Wheeler Defends Lifeline USF, Broadband Privacy Items Ahead of FCC Votes

Congressional sources are very concerned about FCC-proposed minimum voice and broadband service standards for Lifeline USF providers, said a telecom industry representative who believes the agency could delay implementation deadlines. Wireless providers and others have said mobile mandates for unlimited talk and increasing data allowances could force carriers to eliminate free service for low-income Lifeline users. Parties are also concerned about a proposal to phase out Lifeline USF support for stand-alone mobile voice by late 2019. The situation at the FCC appeared to be fluid Wednesday. FCC officials didn’t comment.

Wheeler insisted the Lifeline overhaul would embrace the fiscal responsibility that Sen. Claire McCaskill, D-Mo., has always demanded. The proposed order “would set a Lifeline budget of $2.25 billion, indexed to inflation, that takes into account current participation rates, possible growth of the program as eligible consumers are made aware of its benefits, and safeguards in place to prevent waste, fraud, and abuse,” Wheeler told her in a March 16 letter. He called the proposed budget “a ceiling” and compared the budget approach to that of the Connect America Fund. “Second, the proposed Order establishes a process for the full Commission to promptly evaluate and address Lifeline funding in advance of the program hitting that $2.25 billion budget,” Wheeler said. “Specifically, if expenditures in the Lifeline program reach 90% of the budget in a given year, the proposed Order requires Commission staff to notify the Commission and prepare a written analysis of the causes of the spending growth, with action by the full Commission within six months of receiving the report.”

The Lifeline overhaul also would establish a national eligibility verifier to remove companies from making those determinations and implement minimum service standards, Wheeler told her. He said the Lifeline order builds on earlier efforts to overhaul the program and “would take the additional steps necessary to shut the door on the program’s remaining fiscal vulnerabilities and ensure responsible spending in the program.”

The Lifeline order in particular has come under scrutiny. A House Republican introduced legislation last week to cap the program, and governors issued a warning against the proposal Wednesday. “Governors call on the FCC to reject a proposed rule that would disrupt the existing state-federal partnership and preempt states’ authority to protect consumer interest by creating a third-party National Eligibility Verifier,” the National Governors Association said. “The Lifeline program has helped citizens across the country, but the FCC’s proposal would centralize oversight within the FCC, which has the potential to allow eligible telecommunications carriers [ETC] to circumvent state scrutiny. … Overturning 30 years of shared responsibility between federal and state regulators overseeing the Lifeline program puts low-income consumers at risk. We urge the Commission to reject the Lifeline modernization proposal when it convenes March 31.” Meanwhile, the Media Action Network asked supporters Wednesday to “contribute a social media post” backing the Lifeline overhaul. Several Senate Democrats offered recommendations earlier this week (see 1603280037), as did Commissioner Ajit Pai (see 1603290044).

Charter Communications backs the overhaul, it said in a blog post Wednesday: “First, the proposal to remove the state ETC requirements by creating the more streamlined category of provider called ‘National Lifeline Providers’ would make it easier for cable broadband companies to participate in Lifeline by allowing the FCC to be what some have called a ‘one-stop-shop’ for providers to offer Lifeline services throughout their footprint. Second, removing the requirement that providers determine eligibility would eliminate an important cost previously imposed on providers.”

The FCC could push back the implementation of Lifeline mobile mandates, including the proposed requirement for unlimited voice minutes by Dec. 1, the telecom industry representative said. “The flexibility appears to be in the when, not the what,” the rep emailed us. “Deadlines may be relaxed, but the requirements could stay.” The minimum standards could force mobile providers to impose monthly co-pays of $5-$10 on low-income Lifeline users to cover the costs, eliminating free service, the rep said. “Almost nobody would take the unlimited talk at $5 or $10 per month if given the choice of 300 minutes for free,” the rep said: "It is difficult to understand why the Commission would decide to force Americans in poverty to pay five or ten dollars more for basic phone service each month, so that the rest of the country can save, literally, a couple of pennies on their phone bills." The USF program is funded by telecom carriers, which generally pass costs on to customers.

A telecom industry official said the value of a delay would depend on the details, particularly whether there’s a conditional trigger for implementation. “If it is an arbitrary deadline, then it’ll be little good for anyone,” the official emailed. “If it is tied to the availability and maturity of [Voice over LTE] for example, then it’d be a step in the right direction, especially if it’s tied to VoLTE-capable devices obtainable by carriers for their Lifeline customers that are able to be fully interoperable with 9-1-1, and unlimited minutes can be met by carriers using any platform or technology, such as unlicensed (Wi-Fi or LTE-U)." The official added: “Data consumed for voice services should be part of the minimum data usage required. In other words, if carriers are required to offer 1GB/month of data for example, then consumers can use that data plan to engage in unlimited calls at no extra charge, but they still count toward overall data usage.”

“While the Order on circulation takes many of your recommended steps, I recognize that it may not take all of them,” Wheeler told a group of House Democrats in a March 21 letter. “Nonetheless, I am heartened that we agree completely on the critical need to modernize the Lifeline program for a digital era and to do so as soon as possible.” Rep. Mark Takano, D-Calif., led that supportive letter to Wheeler. His office has sought to hold a briefing on the overhaul (see 1603240030).

Wheeler also addressed his broadband privacy NPRM, supplying several pages of answers to Sen. Jeff Flake, R-Ariz., chairman of the Judiciary Privacy Subcommittee. Flake had written to Wheeler Jan. 29 and again March 4 requesting details about the proposal, complaining in the second letter that more than a month had passed without a response from the FCC. Wheeler responded by Flake’s March 18 deadline.

Flake’s questions centered on the FCC’s enforcement advisory to broadband providers on adherence to Communications Act Section 222 principles. Wheeler told Flake the Enforcement bureau expects compliance with their own privacy policies “and other representations that they may have made about their privacy practices,” he said. “Providers should also employ reasonable security measures to protect the confidentiality of the proprietary information about their customers.” When asked about the specific legal standard in the FCC's determining “reasonable” provider privacy protection, Wheeler told Flake the answer would “depend on the particular facts and circumstances involved.”

Wheeler declined to provide details about ongoing investigations and inquiries. “Responding to this request would involve disclosing sensitive information about Commission enforcement activities that have not been publicly disclosed through a Notice of Apparent Liability for Forfeiture (NAL) or other announcement,” Wheeler told Flake. “The untimely disclosure of such nonpublic law enforcement information could cause serious harm to the FCC’s enforcement efforts and to outside parties.” Wheeler addressed the Cox Communications November data breach settlement with the FCC and disputed Flake’s question that the investigation was “solely pursuant to the Enforcement Bureau’s asserted authority under the Title II order as interpreted by the May enforcement advisory.” Wheeler noted the investigation began many months before the FCC’s net neutrality order, which reclassified broadband as a Communications Act Title II service, was adopted. The broadband privacy NPRM is intended “to ensure consumers have the tools they need to make informed choices and how and whether their data is used and shared by their broadband providers,” Wheeler said.