THE NATIONAL ASSOCIATION OF STATE UTILITY CONSUMER ADVOCATES
RESOLUTION 2010-02
CALLING FOR REFORM OF THE LIFELINE PROGRAM, INCLUDING REFORM FOR PREPAID WIRELESS LIFELINE SERVICES
WHEREAS, Low-income support mechanisms such as Lifeline have long been part of the national universal service goal;
WHEREAS, Lifeline has been an important means of achieving the goals of affordable universal service for all;
WHEREAS, wireless service has become an increasingly important part of telecommunications service, including Lifeline;
WHEREAS, unsettled economic times and changes in technology and consumer lifestyles have created the need for new approaches to low-income telecommunications assistance programs;
WHEREAS, this has created the need for the Federal Communications Commission (“FCC”) to reexamine its earlier decisions regarding the Lifeline program;
WHEREAS, carriers have sought and the FCC and state commissions have allowed on an ad hoc basis a category of “low-income” eligible telecommunications carriers (“ETCs”), that seek only low-income funding under the federal universal service fund and do not seek high-cost funding
WHEREAS, the purpose of Lifeline programs is to balance the maximum value for low-income customers with the costs imposed on all customers who pay for the Lifeline programs;
WHEREAS, the federal Lifeline discount for incumbent local exchange carriers (“ILECs”) not serving tribal lands consists of three tiers, with Tier 1 being a waiver of the subscriber line charge (“SLC”), Tier 2 being an additional $1.75 discount off the retail rate for basic service, and Tier 3 being an additional $1.75 discount off the retail rate for basic telephone service if the state matches the federal Tier 3 discount;
WHEREAS, the federal Lifeline discount for competitive local exchange carriers (“CLECs”) and wireless carriers has been the same dollar amount as for ILECs, even where the carrier does not charge a SLC;
WHEREAS, Lifeline service traditionally consisted of the most basic local service offered by the ILEC, which in many areas includes unlimited local calling;
WHEREAS, the FCC has required non-ILEC Eligible Telecommunications Carriers (“ETCs”) it designates to offer local calling usage that is comparable to the ILECs’ local calling usage;
WHEREAS, technology changes and lifestyle changes have led carriers to market numerous additional services, and to create bundles and packages of services that include basic service along with additional services;
WHEREAS, wireless carriers typically offer only packages that include services beyond basic and usage that goes beyond local usage;
WHEREAS, some state commissions and some carriers have limited Lifeline customers’ access to packages that include more than basic service or, in the case of wireless carriers, to the lowest-usage package;
WHEREAS, in the National Broadband Plan, the FCC has recommended that the FCC and states should require ETCs to permit Lifeline customers to apply Lifeline discounts to any service or package that includes basic voice service;
WHEREAS, the offering of service packages to Lifeline customers gives those customers choices, but there are concerns that carriers will heavily market packages to Lifeline customers that are beyond the customers’ means, and that the Lifeline customers will therefore have service disconnected for non-payment at a rate significantly greater than that applicable to Lifeline customers who subscribe only to limited services;
WHEREAS, the FCC has designated and has allowed the states to designate Lifeline-only ETCs that do not receive high-cost funds;
WHEREAS, the FCC has placed conditions on grants of low-income ETC status, including conditions based on the carrier’s status as a wireless reseller;
WHEREAS, these ETCs, principally prepaid wireless carriers, have brought telephone service to hundreds of thousands of low-income customers who have never had or have dropped their wireline service and previously could not afford wireless service;
WHEREAS, the existence of these prepaid wireless Lifeline-only ETCs has resulted in substantial growth to the federal USF paid by most customers, without a necessary assurance of adequate value provided to the Lifeline customer, or the most efficient use of Lifeline benefits;
WHEREAS, the appearance of prepaid wireless carriers as Lifeline-only ETCs that do not offer a Lifeline discount off their retail rate but instead offer “free” service (with or without a “free” handset) to Lifeline customers has also complicated the calculation of the value of Lifeline service, especially where the free service includes limited usage minutes and requires customers needing additional minutes to purchase those minutes from the carrier;
WHEREAS, the existence of wireless ETCs with limited usage plans, and especially prepaid wireless ETCs that offer extremely limited usage packages on their “free” plans, raises concerns about the equivalency of this calling to the ILECs’ calling packages available to Lifeline customers;
