FCC Issues Interim Rule Aimed at Multiple Lifeline Subscriptions
The FCC issued an interim order that it says will help prevent Lifeline subscribers from receiving multiple subsidies. The order has been ready since last month but was stalled by Commissioners Mignon Clyburn and Michael Copps, who fought over the notice provisions (CD June 14 p2). As expected, the order automatically cancels extra Lifeline subscriptions and divides customers up amongst eligible telecommunications carriers (ETC) in the various states. The new allotment system will take immediate effect in Tennessee and Florida, the two states with the most pronounced Lifeline problems. As staff reviews the process, more states will be subject to the de-enrollment/allotment rules over the next several months, an FCC official said.
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Tuesday’s order requires the Universal Service Administrative Co. to give Lifeline customers at least 35 days’ written notice that they'll be losing one or more of their subsidies. It gives customers a chance to choose a different carrier than the one they've been allotted. ETCs are also now expected to explain the new rules “in plain, easily comprehensible language” when enrolling customers in the Lifeline program, Tuesday’s order said.
The Democratic commissioners said they were satisfied the order will help curb waste while not undermining the goals of the program. “This item clarifies the expectations we have for those carriers when they are signing up a new Lifeline customer,” Clyburn said. “In addition, this Commission is taking a close look at our own consumer information on the program, and we are modifying it as needed to ensure that consumers understand the benefits the Lifeline program affords.” The notification requirements and the opportunities for choice are “critical,” Clyburn added.
Copps, too, said he was gratified by the “more ample notice” outlined in the final order, but is worried about “unintended consequences” that could spring from the order. “The Commission and USAC must monitor closely the initial phase of this process, especially, and should analyze the results and feedback we receive from this first group of states, revising our efforts accordingly, before the Order is applied to additional states,” he said.
The draft order gave customers 30 days’ notice, an eighth floor official said. Copps and Clyburn pushed back, seeking 60 days. Negotiations continued through June and Chairman Julius Genachowski’s staff agreed to give 35 days’ notice, in English on one side and Spanish on the other, in a colored envelope, followed by a postcard reminder and finally, an industry-sponsored robocall that gives customers voice prompts that allow them to choose their carrier by keypad, the FCC official said. Genachowski called Tuesday’s order “an important interim solution to the serious problem of duplicative Lifeline support” and added that “more needs to be done, including establishing a National Accountability Database to ensure that only eligible households are participating in the program."
Commissioner Robert McDowell said the order “takes a step in the right direction.” It shouldn’t be the last step, he said. “There is more to be done, and I look forward to working on additional reforms that will curb waste, fraud and abuse and adhere to Congress’ intent for the Lifeline program."
The big question is how USAC will explain to customers that they have two Lifeline subscriptions when they can only have one, a state telecom analyst said. It’s uncertain whether customers understand that while wireless and wireline are two different types of services, they can select only one at a Lifeline rate, the analyst said. The other question is what information USAC will offer to help customers decide what service is best for them and which service the customer will be assigned to if he doesn’t respond, the analyst said.
The Lifeline fund has gotten out of hand due to little oversight, Nebraska Public Service Commissioner Anne Boyle said. She said she’s pleased with FCC’s action but hopes the agency can address the issue of self-certification. The order also didn’t tackle the question of whether there should be one line per household or one per residential address.
TracFone counsel Rick Brecher said he expects the FCC to address that question by November. That’s when the deadline comes for the commission to respond to the Federal/State Joint Board’s recommendations, he said. There’s been concern about the ballooning of the fund and Tuesday’s action will stop the bleeding, he said. The rules won’t prevent customers from enrolling in multiple programs, he said. It will be helpful to have a national database that carriers can access to determine if an applicant has already received benefits, he said.