Monday, May 02, 2011

A Little About Lifeline

Lifeline was a topic in Orlando (or it came to be a topic in the CLEC Workshop). The idea was presented that a CLEC could have a business model as a Lifelink or Lifeline provider (ETC = eligible telecommunications carrier).

The whole system is being reformed. FCC WC Docket No. 11-42.

Some interesting notes from the almost 200 page file.

"Section 254(e) of the Act limits universal service support, including Lifeline and Link Up support, to ETCs designated under section 214(e) of the Act.518 Section 214 of the Act, in turn, requires that ETCs use their own facilities, at least in part, to provide services supported by universal service and requires carriers to engage in a two-stage “redefinition” process before carriers may serve certain rural service areas."

"Lifeline and Link Up are a critical part of the Commission’s universal service mission, ensuring that we implement Congress’s directive to ensure the availability of basic communications services to all Americans, including low-income consumers. For more than two decades, Lifeline and Link Up (together, “Lifeline/Link Up” or “the program”) have helped tens of millions of Americans afford basic phone service, providing a “lifeline” for essential daily communications as well as emergencies. But recent technological, market, and regulatory changes have put increasing strain on the program. Today, we begin to comprehensively reform and modernize the Lifeline and Link Up program."

Thought: This program is to provide basic voice service to the low income household that can not otherwise afford it. It is also for emergency service, or 911. How does VoIP or cellular provide E-911 when the power is out?

"Background. Link Up support reimburses wireline and wireless ETCs for the revenue they forgo in reducing their customary charge for commencing telecommunications service and in deferring charges assessed for commencing service. Link Up provides qualifying consumers with discounts of up to $30.00 of the initial costs of installing a single telecommunications connection at a consumer’s principal place of residence."

"As part of the ETC designation process, a carrier applying for designation must show that it offers local usage comparable to that offered by the incumbent LEC. In June 2010, the National Association of State Utility Consumer Advocates (NASUCA) adopted a resolution that raised concerns about “free” Lifeline calling plans offered by various wireless ETCs. In particular, NASUCA identified three areas of concern: First, that such plans have resulted in substantial growth of the Lifeline program, without a “necessary assurance of adequate value provided to the Lifeline customer,” or a demonstration that these plans make efficient use of Lifeline funds; second, that such plans include limited usage minutes and require subscribers needing additional minutes to purchase those minutes from the carrier; and third, that it is not evident whether such calling plans offer local usage comparable to available ILEC Lifeline calling plans. The NASUCA resolution recommended that the Commission consider establishing minimum standards of service for pre-paid wireless Lifeline service to ensure value for Lifeline consumers, as well as efficient use of universal service dollars."

An interesting note:

"Some ETCs market their Lifeline-supported products under a trade name. For example, TracFone offers Lifeline-supported service under the name SAFELINK WIRELESS®, while Virgin Mobile’s competing offering is Assurance Wireless. Some eligible consumers may not understand that these products are Lifeline-supported offerings, and therefore may not realize they are violating our prohibition against having more than one Lifeline-supported service per household." (see note 419 on pg 74 for more marketing info.)

The Lifeline service reform is being conducted for a couple of reasons: foremost is USF Fraud. As always in telecom, there are a bunch of con artists. It's annoying to say the least. Second is to somehow use Lifeline to promote broadband penetration. That said, the FCC and the NTIA understand that it will take a number of stakeholders - ISP, telco, state and local government, private enterprise - to work together to cross the Digital Divide. Besides affordable broadband, there is the cost of ownership of a computer or other Internet-enabled device. Moreover, there is an education piece since one obstacle is the lack of digital skills. And there is the Outreach and Marketing piece.

So far the reform input has been pretty open, like AT&T saying every provider should be in the database as an ETC and let the customer choose. The hard part will be the fraud issue.

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