WHEREAS, the existence of wireless ETCs, especially Lifeline-only wireless ETCs, raises concerns about ensuring that each household receives only one Lifeline benefit and ensuring that no carrier receives Lifeline support when customers opt for a different Lifeline service;
WHEREAS, there have been concerns raised about whether prepaid wireless carriers, especially prepaid Lifeline-only ETCs, do or should contribute to state funds, especially state 9-1-1 funds;
WHEREAS, in the National Broadband Plan, the FCC has noted that, in designing a Lifeline broadband program, it should consider the recent experience with expanding Lifeline to non-facilities-based prepaid wireless providers;
WHEREAS, wireline carriers’ rates, including rates for basic service and for packages, are increasingly being rate-deregulated at the state level, and wireless carriers’ rates, including prepaid wireless carriers’ rates have not been rate-regulated, giving rise to additional concerns about the value and efficiency of Lifeline benefits;
WHEREAS, the FCC’s rules for designating ETCs (including low-income ETCs) govern only ETC designations that the FCC makes, and are only suggestions for states that designate ETCs;
WHEREAS, a number of applicants for low-income ETC status have filed petitions for forbearance from statute or FCC rules that contain insufficient information to allow a determination of whether forbearance is in the public interest, specifically a description of the service(s) to be offered that will be subject to the Lifeline discount; now, therefore be it
RESOLVED, That the National Association of State Utility Consumer Advocates (“NASUCA”) continues to support the Lifeline program, particularly for wireline service; and be it further
RESOLVED, That, given the use of dollars from around the country to support the federal Universal Service Fund, NASUCA supports the FCC’s adoption of minimum standards for state ETC, especially low-income ETC, designation; and be it further
RESOLVED, That NASUCA supports a policy that requires carriers to offer discounted basic service while permitting Lifeline customers to purchase packages and bundles, and that requires carriers to apply the full federal Lifeline discount and any applicable state Lifeline discount to basic local service and to the price of any service package containing basic local service that they offer; and be it further
RESOLVED, That such policy should also include a prohibition on disconnection of the basic service portion of telecommunications service if the basic amount is paid, if the carrier offers a basic service, and if the carrier does not offer a stand-alone basic service, a provision that the lowest-price package be maintained if sufficient payment is made for that lowest-price package; and be it further
RESOLVED, That regulators should ensure that Lifeline customers with packages are not disconnected at a significantly greater frequency than Lifeline customers without packages; and be it further
RESOLVED, That the FCC should require any forbearance petition or petition for low-income ETC designation filed for a low-income ETC service to include a complete description of the service to be offered; and be it further
RESOLVED, That the FCC should a consider establishing minimum standards of service for prepaid wireless Lifeline service that would apply to all prepaid wireless Lifeline services, facilities-based or not, and satisfy the public interest by providing adequate value for Lifeline recipients and comply with the universal service mandates of the Act; and be it further
RESOLVED, That the FCC should specifically adopt a minimum standard to ensure adequate value to prepaid Lifeline wireless customers from the service (i.e., minimum number of monthly minutes, maximum price for additional minutes and maximum price for text messages, etc.); and be it further
RESOLVED, That there should be continued evaluation of appropriate federal default rules for ongoing support when there is no monthly billing, carrier contributions to state funds, quality of service obligations, double billing, protection from fraud, recertification, and audits; and be it further
RESOLVED, that the FCC should investigate whether the Lifeline discount should no longer be taken off the retail rate, but off some measure of wholesale or forward-looking cost, especially where the carrier’s services are not price-regulated; and be it further
RESOLVED, That the NASUCA Telecommunications Committee, with the approval of the Executive Committee of NASUCA, is authorized to take any and all actions consistent with this Resolution in order to secure its implementation.
Approved by NASUCA:
Place: San Francisco, CA
Date: June15, 2010
Submitted by:
NASUCA Telecommunications Committee