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April 2013

FCC Static Will Distort the Spectrum Auction

[Commentary] The Federal Communications Commission is considering modifications to the statutory plan to auction off spectrum that could cause the auction to fail.

The Middle Class Tax Relief and Job Creation Act of 2012 is intended to obtain 120 megahertz of spectrum currently allocated to TV and auction it off to wireless carriers—giving these carriers more capacity to complete cellphone calls and enhance Internet access. In most markets, the FCC will be able to simply "repack" the existing TV stations' six MHZ of spectrum into tighter blocks, freeing up spectrum space to be auctioned off. But in the biggest, most congested urban markets (such as New York, Philadelphia, Boston and Los Angeles), there are too many TV stations to get the needed spectrum through repacking. In those markets, the legislation calls for the FCC to pay stations to go off the air. If the auctions are conducted as Congress envisioned, they will entice broadcasters to sell their spectrum and yield $7 billion in surplus revenue to fund the planned First Responders Network and apply the rest toward reducing the federal deficit. The success of the congressional plan crucially depends on attracting, through the prospect of large payments, enough TV stations to surrender their channels. And that requires a robustly competitive auction among wireless carriers. Unfortunately, instead of conducting a straight-up, unbiased auction to recover TV channels, the FCC has proposed a "scoring system" that assigns different prices to TV stations based on the opinions of FCC staff regarding the value of those stations.

[Padden is executive director of the Expanding Opportunities for Broadcasters Coalition, a group of more than 40 major-market TV stations potentially willing to participate in the FCC's Incentive Auction]

Corporate Donations and the SEC

[Commentary] The Supreme Court’s Citizens United decision that triggered an avalanche of corporate political spending also contained a proposal for greater public disclosure from corporations that would prefer to write their checks in the shadows. Transparency, the court advised, would let voters decide for themselves “whether elected officials are ‘in the pocket’ of so-called moneyed interests.” Since that 2010 decision, corporate and Republican opposition has snuffed out Congressional attempts to require donor transparency and accountability. All the more compelling then that the Securities and Exchange Commission, following an impressive petition campaign, is considering a regulation mandating that publicly traded corporations disclose all their political donations to their shareholders. Mary Jo White, the new SEC chairman, has promised dynamic changes in corporate oversight. The looming disclosure fight provides a test.

Hoax Won't Deter Tweeting

The short-lived hoax on Twitter won't deter companies from disseminating market-moving information using social-media sites. Meanwhile, Wall Street firms are plowing ahead with plans that could give some employees access to these sites at work.

After a fraudulent Associated Press tweet claiming that two explosions at the White House had injured President Barack Obama, the Dow Jones Industrial Average dropped 145 points in an instant. The market quickly recovered. Securities and Exchange Commission member Luis Aguilar called on his agency to look into the Twitter hoax and said the SEC hadn't yet determined who carried it out or why. "Where it appears that the securities markets have been manipulated in violation of the federal securities laws, the SEC should undertake a serious inquiry," Commissioner Aguilar said.

E-mail Trove Is Big Job for Bush Library

Along with the obligatory replica of the Oval Office, the George W. Bush Presidential Center will house a less conventional collection of presidential artifacts: Millions of e-mails.

The one billion pages or so in electronic White House correspondence during George W. Bush's eight years in office are unprecedented in the history of presidential libraries, scholars said. They promise to offer an unvarnished look at the inner workings of the Bush administration that hasn't been possible for other presidencies. But first, the roughly 200 million emails have to be reviewed by the center's archivists, a process that could take a long time. With current technology, archivists can only review about 800,000 pages a year. The Bush library is at the forefront of a growing problem for the U.S. National Archives and Records Administration, the federal agency that keeps the nation's trove of historic documents. The digital stacks of information it has to process are rapidly expanding as more of the government's business is conducted via e-mail.

Verizon eyes $100 billion bid for Vodafone's Wireless stake

Verizon Communications has hired advisers to prepare a possible $100 billion cash and stock bid to take full control of Verizon Wireless from its partner Vodafone, two people familiar with the matter said.

