Lifeline Program Uncertainty Lingers After FCC Order on Broadband Minimum Usage
Potential cost impacts on Lifeline providers and subscribers played into an FCC decision to increase the program's broadband usage standards from 2 GB per month to only 3 GB on Dec. 1, instead of the 8.75 GB that had been outlined in a 2016 Lifeline order, said an order released Wednesday in docket 11-42. In deciding to waive, in part, the new broadband minimum service standards in answer to an industry petition, the FCC found it "reasonable to anticipate that a more than four-fold increase in the minimum usage allowance would require substantially greater network resources, and, in turn, the associated costs would be passed along to resellers and/or end-users," the agency said.
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The FCC took comments over the summer on an industry petition to waive the program changes until a planned market study can be reviewed (see 1907310074). Commenters universally supported the waiver. "The record reflects overwhelming support for pausing the voice-only phase down," said Commissioner Geoffrey Starks in his dissent. But the FCC kept the phase-down, which reduces monthly federal Lifeline support from $9.25 to $7.25 for voice-only plans or those that don't meet the broadband standards. "I fear that our poorest Americans now risk losing their link to emergency services, doctors, employers, and family," said Starks.
Commissioner Jessica Rosenworcel, who also dissented, said she supports the concept of increases in minimum data allowances but said she fears the lack of needed certainty for the program. Without pausing to study the Lifeline marketplace, she said, "the FCC will simply be back in the same place, wrestling with the same issues, and more of the same scheduled service adjustments at this time next year."
The order cites "a misalignment between current marketplace dynamics and the commission's efforts to set standards for the program, including the large increase in the required data allotment," Starks wrote. "The [Wireline] bureau is working on a report that will give us a better understanding of the Lifeline market," he said. "We should refrain from making any additional changes until we have the necessary data to make informed decisions, rather than rushing to impose standards that may have far-reaching ramifications on the program."
Industry expressed some relief over the FCC's order. "We appreciate the FCC's efforts to ensure that millions of low-income Americans can continue to rely on mobile wireless services supported by the Lifeline program," said Matt Gerst, CTIA vice president-regulatory affairs, in a statement: "The FCC should move forward with its upcoming marketplace study to ensure that low-income consumers have the ability to choose the services that meet their needs."
FCC Chairman Ajit Pai "understood that the formula that produced the 8.75 GB requirement was impractical," emailed a TracFone spokesperson. "The new 3 GB requirement strikes a fair balance."
The Lifeline market study isn't due until 2021 (see 1906280012), but some stakeholders want the Wireline Bureau to expedite its report.