In re Petition of TruConnect Communications, Inc.
2021 VT 70
| Vt. | 2021Background:
- TruConnect petitioned the Vermont Public Utility Commission (PUC) for designation as an Eligible Telecommunications Carrier (ETC) to provide Lifeline service in Vermont, proposing plans (1,000 minutes, unlimited texts, 3 GB data) at a net cost of $0 and offering a free SIM card for use in existing or purchased devices.
- The PUC hearing officer recommended approval but included a condition requiring TruConnect to provide an E‑911 compliant handset to all Vermont Lifeline customers at no charge (cost borne by TruConnect, not by federal funds).
- TruConnect objected, stating its petition did not propose free handsets (only "easy‑to‑use handsets" generally and a free SIM card) and arguing Lifeline funds do not subsidize equipment and that free handsets are not feasible or required.
- The PUC adopted the hearing officer’s proposed order (after an amended order acknowledging it had omitted TruConnect’s comments initially), explaining the petition indicated TruConnect offered handsets and that free handsets were an "essential requirement" of Lifeline.
- TruConnect appealed to the Vermont Supreme Court, challenging the factual finding that it offered free handsets and the PUC’s legal conclusion that federal Lifeline requires carriers to provide free handsets.
- The Supreme Court reviewed the record and federal law, concluding the PUC’s factual finding lacked record support and that Lifeline does not require free handsets, and reversed and remanded to strike the free‑handset condition.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the PUC’s finding that TruConnect offered free handsets is supported by the record | TruConnect: petition only described "easy‑to‑use handsets" and a free SIM for existing or purchased devices; no promise of free handsets | PUC/DPS: petition language and other materials (website) could be read to show free handset offerings; PUC properly relied on petition | Court: Finding clearly erroneous—record contains no evidence TruConnect promised free handsets; strike finding |
| Whether federal Lifeline law requires ETCs to provide free handsets | TruConnect: statute and FCC rules fund services, not equipment; FCC declined to fund handsets and encourages private sector solutions | PUC/DPS: free handsets are an "essential requirement" of Lifeline and the PUC may impose conditions on ETC designation | Court: Lifeline does not require free handsets; PUC erred to treat provision of free handsets as an essential Lifeline requirement; condition invalid |
Key Cases Cited
- Texas Office of Public Utility Counsel v. FCC, 183 F.3d 393 (5th Cir. 1999) (states may impose additional ETC eligibility requirements and exercise local discretion)
- Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (1983) (agency actions must be upheld on the reasons the agency gave contemporaneously, not post hoc rationalizations)
- Conservation Law Found. v. Burke, 645 A.2d 495 (Vt. 1993) (agency decisions must stand or fall on the contemporaneous reasons stated in the record)
- In re Verizon New England, Inc., 795 A.2d 1196 (Vt. 2002) (courts defer to PUC findings of fact unless clearly erroneous)
- In re J.H., 160 A.3d 1023 (Vt. 2016) (no deference to agency interpretations of federal law administered at the state level)