Verizon, which already owns 55 percent of the company, has not put a proposal to Vodafone yet but it has hired both banking and legal advisers for a possible bid, the sources said. Verizon, which has made little secret of its wish to buy out its British joint venture partner, has ramped up the pressure in recent months, and London-based analysts and investors interpreted the latest move as an attempt to force Vodafone in to serious talks. The sources said Verizon was now ready to push aggressively for a deal. It hopes to start discussions with Vodafone soon for a friendly agreement but is prepared to take a bid public if the British company does not engage, one of the sources added.

A La Carte TV Will Never Be

[Commentary] The prospect of consumers getting the ability to choose which cable channels they want has proven to be a remarkably resilient fantasy. Maybe that’s because TV executives can’t seem to resist giving the proposition just enough attention to make it seem possible.

Verizon CEO Lowell McAdam described the a la carte business model at the National Assn. of Broadcasters confab earlier this month as “a novel way that could help protect subscriptions in the long run.” An unprecedented antitrust suit filed by Cablevision against Viacom has also renewed speculation. But now is as good a time as any to point out the absurdity inherent in a debate that has raged from Congress to coffee shops going back a decade. A-la-carte channel choice no longer makes a lick of sense in the age of on-demand viewing. A post-bundle world would require a much different environment than the one a la carte fans envision, one that probably draws more on title-oriented platforms like Netflix or iTunes than on TV’s linear lineage.

Civic Engagement in the Digital Age

Social networking sites have grown more important in recent years as a venue for political involvement, learning, and debate. Overall, 39% of all American adults took part in some sort of political activity on a social networking site during the 2012 campaign. This means that more Americans are now politically active on social networking sites (SNS) than used them at all as recently as the 2008 election campaign. At that point, 26% of the population used a social networking site of any kind.

The growth in several specific behaviors between 2008 and 2012 illustrates the increasing importance of SNS as places where citizens can connect with political causes and issues:

  • In 2012, 17% of all adults posted links to political stories or articles on social networking sites, and 19% posted other types of political content. That is a six-fold increase from the 3% of adults who posted political stories or links on these sites in 2008.
  • In 2012, 12% of all adults followed or friended a political candidate or other political figure on a social networking site, and 12% belonged to a group on a social networking site involved in advancing a political or social issue. That is a four-fold increase from the 3% of adults who took part in these behaviors in 2008.

RTDNA joins groups to oppose California bills

The Radio Television Digital News Association opposes California proposals to restrict newsgathering.

Two bills making their way through the California legislature, AB-1256 and AB-1356 would broadly redefine personal privacy with the intent of keeping paparazzi away from celebrities, but with the added consequences of severely curtailing legitimate newsgathering, while exposing journalists to criminal prosecution and civil liability. As the National Press Photographers Association outlined in a letter to California lawmakers, the bills as written would blatantly violate the First Amendment, making no distinction between invasions of privacy by members of the public and valid newsgathering efforts. The letter goes on to urge the state to utilize existing laws to prosecute proven incidents of stalking. Similar efforts have been derailed in the past as lawmakers realized overly broad language would be immediately struck down by the courts, but the most recent bills have been pursued more aggressively after recent, publicized incidents involving celebrities.

Google makes concessions to EU antitrust body

Google is offering major concessions on how it displays search results in Europe — including a better labeling of its own promoted content and displaying links to its competitors — to appease concerns it might be abusing its dominant market position, the European Union's antitrust body said.

Google has offered to more clearly label search results stemming from its own services such as YouTube, Google Maps or its shopping search function, allowing users to distinguish between natural search results and others promoted by Google. It also agreed to display some search results from its competitors and links to their services, the EU Commission said. The Commission is now proposing a market test of the concessions for a month as a test run. That would give competitors the chance to say whether they deem them sufficient. Once the Commission accepts them — revised or not — they become legally binding for the company for the next five years. Google has worked closely with the Commission on the concessions' design until formally submitting them earlier this month.

