Lifeline Enters Final Stages of Debate

Submitted on March 24, 2016

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Robbie’s Round-Up for the Week of March 21-25, 2016

The National Telecommunications & Information Administration finds gains in Internet use, but as we know, especially for broadband, cost of service remains the major barrier to adoption. As the Federal Communications Commission considers how to employ its Lifeline program to address this barrier, we’ve entered the final stages of the debate.

NTIA Releases New Data on Internet Use

The Commerce Department’s National Telecommunications & Information Administration released new data about Internet use across the U.S. The data shows that some of the demographic groups that have historically lagged behind in using the Internet—such as senior citizens, minorities, and Americans with lower levels of educational attainment—are making big strides.

Particularly promising, Internet use increased significantly among children and older Americans between 2013 and 2015. Children between the ages of 3 and 14 became substantially more likely to go online, as Internet use among this group increased from 56 percent in 2013 to 66 percent in 2015, and Internet use among those aged 65 or older increased from 51 percent to 56 percent during the same period. In contrast, usage remained largely unchanged among those who were previously most likely to go online, with 83 percent of Americans between the ages of 25 and 44 reporting Internet use in both 2013 and 2015.

As Lifeline Reform Reaches Final Stages, FCC Strives to Find the Right Balance

For an excellent in-depth primer on the upcoming Lifeline vote, see Raphael Leung’s “What to Expect When You’re Expecting Lifeline Reform: A Public Interest Perspective on Making Broadband Service Affordable for All”, and for the history and legal underpinnings of Lifeline, be sure to read Andy Schwartzman’s “Lifeline - Where Did It Come From?” and “Lifeline Reform Reaches the Home Stretch.”

As we head towards the Federal Communications Commission open meeting on March 31, the Lifeline proposal is receiving lots of review and discussion.

As the program undergoes reform to start providing subsidies to make broadband service affordable for low-income consumers, one component, in particular, is being targeted: the concept of “minimum service standards.” These standards are aimed at making sure Universal Service Fund-supported offerings look like what most Americans are getting. But it raises the question: how do we ensure the Lifeline program delivers real, meaningful service, while still being affordable?

Jon Wilkins, the FCC’s Wireless Telecommunications Bureau Chief, and Matt DelNero, the FCC’s Wireline Competition Bureau Chief, wrote a blog about this tension and about striking the right balance between the FCC’s dual mandates of affordability and access to “advanced communications technologies.” The post explores how to guarantee that low-income Americans can take advantage of all the opportunities that real broadband Internet access enables – from jobs to education to healthcare – while also ensuring that this access remains within reach financially.

The solution offered by the FCC? A phase-in of mobile broadband minimum service standards. Wilkins and DelNero wrote:

The proposed rules...provide for a phase-in of mobile broadband minimum service standards so that Lifeline providers can have plenty of 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.

The FCC's plan sets a number of minimum service standards on the speed of Internet and the data allowance of smartphone plans. By December, the FCC will also require Lifeline providers of simple voice-only cellphone service to offer unlimited-minute plans. By 2019, Lifeline will transition completely away from wireless voice-only service.

At a Benton Foundation-sponsored event, Gigi Sohn, Counselor to FCC Chairman Wheeler, addressed a number of concerns the FCC is hearing, one of them being about minimum standards. She said, “[M]inimum service standards for voice and data will ensure that Lifeline is not a second-class service, while ensuring that it is still affordable. The Lifeline order the Chairman circulated sets the following minimums: for fixed broadband Internet access, the minimum speed is 10 Mbps down and 1 up and the minimum data allowance is 150 GB. For mobile voice, the minimum is unlimited minutes, and for mobile data, the minimum data allowance starts at 500 MB on December 1, 2016 with increases to 2GB by December 1, 2018. Finding the right balance between robust service and affordability is difficult, and we continue to talk to a variety of stakeholders on this issue."

Sohn said the FCC has an obligation to focus the Lifeline program on broadband. She stressed that states will continue to play a critical role in the Lifeline Program. "Aside from moving the program to broadband, the single most important thing the proposed order does," Sohn said, "is streamline the process for becoming a Lifeline provider to make it more attractive for new entrants." Finally, she noted that the reforms will limit the impact on ratepayers while at the same time providing a safety valve to protect society’s most vulnerable.

Industry Concern
The wireless industry is concerned that certain minimum standards would be too costly, and therefore be too expensive for some potential Lifeline recipients. The wireless industry has lobbied hard over the past few weeks against the change to require unlimited minutes. Industry representatives argue that the $9.25 per month Lifeline subsidies will not fully cover the price of unlimited voice plans currently on the market and some low-income families would not be able to cover the extra cost. "Implementing an unlimited voice requirement as of December 2016 would effectively eliminate the free wireless Lifeline option – an outcome that would be hugely disruptive to millions of Lifeline subscribers," Sprint wrote in a filing this week, echoing other major wireless trade groups.

CenturyLink also filed comments on the proposal, supporting the efforts to realign the Lifeline program to focus on broadband, but wanting to ensure that the reforms don’t unintentionally leave some consumers behind. The company cautioned against making participation mandatory for any providers or applying a rigid 10/1 Mbps minimum service level for wireline broadband service, as it would limit options for consumers who may prefer less expensive options or who live in areas where only lower speeds are currently available.

Commissioner Clyburn
FCC Commissioner Mignon, a leader on Lifeline reform, addressed some of the concerns about minimum standards at the House Communications Subcommittee Hearing: Oversight of the FCC.

She highlighted more narrow concerns about imposing minimum service standards and mentioned there could be late changes to the Lifeline proposal. "My office has been inundated with concerns about the call for minimum standards, particularly for mobile voice," she said in her opening statement. "But the strongest part of the FCC's process, one that is the envy of regulators from across the globe, is that our process enables parties to give and receive feedback. If parties believe that the current proposal doesn't strike the right balance, I have been clear from the beginning that I am open to taking appropriate adjustments, and I plan to live up to that promise."

In a follow-up conversation, Commissioner Clyburn would not say whether she has proposed any specific changes. She said nothing is "set in stone" and noted she is still in "listening mode."

Support
Public Knowledge, MAG-Net, Communications Workers of America, Color of Change, and OC Inc. submitted more than 20,000 signatures to the FCC urging the agency to expand Lifeline to broadband Internet. The petitions will be added to the public record. The president and executive director of the Writers Guild of America East also wrote an op-ed in support of the Lifeline proposal. We’ll be watching as the FCC votes March 31.

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