the federal lifeline program
DESCRIPTION
THE FEDERAL LIFELINE PROGRAM. Low-income consumers apply for discounts for local telephone service through the telephone company. Low Income support reimburses eligible telecommunications carriers (ETCs) for providing eligible low income customers with discounts. Overview. - PowerPoint PPT PresentationTRANSCRIPT
THE FEDERAL LIFELINE PROGRAM
Overview
• Low-income consumers apply for discounts for local telephone service through the telephone company.
• Low Income support reimburses eligible telecommunications carriers (ETCs) for providing eligible low income customers with discounts.
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Overview
Low Income support consists of three sub-components:
• Lifeline reimburses ETCs for discounting eligible customers’ monthly bill for basic, local telephone service.
• Link Up reimburses ETCs for discounting connection charges incurred when an eligible customer commences service for the first time or at a new address.
• Toll Limitation Service (TLS) reimburses ETCs for providing toll blocking and toll control to eligible customers at no cost to the customer.
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Overview
To participate, a carrier must be designated as an “eligible telecommunications carrier.”
• ETC status is granted by state public service commission, or FCC.
• ETCs must provide service using, at least in part, its own facilities pursuant to section 214(e) of the Telecommunications Act.
• A company can petition the FCC for forbearance from the requirement to use its own facilities.
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Disbursements
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Low Income Program
Low Income Support has grown significantly
• Number of subscribers increased:
– from 7 million in 1Q2009 to 9.2 million in 4Q2009
– from 9.6 in 1Q2010 to 11 in 4Q2010.
• Number of ETCs claiming support increased:
– 99 new SAC requests from April 2010 to March 2011.
– Now averaging 18 per month.
• Participation rate estimated to be 37% as of 4Q2010.
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Factors Contributing to Growth
• “Pre-paid wireless” carriers are non-facilities-based commercial mobile radio service (CMRS) operators that provide Lifeline service on a resold basis.
– TracFone Wireless is currently an ETC in 32 states, PR and DC.
– Virgin Mobile is currently an ETC in 19 states.
– TracFone and Virgin Mobile claim Lifeline support only.
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Pre-Paid Carriers
Lifeline service provided by pre-paid carriers is different from that of other ETCs
• Provide Lifeline customers free wireless handset.
• Provide an established number of free minutes of use per month (both TracFone and Virgin Mobile offer up to 250 per month in some states).
• Advertise heavily (television ads, direct mailings) to attract low-income consumers.
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Pre-Paid Carriers
Additional regulatory requirements imposed on pre-paid carriers
• Obtain certification that carrier is 911 and E911 compliant.
• Obtain annual certification that each consumer is head-of-household and receives Lifeline discounts only from the pre-paid carrier.
• Enact safeguards to prohibit more than one subsidy from the same carrier going to one address.
• Limited to claiming only Lifeline support (not eligible for Link Up or TLS).
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Factors Contributing to Growth
• The number of carriers offering traditional wireless service has also increased.
– Nexus, Midwestern Telecommunications and Yourtel America are among the largest non-pre-paid wireless Lifeline providers.
– Most traditional wireless carriers receive Link Up support.
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Factors Contributing to Growth
• The number of wireline competitors has increased significantly.
– These companies have a switch or purchase UNEs, but also provide service to many consumers via resale.
– Danger to consumers if these companies are cut off by the wholesale carrier due to a billing dispute.
– These companies generally claim Link Up and TLS support.
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Pending Regulatory Matters
Duplicate Lifeline Subscribers
• FCC addressing issue of consumers receiving Lifeline from two or more carriers.
– USAC is conducting In-Depth Data Validations to identify consumers receiving Lifeline from multiple carriers.
– FCC is establishing plan to ensure consumers receive subsidized service from only one carrier.
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Pending Regulatory Matters
Notice of Proposed Rulemaking
• Based on Federal State Joint Board recommended decision and GAO Report.
– Consumer eligibility
– Treatment of duplicate support claims
– Appropriateness of existing outreach and enrollment programs
– The potential expansion of Lifeline to include broadband
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Pending Regulatory Matters
National Broadband Plan
• Establish a pilot program for Low Income broadband support mechanism
• Allow consumers to apply Low Income subsidy to any service package that includes voice
• Promote wireless broadband to increase broadband adoption among Low Income households
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