Increasing Lifeline Minimum Data Usage Limit Widely Opposed
Carriers, state regulatory commissions and public interest groups united in FCC docket 11-42 to again oppose an FCC proposal to raise the Lifeline wireless broadband minimum service standard. Three NARUC Telecom Committee members emphasized they want no change to the MSS, in a virtual news conference Tuesday. Raising the MSS was condemned by every filing in the docket responding to the National Lifeline Association (NaLA) petition.
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Stakeholders raised the same arguments as in response to Chairman Ajit Pai’s July announcement of a draft order to change the way the MSS is calculated (see 2009080079). Increasing minimum would “jeopardiz[e] a literal lifeline for the millions of low-income households that rely on the Lifeline program for connectivity,” said 19 public interest groups. If the mobile broadband MSS is raised, eligible telecom carriers would have to consider relinquishing their ETC designations in some states that don't give subsidies to supplement the federal Lifeline subsidy, said eight ETCs.
Raising the standard to 4.5 GB a month, as the draft would do, or to 11.75 GB, as will happen Dec.1 if there's no FCC action, would devastate the program by making it impossible for providers to offer a free option, said nearly all commenters. Without the freeze at 3 GB sought in the NaLA petition, Tracfone “will regrettably be forced to inform its millions of subscribers in October that they will be charged a monthly co-payment for their previously no cost Lifeline service,” the company said. It's being bought by Verizon. Providers aren’t raising a “false alarm,” said TruConnect. A copay requirement would be “catastrophic” because 85% of existing subscribers said they can’t afford any payment, Tracfone said.
Freeze the current standard, NARUC Telecom Committee members told journalists. Increasing the standard could force out more than 5 million veterans, seniors and low-income households, said Nebraska Public Service Commissioner Crystal Rhoades. Most Lifeline subscribers can’t afford monthly copayments that providers foresee as a likely outcome, the Democrat said. Raising benchmarks means providers will lose flexibility and may have to exit, warned South Dakota Public Utilities Commissioner Chris Nelson. “Let the marketplace work,” urged the Republican, saying affordability isn’t a rural or urban issue.
Lifeline subscribership declined nationally from 13 million in 2016, before a minimum, to 6.9 million today with a 3 GB standard, said Rhoades. In Q1 2017, Maine had about 33,300 Lifeline subscribers, 20% of those eligible; this Q1, it’s down to 17,455, for 10%, said the state Public Advocate Barry Hobbins. Lifeline suffers from “vast undersubscription,” said Rhoades. The national verifier program contributed, “not so much because they were finding waste, fraud and abuse, but just because in many cases it was so difficult and laborious for the consumers to re-certify that many of them dropped.”
In 2019, the FCC waived a similar increase under pressure from the same groups, and with COVID-19, conditions have worsened, said the joint public interest filing from the National Consumer Law Center, Common Cause, National Hispanic Media Coalition and others. “It is in this troubled context that the Commission is considering major, permanent changes." The pandemic increases the importance of affordable service so people can safely keep in touch and do telework, telehealth and remote learning, said Missouri PSC Commissioner Maida Coleman at the news conference. “Now is precisely the wrong time to allow changes.”
Fully restore the Lifeline voice subsidy, several commenters said. “Many subscribers still find greater utility in a voice plan than they do in a data plan, and thus may have specifically chosen to remain voice-only or found it impractical to switch,” Free Press said. “During the COVID-19 public health and economic crisis, consumers have been increasingly reliant on voice service to stay connected," said the joint public interest filing.
Nearly every commenter said the agency shouldn’t change the MSS until it has data from a planned 2021 program study. “Wise public policy and logic dictates” completing the report first, since it's due seven months after the Dec. 1 trigger for the increase, said TruConnect. NARUC agreed.
The Wireless Bureau should start working on that report now, CTIA said. With the Dec. 1 deadline approaching, timing is important, commenters said. “If the FCC ultimately determines that an escalation of the MSS is necessary, then it will take weeks if not months for TracFone and other service providers to properly transition existing Lifeline customers to a post-paid billing system,” Tracfone said.
The Oregon Public Utility Commission believes current MSS for fixed broadband internet access service runs counter to accessibility and affordability goals, wrote Chair Megan Decker: Annual speed increases for fixed BIAS price out low-income customers, “which defeats the program’s objective of affordability.”