FCC Defends Lifeline Minimum Standards as Concerns Mount on Mobile Voice Impact
The FCC defended its proposed Lifeline minimum service standards against a continuing barrage of objections. Two senior FCC officials said a draft order eyed for a March 31 vote seeks to ensure low-income consumers get increasing high-speed Internet access and not just voice service, but it phases in mobile broadband standards to give Lifeline providers time to adjust their business models. "Each year, starting in December 2016, the phase-in increases the amount of 3G data beginning with 500 MB and then increasing to 1 GB and beyond. We believe this 'glide path' would offer a meaningful broadband experience to low-income households at a highly affordable level," said Wireless Bureau Chief Jon Wilkins and Wireline Bureau Chief Matt DelNero in a blog post Monday on "Lifeline: Striking the Right Balance."
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Critics said the FCC proposals could undermine affordable mobile voice service to low-income consumers provided under the Lifeline USF subsidy program. The Lifeline Connects Coalition (LCC) said a requirement that participating mobile carriers offer only unlimited voice service plans by Dec. 1 would force co-pays that produce likely "rates of $15-25 to the customer," which "would essentially kill off mobile voice Lifeline service in less than eight months." The FCC "would drive nails in the coffin of mobile voice Lifeline service" by cutting the subsidy by $2 per user each year until it's eliminated for (stand-alone) mobile voice in late 2019, said the coalition, which includes American Broadband & Telecommunications Co., Blue Jay Wireless, iWireless and Telrite.
The LCC proposed a "reasonable" framework for a Lifeline broadband transition that would preserve support for participating mobile voice plans offering customers at least 500 minutes a month as of Dec. 1, with increasing broadband mandates over time, said a letter from the group posted in docket 11-42 Tuesday. It said it borrowed from proposals by Sprint and TracFone, and noted NTIA comments about the importance of affordable voice service. The FCC didn't comment on the LCC proposal. The Multicultural Media, Telecom and Internet Council, National Association of American Veterans, National Grange, Puerto Rican Telecommunications Regulatory Board Chairman Javier Rua Jovet, Q Link Wireless and Sprint also expressed concerns about the proposed FCC mandates in docket 11-42.
The FCC bureau chiefs said they understood such concerns but said the Communications Act makes clear that USF-supported offerings "should look a lot like" what most Americans receive. "The minimum service standards outlined in the proposal are aimed at ensuring Lifeline begins to deliver real, meaningful service," Wilkins and DelNero said in their blog post. "Modern mobile networks continue to see technological advances that allow services such as voice to be delivered more and more efficiently," including through LTE-enabled broadband/voice offerings. They urged parties to consider evidence that the per-megabit price of mobile data was already modest and declining. They also said the FCC's proposed shift of Lifeline consumer-eligibility administration to a national verifier should reduce costs for participating carriers further.
"Taking these market trends and reform impacts together -- and of course factoring in device costs and companies’ overhead and profit -- we are confident that the Lifeline provider market under the proposed reforms would be able to meet the minimum standards with very affordable offers," Wilkins and DelNero said. "To ensure that Lifeline is continuing to meet subscribers’ needs and that our reforms are accomplishing their intended modernization goals, the proposal also specifically requires a mid-2019 program review and report" by the Wireline Bureau.
The Center on Budget and Policy Priorities and Global Reconnect expressed concerns about FCC proposals for how consumer eligibility would be determined, in filings posted Tuesday in the docket.