Some Coming FCC Lifeline Changes Backed by State Regulators, Seeking More Tweaks

No state commissioners reported getting information from the FCC about the order and further NPRM (see 1908190028) that FCC Chairman Ajit Pai circulated to his colleagues Aug. 19. At least one checked with the agency for information after our query and hadn't received it. What they heard was mostly limited to the "backgrounder" we distributed since it's not online. Some would like to see the regulator release a draft before FCC members vote, such as having it on the Sept. 26 open meeting agenda. Under Pai's transparency actions, it would be made public three weeks in advance.

"This is the type of thing that I would hope would be on the [meeting] agenda," said NARUC General Counsel Brad Ramsay. "Stakeholders can provide better insight" if the draft is released early and it would likely "solidify their support," he added. Such public vetting could spot unintended consequences, he noted.

"There’s a lot of room for improvement" with the FCC and states working together, said Michigan Public Service Commission Chairman Sally Talberg, a political independent who's on such joint boards. "Generally speaking, I think it’s important for states to have a working relationship with the FCC, and challenging at times, and I think there’s a lot of good we can do by working collaboratively and respecting our jurisdictions." Noting she's speaking just for herself, she hopes to use those boards "to their full potential" on figuring out FCC and state roles.

The order "restores the states' traditional and lawful role in designating carriers to participate in the Lifeline program, and thereby providing states with certainty regarding their role in monitoring and enforcing carrier activities," an FCC spokesperson emailed. "It increases transparency that will allow states to improve oversight.”

Commissioners of both political parties and from several states seek more changes to Lifeline than what the FCC says are in the draft. The state officials want to prevent those eligible for subsidized voice and broadband from being incorrectly deemed ineligible. Its annual budget is some $2 billion-plus, actual support about half that.

NARUC worries about lack of a Lifeline application programming interface for subscriber sign-ups, and wants the agency to halt minimum-service standard increases as sought in its resolution and by CTIA and others. The draft doesn't address that petition, and the comment cycle ended Aug. 15, the FCC says. "The petition remains pending."

Lifeline Changes

Last month, NARUC members asked the FCC to delay implementing in December a 2016 plan to increase the amount of data carriers must provide Lifeline customers monthly; to not lower by some $2 to about $7.25 the amount telcos get for voice-only service monthly; and to slow the rollout of a Lifeline national verifier (NV) that may have inaccurately deemed some subscribers ineligible (see 1907230040). State commissioners still seek these changes. Some hope they occur in time to prevent the program from ratcheting up requirements that could mean the telecom products would cost the poor more.

All state commissioners who responded to our survey want no additional states to be required to switch Lifeline eligibility checks to the NV until fixes are made. They said that would include adding a national API to ease such verification. NARUC is "concerned about the lack of an API for subscriber sign-ups," Ramsay said.

U.S. Virgin Islands Public Service Commissioner Johann Clendenin remains "hopeful" the FCC pauses the NV rollout until improvements are made. "I think that the issues are understood, they are also complex," said Clendenin, a tech expert who holds the nonpartisan post on a part-time basis with almost no pay.

Nebraska Public Service Commissioner Crystal Rhoades is frustrated the FCC hasn't addressed Lifeline concerns. "They are deliberately creating a broken system that is designed to push people out of the system, regardless of their eligibility," she said. "That’s disappointing and frankly disgusting. If they want to end the Lifeline program, they should just say that." The FCC didn't allot enough time for "these databases to be constructed so that this process works smoothly," alleged Rhoades, an elected Democrat representing Omaha. No one wants the waste, fraud and abuse the FCC says such changes are designed to combat, she added: But the agency "has deliberately constructed a system in which people cannot be verified" efficiently.

South Dakota Public Utilities Commission Vice Chairman Chris Nelson backs "the concept and the purpose of the NV," but he wants its introduction "slowed down so that it works when it’s actually rolled out." Its "value" "remains in question if they continue to push forward at this pace," added Nelson, a Republican elected to the PUC in a statewide vote. Michigan had no significant problems with NV implementation, unlike some other states, but Talberg thinks a pause is worthwhile.

Resellers, Certifications

All state stakeholders want the FCC to back down from an earlier plan to exclude resellers. The draft order doesn't "address the FCC’s 2017 proposals (1) to set a self-enforcing budget cap on the program; (2) to limit Lifeline support to facilities-based carriers (and thus exclude wireless resellers from participating in the program); or (3) to establish a mandatory minimum contribution by the subscriber towards the cost of service," the agency notes. "Those proposals remain pending."

NARUC remains "concerned about many outstanding issues that this order does not address -- concerns that are causing [considerable] uncertainty affecting both the federal and state complementary programs," Ramsay said. "The FCC needs to specify that resellers will remain."

Michigan's Talberg said most of her state's Lifeline providers lack facilities there, and so could be banned if the FCC moves ahead. She worries about "pretty significant ramifications" and thinks "having clarity one way or the other is essential." There's much "uncertainty."

One way under NV administrator USAC makes it easier for would-be Lifeline customers is by letting them check their eligibility online, based on their state, said Pennsylvania Assistant Consumer Advocate Barrett Sheridan. "That is a beneficial aspect" of NV's introduction, said Sheridan, a member of the National Association of State Utility Consumer Advocates' telecom committee.

USAC declined to comment.

States' Role

State regulators said keeping jurisdiction over whether a telecom company can get public money by being deemed an eligible telecom carrier ensures local oversight and wards off FCC encroachment. Challengers to the 2016 Lifeline order, enacted under a Democrat-led FCC, essentially agreed to drop their case if the agency reversed the order giving carriers the option to get nationwide OK.

At the time the option was OK'd, then-Commissioner Pai opposed the national ETC broadband designation, a spokesperson noted now. "When he became Chairman, he announced he would work to reverse that," the representative emailed Thursday. "The draft Order follows through on his commitment."

The draft order would give states "certainty regarding their role in monitoring and enforcing carrier activities," the FCC says. The agency hadn't granted any nationwide Lifeline ETC designations, a spokesperson said. States have continued their own eligibility processes for providers, commissioners said. Some, including Indiana, asked for a return to states only, noted Indiana Utility Regulatory Commissioner Sarah Freeman.

NARUC agrees with the FCC on putting "states back in the driver’s seat on ETC designations," said Ramsay. That would mean "state cops stay on the beat helping it assure the federal USF programs work as efficiently as possible. For the same reason, directing USAC to keep everyone that is involved in enforcement and oversight in the loop on suspicious activity is obviously a smart thing," he continued.

State representatives think getting more data from USAC may help them combat chicanery. The order would bar "carriers from paying commissions to employees or sales agents based on the number of consumers who apply for or are enrolled in the Lifeline program with that carrier," the FCC notes.

That's "important to curbing waste, fraud and abuse,” said Freeman in a statement. "The future order from the FCC could have significant impacts for Indiana."