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HomeMy WebLinkAboutDegginger Decl_02122021_1639291 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 BEFORE THE HEARING EXAMINER OF THE CITY OF RENTON RE: TracFone Wireless, Inc. SECOND DECLARATION OF GRANT S. DEGGINGER Administrative Appeal I, Grant S. Degginger, declare as follows: I am one of the attorneys for appellant TracFone Wireless, Inc. ("TracFone"), and make the following statements based upon my personal knowledge. Attached are true and correct copies of the following documents: 1. Exhibit 7. Excerpts from the deposition of Garth Ashpaugh: Pages 5, 6, 13, 46, 52, 62, 63 2 Exhibit 8. Excerpts from the deposition of Nate Malone: Pages 6, 9, 10, 40, 52, 53, 82, 89, 91, 92, 98, 103, 118, 119, 134, 136 3. Exhibit 9. Excerpts from the Deposition of Jan Hawn: Pages 48 and 56. 4. Exhibit 10. Receipts from Nate Malone's purchase of a TracFone prepaid wireless airtime card from Fred Meyer dated September 15, 2020; SECOND DECLARATION OF GRANT DEGGINGER - 1 LANE POWELL Pc 1420 FIFTH AVENUE, SUITE 4200 P.O. BOX 91302 SEATTLE, WA 98111-9402 206.223,7000 FAX:206.223.7107 125110.0002/8356704.3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 5. Exhibit 11. A Public Notice Seeking Comment on TracFone's Second Amendment to its Petition Expand Eligible Telecommunications Carrier Designation, dated April 4, 2019; 6. Exhibit 12. TracFone's Second Amendment to Petition to Expand Eligible Telecommunications Carrier Designation, contained in a link in Exhibit 2. I declare under penalty of perjury under the laws of the United States and the laws of the State of Washington the foregoing is true and correct to the best of my knowledge. EXECUTED at Seattle, Washington, this 12th day of February, 2021. SECOND DECLARATION OF GRANT DEGGINGER - 2 /s/ Grant S. Degginger Grant S. Degginger LANE POWELL PC 1420 FIFTH AVENUE, SUITE 4200 P.O. BOX 91302 SEATTLE, WA 98111-9402 206.223.7000 FAX:206.223.7107 125110.0002/83 5 6704.3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 CERTIFICATE OF SERVICE I hereby certify under penalty of perjury of the laws of the State of Washington and the United States that, on the date listed below, I caused to be served a copy of the attached document to the following persons via electronic mail: Kari L. Sand Ogden Murphy Wallace P.L.L.C. 901 Fifth Avenue, Suite 3500 Seattle, WA 98164 ksand@omwlaw.com Cynthia Moya Renton City Clerk 1055 So. Grady Way Renton, WA 98057 cmoya@rentonwa.gov olbrechtslaw@gmail.com Executed on the 12t" day of February, 2021, at Seattle, Washington. SECOND DECLARATION OF GRANT DEGGINGER - 3 s/ Barbara LaBelle _ Barbara LaBelle, Legal Assistant LANE POWELL Pc 1420 FIFTH AVENUE, SUITE 4200 P.O. BOX 91302 SEATTLE, WA 98111-9402 206.223.7000 FAX:206.223.7107 125110, 0002/8356704.3 Exhibit 7 In Re: TracFone Wireless, Inc. Garth Ashpaugh Page 5 1 1 Q. Okay. When was the last time you had your 2 deposition taken, sir? 3 A. About two and a half, three weeks ago. 4 Q. Okay. And what was that matter involving? 5 A. Litigation between the City of -- well, actually 6 it's the Sacramento Municipal... Let's see. It's SMCTC 7 is the acronym. But it's basically the City and County 8 of Sacramento versus Comcast. 9 Q. And what's the issue in that case? 10 A. We did a franchise fee review for Sacramento on 11 a couple of occasions. The City is pursuing the amount 12 that was identified in the -- in the review. 13 Q. So you're -- are you representing the City -- 14 are you assisting the City of Sacramento in that case? 15 A. Yes, I'm engaged as an expert witness for the 16 City of Sacramento, and our firm did the -- did the 17 review. 18 Q. Okay. When you say your firm, that goes on -- 19 that's a good segue to my next question, which is: 20 Where are you employed, sir? 21 A. Ashpaugh & Sculco, S-c-u-I-c-o, CPAs, PLC, 22 Winter Park, Florida. 23 Q. And what does Ashpaugh & Sculco do, sir? 24 A. Our primary focus is working for local 25 governments in telecommunications and cable, the cable BUELL REALTIME REPORTING, LLC 206.287.9066 1 800.846.6989 In Re: TracFone Wireless, Inc. Garth Ashpaugh Page 6 1 matters. 2 Q. So as a CP -- are you doing any work that is 3 traditional CPA work? 4 A. No. 5 Q. And -- 6 A. It's -- excuse me, it's all consulting work. 7 Q. So and how long have you been doing solely 8 consulting work? 9 A. Roughly since about 1991. 10 Q. Okay. Are you still a CPA? Are you licensed as 11 a CPA, sir? 12 A. Yes, in the states of Missouri and Florida. 13 Q. Okay. 14 Just to get a little bit of a -- of a history of 15 your -- of your work, you've told us what you're doing 16 currently. We'll talk about that some more. What did 17 you do prior to -- to joining Ashpaugh & Sculco? 18 A. We formed Ashpaugh & Sculco December 1, 1999. 19 Prior to that I was with a small consulting firm, Public 20 Resources Management Group, in Maitland, Florida. I was 21 there for about two and a half years. And before that 1 22 went -- I was working as a consultant with R.W. Beck, 23 B-e-c-k. It's a consulting and engineering firm. 24 Client base is mainly municipal electric utilities, or 25 municipal governments. BUELL REALTIME REPORTING, LLC 206.287.9066 1 800.846.6989 In Re: TracFone Wireless, Inc. Garth Ashpaugh Page 13 1 it's litigation work, I -- I principally take it. 2 If it's analytical work, for example, doing 3 franchise fee reviews, we just kind of split that up as 4 it comes along. And we -- we kind of shift it around 5 between -- for example, she'll work on a client and then 6 I'll work on the client the next time we get them, that 7 kind of stuff, so we both stay fresh with the client, 8 and kind of keeps us fresh on the ideas of what goes 9 into each of the reviews also. 10 Q. How much of your time is spent on forensic work? 11 A. Probably about 80 percent. 12 Q. And by "forensic work" I -- what I mean is work 13 that is related to litigation or litigation support. 14 Did you understand that in your prior answer? 15 A. Well, my -- my reference would have been a 16 little broader to that. Every time we do a franchise 17 fee review, we assume that it could lead to litigation. 18 So that's -- that's why I'm involved in -- in all of the 19 reviews, and that's why Carolyn's involved in all of our 20 reviews also. 21 Q. Okay. 22 And when you do a franchise fee review, what is 23 the nature of the employment relationship with your 24 client? 25 A. Are you asking me if it's cost work or if it's BUELL REALTIME REPORTING, LLC 206.287.9066 1 800.846.6989 In Re: TracFone Wireless, Inc. Garth Ashpaugh Page 46 1 regulation of those hardwired providers of cable and 2 franchise services; is that correct? 3 A. No, it's on use of rights -of -way. A big focus 4 over the past three years has been the FCC's intrusion 5 into the use of rights -of -way by cellular companies. 