Public Interest Advocates Defend Lifeline Program

April 23, 2013

Chairman Greg Walden
Subcommittee on Communications and Technology
Committee on Energy and Commerce

Ranking Member Anna Eshoo
Subcommittee on Communications and Technology
Committee on Energy and Commerce

RE: The Importance of Lifeline Phones to Consumers with Limited Means

Dear Chairman Walden, Ranking Member Eshoo, Members of the Subcommittee on Communications and Technology:

The Lifeline program provides modest, affordable, essential phone service to low-income households and is literally a “lifeline” to jobs, emergency service, medical care, childcare, the school system, social services, family and community. The following organizations urge you to allow the recent round of reforms to take hold before precipitously altering this program:

  • The National Consumer Law Center® (NCLC®) is a nonprofit that works for economic justice for low-income and other disadvantaged people in the U.S. through policy analysis and advocacy, publications, litigation, and training. NCLC has long been involved in the policy issues around the design of the Lifeline program as part of its work to ensure affordable, reliable access to essential utility service for consumers with limited means.
  • Advocates for Basic Legal Equality, Inc. (ABLE) is a regional non-profit law firm in Ohio that provides a full range of free, high quality legal services to low-income individuals and groups to help them achieve self-reliance, economic opportunity, and equal justice. ABLE serves clients in thirty-two counties in Northwest and Western Ohio as well as migrant farmworkers and immigrant workers statewide. Established in 1969, ABLE has a long history of representing low-income clients in all types of administrative advocacy and complex civil litigation, including consumer protection and utilities matters. Since 1995, ABLE attorneys have actively worked on behalf of community organizations to expand access and ensure affordability of telecommunications services.
  • The Benton Foundation works to ensure that media and telecommunications serve the public interest and enhance our democracy. Benton pursues this mission by seeking policy solutions that support the values of access, diversity and equity, and by demonstrating the value of media and telecommunications for improving the quality of life for all. Benton has long advocated for the ubiquitous telecommunications access for all Americans.
  • The Center of Media Justice is a non-profit whose mission is to create media and cultural conditions that strengthen movements for racial justice, economic equity and human rights.
  • Connecticut Legal Services is a nonprofit law firm that provides advice and representation to low income households and pursues policies to protect and enforce their legal rights.
  • The Greenlining Institute is a research, advocacy, and leadership development organization working for racial and economic justice. We believe that everyone, regardless of race or income, should have a fair chance to achieve the American Dream.
  • The Low Income Utility Advocacy Project (LIUAP) engages in administrative and legislative advocacy in Illinois in the utility/energy area on behalf of low income households and not-for-profits. It is a project of the Shriver Poverty Law Center, Voices for Illinois Children and Heartland Alliance for Human Needs and Human Justice
  • The Legal Services Advocacy Project, is a division of Mid-Minnesota Legal Aid, providing legislative and administrative advocacy on behalf of the seven regional legal services programs and on behalf of low-income Minnesotans statewide.
  • New Jersey SHARES, Inc. is a statewide non-profit corporation primarily providing assistance to individuals and families in need of help meeting their energy and utility burden. Through assistance, advocacy, community outreach, education, information and referral, we connect low and moderate income households with available resources.
  • The Ohio Poverty Law Center is a nonprofit law office that pursues statewide policy and systemic advocacy to expand, protect, and enforce the legal rights of low-income Ohioans.
  • Open Access Connections facilitate communications services to encourage self-determination and stronger community connections for low-income and homeless people. We do this by advocating for and providing free communication tools for people in need.
  • Pro Seniors is a non-profit organization that provides free legal and long-term care help to older adults. Pro Seniors offers Ohio residents age 60 and older the advice and information they need to solve their legal and nursing home, adult care facility, and home health care problems.
  • Springwire (www.springwire.us) is a national non-profit organization that provides communication technologies and information services to more than 50,000 people living in poverty in the United States and Canada, through a network of more than 1,400 social service agencies in 320 communities. Using these tools and services, Springwire enables those facing poverty and homelessness to directly connect to critical resources to secure employment, housing, health care, social services and other forms of support.

