América Móvil's U.S. MVNO, TracFone Wireless, thinks the FCC should not impose minimum service standards on Lifeline phone service providers as it seeks to revamp and reform the program. TracFone has around 4.4 million qualified low-income households currently enrolled in its SafeLink Wireless Lifeline program, and is the country's leading provider of Lifeline-supported services.
In June, the FCC voted to reboot and modernize the Lifeline program by adding broadband service to the mix and having a third party establish eligibility for the program. TracFone is wary of the expansion to cover broadband. Some wireless carriers have also been dropping their support for Lifeline. Last year, T-Mobile US (NYSE:TMUS) dropped its support for the program and AT&T Mobility's (NYSE: T) Cricket prepaid brand indicated it would phase out its support.
The comments from TracFone are part of a deluge of responses the FCC is receiving, in both official filings and public pronouncements, about changes it is thinking of making to the Lifeline program.
Cable operators, for example, want to expand the pool of eligible Lifeline carriers by making it easier to apply, agreeing on the idea of establishing a third party to verify subscriber eligibility and allowing subsidy recipients to use the money for more than the basic level of service. Meanwhile, some elected officials in several cities and states have expressed their opposition in principle to the idea of using subsidies for broadband instead of mobile or voice services.
The Lifeline program currently 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).
TracFone proposed two steps the FCC could take to prevent fraud in the program, and renewed its prior recommendation that the FCC prohibit in-person handing out of cell phones on street corners, out of car trunks, in front of government offices and other public locations. TracFone also asked the FCC to forbid incentive-based compensation for agents marketing Lifeline services to consumers.
However, TracFone said it is opposed to the FCC imposing mandatory service standards, such as forcing Lifeline providers to provide unlimited calling services. TracFone said it is opposed to standards which require low-income households to pay for a portion of their Lifeline service.
"When modernizing the Lifeline program, it is imperative for the Commission to preserve the availability and affordability of Lifeline services relied upon by existing low-income customers who use free mobile voice connectivity provided by Lifeline carriers for critical communications needs, such as dialing 911, setting up job interviews and contacting health care providers," the carrier said. TracFone added that "expanding the Lifeline program to cover broadband must therefore be conducted in a responsible manner that fully recognizes the financial realities of such an expansion while taking into consideration the need to preserve the types of voice services that many Lifeline customers need and have come to rely upon."
TracFone also thinks a third-party verification system for Lifeline participants could end up being both costly and duplicative. The company said it is "concerned that the purported benefit of the FCC's effort to eliminate Lifeline carriers from the process of verifying customer eligibility is insufficient to justify the total cost, complexity and inefficiency of a national third party verification system. TracFone does not oppose the concept of a national third party eligibility verifier, but how the FCC implements such a system remains a source of concern for TracFone."
Meanwhile, the National Cable & Telecommunications Association warned against a "one-size-fits-all" approach to the Lifeline reforms, and said the FCC needs to increase choices for Lifeline users and make it easier for MSOs to participate.
And as IDG News Service notes, state and local officials from Maryland, New York, Oregon and Texas are among those objecting to parts of the FCC's proposal to let people use the subsidies on broadband instead of voice service. While many of the politicians support expanding access to broadband for low-income households, some questioned whether the FCC's current plan would force some consumers to choose between voice and broadband service.
- see this TracFone release
- see this TracFone filing
- see this Multichannel News article
- see this IDG News Service article
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