FCC Seems Poised To Adopt Lifeline, VoIP Numbering Items

At its monthly meeting, the commission plans to vote on orders and an NPRM to "restructure and modernize" Lifeline to move toward giving low-income consumers more access to broadband while strengthening administrative oversight and targeting waste, fraud, and abuse, and on an order to give interconnected VoIP providers direct access to phone numbers, said the agency's agenda. Commissioners also are to vote on a declaratory ruling on Telephone Consumer Protection Act rules and an order on a petition for reconsideration of broadcast incentive auction rules. Items can always be voted on before the meeting and released separately or simply withdrawn.

The draft Lifeline orders circulated by FCC Chairman Tom Wheeler would require participating telecom providers to retain documentation on the eligibility of their customers to facilitate oversight and audits, and extend all record retention duties from three to 10 years, an FCC fact sheet said. The draft NPRM would seek comment on potential minimum service standards for both voice and broadband, and on proposals for shifting responsibility for ensuring the eligibility of Lifeline customers from carriers to another mechanism "such as establishing a neutral third-party administrator."

In a speech at the Progressive Policy Institute, Clyburn spoke hopefully about updating Lifeline. "The FCC has an opportunity to endorse a path for a rebooted 21st century program," she said. "If launched right, it could be one of the best investments our government ever makes. If done right, this program could bridge chronic divides and the network effects could be tremendous. ...I believe we should view the Lifeline program ... as a temporary bridge for those in need. I believe we should create a successful, innovative, 21st century program that meets the information and technology needs of those who qualify."

However, Pai, writing in National Review, was concerned about Lifeline problems. "Unfortunately, Lifeline, known in some circles as the 'Obamaphone' program, is plagued by waste, fraud, and abuse," he said. "And ground zero for the program's current woes is the state of Oklahoma." Pai said the typical Lifeline subsidy is $9.25 per month, but those living on designated "tribal" land receive $34.25 per month, whether or not they are Native American, and the FCC treats virtually all of Oklahoma as tribal land. "For example, non-Native Americans living in Tulsa are eligible for $300 more per year in Lifeline subsidies than a low-income person in East Los Angeles or Appalachia," he said. Pai said he had deep respect for tribal nations, but "this federal spending in Oklahoma is outrageous. ... The FCC must act promptly to end this kind of swindle." (Although sometimes referred to as Obamaphone, the program predates the Obama administration.)

Pai said Lifeline has other problems and needs to be placed on a budget. "It is now the only FCC program of its kind without a cap on spending," he said. Pai said carriers also should be prevented from providing free service so that recipients "have some skin in the game" to discourage abuse. "These reforms -- and others -- must go hand in hand with any decision to begin providing broadband subsidies through Lifeline," he said.

Danielle Frappier, a Davis Wright attorney representing some wireless Lifeline providers, told us an "aspirational" Lifeline budget made more sense than a hard cap because the latter, depending on where it's set, could simply restrict providers from signing up new low-income customers or force existing customers to drop off -- going against the program's goals. Frappier said she hoped proposed changes to the definition of Oklahoma tribal lands would be put in the NPRM, not the orders. "If they're going to make a significant change, they need to put it out for notice and comment," she said. Frappier said the FCC could always make "last-minute changes" but said she "can't imagine they're not going to move forward."

Document Retention

Large telcos have objected to FCC proposals to increase and extend their obligations to retain personal customer information for determining individuals' eligibility for Lifeline (see 1506110023).

Melissa Newman, vice president-federal regulatory policy and affairs, told us CenturyLink supports Lifeline and shifting administrative duties from carriers to a central administrator, but was concerned about the draft’s proposal to require Lifeline providers to retain customer information for 10 years. “If you’re looking at proposed administrative changes in an NPRM, why do an order changing the current retention rules for carriers, which will be costly and burdensome for us, just to have it undone if you go to a central administrator in a couple of years?” she said. Newman also said it could be a barrier to signing up low-income customers to Lifeline if they have to provide very sensitive personal and financial information to companies that are now going to be required to hold onto the information for 10 years.

Frappier said the FCC should keep Lifeline eligibility verification procedures as simple as possible and use what works now to make improvements. "There's no need for a whole new system," she said. Frappier said more than 90 percent of Lifeline participants use their food-stamp cards to prove their eligibility, but others use other cards and documents and there are issues about what carriers will have to retain in terms of scanned or copied documents. She suggested the FCC could build on the success of wireless Lifeline provider TracFone, which she doesn't represent, in gaining access to the Supplemental Nutrition Assistance Program databases of 23 states to determine eligibility. The FCC could push those states to give other Lifeline providers access and also seek access from the databases in other states, she said.

VoIP Numbers

The FCC is considering an order to give interconnected VoIP providers direct access to phone numbers from numbering administrators without classifying interconnected VoIP as a Title II telecom service under the Communications Act, agency and industry officials told us. The FCC isn't likely to make big changes to a draft order, but some issues are still under discussion, said an agency official.

NARUC and NTCA opposed giving non-Title II VoIP providers direct access to phone numbers, but the FCC is not expected to classify interconnected VoIP as a telecom service, various sources said. Vonage and others said the FCC had plenary authority to regulate numbering issues. Public Knowledge also had concerns about non-Title II VoIP numbering access, but suggested there were ways the FCC could protect the integrity of the system, and an FCC official told us VoIP providers would be "subject to a number of safeguards."

Another FCC official said the agency was looking at setting up a process where VoIP providers seeking direct access to phone numbers would have to demonstrate they're qualified to use them, including by showing they have the necessary "technical, managerial and financial" capacity. "We have a lot of rules for that," the official said, noting the FCC could adapt those rules for VoIP: "We're not walking away from our rules."