TracFone Objects to AT&T Proposals for Overhauling Lifeline Administration

AT&T had said its New Lifeline proposal could significantly improve the program for consumers and providers. AT&T seeks Lifeline changes "to give eligible users greater autonomy and remove service providers from all program administration duties, including enrollment and eligibility verification, delivering benefits to Lifeline consumers, performing annual recertification and de-enrolling consumers from the program." It also supports proposals "that would benefit Lifeline recipients and reduce waste, fraud and abuse." These include "delivering Lifeline benefits directly to participating consumers, providing greater choice of services including broadband Internet access services, implementation of coordinated enrollment/de-enrollment and replacement of the [eligible telecom carrier] designation and obligations with a registered Lifeline service provider certification process," the telco said. AT&T declined further comment Wednesday.

TracFone agreed with AT&T that some administration should be performed by a third party, including verification of consumer eligibility. TracFone said it "has suggested that the National Lifeline Accountability Database, administered by the Universal Service Administrative company (USAC), be enhanced and used for eligibility determinations -- an idea with which AT&T has concurred.”

But TracFone said it “strongly” opposes an AT&T “suggestion that providers be removed from other enrollment functions, including, for example, marketing and customer outreach, explaining program rules to consumers, and delivering Lifeline benefits to enrolled customers.” TracFone said those functions were best performed by Lifeline providers, not other entities.

TracFone said it's puzzled by other AT&T comments, including that the current Lifeline program is “inefficient” for providers. Noting it provides Lifeline service to 4.6 million households, the most of any provider, TracFone said it had “not found those processes to be inefficient.” AT&T had for years asked to be relieved of Lifeline duties, said TracFone, which said that raises questions about AT&T’s “stated concern about program inefficiencies,” whereas TracFone “remains staunchly committed" to the program.

TracFone objected to AT&T’s proposal to “initially” tie Lifeline eligibility to a single program, the federal Supplemental Nutrition Assistance Program (SNAP or food stamps). The proposal made “no sense,” largely because it “would render ineligible for Lifeline assistance millions of low-income households which are Lifeline-eligible based upon factors other than SNAP enrollment.” TracFone also knocked AT&T’s suggestion that other programs could be added back later.

TracFone dismissed an AT&T suggestion that Lifeline enrollment be coordinated with SNAP enrollment, with responsibility for enrolling consumers shifted to state and local SNAP administrators. The FCC doesn’t administer SNAP; the Department of Agriculture does, and a USDA agency “put this proposal to rest" in its comments (see 1509040045), TracFone said. It also opposed AT&T’s suggestions that benefits could be delivered via vouchers or retrieved online as misguided and impractical.

The Cherokee Nation cited the importance of Lifeline and Link Up (subsidizing initial connections) programs to its 320,000 enrolled citizens, which it said was the largest of any tribe. It said the FCC shouldn't tie Lifeline eligibility to enrollment in one other program, but instead should maintain its current list of 11 qualifying programs, including Medicaid, SNAP and the free school lunch program.

The Cherokee Nation also urged the FCC to reconsider its June decision to reinterpret former boundary lines of Oklahoma tribes that will make “many low-income individuals on these lands … no longer eligible for the enhanced Tribal Lifeline program.” The tribal monthly subsidy is $34.25 per customer compared to the regular Lifeline $9.25/customer subsidy. The FCC recently opposed Assist Wireless’s request for a court stay of the commission’s Feb. 9 effective date for implementing its revised approach (see 1512010070).

Incompas urged the FCC not to set minimum service standards in its proposed move to expand Lifeline support from voice to broadband service. That "could have the unintended effect of limiting consumer choice among affordable options and/or discouraging providers from participating in the program,” the group said. Instead, it said the FCC should make changes “that allow customers to choose an optimal mix of voice, broadband, or bundled services based on their own understanding of their individual or household needs.”

The Lifeline Connects Coalition stressed the need to retain a “fully subsidized ‘free’ service plan option,” particularly given 11 million Lifeline users receive such service. If the FCC imposes “excessive minimum service standards” or a “minimum charge,” it could drive millions from the program, the coalition said. If the agency insists on a minimum service standard, the coalition suggested wireless Lifeline providers be required “to provide 3G or above service rather than a minimum number of minutes, texts or megabytes per month."

Smith Bagley, which does business as Cellularone, asked the FCC not to impose a minimum service mandate for tribal lands that excludes “existing 3G/HSPA+ services” (i.e., that requires 4G). It said a (redacted) number of cell sites lack fiber/ethernet backhaul, only some of which could be upgraded -- if the “economics work.” Smith Bagley said it has 61,000 Lifeline customers in Arizona, New Mexico and Utah, most on tribal lands. It said that facilities-based providers have an estimated 135,000 tribal Lifeline subscribers nationwide. Many others are served by resellers.