6 Q. Those are cellular companies that have 7 facilities in the rights -of -way; correct? 8 A. Yes, that the -- are -- are -- either have 9 facilities in, want to expand facilities in, or what is 10 referred to as small cell companies that want to put 11 facilities in the rights -of -way. 12 Q. Okay. 13 Would you agree that you are not an expert on 14 state and local tax law in Washington? 15 A. I'm -- I agree I'm not an expert on tax law in 16 Washington. 17 Q. Okay. 18 Can you take a look at the next exhibit, which 19 is going to be... It's listed as -- it's in -- it's in 20 package D, as in Degginger. 21 A. Oh, so we're skipping over C? 22 Q. We are, just to speed things up. 23 A. Okay. 24 (Exhibit No. 54 marked.) 25 THE WITNESS: And will this then become 54? BUELL REALTIME REPORTING, LLC 206.287.9066 1 800.846.6989 In Re: TracFone Wireless, Inc. Garth Ashpaugh Page 52 1 1 of organizations; is that correct? 2 A. I can't recall any, no. 3 Q. Okay. And you haven't written any papers about 4 the prepaid wireless industry? 5 A. No. 6 Q. Have you taken any -- have you attended any 7 seminars to learn about the prepaid wireless industry? 8 A. No, my... Excuse me. My knowledge of that 9 industry is based upon reviews of companies that operate 10 as prepaid companies. 11 Q. Based upon your reviews of them, what do you 12 mean by that, sir? 13 A. For example, Cricket and Nextel/Boost, doing 14 reviews of those companies. 15 Q. When you say you've done reviews of them, what 16 do you mean, sir? 17 A. Reviews for -- to address their payment of 18 franchise fees and occupation taxes for municipal 19 clients. 20 Q. When did you do -- well, strike that. 21 How many reviews of prepaid wireless industry 22 companies have you performed? 23 A. I've looked at Nextel/Boost, and also Cricket 24 for the City of Lincoln, Nebraska. I -- I think I've 25 looked -- I think I've looked at Cricket for somebody BUELL REALTIME REPORTING, LLC 206.287.9066 1 800.846.6989 In Re: TracFone Wireless, Inc. Garth Ashpaugh Page 62 1 practice; correct? 2 A. I consider it to be the best practice to -- to 3 be prepared for litigation. For example, the litigation 4 we're involved in in Texas, the work that we did was 5 actually done five years ago. So, you know, we don't 6 recall it. We have to have the ability to go back and 7 look at that, so... 8 Q. Okay. Have you done any consulting or auditing 9 for cities regarding TracFone? 10 A. No. 11 Q. In any of your work for your --other than this 12 matter that brings us here today, have you done any work 13 where you've reviewed any of TracFone's business? 14 A. No. 15 Q. And I take it you've never testified -- 16 testified about TracFone before in any proceeding? 17 A. That's correct. 18 Q. Are there -- has there ever been an occasion 19 where you were alleged to have violated any professional 20 standards? 21 A. No. 22 Q. Any disciplinary actions at all I take it? 23 A. No. 24 Q. Okay. 25 A. None. BUELL REALTIME REPORTING, LLC 206. 287. 9066 1 800, 846. 6989 Garth Ashpaugh In Re: TracFone Wireless, Inc. Page 63 1 Q. I'm going to ask you some questions about the 2 matter that brings us here today. 3 When were you retained in this matter and by 4 whom? 5 A. I was retained by the City, I believe... 1 6 believe it was in September. 7 Q. September of 2019 or 2020? 8 A. 2020. 9 Q. Okay. Who retained you? 10 A. The City -- what person at the City? 11 Q. Yeah. 12 A. It was... Oh, heck, now you would ask a tough 13 question. 14 Q. Like who's your client? 15 A. Yeah. Well, the client is the City of Renton. 16 I'm... I think it was Mr. Malone and Ms. Clark. And 17 Ms. Clark's with the City Attorney's Office. I believe 18 that's her name. 19 Q. Okay. 20 A. Is it Leslie Clark? 21 Q. We'll call her Ms. Clark. Sounds more formal. 22 A. All right. 23 Q. Have you ever worked for the City of Renton 24 before? 25 A. No. BUELL REALTIME REPORTING, LLC 206.287.9066 1 800.846.6989 Exhibit 8 In Re: TracFone Wireless, Inc. Nate Malone Page 6 1 A. I met briefly with Jan Hawn. 2 Q. When did you meet with Jan Hawn? 3 A. Yesterday. 4 Q. What did you and Jan discuss? 5 A. We just wanted to go over the case and some of 6 the history involving the audit, especially in terms of, 7 since we were both involved in the audit, what roles we 8 each had and when, because that did evolve over time 9 from 2017 until present. 10 Q. And what roles did each of you have 11 respectively? Let's start with yours. 12 A. So we -- initially I started in March of 2017 13 with the City of Renton. Initially I had no involvement 14 at all with TRS until approximately July of 2017 when 1 15 started to be included on some of the monthly updates 16 from TRS. 17 Throughout 2017 1 had a smaller role until the 18 end of 2017 when I started to take more of the lead role 19 in communicating with TRS, Tax Recovery Services, 20 regarding the audit and other audits ongoing, as well as 21 managing the contract renewal and getting those items 22 through our process for contract renewals. 23 Q. And did you maintain having this lead role from 24 late 2017 forward? 25 A. There was some crossover in -- in 2018 where Jan BUELL REALTIME REPORTING, LLC 206.287.9066 1 800.846.6989 In Re: TracFone Wireless, Inc. Nate Malone Page 9 1 Q. Can you tell me what the audit files for the 2 TracFone audit consist of? 3 A. The audit files that I reviewed primarily 4 consisted of the final audit report, the letter; the 5 schedules that were provided by TRS; as well as the 6 methodology document; and then also some of the monthly 7 statements that had some information regarding the 8 process of the -- the audit. 9 Q. You mean the monthly reports that TRS would send 10 to the City; is that what you're referring to? 11 A. Yes, it is. 12 Q. Is there a... This is a record -keeping type of 13 question, but is there a... electronic or paper file 14 that one would see that says "TracFone audit" that is in 15 the possession of the City of Renton that has all the 16 documents you referred to in -- in one location? 17 A. Yes, there is a file on -- that is electronic, 18 but primarily for this case there -- we have been using 19 the -- I -- in particular for the preparation, I was 20 using the files that were on the share file site that we 21 had prepared, which was essentially a combination of the 22 records that the City had as well as the records that 23 TRS had provided in response to this case. 24 Q. Would you consider the documents regarding 25 TracFone in the possession of TRS to be part of the BUELL REALTIME REPORTING, LLC 206.287.9066 1 800.846.6989 In Re: TracFone Wireless, Inc. Nate Malone Page 10 1 audit file for the City of Renton on this matter? 