Lifeline Advocacy

FCC Press Release: FCC MODERNIZES LIFELINE PROGRAM FOR THE DIGITAL AGE

As originally posted by the FCC Here: http://transition.fcc.gov/Daily_Releases/Daily_Business/2016/db0331/DOC-338676A1.pdf

New Rules Will Help Make Broadband More Affordable for Low-Income Americans

WASHINGTON, March 31, 2016 – The Federal Communications Commission today modernized and reformed its Lifeline program to help low income consumers afford access to the 21st Century’s vital communications network: the Internet.

Since 1985, Lifeline has helped make telephone service affordable for low-income Americans. Today, consumers need Internet access for full and meaningful participation in society. Yet 43 percent of nation’s poorest households say they can’t afford modern broadband service.

To help close this digital divide, the Order adopted by the Commission today refocuses Lifeline support on broadband, which will enable low-income Americans to share in the 21st Century opportunities that access to the Internet provides. At the same time, new rules build on recent reforms in the program to combat waste fraud and abuse and increase program efficiency.

For the first time, Lifeline will support stand-alone broadband service as well as bundled voice and data service packages. To spark competitive service options for Lifeline consumers, the rules will unlock the Lifeline broadband marketplace to attract additional providers. And new service standards will ensure that supported services meet modern needs.

The rules significantly strengthen the Commission’s landmark 2012 reforms (http://go.usa.gov/cGykW) of the program by establishing an independent National Eligibility Verifier to confirm subscriber eligibility. At the same time the verifier deters waste, fraud and abuse, it will encourage participation by legitimate providers by removing the burden of eligibility screening.

Finally, a budget mechanism will limit Lifeline’s cost to ratepayers. Specifically, the Order:

Provides support for robust broadband

  • Allows Lifeline support for stand-alone mobile or fixed broadband Internet access service, as well as bundles including fixed or mobile voice and broadband
  • Phases in mobile broadband requirement over five years
  • Helps close the homework gap by promoting the offering of mobile devices with Wi-Fi and hotspot functionality

Ensures that Lifeline subscribers receive services meeting 21st Century needs

  • Sets minimum standards for broadband to enable consumers to fully participate in digital society:
    • Fixed speed standard based on what a substantial majority of consumers receive (currently 10 Mbps downloads/1 Mbps uploads)
    • Sets minimum monthly fixed broadband usage allowance standard, starting at 150 GB and updated thereafter
    • Phases in minimum standards for mobile broadband service, starting at 500 MB per month of 3G data by Dec. 1, 2016, 1 GB by Dec. 1, 2017, and increasing to 2 GB per month by the end of 2018
    • Phases in mobile voice monthly standards: 500 min/mo., beginning on Dec. 1, 2016; 750 min/mo. on Dec. 1, 2017; and 1,000 min/mo., starting on Dec. 1, 2018.
    • Anticipates technological advances in the convergence of mobile voice and data, phasing in broadband requirement as support for stand-alone voice decreases to $7.25 on Dec. 1, 2019; $5.25 by Dec. 1, 2020; and no support by Dec. 1, 2021, except in areas where there is only one Lifeline provider
    • Voice remains eligible for full support as part of a voice and data bundle
    • Full review of standards phase-in and report to Commission required by mid-2021

Unlocks the Lifeline marketplace to encourage participation by broadband providers, increasing availability and consumer choice

  • Provides streamlined, nationwide entry for a new category of providers, called Lifeline Broadband Providers
  • Establishes a third-party National Eligibility Verifier, reducing cost to providers of verifying subscriber eligibility
  • Modernizes rules to improve program flexibility, reduce burdens, and incentivize participation by providers

Builds on 2012 reforms to close remaining vulnerabilities to waste, fraud and abuse

  • National Eligibility Verifier removes the opportunity for providers to enroll ineligible subscribers
  • Refines list of federal programs that may be used to validate Lifeline eligibility to those that support electronic validation, are most accountable, and best identify people needing support (SNAP, SSI, Medicaid, Veterans Pension, HUD Federal Public Housing Assistance, Tribal), along with income-based eligibility
  • Increases transparency by making program data publicly available and understandable, including subscriber counts by provider and uniform disclosure of annual subscriber recertification data