Lifeline Provides Affordable No-Frills Voice Service: The Lifeline program has been in existence since 1985 and evolved to include wireless service in 2005. The current Lifeline program provides a discount on voice service via traditional landline local service or wireless service. Carriers are approved by states or the FCC to participate in the Lifeline program. The wireline Lifeline phone service provides a discounted rate on traditional phone service to the home. Wireless Lifeline is an evolving product in terms of number of minutes covered by the $9.25 per month covered by the Lifeline program. Typically it is a modest prepaid service requiring no deposit, often including a free handset and 250 minutes a month (a little over 4 hours of phone service a month for incoming and outgoing calls). Lifeline households can purchase additional minutes to add to their plan. The current Lifeline program does not cover data, but there is a small Lifeline broadband pilot that was part of the recent reform decision and is rolling out now.

Lifeline Enhances the Network Effect: The communications network has more value the more people are connected to it and access is increasingly important. Expectation of instantaneous connection has become the societal norm for those who can readily afford smart phones and broadband connectivity via multiple devices. It is increasingly an expectation of employers to readily reach employees or perspective employees. Yet, having reliable access to a wireline and wireless connection is not readily affordable for households of modest means and the Lifeline program only covers one phone service per household. Even with its limitations, Lifeline plays an important and unique role in the provision of basic essential voice connectivity for low-income households.

The Importance of the Lifeline Program: The Lifeline program provides no-frills basic phone service to households at or below 135% of poverty (around $26,400 a year for a family of 3) and households participating in needs-based assistance programs such as Medicaid, SNAP SSI, Public Housing Assistance, LIHEAP, TANF or the National School Lunch Free Lunch Program. Recent surveys of wireless Lifeline customers show:

  • Around half are over 45 to 50 years of age, with a substantial percent over sixty.
  • Veterans participate.
  • Consumers with disabilities participate.
  • A large percent are unemployed or underemployed and use their Lifeline service to find work.
  • Lifeline service provides access to healthcare.
  • Lifeline service provides an introduction to wireless service.

Low-Income households move more often than non-low–income households: It is vital that Lifeline remain technology neutral and include wireless service, particularly because of the high levels of geographic mobility. Certain populations move more frequently than others. According to the US Census, over half of households below poverty moved and almost two-thirds of renters moved within a 5-year period. African-American, Asian and Hispanic or Latino households move more often than white households. The unemployed move more often than the employed. Over half of separated households and 40% of divorced households move within a 5-year period compared to 18% for married households.

Low-income households resort to doubling-up and using shelters for housing: scenarios where more than one eligible household can live at the same postal address: A sad reality for households with limited means is an inability to afford housing. The bleak economic effects of the recession resulted in an11.4% increase in the number of people doubling up between 2007 and 2010 (affecting 22 million households). There are also group housing situations, such as single-room occupancies (SROs), nursing homes, group homes for those with disabilities, domestic violence shelters, where the dwelling units may not have their own US Postal service address although the occupants are separate households. These are amongst the most fragile of low-income households and a group most in need of wireless Lifeline service to achieve self-sufficiency or independence.

Lifeline service is a lifeline for the working poor and the unemployed: A substantial number of Lifeline participants are unemployed or underemployed. A stable phone number is essential for a low-wage worker to pick up extra shifts or jobs. Phone service is also important to coordinate transportation to and from work and to notify an employer if work will be missed due to an emergency, thus helping to maintain employment. If the worker has young children, the phone is important for coordinating childcare logistics and to remain in contact in case the child is sick or in an emergency.

Lifeline enhances the efficient operation of other assistance programs: Increasingly social services supports are accessed electronically, through centralized call centers and internet sites. While Lifeline program is limited to voice service, this provides access to critical programs, allowing checking on the status of benefits, re-certification of program eligibility, obtaining notice of trainings, interviews, work assignments, etc. It is worthy of investigation to determine whether the currently offered 250 minutes (a little over 4 hours a month) is adequate, given this trend in program delivery, especially where wait times can be long and call backs are common.