2 A. I would say yes, those are relevant documents to 3 the audit file. 4 Q. And do they constitute a portion of the audit 5 file? 6 A. Yes, they would. 7 Q. Okay. 8 Other than what's on the share file that you 9 described in terms of documents from TRS, what 10 documents -- are there any other documents that TRS has 11 regarding the TracFone audit that are not include -- 12 that -- that are part of the City's audit file? Do you 13 understand my question? Because it's... 14 A. Not exactly. If you would rephrase a little 15 bit, that would be great. 16 Q. I'd be happy to, because it was sort of a 17 rambling question. 18 What I'm trying to ascertain, sir, is whether 19 there are -- you mentioned that there are documents that 20 TRS has provided in this matter that are on the share 21 file that was produced to Mr. Edwards and I; right? 22 A. Correct. 23 Q. And what I'm trying to ascertain is whether 24 there are other documents from TRS about the TracFone 25 audit that have not been provided and put on the share BUELL REALTIME REPORTING, LLC 206.287.9066 1 800.846.6989 In Re: TracFone Wireless, Inc. Nate Malone Page 40 1 taxpayer? 2 A. Yes, pertinent communication. There's obviously 3 some communication that's more transitory in nature 4 would -- would not need to be kept in an audit file. 5 Q. By the way, have you reviewed Mr. Crisp's 6 deposition in this case? 7 A. I have not. 8 Q. Okay. 9 In the course of your work on this -- on the -- 10 on this audit, have you ever reviewed -- well, strike 11 that. 12 Prior to the time the assessment was issued, did 13 you ever review any -- review any of TRS's audit file? 14 A. Regarding the TracFone audit? 15 Q. Correct. 16 A. Audit file in its entirety? 17 Q. Well, any -- all or any portion of it. 18 A. There had been pieces that were reviewed. They 19 had sent some drafts, schedules along the way. They had 20 sent their monthly updates which really ended up being 21 similar to what I described as an audit blue where it 22 tracked their -- their work throughout the progress of 23 the audit, documented who they talked to and pertinent 24 emails and communications. 25 Q. Did you ever ask any questions about their BUELL REALTIME REPORTING, LLC 206.287.9066 1 800.846.6989 In Re: TracFone Wireless, Inc. Nate Malone Page 52 1 1 first draft of schedules and methodology was provided. 2 1 believe during this time is when TRS was reaching out 3 to TracFone, specifically Mr. Ford, to discuss the 4 methodology and -- and their preliminary schedules. 5 Q. Okay. And is... TRS reporting that Mr. Ford 6 said he had some questions about methodology and asked 7 to have a meeting with the City? 8 A. I believe that is the case. I don't know if 9 he's asking for a meeting specifically. Oh, yes, he is. 10 Would like to have a meeting, yes, I see that. 11 Q. Is that something that taxpayers who are 12 involved in an audit frequently request, opportunity to 13 meet with the City to discuss questions or issues? 14 A. Not necessarily with the City specifically, but 15 with the auditor, whoever is conducting the audit, 1 16 would say that that is very typical in a typical audit. 17 Q. It's a reasonable thing for a taxpayer to ask 18 for? 19 A. Yes. 20 Q. But Mr. Crisp suggested that there not be a 21 meeting; is that correct? He recommended against that, 22 didn't he? 23 A. Yes. 24 Q. He asked what -- he wanted to know what you 25 thought, you and Jan I presume, Jan Hawn thought. What BUELL REALTIME REPORTING, LLC 206.287.9066 1 800.846.6989 In Re: TracFone Wireless, Inc. Nate Malone Page 53 1 was your response to him, sir? 2 A. In -- in this case it looks like Jan responded 3 that she was fine with the proposed approach. 4 Q. What was the proposed approach? Not to meet 5 with the taxpayer? 6 A. That is correct. 7 Q. If there had been a meeting, might there been an 8 opportunity to identify any issues with the methodology 9 that the taxpayers had found? 10 MS. SAND: Objection. Calls for 11 speculation. 12 You can go ahead and answer, Nate. 13 THE WITNESS: I think that that is possible. 14 BY MR. DEGGINGER: 15 Q. Uh-huh. 16 A. I think in this case, just based on his email, 17 he felt that questions could be asked electronically, 18 and if there was a need for a meeting later, they would 19 consider it at that time. I think that's -- that's just 20 what this email's statement is. 21 Q. Okay. So the bottom line was the taxpayer's 22 request for a meeting was -- was denied; correct? 23 A. To me it appears that he felt that it was 24 unnecessary at this time to -- to do a formal meeting 25 and chose to do electronic email communication at that BUELL REALTIME REPORTING, LLC 206.287.9066 1 800.846.6989 In Re: TracFone Wireless, Inc. Nate Malone Page 82 1 about RCW 35A.82.060 that you have mentioned previously, 2 which I believe is several pages into this document, if 3 you can find it. 4 A. Yes. 5 Q. It might be easier to have you looking at the 6 statute. This will be the open -book part of this test. 7 A. (Laughter). 8 Q. So I believe you said earlier that the 9 legislature had authorized cities to impose the utility 10 taxes on the business of engaging in the telephone 11 business or words to that effect; is that right? 12 A. Yes, that's correct. 13 Q. What constitutes the business activity of 14 engaging in a telephone business? 15 MS. SAND: Object to the extent it calls for 16 a legal conclusion. 17 Go ahead and answer, Nate. 18 BY MR. DEGGINGER: 19 Q. Let me -- let me -- let me restate the question. 20 What do you understand constitutes the business 21 activity of engaging in the telephone business as that 22 terms is found in the statute? I'm asking for your 23 understanding as the tax manager and person who is 24 involved in collecting this tax from the good people of 25 the City of Renton. BUELL REALTIME REPORTING, LLC 206. 287, 9066 1 800. 846. 6989 In Re: TracFone Wireless, Inc. Nate Malone Page 89 1 1 Q. So that was well over a year and a half after 2 the TracFone audit assessment was made; correct? 3 A. Correct. 4 Q. So at the time of the assessment, what was your 5 understanding of how TracFone -- whether it was -- did 6 you have an understanding of how TracFone provided 7 network telephone service? 8 A. It was the same understanding that I have now, 9 maybe with a few more details now that I have purchased 10 a TracFone. But the taxpayer did provide TRS with 11 their -- their business processes or their... And TRS 12 did communicate what -- what TracFone does. Plus I've 13 done Internet research into what TracFone's business 14 model was. 15 Q. When did you perform the Internet research? 16 A. Throughout the audit. 17 Q. How come it's not in your file? 18 A. It wouldn't be part of the file. 19 Q. The research you performed on the taxpayer isn't 20 part of the audit file? Really? 