Establishes budget mechanism to minimize impact on ratepayers

  • Sets budget of $2.25 billion, indexed to inflation, sufficient to allow for increased participation generated by support for broadband service
  • Requires FCC’s Wireline Competition Bureau to notify Commission when spending reaches 90 percent of the budget and to prepare an analysis of the causes of spending growth, with recommended actions for the Commission to consider.
  • Maintains current $9.25 monthly household subsidy

Retains Tribal lands designation for the Cherokee Outlet in Oklahoma where residents will continue to receive enhanced Tribal Lifeline support

These and other changes will fully modernize Lifeline to support broadband service and obtain the highest possible value from the expenditure of Universal Service funds.

To learn more about the Lifeline program for low-income Americans, visit https://www.fcc.gov/general/lifeline-program-low-income-consumers.

Action by the Commission March 31, 2016 by Notice of Proposed Rulemaking (FCC 16-39). Chairman Wheeler, Commissioners Clyburn and Rosenworcel approving. Commissioners Pai and O’Rielly dissenting. Chairman Wheeler, Commissioners Clyburn, Rosenworcel, Pai and O’Rielly issuing separate statements.

WC Docket No. 16-106

Office of Media Relations:
(202) 418-0500
TTY: (888) 835-5322
Twitter: @FCC
www.fcc.gov/office-media-relations

This is an unofficial announcement of Commission action. Release of the full text of a Commission order constitutes official action. See MCI v. FCC. 515 F 2d 385 (D.C. Circ 1974).

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Jordan AxtFCC Press Release: FCC MODERNIZES LIFELINE PROGRAM FOR THE DIGITAL AGE
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2016 NaLA Conference Tickets Now Available!

Tickets for the 2016 NaLA Spring Conference are now available!

Remember, early registration discounts end on March 14th! Full price tickets begin on March 15th. Late registration fees apply for any tickets purchased on or after April 15th.

  • March 15th, 2016 – Regular Registration Prices Begin
  • April 15th, 2016 – Late Registration Prices Begin

SAVE $100 AND REGISTER TODAY!

BUY CONFERENCE TICKET
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Jordan Axt2016 NaLA Conference Tickets Now Available!
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2016 NaLA Conference Update

New Orleans - Burbon St.

Hello NaLA Members!

Welcome to 2016, a new year for everyone and a particular new year for NaLA. The White House is up for grabs, new legislation is around the corner, and advances in technology create meaningful impacts on our margins – we will have plenty to talk about at this year’s conference!

Our event team is in full gear making sure the 2016 conference is the biggest and best ever.

Here is important information about this year’s event:

2016 NaLA Spring Conference 

May 17th-19th – New Orleans, LA
New Orleans Marriott
555 Canal Street, New Orleans, LA 70130

We are opening sponsorship opportunities and registration much earlier this year to allow ample planning for attendees, vendors, exhibitors, and also our speakers & event staff.

Here are some important dates to remember:

  • Jan 10th – Feb 10th 2016 – Sponsorship Opportunities Open Up
  • February 15th, 2016 – Hotel Registration & Discounted Early Ticket Sales Begin
  • March 1st, 2016 – Speaking & Volunteer Opportunities Open Up
  • March 15th, 2016 – Regular Registration Prices Begin
  • April 15th, 2016 – Late Registration Prices Begin
  • May 17th, 2016 – Conference Begins with Opening Party!

With such positive feedback from our members on last year’s conference format, we are going to repeat this format with plenty of poignant “NaLA talks” and interactive break-out forums. An overview of the event schedule can be found HERE.

I would not be doing my job if I did not remind you that NaLA is a non-profit organization; the success of our efforts are reliant on the contributions of your donations.  Because of this, we ask that everyone contribute to that extent they can; donate what you can, when you can, as often as you can.  Each and every donation helps the Lifeline community of which makes up NaLA, our members, and lifeline recipients everywhere.

Thanks all and we look forward to hosting everyone in New Orleans! Keep checking our website for updated information!