Other agencies see the value of the Lifeline program in their administration of services. The Department of Veterans Affairs, Homeless Veterans Initiative Office asked the FCC to consider establishing automatic eligibility for Lifeline for veterans participating in the Department of Veterans Affairs Homeless Veterans Program. The arguments are applicable to a range of existing assistance programs:

  • Lifeline Telephone services will allow the Department of Veteran Affairs and its community partners to expand outreach access and coordinate essential services for Veterans and Veteran Families. It will assist in overcoming many of the Veteran unique barriers to preventing and eliminating Veteran homelessness such as receiving appropriate healthcare and surmounting the disproportionately high unemployment rate among Veterans in a very competitive, economy driven market. In addition, such services provide more ready access to other supportive services, as well as preventative and emergency services. In addition, it permits case workers to provide more frequent contact with this most vulnerable population and therefore, eliminate the isolation that places them at increased risk for homelessness.

Lifeline also helps the medical community provide care: Health care providers treating low-income patients can find it difficult to follow-up with their patients without reliable phone service. A pediatrician who practices in the inner-city and whose patients are very young and fragile described why the Lifeline service is so important. When she treats a 2-year old with a congenital heart condition, developmental delay and a failure to thrive, she needs to be able to reach the parents to arrange for medical transport and delivery of special formula, and ensure that medications are taken as prescribed to avoid serious complications. The ability of parents of medically fragile young children to reach her immediately when there is a problem can mean the difference between treating a developing pneumonia with medication or treating the child in the pediatric intensive care unit with severe respiratory distress.

Lifeline is essential in emergency situations: The no-frills Lifeline voice service is important for protecting public health and safety. This includes the ability to call 911 for help in an emergency as well as the ability to be contacted (e.g., the ability of the school to contact a parent or guardian when a child is sick or injured). Increasingly communities are relying on reverse 911 to warn residents in emergencies.

The Lifeline Program has Undergone Serious Reforms That Should be Allowed to Play Out: The recent Lifeline reform has put the program on more secure footing and made it more uniform between states. The FCC eliminated the Link Up program and ramped down toll limitation service. The Link Up program was created to help cover the cost of establishing a wireline connection in a home and toll limitation was designed to avoid expensive long distance charges that could make the phone bill unaffordable. The FCC tightened enrollment procedures for consumers. Obtaining and retaining Lifeline service has become more burdensome for consumers which may well account for enrollment drop-off. Lifeline applicants must provide documentation of eligibility (e.g., proof of SNAP participation) before being approved for Lifeline service. Consumers must also re-certify eligibility annually or they will be de-enrolled from the program. Applicants must also provide their date of birth, partial social security number in addition to their address for a duplicates check. If the address has other Lifeline households, then the applicant must fill out a Household worksheet to determine eligibility. There are a number of certifications made under penalty of perjury under these new reforms.

Carriers also have new requirements to prevent waste, fraud and abuse. They must now clearly disclose if a particular service is a Lifeline service. It was not always clear in the past whether a particular product was part of the Lifeline program. Carriers must disclose that there is only one Lifeline phone per household permitted under the program rules. An officer of the company must certify under penalty of perjury that the company is in compliance with the Lifeline rules, has obtained valid certifications from the applicants, and that the information in the monthly reimbursement request from the universal services fund is true, accurate and complete. The carrier must also de-enroll a customer from Lifeline if a prepaid wireless phone is unused for 60 days, if the Lifeline customer fails to re-certify eligibility, and in the case of duplicate service. The reform also includes the creation of a national duplicates database that is expected to be constructed sometime this year.

These reforms are dramatic and drastic and targeted to address the pre-reform Lifeline program weaknesses. Lifeline is a vital program that protects health and safety and helps struggling households achieve independence. These reforms should be given a chance to operate before subjecting this vital program to disruption.

Sincerely,

Olivia Wein,
Staff Attorney
National Consumer Law Center
On behalf of its low-income clients and the Joint Consumers listed above.

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