21 A. Not necessarily. 22 Q. Wow. Okay. 23 What does it take to be in the telephone 24 business? 25 A. Can you rephrase that question? BUELL REALTIME REPORTING, LLC 206.287.9066 1 800.846.6989 In Re: TracFone Wireless, Inc. Nate Malone Page 91 1 reselling it to customers. And they use the SIM cards 2 and other software to essentially manage the number of 3 minutes or, in some cases, unlimited that a customer 4 uses on those network -- telephone networks. 5 Q. And did you buy a SIM card -- did you buy a 6 card? 7 A. I -- a -- a airtime minute card? 8 Q. Yeah. 9 A. Yeah, I did. 10 Q. Where'd you buy it? 11 A. I bought it at Fred Meyer in Renton. 12 Q. And when you bought it at Fred Meyer in Renton, 13 did you get a receipt? 14 A. I did. 15 Q. Was the receipt from Fred Meyer? 16 A. Yes. 17 Q. So the card you bought was purchased from a 18 retailer; correct? 19 A. It was. 20 Q. Okay. And did... And so how did the retailer 21 get that card? 22 A. I would assume that they purchased it from 23 TracFone. 24 Q. Okay. So TracFone was selling to Fred Meyer 25 that card; correct? BUELL REALTIME REPORTING, LLC 206.287.9066 1 800.846.6989 In Re: TracFone Wireless, Inc. Nate Malone Page 92 1 1 A. They would have sold that card to -- to Fred 2 Meyer. 3 Q. And Fred Meyer sold it to you, their customer; 4 correct? 5 A. That is correct. 6 Q. Let's go over to -- back over for a minute to 7 35A.82.060. 8 A. Okay. 9 Q. Now, as you were just talking about a moment 10 ago, when... when you purchased that card from Fred 11 Meyer, that card provided -- are you saying that that 12 card provided you access to a telephone network? 13 A. It did not until I activated the card through 14 the TracFone website. 15 Q. So you're saying it was not activated at the 16 time that you purchased; is that right? 17 A. It is not activated as minutes until I went 18 through TracFone's procedure to activate that -- those 19 minutes on the TracFone device that I purchased. 20 Q. But if you didn't buy the card, you couldn't 21 have had access; correct? 22 A. Correct. 23 Q. So was... Fred Meyer providing you access to the 24 network? 25 A. No, they were providing me a means to purchase a BUELL REALTIME REPORTING, LLC 206.287.9066 1 800.846.6989 In Re: TracFone Wireless, Inc. Nate Malone Page 98 1 didn't really answer my question. 2 MR. DEGGINGER: So, Madam Court Reporter, 3 could you reread my question. 4 BY MR. DEGGINGER: 5 Q. And, Mr. Malone, could you take another shot at 6 answering. 7 (Question was read back.) 8 BY MR. DEGGINGER: 9 Q. How much of the sale was -- yeah, can you answer 10 the question? Can you answer the question, Mr. Malone? 11 A. I -- I don't see how my answer would differ. 12 There was a wholesale sale of the card and phone to Fred 13 Meyer, but there was no wholesale sale of the network 14 telephone service. 15 Q. Well, but when you -- when you acquired that 16 card, you didn't pay another fee to use it, did you? 17 A. After I purchased the card? 18 Q. Yeah. 19 A. That's correct. 20 Q. So there was no other sale afterwards. You were 21 the ultimate retail purchaser, were you not? 22 A. Correct. 23 Q. Okay. 24 All right. Can you take a look at RCW 25 35A.82.060? BUELL REALTIME REPORTING, LLC 206.287,9066 1 800.846.6989 In Re: TracFone Wireless, Inc. Nate Malone Page 103 1 Q. You've purchased it for that purpose though; 2 correct? 3 A. That is correct. And -- 4 (Inaudible due to crosstalk.) 5 BY MR. DEGGINGER: 6 Q. I'm sorry, go ahead and finish your answer. 7 A. I did purchase it if that reason. 8 Q. Okay. 9 A. Correct. 10 Q. And you paid for it, you paid Fred Meyer the 11 money for it; correct? 12 A. That is correct. 13 Q. That was a retail transaction; correct? 14 A. That's correct. 15 Q. And with that -- as a result of that retail 16 transaction, you had -- you didn't have to pay any more 17 money in order to use that service; correct? 18 A. Beyond the purchase at Fred Meyer, I did not 19 have to pay any additional. 20 Q. Right. 21 A. But I also could not use that service until it 22 was activated through TracFone. Because ultimately 23 TracFone controls the network telephone service and 24 means to provide access to the local telephone network. 25 Q. How does it do that? BUELL REALTIME REPORTING, LLC 206.287.9066 1 800.846.6989 In Re: TracFone Wireless, Inc. Nate Malone Page 118 1 A. As I mentioned, "telephone business" was the 2 definition, and under "telephone business" it contained 3 the definition for "network telephone service". 4 Q. Okay. I believe in a prior version of it, it 5 said the providing by any person of access to the local 6 telephone network as opposed to a local telephone 7 network. And I was just curious if you could describe 8 for me why that change was made. 9 A. That could be. I think that the only reason we 10 would change that is to match the state statute. I 11 don't think that it would have an impact. 12 Q. Where in the Renton utility tax ordinance does 13 it state that the tax only can be collected on revenue 14 received from intrastate services? 15 A. So that would be under the definition of... 16 (Reviews exhibit.) 17 May not specifically state that that I can see. 18 (Reviews exhibit.) 19 Q. Are you still looking? 20 A. Yeah, I don't see a specific statement on that. 21 Q. Okay. Where in the Renton utility tax ordinance 22 does it state that revenue from sales for resale are 23 exempt from the tax? 24 A. I don't think that there's a specific cite for 25 that. I do not believe it contains that language. BUELL REALTIME REPORTING, LLC 206.287.9066 1 800.846.6989 In Re: TracFone Wireless, Inc. Nate Malone Page 119 1 1 Q. So without those limitations, it would appear 2 that the Renton utility tax is attempting to tax 3 activities that are exempt under the state statute; is 4 that right? 5 MS. SAND: Object to the extent that calls 6 for a legal conclusion. 7 Go ahead and answer, Nate. 8 THE WITNESS: I think at its face it could 9 be construed that way, in which case the controlling 10 statute, RCW 35A.82.060, would be the controlling 11 statute as to what we can apply the utility tax to. 12 BY MR. DEGGINGER: 13 Q. Okay. I wanted to ask you about... You had 14 mentioned the administrative provisions earlier. 1 15 think that's 5-11-2; is that right? 16 A. Correct. 17 Q. And I wanted to ask you about whether the change 18 that was made in the statute in November of 2019, 19 November 18th, 2019, changed the interest rate that 20 would be charged on assessments. 21 A. The change -- the ordinance 5944 wouldn't have 22 changed that because 526 already stated that it was the 23 administrative chapter that controlled over the title 5. 