Calif. Groups Seek More Time For Revising State LifeLine Formula

In response to carriers’ resistance to a CPUC staff proposal that would update the method for SSA calculation, Administrative Law Judge Robyn Purchia last month suggested the freeze as a near-term step. “We agree with parties’ recommendations to further analyze market conditions, customer impacts, pilot results, and the regulatory landscape,” Purchia wrote in docket R20-02-008. “However, we also see a need to de-link the SSA from the highest [carrier of last resort] basic rate before rates increase again in 2025.” The CPUC currently sets the SSA based on the highest basic service rate for carriers of last resort (COLRs), which has been AT&T's rate for about a decade.

"Given the outlier nature of AT&T’s ever-increasing rate for basic service, and wireless providers’ failure to demonstrate that annual rate increases bear any relation to the costs of providing service, it is doubtful that the current mechanisms for calculating the SSA are reliable or accurate,” the Center for Accessible Technology commented. “Rather, those mechanisms simply respond to providers’ ad hoc increases in rates. The proposed SSA freeze is reasonable and demonstrates responsible stewardship of ratepayer funds.”

Tracfone supports freezing the SSA at $19 -- and presumes the CPUC also meant to put closely related minimum service standards (MSS) on ice, the Verizon subsidiary said. "Freezing the current levels of the SSA and MSS will prevent further disruption while the CPUC undertakes a more thorough rulemaking process considering the views of all stakeholders and studying the retail marketplace.” Also, it "will inject stability into existing California LifeLine offers while uncertainty persists regarding the potential extension of the" ACP, Tracfone said.

The National Lifeline Association supported a proposed freeze on behalf of many other wireless low-income providers. The association noted that such substantial possible changes "require a more deliberative and collaborative process that will take time.”

AT&T supports freezing the SSA for wireless but not wireline, the carrier said. The CPUC’s Oct. 30 staff proposal found no big problems with wireline companies using the existing SSA method, so there's no "urgent reason" to freeze it at $19 for them, AT&T said. The SSA is already set for 2024, "so in effect the SSA is already 'frozen' for the rest of the year,” it said. “Any freeze into 2025 and beyond should be rejected."

Cox urged the CPUC to "focus on completing its holistic review of the California LifeLine program and avoid making piece-meal decisions, especially on foundational pieces of the program” like SSA and MSS. Any changes to “minimum service standards, support amounts, and application and enrollment requirements, among others, can directly and significantly impact low-income consumers,” the cable company warned. “Those types of changes can also directly and significantly impact the participating providers that serve them.”

A group of small local exchange carriers urged that the CPUC set the possible SSA freeze higher. The current calculation method is unsustainable, including because of continued AT&T rate hikes, it said. "To ensure that the Commission has the leeway to fashion a long-term solution … without unintentionally creating unreasonable rate increases for LifeLine customers or unlawful funding shortfalls for the Small LECs,” freeze the SSA at $20.75, the small LEC group said. At least set it at $20, "which is a sufficient level to keep most of the Small LECs’ LifeLine rates at $5.00,” it wrote.

Meanwhile, consumer groups responded to telecom industry opposition to their plan to tap state LifeLine to cover the loss of ACP. Companies commented last month that the proposal from The Utility Reform Network (TURN) and CPUC’s independent Public Advocates Office (PAO) was rushed and unlawful (see 2405240060).

Consumer groups merely seek "a temporary bridge akin to a pilot," limited to two years, TURN replied Monday. They don’t "seek to make a permanent change to the California LifeLine Program or establish a separate standalone broadband subsidy program,” it said. Rather, the petition "only seeks to mitigate potential harm to California-LifeLine eligible consumers who relied on the ACP to receive standalone broadband services.”

The proposed "framework is a focused stop-gap measure to address an immediate problem to give the Commission time to establish and implement a more permanent solution,” said PAO. “Given the urgency of the Petition to prevent disruption or alteration of broadband services for numerous California customers, we urge the Commission to act promptly." PAO clarified that the proposal wouldn’t require service providers to offer a standalone broadband service if they don’t have one already. However, the CPUC should encourage providers to offer consumers at least 25 Mbps download and 3 Mbps upload speeds for at most $15, it said.