Sincerely,

David Dorwart - Chairman, National Lifeline Association

David Dorwart
Chairman, National Lifeline Association

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Jordan Axt2016 NaLA Conference Update
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Business Misconceptions and the NPRM

By: Dave Skogen, NaLA Board Member

FCC Broadband InitiativeEvery American should have access to essential communication services, and in today’s world, that includes Broadband service. The Lifeline framework can, and should, be a critical tool to help make that idea a reality. In its recently released Second Further Notice of Proposed Rulemaking, Order of Reconsideration, Second Report and Order and Memorandum Opinion and Order (“NPRM”), the FCC makes it clear that they understand that and I applaud them for it.

The NPRM is sure to initiate significant commentary, and those of us in the Lifeline community must play a central role in that debate. While Regulatory and policy arguments will be forthcoming, it is important for all of us in the industry to help educate decision makers on what I see as misconceptions from a business perspective. Incorrect assumptions on business issues pose a serious threat to sound policy making and effectively moving the program forward in a way that is optimal for the American public.

In my view, the primary areas where there is seemingly a break from perception and reality – from a business perspective – are (a) the current $9.25 reimbursement can and should be funding consumer offers beyond those currently in the market (b) shifting consumer eligibility away from Lifeline providers would remove a significant financial burden from them and (c) the lack of greater competition is largely due to the existing ETC framework.

MINIMUM SERVICE STANDARDS FOR VOICE

In the NPRM, the FCC suggests that the current structure may not “extract” enough value for the fund and consumers. To support this, the Commission points out that the common industry offer of 250 minutes per month has gone largely unchanged in three years. It also notes that non Lifeline services have seen reduced prices in that period, and that consumers may have to pay out of pocket for services at a new minimum standard.

There are several things the Commission may not fully understand regarding the existing model (again, from a business perspective).

  • The commission argues that the offer has gone stagnant during this time, but does not mention that the 250 minute offer was developed prior to the elimination of Link Up. That alone is a $30 “extraction” from providers.
  • While the commission points out that wholesale telco prices may have been reduced during the period, it ignores other significant and real costs of providing services. There has been no reduction in phone costs and, as penetration rates have increased, distribution costs have also gone up. While these may not be considered “supported services”, from a practical perspective that is not relevant as the financial model does not change due to such distinctions.

The evidence that the offer is not unduly enriching providers is evidenced by the FCC’s own statements. They point out that there are several providers yet the general offer has not changed. If the flexibility on the offer was not limited due to financial reasons tied to the $9.25 reimbursement rate, we would naturally see competitors differentiating themselves through enhanced offers. Simply forcing higher minimum standards upon providers will not lead to improvements for consumers, but will simply force providers abandon customer outreach, reducing options for consumers.

ELIGIBILITY DETERMINATION AND IT’S ASSOCIATED COST FOR PROVIDERS

The debate on where eligibility determination should lie is beyond the scope of this piece. Here, the discussion is limited to the FCC’s perception on the costs associated with that function. This is relevant because an overestimation of costs may (a) justify the FCC spending an unreasonable amount to support the function, (b) overcharge carriers, ultimately harming consumers and (c) inaccurately influence the decision making process.

Currently, the eligibility determination is done during the enrollment process. It is but one of the several steps a carrier and consumer must go through at that time. Other items include describing the program and offering, going over the large number of disclosures, covering Terms and Conditions, instructing the consumer on use of the product, etc. Eligibility determination takes a small percentage of that time. Adding a third party to the process only lengthens it, especially if it cannot be done in real time, as the Commission suggests. On top of that, the third party must be compensated. In short, while other merits of the proposal may be debated, this change would ADD costs for the provider and the overall Lifeline ecosystem, not reduce them.

COMPETITION AND THE CURRENT ETC FRAMEWORK

The NPRM discusses potential changes to the ETC designation process and a potential alternative with the goal of encouraging more competition. The possible merits and issues with those approaches are beyond the scope of this paper. However, it is worth noting that the existing framework could provide much greater competition if the FCC simply executed within it. Dozens of Compliance Plans and Federal ETCs (created at no small expense by carriers) have gone simply unaddressed for literally years. If increased competition is truly desired, an immediate way to address that seems obvious.

All of these issues matter, because – again – sound policy making must be built on a reasonable understanding of market realities. Where that is not the case, it is incumbent on all of us to educate those influencing policy.

The opinions expressed above are solely those of the author and do not necessarily represent those of NaLA or its members.

