AT&T Disputes TracFone, Pushes for Taking Providers Out of Lifeline Oversight
AT&T pressed the FCC to give low-income “consumers greater autonomy” and to relieve Lifeline service providers of administrative duties in overhauling the program. In doing so, AT&T disputed TracFone Wireless arguments for keeping Lifeline providers involved in some administrative activities (see 1512090041). Separately, Comcast supported establishing a national third-party verifier of consumer Lifeline eligibility, and Public Knowledge said broadband access providers that aren't eligible telecom carriers (ETCs) should be able to participate in the program. FCC Chairman Tom Wheeler recently said he hopes the FCC can approve a Lifeline modernization order early next year (see 1512170066).
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AT&T cited disagreement over whether Lifeline support should be considered a “service” or a “benefit.” Noting a TracFone letter, AT&T said those who see Lifeline as a service argue providers should be responsible for administrative functions, such as consumer outreach, authorization and delivery of Lifeline benefits to consumers, and consumer interaction related to service rules and eligibility duties. “AT&T firmly believes that the Lifeline program is best conceived of primarily as a 'benefit,' like other low-income assistance benefits,” the company said in a filing posted Tuesday on a meeting with FCC officials in docket 11-42. “This benefit should be provided directly to the consumer by the governmental entity operating the program.”
The Supplemental Nutrition Assistance Program allows consumers to take their benefit cards (food stamps) to virtually any participating grocery store, not just one offering discounts, AT&T said. By contrast, Lifeline consumers are tied to a single provider that “essentially controls the benefit,” the telco said. Taking providers out of the eligibility verification process is a “critical first step” to restructuring Lifeline, AT&T said, noting it and others had urged the FCC to convert the benefits from a provider discount to a “portable direct benefit” to low-income consumers. “The current discount pass-through and reimbursement process limits customer choice, creates inefficiencies for providers and USAC [Universal Service Administrative Co.], and exposes the program to potential error and fraud,” AT&T said.
AT&T said TracFone argues consumers can easily change Lifeline service providers, with the latter submitting a screen shot of the current benefit transfer process. “But as the instructions make clear it is the provider who is in control of the process,” AT&T said, saying consumers seeking to switch providers are directed to contact other Lifeline providers to effectuate the change, sometimes leading to “confusion and delay.” AT&T said it had frequently been contacted by consumers asking why their Lifeline benefit had been removed, and it turned out another carrier had changed their service. “Unfortunately, the bewildered consumer is not aware they approved such a transfer and has no idea to which carrier their benefit is now being paid,” the telco said. The process “masks any information about the receiving carrier from the losing carrier so we have no way to assist our customer.”
Passing benefits through providers also “creates inefficiencies” that cost both the providers and USAC. “More importantly the current process is fraught with systemic vulnerabilities that expose the program to unacceptable levels of error and potential fraud. It is the opportunity for providers to readily receive payment that creates the incentive to game eligibility and enrollment,” AT&T said. There are “few if any government controls other than after the fact auditing of a sample of provider participants,” it said.
"We are reviewing" the AT&T filing, a TracFone spokesman said Tuesday. TracFone recently said it agreed that a third party should perform some administrative duties, including verification of consumer eligibility. But it strongly opposed AT&T’s suggestion that providers be removed from other enrollment functions that TracFone believes are best handled by the providers, the company said in its filing.
Comcast urged the FCC to “simplify and streamline the rules” for Lifeline entry and provider participation, arguing a national third-party eligibility verifier “would also reduce opportunities for waste, fraud and abuse.” In a filing on a meeting with FCC officials, Comcast backed eliminating or simplifying Lifeline provider requirements, including that they be ETCs. “Digital literacy and relevancy issues” must also be addressed to “meaningfully tackle the broadband adoption gap," said the company, which said its Internet Essentials program was successful because it “marries low-cost high-speed Internet access with training and education and access to a low-cost computer.”
Public Knowledge said allowing non-ETCs to participate in Lifeline would assist the FCC’s goal of expanding program support to broadband access. In a filing on an FCC meeting, the group argued the FCC had the legal authority to authorize non-ETCs for Lifeline and had provided adequate notice in its June NPRM. Alternatively, the commission could forbear from its current rules preventing non-ETC participation, said the group, which argued the agency could root its action in its authority under Section 706 of the 1996 Telecommunications Act.