NARUC Members Hope FCC Heeds Coming Resolutions; USF One May Be No-Go

State commissioners' first draft would have the FCC not change minimum service-level thresholds that companies providing Lifeline services must meet. It would help make it so phone and not just broadband products could get the full monthly federal subsidy of $9.25 a household. This would make it easier for people to get cheap voice-only services, which proponents contend is necessary because the product costs less than broadband and phone service remains necessary. The third draft resolution would have the FCC stop requiring some states to participate in a national Lifeline verification program while NV bugs are ironed out. The second resolution, the one without a sponsor, would back Lifeline and Connect America Fund budgets similar to those for the E-rate and rural healthcare programs.

The FCC under Chairman Ajit Pai seems open to getting the sort of feedback NARUC is preparing via the proposals, some state commissioners said. When we asked all FCC members last week whether they would support what NARUC will propose if the resolutions pass next week, Democrats were generally supportive, Republicans less so. The agency declined to comment Wednesday.

"A necessary part of the FCC process that Chairman Pai is trying to ensure" is getting government perspective, such as via the Intergovernmental Advisory Committee, said U.S. Virgin Islands Public Services Commissioner Johann Clendenin. "We’re providing that input." Clendenin, a member of the IAC, sponsored the NV resolution. Pai "wants more data and input," Clendenin said. "Well, this is more data and input." Clendenin's territory has been struggling with the Lifeline NV and lacks the budget to provide the kind of data needed for the national eligibility checking system, he said. "I’m just saying, 'Time out.'" This isn't "an attempt to slow the rollout of the program," he said. "It has to proceed with alacrity."

The U.S. Virgin Islands is among states and territories that must use the NV. People who may be eligible for Lifeline there apparently aren't being verified, Clendenin said. "But we don’t have the numbers" to illustrate to what extent. Other so-called hard rollout states reported similarly, when we asked recently (see 1907080009).

'Hard Launches'

NARUC would recommend the FCC temporarily suspend more hard launches this year: "And that only soft launches continue in states the remainder of this year to allow sufficient time to ensure that hard launches will work as intended."

In "existing hard launch states where documented Lifeline enrollment has dropped 35 percent or more, the FCC should permit those states revert to soft launch National Verifier status for the rest of 2019," the draft says. "Anecdotal data strongly suggests that many eligible Lifeline subscribers have been denied service or were de-enrolled from the program, a problem which will necessarily continue in each hard launch state until needed improvements are implemented."

Several other state commissioners we asked said they likely will vote yes on the third resolution. Stakeholders noted drafts often change before members approve them, so changes are possible. "There’s not this interface anymore" to ease such eligibility checks, said Vermont Public Utility Commissioner Sarah Hofmann, of the absence of an NV application programming interface. She’s "favorable to the resolution" and wants to hear all sides to it.

Nebraska Public Service Commissioner Crystal Rhoades and South Dakota Public Utilities Commission Vice Chairman Chris Nelson are amenable, too, to the proposal. It "absolutely makes sense" for a halt, said Nelson, a member of NARUC's board. "You can do all these hard launches you want, but unless you’re actually connecting with databases, you haven’t accomplished anything." Rhoades said the FCC might want to delay the hard launches into 2020, because it may take longer for the technology to work. "Rome was not built in a day," she said. "It would be prudent to do it correctly, rather than quickly."

"The FCC has been really unrealistic with the timelines that they have proposed" with a hard-launch this year, Rhoades said. "We’re going to ask them to take a little more time and work through these things maybe a little bit more before fully rolling them out, and we’re going to hope that they listen." She said the federal regulator hasn't told her PSC when Nebraska will be required to use the NV. The state may be ready, but "it's really difficult for us to know. You don’t know until you start doing these launches," the commissioner said.

Voice-Only

Resolution 1 from Hofmann and Rhoades would leave full federal support for Lifeline voice services at the Dec. 1, 2018, levels and not phase down the subsidies until they eventually would be zero on Dec. 1, 2021.

Some 53 percent of Lifeline money goes to voice-only or voice with broadband services, NARUC says the Universal Service Administrative Co. reports. "If the FCC eliminates Lifeline voice support, it will significantly and negatively impact low-income households," the draft says. "Many consumers, including seniors, elders, and families with children, rely on voice services to contact first responders in time of emergency, reach social service agencies, access healthcare, and keep connected to other essential services."

Hofmann hopes the FCC "would look at this very carefully, because it is a very aggressive schedule" of phasing out voice only. "A lot of people still use voice services, including a lot of elderly people." She said "the bridge needs to be made a little longer before we cut off the voice component." She's "not sure I should be optimistic, but we’re hopeful" the FCC will look at changing the milestones: "I really think that might be possible to at least get them to look at it" and say, "'Oh, we really are doing it too aggressively." Hofmann agrees Lifeline should also subsidize broadband.

Rhoades hopes the FCC gets "enough feedback from state regulators" on what the problems are with the agency's current schedule that it will make adjustments. She said that if Lifeline users must buy broadband, even including state and federal subsidies, it would easily cost more than what's covered. "A lot of people still are using a voice-only product, because that’s what they can afford and that’s what they need the most," the state regulator said. "We’re going to ask, and make our best case, and hopefully the FCC will review that."

On the sponsor-free resolution to not start an overall federal USF cap, NARUC members and a staffer confirmed that no state commissioner had stepped forward. They said then-New York Public Service Commissioner Gregg Sayre had suggested the proposal. Sayre didn't write that resolution and he left the PSC June 20, he said Wednesday. He declined to speak about the substance of the draft.

It's said to be unusual for a resolution to be sponsorless, but it's still possible a commissioner will get behind it and the organization would consider it. A 3-2 FCC NPRM (see 1905310069) asks about an overall USF cap of $11.42 billion, "the sum of the authorized budgets for the four universal service programs in 2018." No state commissioner "has agreed to sponsor the resolution yet," said NARUC General Counsel Brad Ramsay: "There’s no way to know for sure if it will be introduced or not until the NARUC business meeting" on telecom issues.