24 Q. All right. So let me under -- I'm just trying 25 to understand it, because it's a little -- it's not BUELL REALTIME REPORTING, LLC 206.287.9066 1 800.846.6989 In Re: TracFone Wireless, Inc. Nate Malone Page 134 1 1 Don't have the phone. I don't have a copy or a 2 picture of the phone. Do you still have your -- 3 (Telephonic interruption.) 4 BY MR. DEGGINGER: 5 Q. Do you still have your receipt? 6 A. I do. 7 Q. Could you provide that to Ms. Sand? 8 A. Yes. 9 MR. DEGGINGER: And, Kari, can you provide 10 it to me? 11 MS. SAND: Yes. 12 MR, DEGGINGER: Thank you. 13 BY MR. DEGGINGER: 14 Q. We talked earlier about the documents that were 15 requested from TracFone. Did you review any of the 16 documents that you received? 17 A. Pertaining to the agreements with retailers 18 and -- 19 Q. Yeah. 20 A. Yes, I did. 21 Q. Which ones did you review? 22 A. I looked mostly in-depth at the Rent -A -Center 23 agreement. It had the most content. The remaining 24 retailer agreements were more boilerplate agreements 25 from the look of it. BUELL REALTIME REPORTING, LLC 206. 287. 9066 1 800, 846. 6989 In Re: TracFone Wireless, Inc. Nate Malone Page 136 1 1 A. Yes. 2 Q. And that their customers were reselling as well? 3 A. Yes. 4 Q. Okay. All right. 5 At this point I have no further questions at 6 this time. Reserve my right if there's additional 7 documents that are produced. Thank you for your time 8 and attention, Mr. Malone. 9 A. Thank you. 10 MS. SAND: I just have a few questions. 11 12 EXAMINATION 13 BY MS. SAND: 14 Q. So, Mr. Malone, in reference to the questions 15 that Mr. Degginger just asked you that characterize 16 TracFone as a reseller, would you say that they are a 17 reseller of network telephone service? 18 MR. DEGGINGER: Object to the form. It 19 mischaracterizes. 20 THE WITNESS: They are -- 21 BY MS. SAND: 22 Q. You can go ahead and answer. 23 A. They are not. They are a reseller of changeable 24 personal property being the cards and the phones. 25 Q. And who's the "they"? BUELL REALTIME REPORTING, LLC 206.287.9066 1 800.846.6989 Exhibit 9 In Re: TracFone Wireless, Inc. Jan Hawn Page 48 1 your -- what did your consultant tell you the Missouri 2 Supreme Court decided? 3 A. That -- that direct sales were taxable, but 4 Springfield's code was not written in a way so that they 5 could tax indirect sales. 6 Q. It says: They also stated -- that would be the 7 Missouri Supreme Court; correct? 8 A. Correct. 9 Q. -- ruled that the what they called indirect 10 sales were not taxable; correct? 11 A. The way Springfield code was written; that is 12 correct. 13 Q. Did you review the Springfield code? 14 A. No, I did not. 15 Q. Okay. So you didn't do any analysis about 16 whether the Springfield code was any -- was different 17 than Renton's or not; right? 18 A. Michael Crisp is telling us right here that our 19 code is written differently than the Springfield code. 20 Q. That's not what I asked. Didn't ask anything 21 about Michael Crisp in my question. I asked about you. 22 A. And I'm telling you that I relied upon his word 23 that ours was written differently, so that piece of 24 their ruling would not apply to Renton. 25 Q. And I'm asking you whether you did that -- any BUELL REALTIME REPORTING, LLC 206.287.9066 1 800.846.6989 In Re: TracFone Wireless, Inc. Jan Hawn Page 56 1 1 Nate to send this out. I -- I don't know. I probably 2 shouldn't answer because I'm guessing. 3 Q. So you don't know the answer, you don't know why 4 this was sent out? 5 A. Not specifically. 6 Q. Okay. 7 Now, the assessment was sent out in February of 8 2019; right? 9 A. Uh-huh. Yes, that is correct. 10 Q. Fair to presume that the City felt it had all 11 the information it needed to issue the assessment when 12 it did so? 13 A. Yes. 14 Q. Okay. So you don't know why this request for 15 additional information was sent out then; right? 16 A. No, I don't know. 17 Q. Okay. 18 All right. I have a few more exhibits I want to 19 go over with you, Ms. Hawn, but I need about five 20 minutes to pull them together, so let me do that. Let 21 me take a short break and we'll see if we can streamline 22 by getting the rest of them out. So why don't we take a 23 short break. 24 MS. SAND: Back on the record at 3:35? 25 MR. DEGGINGER: Sure. BUELL REALTIME REPORTING, LLC 206.287.9066 1 800.846.6989 Exhibit 10 l.A wo CT CV .— � L'v LU F - w _J V QJ �' d J F- 3 ( ' , A7 Lo rti > p i U - �Qos moo A ti 1 L C 4- w cn— m cx� LI', = f7 u v 3 rn O c CP r rt ')CL-C--) o 3: +c cr O ti Q -'3 — Ln d �t7 3 Z- 0 C] i z LO, `-+ CLD � 0 Ri r,4 +� C w 't C7 O CV �Nfl � :L •� 'M' C fS7 'AP yi .. � .j, CJ {� 3 +t [L CL — p � '. ter® W !'mil m » •-• - U) Li 14 r. u `V rC„+ iceru ,. 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News Media Information 202 / 418-0500 Internet: htt s://www.fcc. ov Washington, D.C. 20554 TTY:1-888-835-5322 DA 19-258 Released: April 4, 2019 WIRELINE COMPETITION BUREAU SEEKS COMMENT ON TRACFONE WIRELESS, INC.' S SECOND AMENDMENT TO PETITION TO EXPAND ELIGIBLE TELECOMMUNICATIONS CARRIER DESINGATION TO INCLUDE TRIBAL LANDS AND MOTION FOR EXPEDITED ACTION WC Docket No. 09-197 Comment Date: April 22, 2019 Reply Comment Date: April 29, 2019 By this Public Notice, the Wireline Competition Bureau seeks comment on an amended petition filed by TracFone Wireless, Inc. (TracFone). TracFone seeks to expand its designation as an eligible telecommunications carrier to certain Tribal lands in Alabama, Connecticut, New York, North Carolina, and Virginia.' Interested parties may file comments and reply comments on or before the respective dates indicated above. Comments may be filed using the Federal Communications Commission's (Commission) Electronic Comment Filing System (ECFS) or by filing paper copies.2 Electronic Filers: Comments may be filed electronically using the Internet by accessing the ECFS: https://www.fcc.gov/ecfs/. Paper Filers: Parties who choose to file by paper must file an original and one copy of each filing. Filings can be sent by hand or messenger delivery, by commercial overnight courier, or by first- class or overnight U.S. Postal Service mail. All filings must be addressed to the Commission's Secretary, Office of the Secretary, Federal Communications Commission. • All hand -delivered or messenger -delivered paper filings for the Commission's Secretary must be delivered to FCC Headquarters at 445 12th St., SW, Room TW-A325, Washington, DC 20554. The filing hours are 8:00 a.m. to 7:00 p.m. All hand deliveries must be held together with rubber bands or fasteners. Any envelopes and boxes must be disposed of before entering the building. • Commercial overnight mail (other than U.S. Postal Service Express Mail and Priority Mail) must be sent to 9050 Junction Drive, Annapolis Junction, MD 20701. o U.S. Postal Service first-class, Express, and Priority mail must be addressed to 445 12th Street, SW, Washington, DC 20554. I TracFone Wireless, Ine.'s Second Amendment to Petition to Expand Eligible Telecommunications Carrier Designation to Include Tribal Lands and Motion for Expedited Action, WC Docket No. 09-197, at 1 (filed Feb. 28, 2019), littps://www.tcc.