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Jordan AxtBusiness Misconceptions and the NPRM
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911 Fees and Taxes on No-Charge Lifeline Services

Emergency Petition for Declaratory Ruling

FCC Petition with scale and gavelLast year, our attorney filed comments on behalf of the National Lifeline Association in support of an Emergency Petition for Declaratory Ruling that requested FCC preemption of state laws that impose 911 fees and taxes on no-charge lifeline services filed by TracFone Wireless. The FCC has not yet ruled on this petition.

On March 13th, 2015, TracFone filed a supplement requesting that the FCC, if unwilling to preempt state laws, commence a rulemaking proceeding to disseminate rule revisions that would prohibit any state or local taxes on Lifeline services where the effect of such taxation would be to reduce the net Lifeline support received by the customer to levels below those mandated by the FCC.

We will continue to monitor this proceeding and keep members updated. Feel free to post comments and share your thoughts.

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Jordan Axt911 Fees and Taxes on No-Charge Lifeline Services
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The Truth About Lifeline & “Obama Phones”

  1. Myth # 1 – Lifeline & “Obama Phones” are free phones paid for by the government via taxpayers

    Truth: Telecommunications companies provide funds for the Lifeline program via required FCC Universal Service Fees which are sometimes passed on to consumers via their phone bill. It is usually a small amount of money and not all telecommunications companies pass this fee on to their customers. The lifeline program does not actually reimburse telecommunications companies for the cost of the phone. This up-front cost is funded entirely by the telecommunications company and slowly recovered over the lifetime of the customer. If service is disconnected early or a phone is lost, that cost is incurred entirely by the lifeline service provider.

  2. Myth #2 – Lifeline & “Obama Phones” is a program created by President Obama

    Truth: The Lifeline program was launched by President Reagan in 1984 and intended for landlines before cell phones were widely available to the public. In 2005, the program was amended by the Bush administration to allow for wireless plans. Then, in 2008, President Bush amended the program to allow households to decide between receiving the discount on wireless or landline service. President Obama has had virtually nothing to with the Lifeline program with the exception of one coincidence. The first wireless lifeline phones were distributed in 2008, the same year President Obama took office. However, those first phones were distributed 3 months prior to him taking office. Sources of the term “Obama Phone” originate from emails that went viral in 2009 incorrectly associating the lifeline program with President Obama. Misinformed consumers and clever marketing carry the term forward.

  3. Myth # 3 – Lifeline & Obama Phones are just more handouts for welfare recipients

    Truth: Welfare is not a requirement for eligibility in the Lifeline program. It is true that welfare recipients do qualify for Lifeline service, but many other programs and criteria make someone eligible for the service. Examples include: SSI, TANF, Medicaid, Section 8 Housing, LIHEAP, and more. It is important to note that this program is not funded by tax dollars and a government agency does not distribute the phones or set up service.

  4. Myth 4 – Lifeline is filled with waste & fraud

    Truth: FCC, OIG, NLAD, USAC, and state agencies all help regulate the program with very strict guidelines, rules, and technology that eliminate fraud and waste. Although it is nearly impossible to eliminate all fraud, there is very few documented cases of fraud as it compares to the entire lifeline program and certainly nowhere near as much as some may want you to believe.

At the end of the day, this program does what it is intended to do. It provides low income consumers with the ability to reach essential medical services, secure job interviews, call emergency services, government agencies, and keep in touch with family and friends. I would be very difficult to secure a job or remain healthy and safe without essential telecommunications services today.

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Jordan AxtThe Truth About Lifeline & “Obama Phones”
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Lifeline Eligibility Tool

If you aren’t sure if you are eligible for lifeline and you would like to discreetly check your eligibility status, use this great tool provided by USAC:

http://www.lifelinesupport.org/ls/eligibility/default.aspx

Lifeline provides a monthly discount for home or wireless telephone service to eligible consumers. This Lifeline screening tool will help you determine if you may be eligible for the Lifeline discount. You may also review the eligibility requirements at this page:

http://www.lifelinesupport.org/ls/eligibility/eligibility-requirements.aspx

Lifeline eligibility requirements vary from state to state. These references and tools are not intended to guarantee lifeline program eligibility, they are only for your reference. Contact your local lifeline provider to check your eligibility status.

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Jordan AxtLifeline Eligibility Tool
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