesale basis to offer nationwide service. TruConnect obtains from its Underlying Carriers the network infrastructure and wireless transmission facilities to allow the Company to operate as a Mobile Virtual Network Operator (“MVNO”), similar to

TracFone Wireless, Inc. (“TracFone”), Virgin Mobile USA, L.P. (“Virgin Mobile”), and i-wireless, LLC (“i- wireless”), each of which has been granted ETC status in New York. TruConnect is currently designated as a wireless ETC in Arizona, Arkansas, California, Colorado, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas,

3 Kentucky, Louisiana, Maryland, Michigan, Minnesota, Mississippi, Missouri, Nebraska, Nevada, Ohio,

Oklahoma, Pennsylvania, Puerto Rico, South Carolina, Texas, US Virgin Islands, Utah, West Virginia and

Wisconsin. TruConnect has applications for ETC designation pending with the FCC (for the states of

Alabama, Connecticut, Delaware, Florida, Maine, New Hampshire, North Carolina, Tennessee, Virginia, and the District of Columbia, the “Non-Jurisdictional States”) and with state public utility commissions in New

Mexico, and Washington.

II. DESIGNATED CONTACT

Questions, correspondence, or other communications concerning this Petition should be directed to:

4 III. DESCRIPTION OF SERVICE OFFERING

Currently, TruConnect’s Lifeline offering in the State of New York includes 1,000 voice minutes, unlimited text messaging, 3 gigabytes (“GB”) of data usage, and a free SIM card. This offering meets the minimum service requirements established by the FCC and is entirely supported by the federal Universal Service Fund (“USF”), which is limited to $9.25 per household per month.2 With TAF support of an additional $11.05 per household per month,

TruConnect proposes to increase its Access offering in New York State to include all of the existing service components, plus unlimited calling and 6 gigabytes (GB) of data. Table 1, below, is a comparison of the current and proposed offerings:

Table 1: Comparison of Current v. Proposed Monthly Offering

Proposal for Enhanced Offering Service Component Current Offering in NY Voice Minutes 1,000 minutes Unlimited Text Messaging Unlimited Unlimited 3 GB 6 GB Data Usage

SIM Card Free Free/4G LTE smart phone if 90 day port freeze Retail Value of Service $9.25 per household $20.30 per household Funding Source Federal USF only Federal USF and NYS TAF

2 47 C.F.R. § 54.403(a)(1).

To support this expanded service offering, TruConnect seeks the Commission’s approval for distributions from TAF of $11.05 per household per month. This level of funding is necessary in order to support the service components of unlimited voice and incremental data usage. The unsubsidized retail rate for TruConnect’s service offering would be $20.30 per month. Federal USF funding already covers $9.25 of this amount; therefore, TruConnect seeks to recover the remaining $11.05 from TAF.

This level of funding would also be consistent with the formula set forth for competitive carriers in the TAF Manual, which prescribes that competitive wireline carriers providing

Lifeline service should receive distributions from TAF based on the difference between (i) the retail local exchange service rate for the ILEC in the carrier’s service territory, and (ii) the

Lifeline service rate for the ILEC in the carrier’s service territory, (iii) less the Federal USF subsidy of $9.25.3 To the best of TruConnect’s knowledge, for example, the TAF subsidy for competitive wireline carriers offering Lifeline service in Verizon territory is approximately

$11.05 per subscriber.4 The actual elements of TruConnect’s enhanced offering may vary, depending upon the amount of the TAF distribution approved by the Commission. In any event, TruConnect will ensure that New York Lifeline consumers receive services at least equivalent to the full value of the combined federal and TAF subsidies.

3 Targeted Accessibility Fund of New York, Operational Procedures and Advisory Board Manual, Version 14.0, Rev. May 11, 2016 (the “TAF Manual”) at p.16. 4 (i) Verizon retail local service rate: $29.50 ($23.00 plus $6.50 Subscriber Line Charge); less (ii) Verizon Lifeline service rate: $9.20, less (iii) Federal USF subsidy $9.25 = $11.05. 6 IV. LEGAL BASIS FOR APPROVING REQUEST

During the 2017 Regular Session, the state Senate and Assembly voted unanimously to enact Section 92-h in order to expand New York State’s Lifeline program to allow wireless telecommunications providers to offer wireless Lifeline service, regardless of whether the provider is a facilities-based provider, and to receive distributions from TAF. The new law became effective upon the Governor’s signature on November 29, 2017. Prior to this expansion, only wireline carriers were eligible to receive New York State Lifeline support.

Legislators recommended changing the law because the restriction on wireless participation in the state Lifeline program had become “obsolete.”5 Expanding the program to wireless companies would “increase consumer choice and unlock the Lifeline marketplace to encourage

6 participation by broadband providers.”

Under the new law, a wireless service provider may participate in the TAF for

purposes of offering Lifeline service so long as the wireless service provider has been

designated as an ETC in the state pursuant to 47 USC § 214 (e). As stated above, the

Commission FCC designated TruConnect as an ETC throughout New York State on March

19, 2020. Therefore, TruConnect is qualified to participate in the state Lifeline program.

Accordingly, TruConnect hereby elects to participate in the TAF and represents that it will

assume all rights and obligations associated with participation on the same basis as other

participants. TruConnect respectfully requests that the Commission acknowledge

5 2017 N.Y. Senate Bill No. 5192, Committee Report (Mar. 14, 2017). 6 Id. 7 TruConnect as a participant in the TAF, for the purpose of offering enhanced Lifeline service.