�-lov/ecfs/thin /10228830200.523. 2 See Electronic Filing of Documents in Rulemaking Proceedings, GC Docket No. 97-113, Report and Order, 13 FCC Rcd 11322 (1998). Federal Communications Commission DA 19-2.58 People with Disabilities: To request materials in accessible formats for people with disabilities (Braille, large print, electronic files, audio format), send an e-mail to fcc504 a fcc. ov or call the Consumer & Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 (TTY). Permit but Disclose Ex Parte Communications: The proceeding this petition initiates shall be treated as a "permit -but -disclose" proceeding in accordance with the Commission's ex parte rules.' Persons making ex parte presentations must file a copy of any written presentation or a memorandum summarizing any oral presentation within two business days after the presentation (unless a different deadline applicable to the Sunshine period applies).4 Persons making oral ex parte presentations are reminded that memoranda summarizing the presentation must (1) list all persons attending or otherwise participating in the meeting at which the ex parte presentation was made, and (2) summarize all data presented and arguments made during the presentation.5 If the presentation consisted in whole or in part of the presentation of data or arguments already reflected in the presenter's written comments, memoranda or other filings in the proceeding, the presenter may provide citations to such data or arguments in his or her prior comments, memoranda, or other filings (specifying the relevant page and/or paragraph numbers where such data or arguments can be found) in lieu of summarizing them in the memorandum. Documents shown or given to Commission staff during ex parte meetings are deemed to be written ex parte presentations and must be filed consistent with rule 1.1206(b).6 In proceedings governed by rule 1.49(f) or for which the Commission has made available a method of electronic filing, written ex parte presentations and memoranda summarizing oral ex parte presentations, and all attachments thereto, must be filed through the electronic comment filing system available for that proceeding, and must be filed in their native format (e.g., .doc, .xml, .ppt, searchable .pdf).7 Participants in this proceeding should familiarize themselves with the Commission's ex parte rules. For further information, please contact Nicholas Page, Telecommunications Access Policy Division, Wireline Competition Bureau at (202) 418-2783 or via email at nichoias. a e fcc.gov. ' 47 CFR § 1.1206. 41d. § 1.1206(b)(2)(iii). 51d. § 1.1206(b)(1). 6Id. § 1.1206(b)(2). 7 Id § 1.1206(b)(2)(ii); see also id. § 1.49(f). — FCC — 2 Exhibit 12 Before the FEDERAL COMMUNICATIONS COMMISSION Washington, DC 20554 In the Matter of ) Telecommunications Carriers Eligible ) WC Docket No. 09-197 For Universal Service Support ) TRACFONE WIRELESS, INC.'S SECOND AMENDMENT TO PETITION TO EXPAND ELIGIBLE TELECOMMUNICATIONS CARRIER DESIGNATION TO INCLUDE TRIBAL LANDS AND MOTION FOR EXPEDITED ACTION TracFone Wireless, Inc. ("TracFone"), by this filing, amends its Petition to Expand Eligible Telecommunications Carrier Designation to Include Tribal Lands, filed with the Commission on September 11, 2017, and amended on September 18, 2017, and requests the Commission to grant the long -pending Petition on an expedited basis. TracFone amends its Petition to reflect its current proposed enhanced Lifeline offering for residents of Tribal lands and to provide updated data regarding Lifeline services being provided to residents of Tribal lands by other carriers. TracFone's Petition has been pending for over 17 months with no action by the Commission. There is no basis for continuing to delay the availability of TracFone's enhanced Lifeline offering to qualifying low-income households residing on Tribal lands.' I. BACKGROUND In the Petition, TracFone requested that the Commission expand its Eligible Telecommunications Carrier ("ETC") designation to include Tribal lands within certain states for which the Commission authorized TracFone to provide Lifeline service ("FCC -designated I In accordance with 47 C.F.R. § 54.202(c), TracFone is sending a copy of this fling to the relevant tribal governments and tribal regulatory authorities. states") in a 2008 Order.2 Those states include: Alabama, Connecticut, New York, North Carolina, and Virginia.' As explained in the Petition, in the 2008 TracFone ETC Desi nation Order, the Commission "clariftied] that TracFone's designated service areas do not encompass federally -recognized tribally -owned lands."' The Commission did not include Tribal lands in TracFone's designated Lifeline service areas because TracFone did not request ETC designation for Tribal lands in its petitions for designation as an ETC.' As TracFone explained in the Petition, grant of the Petition would benefit the public interest by allowing TracFone to provide enhanced Lifeline benefits to Tribal land households in FCC -designated states and introducing more robust competition in the provision of Lifeline service in general and expanding the availability of mobile broadband service to Tribal land residents in particular. In the nearly 18 months since TracFone filed its Petition (on September 11, 2017), the Commission has not taken any action regarding TracFone's request. The Commission has not even issued a public notice seeking comments nor contacted TracFone regarding the Petition. 2 See Federal -State Joint Board on Universal Service, TracFone Wireless, Inc. Petition for Designation as an Eligible Telecommunications Carrier in the State of New York et al., Order, 23 FCC Red 6206 (2008) ("TracFone ETC Designation Order") (designating TracFone as an ETC for Lifeline support only in New York, Virginia, Connecticut, Massachusetts, Alabama, North Carolina, Tennessee, Delaware, New Hampshire, Pennsylvania, and the District of Columbia). TracFone's Petition only includes those FCC -designated states in which Tribal lands are located. ' TracFone's Petition also listed Massachusetts as one of the FCC -designated states. However, in its First Amendment to Petition to Expand Eligible Telecommunications Carrier Designation to Include Tribal Lands, filed on September 18, 2017, TracFone deleted all references to Massachusetts in its Petition and advised the Commission that it does not seek to expand its ETC designation to include Tribal lands within Massachusetts. TracFone filed the amendment after being advised by the Massachusetts Department of Telecommunications and Cable that it has asserted jurisdiction over ETC designations pursuant to 47 U.S.C. § 214(e)(2) and state law. 4 TracFone ETC Designation Order, ¶ 17. The FCC's rules define "Tribal lands" to include "any federally -recognized Indian tribe's reservation, pueblo, or colony" and other types of lands not relevant to TracFone's Petition. 