State Regulators Blast Proposals To Streamline Lifeline Broadband ETC Process
State regulators hammered Lifeline proposals to simplify provider participation and bypass state reviews in the FCC’s planned expansion of the low-income support program to broadband coverage. Gutting the state’s screening role would be bad policy and contrary to the law, said a NARUC letter to the commission signed by 90 state commissioners posted Friday in docket 11-42. It would invite fraud and abuse, undermine state matching programs and result in service deterioration, it said, adding detailed arguments to, and broad backing for, previous NARUC/state concerns (see 1603090040). The NARUC pushback, which could be a harbinger of litigation, is a “big deal” because it complicates the FCC’s drive to spur provider participation and competition, a telecom attorney told us Friday.
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
The NCTA welcomed FCC plans to reduce entry barriers to the market for Lifeline-subsidized service, and lauded the agency’s proposal to create a streamlined federal process for approving broadband provider participation. Meanwhile, various other parties lobbied the FCC on Lifeline as it heads toward a vote on a draft order tentatively scheduled for March 31. They included AT&T and Verizon, which said any phaseout of Lifeline support of stand-alone voice services should be technologically neutral and not target mobile service only.
The state regulators objected to “industry-driven” filings asking the FCC to either (1) create an optional federal process for designating Lifeline broadband providers as eligible telecom carriers or (2) give Lifeline broadband support to non-ETCs. The first proposal is what the FCC outlined in its draft, while some parties continue to push the second proposal. Even if either proposal has some merit, “neither can be squared with the plain text” of Sections 254, 214(e) and other provisions of the Communications Act, said the NARUC letter, which said 29 of the signers are NARUC executives or group leaders.
The state regulators knocked both proposals on policy grounds, saying they would eliminate “crucial” state oversight of Lifeline carriers and services. “On its face, taking these State ‘cops’ off the beat is an extremely poor policy choice -- a choice which can only have three obvious repercussions,” the letter said. “First, it can only increase fraud and abuse of the Lifeline program. Second, it can only undermine existing complementary State Lifeline programs. Third, it can only result in the provision of substandard services to Lifeline consumers by some subsidized providers.”
The FCC doesn’t have the resources to pick up the slack if state regulators no longer screen applicants seeking to participate in Lifeline, the state regulators said. “No one can seriously contend that funneling Broadband Lifeline ETC applications to the FCC can do anything but reduce the scrutiny imposed on any carrier’s 'national' application and that carrier’s subsequent operations," the letter said. State legislators “are not likely to welcome” limits on state ability to oversee provider participation, which could undermine state Lifeline matching programs, the letter said: In the worst case, "it could, long term, sound the death knell for State matching programs.” Removal of state oversight is also likely to lead to service deterioration by providers, and is unlikely to spur new entry by big players, the state regulators said. “Any rational look at the history of the Lifeline program and the economics of the current market indicate none of the proposed changes are likely to lure large facilities-based carriers into the Lifeline business,” the letter said.
The FCC said changes were needed to boost provider participation and expand affordable broadband options for low-income consumers. Providers want centralized entry “to avoid the cost and red tape of state-by-state approvals,” and the proposed federal Lifeline process creates a path, an agency spokesman said. To get streamlined treatment, providers still would need to show they're financially stable, experienced in providing broadband service and have a history of compliance with FCC rules, he said. The draft order doesn’t scrap existing state and federal Lifeline designation processes, he added, calling Lifeline regulation a shared federal-state responsibility: “We value states’ continuing contributions to protecting Lifeline.”
NCTA supported the FCC’s push “to increase competition and innovation in the Lifeline marketplace by reducing barriers to entry” for providers looking to offer program low-income discounts, and it specifically commended the agency’s proposed national ETC process. “As the Commission has noted, the current multistate ETC designation process has been identified as an impediment to service provider participation in the Lifeline program,” said an NCTA filing summarizing meetings with aides to four FCC commissioners. “Providing a single, nationwide designation option for broadband Lifeline support is a positive step toward encouraging new providers to participate.” In addition, NCTA urged the FCC to allow consumers to use Lifeline discounts on any broadband service offered by a participating provider, and it suggested providers could be required “to offer any Lifeline-specific broadband tiers” at 10/1 Mbps speeds.
The Bells took issue with FCC plans to phase out Lifeline support for stand-alone voice service only. Verizon said any phaseout should be done “in a technologically-neutral manner.” AT&T agreed, saying it wasn’t taking a position on whether stand-alone voice service subsidies should be eliminated. The FCC shouldn’t “compromise its longstanding principle of competitive neutrality by eliminating support for standalone mobile voice services, while maintaining support for standalone fixed voice service,” AT&T said. “In light of the fact that consumers greatly prefer mobile voice services to fixed services, such a change would be particularly misplaced.” Both Bells also urged the FCC to act speedily to shift Lifeline administration duties away from providers, with AT&T suggesting a Jan. 2 deadline. Both companies had meetings with FCC officials.
Wireless, telecom and tech groups voiced concern about an FCC proposal to require mobile Lifeline providers to offer unlimited talk plans (see 1603180022). Other parties voiced similar concerns (here and here). The telecom attorney we spoke to Friday suspects FCC officials realize they “overreached” and may scale back the unlimited talk plans by delaying proposed Dec. 1 implementation, or possibly even by capping the number of minutes, albeit at levels higher than most free plans today. Allowing unlimited talk would probably require Lifeline providers to charge consumers co-pays that discourage their participation, the attorney said.
Public-interest groups urged the FCC to “carefully monitor any changes to the Lifeline program that could undercut access to mobile voice service and ensure that adoption of minimum service standards or a phase-out of support for standalone mobile voice services does not unintentionally harm Lifeline subscribers and reduce access to affordable telecommunications services,” said a Public Knowledge filing on a meeting with commissioner aides that included officials from the Benton Foundation, the Leadership Conference on Civil and Human Rights, the National Consumer Law Center and the United Church of Christ. They also asked the FCC to allow non-ETCs to participate in Lifeline and not to impose a hard cap on program expenditures.