TracFone leans on FCC to make changes to Lifeline program

Executives from América Móvil's U.S. MVNO, TracFone Wireless, met last week with FCC officials to press their position on what reforms the agency should make to its Lifeline phone program. TracFone, one of the nation's largest providers of Lifeline service, proposed reforms that would make it easier to track Lifeline enrollees' information but in some cases make it tougher for them to be purged from customer rolls.

Last week Javier Rosado, senior vice president of TracFone, and Mark Rubin, TracFone's top government relations executive, met with various FCC officials, according to an FCC filing. The executives brought up previous reform proposals the carrier had floated, including requiring Lifeline providers to keep Lifeline eligibility documentation, prohibiting real-time in-person handset distribution, and allowing texting to be considered as a way to measure if a customer is actively using their service.

Additionally, TracFone is proposing several other changes to the Lifeline program. They include:

  • Creating specific rules on what constitutes "sufficient personal identification information" during the Lifeline enrollment process.
  • Using systems like the U.S. Postal Services' Coding Accuracy Support System to validate customers' address information.
  • Changing a government form to address situations where multiple households live at the same address.
  • Prohibiting agents, including independent retail vendors, from being able to make applicant eligibility or enrollment determinations.
  • Ensuring greater access to federal and state databases of enrollment programs Lifeline customers are also eligible for.

During the meeting the TracFone executives also discussed Lifeline reform proposals put forward by FCC Commissioner Mignon Clyburn. Those include minimum service standards, having carriers that are not Lifeline providers themselves determine if customers are eligible, coordinated enrollment with other assistance programs, and creation of public-private partnerships to promote the availability of Lifeline service.

The Lifeline program offers participating carriers a subsidy of up to $10 per month per subscriber, and the program is part of the FCC's Universal Service Fund, which the FCC is in the process of reforming. USF is paid for by wireless subscribers. Customers who qualify for Lifeline are often those who qualify for other federal benefit programs such as the Supplemental Nutrition Assistance Program (SNAP, or food stamps).

In 2012 the FCC instituted new rules that required carriers that received Lifeline funds to certify that their Lifeline subscribers were eligible for the program, an effort to streamline the program and reduce waste. The FCC's rules prohibit Lifeline service providers from requesting and/or receiving support for consumers who already receive Lifeline service. 

TracFone currently has around 4 million Lifeline customers out of a total subscriber base of 25.688 million total customers. TracFone provides Lifeline service through its SafeLink Wireless brand. In the first quarter TracFone said that it engaged in a "clean-up of our subscriber base that led us to disconnect [318,000] subscribers mostly from our Lifeline program."

Clearly, TracFone has an incentive to make sure it is following the FCC's rules and keeping accurate track of Lifeline customers' information so that it does not run afoul of the commissions' rules. At the same time, TracFone also wants to retain as many customers, including Lifeline subscribers, as possible. For example, prohibiting third-party agents from determining if a customer is eligible for Lifeline would give TracFone more control over making those kinds of determinations.

TracFone's efforts also come as new questions are being raised about the Lifeline program's effectiveness. Last month the Governmental Accountability Office, the independent investigative arm of Congress, issued a report that said the FCC should review the efficiency of the Lifeline program, according to The Hill. The GAO said data from telephone penetration rates suggests "the [Lifeline] program may be a rather inefficient and costly mechanism to increase telephone subscribers."

For more:
- see this FCC filing

Related Articles:
Survey paid for by TracFone-funded group finds support among older Americans for maintaining Lifeline program
América Móvil's TracFone loses 318K subs in Q1, partially due to Lifeline changes
With just 400 Lifeline customers, T-Mobile to drop support for federal Lifeline program
AT&T's Cricket to discontinue Lifeline support

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