47 C.F.R. § 54.400(e). 5 See id. ¶ 17 n.49. Those ETC petitions were filed in 2004. 14 Shortly after TracFone filed its Petition, the Commission adopted two limitations on enhanced Tribal Lifeline support, as detailed in its 2017 Lifeline Order released on December 1, 2017.6 First, the Commission implemented a facilities requirement for ETCs receiving enhanced Lifeline support for providing service to residents of Tribal lands. Regarding wireless services, the Commission stated that it was "limit[ing] enhanced Tribal support to ... fixed or mobile wireless facilities -based Lifeline service provided on Tribal lands with wireless network facilities covering all or a portion of the relevant Lifeline ETC's service area on Tribal lands ... ."7 TracFone, as a reseller, would not be eligible to receive enhanced Lifeline support for service provided to residents of Tribal lands, if this facilities requirement had become effective (as explained below, it did not). The facilities requirement was a departure from the Commission's prior decisions to forbear from the requirement in Section 214(e)(1)(A) of the Communications Act of 1934, as amended (47 U.S.C. § 214(e)(1)(A)) that ETCs shall offer services, at least in part, over their own facilities.' Second, the Commission limited enhanced Tribal Lifeline support to residents of rural areas on Tribal lands.9 Several petitions for review of the limitations on enhanced Lifeline support in the 2017 Lifeline Order were filed with the United States Court of Appeals for the District of Columbia Circuit ("D.C. Circuit"). Although the Commission denied a request to stay the limitations in the 2017 Lifeline Order, the D.C. Circuit granted a motion for stay. Therefore, the limitations never 6 See Bridging the Digital Divide for Low -Income Consumers et al., Fourth Report and Order, Order on Reconsideration, Memorandum Opinion and Order, Notice of Proposed Rulemaking, and Notice of Inquiry, 32 FCC Red 10475 (2017) ("2017 Lifeline Order"). See id. ¶ 24. 8 See, e.g., Lifeline and Link Up Reform and Modernization et al., Report and Order and Further Notice of Proposed Rulemaking, 27 FCC Red. 6656, ¶ 368 (2012) ("2012 Lifeline Reform Order"). 9 See 2017 Lifeline Order, ¶ 3. 3 became effective. On February 1, 2019, the court unanimously issued an opinion in which it held that the Commission's adoption of the two limitations on enhanced Lifeline support was "arbitrary and capricious by not providing a reasoned explanation for its change of policy that is supported by record evidence" and granted the petitions for review.10 Specifically, the D.C. Circuit found: By departing from its prior forbearance policy without reasoned explanation and failing to consider key aspects of the program — e.g., facilities -based providers' unwillingness to offer Tribal Lifeline services, the effect of eliminating the enhanced Tribal subsidy on access and affordability, the effect of directing the subsidy only to facilities -based providers on network buildout, and the reliance interests of these carriers and their consumers — the Commission's adoption of the Tribal Facilities Requirement was arbitrary and capricious. I I Regarding the Commission's limitation of enhanced Lifeline support to residents of rural Tribal lands, the D.C. Circuit held that "the Commission pointed to no record evidence that telecommunications services are more available or more affordable for low-income consumers on urban Tribal lands than on rural Tribal lands, such that the enhanced subsidy would be less necessary in urban areas for furthering the Lifeline program's primary goals of access and affordability." 12 The court vacated the 2017 Lifeline Order and remanded the matter to the Commission.13 As such, there is no facilities requirement nor a rural limitation applicable to ETCs for receipt of enhanced Lifeline support for service to residents of Tribal lands. Moreover, there is no basis for denying or continuing to delay action on TracFone's Petition to expand its Lifeline service area to include Tribal lands in FCC -designated states. " National Lifeline Assoc. v. Federal Communications Commission, No. 18-1026, 2019 U.S. App. LEXIS 3278, at *2-3 (D.C. Cir. Feb. 1, 2019). 11 Id. at *26-27. 12 Id. at *27. 13 Id. at * 34. 4 II. SECOND AMENDMENT In the Petition, TracFone stated that as a recipient of federal Tribal lands support ($25.00) and non -Tribal lands support ($9.25) for a total of $34.25 in monthly support per subscriber, TracFone would offer Lifeline customers residing on Tribal lands in FCC -designated states unlimited airtime voice minutes, unlimited text messaging, and 2 GB of mobile broadband data each month. TracFone advises the Commission that it has increased its proposed enhanced Lifeline benefits for residents of Tribal lands to include unlimited airtime voice minutes, unlimited text messaging, and 4 GB of mobile broadband data each month. Although the Commission has not established a minimum amount of data that must be offered to receive Lifeline Tribal lands support, TracFone's offering significantly exceeds the amount of mobile broadband data that it provides to its non -Tribal Lifeline customers (i.e., 1 GB). Moreover, as required by Commission rules, TracFone certifies that it will pass through to Tribal land residents the entire amount of federal Universal Service Fund support it receives for providing Lifeline service to residents of Tribal lands.14 In the Petition, TracFone stated that Tribal customers would have the option of receiving a free Android smartphone or using their own smartphone. Under TracFone's amended proposed offering, all Tribal customers will receive a free Android smartphone that must be used to access TracFone's service. The smartphone provided by TracFone at no charge will be Wi-Fi capable, as required by the Commission's rules,15 and will be activated on the network of the underlying carrier that provides the best coverage to the customer based on the customer's residential address. This amended offering will enable TracFone to ensure that each customer residing on Tribal lands receives an optimal service experience. 14 See 47 C.F.R. § 54.403(a)(3). 15 See 47 C.F.R. § 54.408(f)(1). 