Proposed California LifeLine Rules Ignite Debate Between Providers, Advocates

The California Public Utilities Commission is scheduled to discuss at its Dec. 5 open meeting a proposed decision to revise the state LifeLine program. Commissioner Catherine Sandoval’s proposed decision would extend the price cap and adopt specifications for LifeLine wireless services (http://bit.ly/Ihm0C6). The proposed decision requires all participating providers to have a certificate of public convenience and necessity (CPCN), a wireless identification registration from the PUC and/or a franchise authority to provide service. All wireline service providers must charge no more than $6.84 per month for flat-rate local service and no more than $3.66 monthly for measured rate service through Dec. 31, 2015, said the proposed decision. To participate in the California LifeLine program, any fixed VoIP provider or wireless service provider must file a Tier 3 advice letter to demonstrate that its proposed services are in compliance with the proposed decision, it said. Gov. Jerry Brown (D) vetoed a bill that would have limited the PUC’s powers to adopt new rules for its LifeLine program due to the open proceeding (CD Oct 16 p16).

Modifications to the LifeLine program meet the PUC’s definition of basic service “to provide low-income customers with a broader range of flexibility for discounted Lifeline options, consistent with their Lifeline service needs and appropriate consumer protections,” commented CTIA (http://bit.ly/1cOgMGK). The PUC is changing its LifeLine requirements to limit wireless carriers’ barriers to entering the program, said CTIA. The proposed decision “appropriately eliminates” the wireline-centric service elements of the LifeLine program such as a white pages directory and a listing in a local directory if requested by the customer, said the association. “Adopting the PD may help to facilitate wireless participation in the Lifeline program and permit low-income consumers to choose wireless services."

Some elements of the proposed decision could inhibit wireless carriers from participating in the program, said CTIA. The proposed requirement that California LifeLine providers offer customers all available rate plans shouldn’t be adopted, it said. “The proposed requirement could limit the number of wireless carriers who choose to be California LifeLine providers; a particularly unfortunate result because the remaining Lifeline service elements help assure that wireless Lifeline customers receive service which is comparable to non-Lifeline customers without requiring the availability of every retail rate plan.” If this requirement were adopted, the wireless providers would be required to update schedules on file with the PUC on a “nearly continuous basis,” said CTIA.

TracFone added its own interpretation on non-recurring charges (http://bit.ly/Ihf8V7). The PUC should discontinue LifeLine reimbursement for non-recurring charges such as connection and activation charges similar to the FCC ending its Link Up program, said the company. “That Link Up-type subsidization of activation and connection charges is unnecessary is shown by the fact that TracFone has never requested nor received any Link Up support and has been able to enroll more Lifeline customers than any other Lifeline provider."

While the proposed decision makes strides to help low-income consumers readily choose the best program to meet their needs, it would implement certain rules that are unnecessary or unlawful, said Cox Communications (http://bit.ly/1eAw97O). Existing PUC decisions and policies don’t support re-establishing a former transitional cap on LifeLine rates that wireline and fixed VoIP providers may charge, said Cox. “Capping LifeLine rates could create increased demand on the LifeLine fund as providers may seek reimbursement from the fund that they would otherwise be able to collect from their LifeLine customers.” An increased draw on the fund could increase the LifeLine surcharge that non-LifeLine customers pay, and it could put an “unnecessary and unfair burden on non-Lifeline customers,” it said. If the commission decides to cap rates, it should do so to all wireless and wireline providers, said the cable operator.

The Greenlining Institute, National Consumer Law Center and The Utility Reform Network (TURN) jointly asked for more specific requirements in the proposed decision (http://bit.ly/18HWLTl). They said they support the holding that VoIP providers should have a CPCN and/or franchise authority to offer LifeLine service, but some confusion remains as to whether VoIP LifeLine providers must file a tariff in order to satisfy the requirement to provide rates and terms of their LifeLine service. The groups are troubled by the proposed decision’s “failure to incentivize unlimited plans” and urged the PUC to revise the reimbursement rates for wireless LifeLine to provide the full subsidy only for those plans with limited minutes, they commented. The PUC also should think about service needs in its decision by including E-911 and directory assistance, said the groups.

Wireless and wireline providers could be resistant to the proposed rulemaking because they are “hesitant to change,” Christine Mailloux, TURN telecom attorney, told us. “We believe that these programs provide stability to consumers, and we don’t want there to be any tradeoffs for the companies.” TURN has been active in LifeLine proceedings in the state since the proceedings started in 2005, said Mailloux. “The commission has been very active in reviewing and changing their LifeLine rules along with the FCC’s rulemaking.” Even if the PUC approves this decision, a lot needs to be worked out, said Mailloux. “In our comments, we laid out the areas of confusion and the future tracks of this discussion.”