V. APPROVAL OF THIS REQUEST IS IN THE PUBLIC INTEREST

As an experienced provider of wireless Lifeline, TruConnect is well-positioned to

offer enhanced capability once the Commission authorizes TruConnect to receive

distributions from TAF. In addition to meeting the basic qualifications for participating in

the expanded state Lifeline program, TruConnect’s Petition to offer enhanced wireless

Lifeline serves the public interest not only by providing unlimited nationwide minutes (which

more than meets the calling capacity sufficient for telecommunications needs), but also by

providing a substantial increase in data usage to help confront the “digital divide.” Enhanced

Lifeline customers will have more minutes to contact (or be contacted by), for example, current

and prospective employers, health care providers, or government services, and to remain in

contact with family members and friends, as well as access to additional mobile data to send and

receive email, apply for jobs, or otherwise access the internet. The proposed service meets

the needs of low-income households and addresses continued growth in the importance of

mobile broadband access.

Low-income households are very reliant on wireless telecommunications services,

including mobile broadband. Many households use wireless Lifeline service as their sole

telecommunications service.7 Like other households, low-income households want wireless

service because of the convenience and accessibility that it provides. Moreover, while voice

7 See In the Matter of Lifeline and Link Up Reform Modernization, 27 FCC Rcd. 6656, ¶ 15 (2012) (“Indeed, many low-income consumers have stated in our record that without a Lifeline subsidy, they would be unable to afford service.”). 8 minutes and text messaging capability are crucial wireless services, wireless data usage is

growing significantly. In fact, low-income smartphone owners are especially likely to use

their mobile device when seeking and applying for jobs.8 Consistent with the purpose behind

New York’s expansion of its Lifeline program, providing TruConnect the ability to offer

enhanced Lifeline service offerings will help “modernize the Lifeline program to help low-

income consumers afford access to the internet and help close the digital divide.”9

The need is acute in this state. According to the Governor’s office, “Broadband

adoption or use of broadband at home is a critical component of New York State’s Broadband

Strategy. More than six million New Yorkers, or 30 percent, don’t use broadband at home

due to issues such as affordability, lack of knowledge or perception of need. . . . In older

adults, the technology gap is a product of a much wider problem of isolation and

marginalization.”10 To address this problem, “New York State has been working with its

broadband provider and adoption partners to increase broadband adoption rates among New

Yorkers.”11

The federal Lifeline program was created to ensure that low-income Americans could make voice calls, including for educational, health, and employment purposes.12 But today,

8 M. Anderson, Digital Divide Persists Even as Lower-Income Americans Make Gains in Tech Adoption, Pew Research Center, Mar. 22, 2017, http://www.pewresearch.org/fact-tank/2017/03/22/digital-divide-persists-even- as-lower-income-Americans-make-gains-in-tech-adoption/. 9 2017 N.Y. Senate Bill No. 5192, Committee Report (Mar. 14, 2017). 10 Press Release, New York Governor’s Office, Gov. Cuomo Announces $9 Million Broadband Investment in the North Country (July 30, 2014) (available at https://www.governor.ny.gov/news/governor-cuomo-announces-9- million-broadband-investment-north-country). 11 Id. 12 Federal Communications Commission, Universal Service, https://www.fcc.gov/general/universal-service; 9 the “Internet has become a prerequisite to full and meaningful participation in society.”13 As our society becomes more digital, wireless, and broadband-based, programs that serve vulnerable populations must adjust. The biggest reason low-income households do not sign

14 up for broadband is the cost.

Given this combination of factors, TruConnect’ proposal gives New Yorkers an

opportunity to participate more fully in this new technological environment without an added

cost burden, which is what the Legislature intended.

VI. CONCLUSION

TruConnect meets the requirements outlined in Section 92-h for participation in the

TAF. The Commission’s approval of this Petition will enable TruConnect to significantly

enhance its service to eligible recipients in New York State to meet current and growing

technological needs.

For the reasons detailed above, TruConnect respectfully requests that the Commission

promptly grant this request to acknowledge TruConnect as a participant in the state Lifeline

program and approve the distribution of at least $11.05 per household per month from TAF.

Federal Communications Commission, Lifeline Program for Low-Income Consumers, https://www.fcc.gov/general/lifeline-program-low-income-consumers (“Since 1985, the Lifeline program has provided a discount on phone service for qualifying low-income consumers to ensure that all Americans have the opportunities and security that phone service brings, including being able to connect to jobs, family and emergency service.”). 13 In the Matter of Lifeline and Link Up Reform and Modernization, Third Report and Order, Further Report and Order, and Order on Reconsideration, 31 FCC Rcd. 7048, ¶ 1 (2016). 14 Id. ¶ 2. 10

Respectfully submitted on April 3, 2020.

/s/ Lance J.M. Steinhart ______Lance J.M. Steinhart, Esq. Managing Attorney Lance J.M. Steinhart, P.C. 1725 Windward Concourse, Suite 150 Alpharetta, Georgia 30005 (770) 232-9200 (Phone) (770) 232-9208 (Fax) [email protected] (E-Mail)

Attorneys for Sage Telecom Communications, LLC

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