5 By this amendment, TracFone also updates information in the Petition regarding other ETCs that receive enhanced Lifeline support for services provided to residents of Tribal lands in TracFone's FCC -designated states. TracFone's statements in the Petition that no ETCs are providing Lifeline service on Tribal lands in Connecticut and Virginia and that only a few households in New York are benefitting from the enhanced Lifeline support continue to be accurate,16 In Alabama, North American Local LLC ("North American Local"), a wireless provider, receives over 75 percent of the Tribal lands support in Alabama.17 North American Local's Tribal lands Lifeline plan available for no charge includes 1,000 minutes, unlimited texts, and 100 MB of mobile data.18 TracFone's proposed offering to Tribal residents is far more generous. TracFone's no charge Tribal lands Lifeline plan will offer unlimited voice minutes, unlimited texts, and 4 GB of mobile broadband data. 19 In North Carolina, Frontier Communications of the Carolinas Inc. ("Frontier"), a wireline carrier, continues to be the only ETC that receives a significant amount of Tribal lands support.20 Frontier's Tribal lands Lifeline plan offers eligible households a monthly discount of up to $34.25 off the monthly service charge. Frontier's bundled Internet and unlimited voice service terms are no longer available on its website. While wireline and wireless services are not 16 See LI05 Annual Low Income Support Claimed by State and Company January 2016 through December 2018.xlsx, available at http•//www usac org//about/tools/fcc/filings/2019/g2.aspx ("USAC Low Income Support Report"). 1 See id. 1$ See https•//www.northamericanlocal.com/sign-up. 19 North American Local also offers residents of Tribal lands Lifeline plans with unlimited minutes and texts and higher amounts of data, but those plans only provide 3 GB of data at most and require enrolled customers to pay a monthly fee (I GB for $10.99; 2 GB for $19.99; or 3 GB for $29.99). See id. 20 See USAC Low Income Support Report (in 2018, Frontier received $16,968 in Tribal lands support and CenturyLink Carolina Telephone and Telegraph Company, the only other recipient of Tribal lands support in North Carolina, received $27). 2 directly comparable, there is no doubt that TracFone's Tribal lands no charge Lifeline offering would provide Tribal lands households with a significantly less expensive and more affordable alternative bundled service that includes unlimited voice and text service, as well as the benefits of 4 GB per month of mobile broadband Internet access service. III. REQUEST FOR EXPEDITED ACTION TracFone requests that the Commission consider and grant its long -pending Petition on an expedited basis. There is no legal basis for delaying or denying grant of TracFone's request to expand its ETC designated area to include Tribal lands. First, the sole reason that the Commission carved out Tribal lands from the designated service areas in TracFone's FCC - designated states was that TracFone specifically excluded Tribal lands from its application seeking ETC designation. In other words, it was TracFone's decision in 2004 to exclude Tribal areas from its proposed Lifeline service area. It was not the Commission's decision to impose such a limitation. At the time when TracFone filed its ETC applications with the Commission, in 2004, TracFone did not offer service to Tribal lands in the FCC -designated states. Now it is able to provide Lifeline service to Tribal lands. Like other ETCs, including other non -facilities -based ETCs, it should be permitted include Tribal lands within its Lifeline service area. Second, the Commission previously determined that TracFone met the federal requirements for designation as an ETC for the purpose of receiving federal Lifeline support. Given that federal Tribal lands support is a type of federal Lifeline support, TracFone has already demonstrated that it meets the requirements for designation as an ETC for the purpose of receiving federal Tribal lands support. Third, there are no Commission rules or orders limiting the receipt of enhanced Lifeline support to facilities -based ETCs. Section 214(e)(1)(A) of the Communications Act of 1934, as %I amended (47 U.S.C. § 214(e)(1)(A)) provides that ETCs shall offer services, at least in part, over their own facilities. 21 Although TracFone, as a reseller, does not offer services over its own facilities, in 2005, the Commission exercised its forbearance responsibilities under Section 10 of the Communications Act (47 U.S.C. § 160) with respect to the facilities -based service requirement.22 In 2012, the Commission found that the forbearance from the facilities requirement in Section 214(e)(1)(A) of the Communications Act was applicable to all non - facilities -based providers.23 Both the TracFone Forbearance Order and the 2012 Lifeline Reform Order are applicable and effective Commission precedent. As described above, the Commission's effort to limit enhanced Lifeline support for services provided to residents of Tribal lands to facilities -based ETCs was found to be unlawful and was vacated by the D.C. Circuit. Indeed, the D.C. Circuit noted, "[t]he Commission also failed to justify its fundamental policy reversal on forbearing the `own facilities' requirement in light of its previous findings regarding the important role of non -facilities -based providers in promoting affordable telecommunications service."24 Therefore, there is no legal justification for denying TracFone's Petition to expand its ETC designated area to include Tribal lands. As such, TracFone requests that the Commission grant its petition (which has been pending for nearly 18 months) on an expedited basis, so that TracFone can promptly provide enhanced Lifeline benefits to Tribal land 21 See also 47 C.F.R. § 54.201(d)(1). 22 See Federal -State Joint Board on Universal Service; Petition of TracFone Wireless, Inc. for Forbearance from 47 U.S.C. § 214(e)(1)(A) and 47 C.F.R. § 54.201(i), 20 FCC Red 15095 (2005) ("TracFone Forbearance Order"). 23 See 2012 Lifeline Reform Order, ¶ 368. 24 National Lifeline Assoc., at * 15; see id. ("the Commission rescinded its policy of forbearance as to the Tribal Lifeline program without conducting a new forbearance analysis or providing any reasoned explanation for its reversal."). households that are eligible for Lifeline service and increase competition in the market for Lifeline service consistent with the public interest. CONCLUSION Based on the foregoing and for the reasons stated in its Petition, TracFone requests that the Commission promptly grant its Petition to expand its designated service area to include Tribal lands in Alabama, Connecticut, New York, North Carolina, and Virginia. February 28, 2019 I Respectfully submitted, TRACFONE WIRELESS, INC. Mitchell F. Brecher Debra McGuire Mercer GREENBERG TRAURIG, LLP 2101 L Street, NW Suite 1000 Washington, DC 20037 (202) 331-3100 Its Attorneys