Lifeline Broadband Forbearance Filings Surprise Sprint, Concern Hispanic Advocate
It's surprising how many Lifeline providers opted for FCC broadband forbearance, said Norina Moy, Sprint director-government affairs, on an FCBA panel Tuesday. She said Sprint has begun offering Lifeline-supported broadband service to low-income customers, and it remains to be seen how much competition there will be. The National Hispanic Media Coalition was "troubled by the number of providers that asked for broadband forbearance," said Policy Counsel Carmen Scurato. Garnet Hanley, Wireline Bureau counsel, noted providers choosing forbearance could still offer Lifeline-supported broadband voluntarily.
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Many telcos and cable companies notified the FCC they wanted forbearance relief from broadband service duties under the Lifeline subsidy program, though Verizon said it expects to begin offering the supported service by mid-2017 after making system changes, and others said they reserved the right to offer it (see 1612050029). Major Lifeline provider TracFone Wireless also didn't seek broadband forbearance. "TracFone proudly plans to offer Lifeline broadband services that comply with the FCC's new minimum service standards for mobile broadband and we did not need to request forbearance," a spokesman emailed us Wednesday.
Asked about potential changes under a Republican-run FCC, Moy said she expects Commissioner Ajit Pai, if he becomes chairman, to be "very vigorous" in seeking to root out waste, fraud and abuse in Lifeline. Scurato is hopeful Lifeline would go "under the radar for the most part" in a Republican administration. After a potential compromise over a Lifeline funding cap fell apart, both Pai and fellow GOP Commissioner Michael O'Rielly bitterly dissented from an order revamping the program, citing criticisms of the agency's $2.25 billion annual "budget" and other objections (see 1603310056 and 1604270028).
For now, Hanly said the FCC recognized the need to clarify many aspects of the spring Lifeline order that extended low-income subsidy support to broadband and overhauling the program's administration, particularly of its consumer eligibility and verification procedures. She noted various recent FCC actions, including to approve some state relief from new eligibility requirements and to approve four initial applications for Lifeline broadband provider designations under streamlined treatment (see 1612010070). "It's just a lot of little things" that need further guidance and action, she said.
Many states needed more time to make statutory changes to their eligibility rules, said Betty Ann Kane, chairwoman of the District of Columbia Public Service Commission. She said her PSC was able to make the eligibility changes by regulation. But the FCC's changes to eligibility standards -- dropping some criteria and adding others -- remain a challenge for many states. A new criterion based on a low-income housing program is a particular challenge because it's often overseen by localities, she said: "States don't like pre-emption," she said. "They don't like being told what to do," particularly with state money.
Panelists welcomed the FCC shift to a national verifier of consumer Lifeline eligibility from carrier-overseen verification. "We’re very excited about the national verifier process," said AJ Burton, Frontier Communications director-federal regulatory affairs. Dale Schmick, TerraCom chief operation officer, said he's "happy to shed that liability." Moderator Danielle Frappier, a Davis Wright attorney with Lifeline clients, said "nobody wants the liability" of verifying consumer eligibility.
Universal Service Administrative Co. is eager to receive feedback about its draft national verifier plan (see 1612010043), said Michelle Garber, Lifeline program vice president at USAC, which the FCC tasked with creating the new verifier. She noted comments are due this month on the draft and a "final" plan is expected to be released in January, though it will be a "living document" that's updated every six months or so. USAC plans to add different state systems to its national verifier mechanism over the next three years, with probably one batch toward the end of 2017 but possibly three batches throughout both 2018 and 2019. "I have a lot of confidence in USAC," Schmick said.
Sprint's Moy said time is needed to test systems before deadlines. She said the uncertainty over the state waivers was a major challenge for Sprint because it had to have two contingencies for states: with waivers and without. Moy said it remains to be seen whether an FCC 12-month broadband "port freeze" rule would be enough for Lifeline broadband providers to recoup initial costs.
"We were drinking from a fire hose this last year," said Schmick. He said all the changes and implementation have been a particular challenge at the end of the year, when TerraCom staffers are busy dealing with high retail consumer demand. He said the FCC's change in a "nonusage" rule for consumer de-enrollment from 60 to 30 days is a "huge lift" because of the need to make software changes affecting voluminous call records and other data, while upholding data-security protocols.
Frontier's Burton agreed all the Lifeline "moving parts are a major challenge for providers. He said the telco is concerned about potentially being the last voice provider in some areas as the program's voice support is phased down through 2021. Frontier also is concerned about FCC restrictions on changes to Lifeline service terms, which complicate providers' ability to make generally available offers to low-income participants in the program, he said, noting a pending industry petition for reconsideration.