TracFone Asks FCC to Approve Lifeline Rule Change
TracFone Wireless is asking the FCC to change its Universal Service Fund rules to maximize the benefit it could provide to Lifeline customers. The carrier said in a filing last week that its petition seeking a rulemaking would base reimbursement on a single subscriber line charge rate nationwide, regardless of what’s charged by the local incumbent, faced no real opposition. It said the FCC should ask for additional comment.
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TracFone, the largest prepaid wireless carrier, launched a two-pronged attack. First, TracFone filed a petition for rulemaking at the FCC, on which the commission sought comment. Then, earlier this month, TracFone asked the FCC to grant it a waiver independent of its rulemaking petition.
Under the formula for calculating Lifeline benefits, the FCC bases its calculation in part on SLC, which is capped at $6.50 per month and which is considered a reasonable proxy for interstate loop costs. But in some parts of the country, the local exchange carrier charges a SLC below $6.50. As a result, the amount available to TracFone customers can be $2 to $3 lower in some markets. Based on a complicated formula, Lifeline customers get as much as $13.50 per month in benefits, but several dollars less in markets where the ILEC charges a lower SLC.
TracFone said this distinction makes no sense. It said only the Independent Telephone & Telecommunications Alliance filed comments on the petition. The group “acknowledges that TracFone’s proposal to revise the measure of Tier One support would enhance consumer welfare,” though ITTA said change should await comprehensive Universal Service Fund reform, the company said.
TracFone said it shouldn’t have to wait for broad changes to USF rules. “The Commission has been considering comprehensive universal service reform since the beginning of this decade,” the carrier said. “There remain profound differences in how to reform USF.”
Joshua Seidemann, vice president of regulatory affairs at ITTA, told us the TracFone petition raised some interesting issues and he was surprised it didn’t provoke more response. Seidemann said others likely will comment if the FCC decides to issue a rulemaking based on the petition. “It’s a very consumer-centric petition,” he said. “Our comment was really this is an idea that should be looked at, as we're doing an overhaul of USF, let’s bundle this in.”