CPUC Staff's Low-Income Subsidy Plan Irks Wireless Industry

Wireless carriers balked at a California Public Utilities Commission staff plan to restrict subscribers from combining state low-income support with federal affordable connectivity program (ACP) benefits for mobile plans. The CPUC received comments Thursday in docket R.20-02-008 on interaction among California LifeLine, federal Lifeline and ACP. The plan “is inconsistent with and preempted by applicable federal law, violates California law governing the state’s LifeLine program, and ignores relevant facts regarding subscribers’ wireless data needs,” said the National Lifeline Association.

State and ACP benefits could be combined for wireline plans, under the staff proposal. It concluded that the $30 monthly ACP subsidy provides affordable wireless voice and broadband without needing a California LifeLine subsidy, and that minimum prices for wireline voice and broadband bundles meeting federal Lifeline minimum service standards “generally exceed” combined ACP, Lifeline and LifeLine support (see 2203220026). Staff proposed setting a LifeLine specific support amount (SSA) of zero dollars to wireless service plans that receive an ACP subsidy but keep the current SSA for wireline plans even if they get an ACP subsidy.

TracFone and acquirer Verizon are "deeply concerned" the staff proposal "recommends an approach that will deny consumer choice and will jeopardize" CPUC efforts to increase LifeLine participation, they commented. It ignores consumers’ wireless preference, said the companies, saying 81% of LifeLine subscribers choose bundled wireless voice and broadband plans. The CPUC previously allowed combining the emergency broadband benefit with LifeLine SSA and federal Lifeline support, but now staff is concerned for no good reason, they said: EBB subscribers could lose their unlimited data plans due to staff’s recommendation and EBB ending March 1.

The Infrastructure Investment and Jobs Act and the FCC's ACP rules require providers to allow low-income consumers to apply the ACP discount to any internet service offering, said NaLA: That must include all California LifeLine plans. A CPUC rule adopting staff proposal "would be unenforceable under ... conflict preemption," and California's Moore Act requires the CPUC to administer LifeLine in an equitable and nondiscriminatory way that doesn't affect competition, it said.

Staff’s plan "would clearly be inequitable and discriminatory, and would significantly impede consumer choice,” CTIA commented. It would artificially constrain "consumers’ ability to choose service plans they desire, but that are only affordable by aggregating the state and federal subsidies available to them," and "providers’ ability to provide consumers with the broadest array of subsidized services that best meet their needs."

Consumer advocates disagreed. ACP’s $30 is more than enough to provide affordable wireless voice and broadband services, said the CPUC’s independent Public Advocates Office. The Center for Accessible Technology, The Utility Reform Network and the Greenlining Institute agreed: "Providing wireless Lifeline providers with a windfall of up to” about $31.40 monthly per subscriber “for providing service that meets the Commission’s minimum standards would constitute an enormous waste of LifeLine Program funds and would likely incentivize provider fraud and abuse.”

The California Emerging Technology Fund supported staff's "premise ... that there are many superior benefits of a home wireline broadband adoption,” and “a policy that would encourage and educate LifeLine subscribers to use federal ACP benefits for wireline broadband subscriptions while preserving California LifeLine benefits for an accompanying mobile device subscription.” But it’s “not required to combine ACP with federal or state Lifeline benefits to afford a wireline plan,” commented CETF: Charter, AT&T, Frontier Communications and Comcast have plans that are free or less than $20 monthly with the ACP benefit. Combining benefits might be needed in rural areas not served by the big ISPs, it said.

Qualifying households can get free wireline broadband from AT&T through ACP without needing California LifeLine, agreed AT&T. Many wireline broadband plans are free or cheap for ACP participants, agreed the California Cable and Telecommunications Association (CCTA). CalTel and other small rural LECs supported staff’s recommendation to keep the full Lifeline SSA for wireline carriers and customers even if they participate in ACP.

Consumer advocates disagree that wired plans are cheap. Prices for wireline broadband, especially when bundled with voice, usually exceed combined federal and state support, said PAO, noting California LifeLine doesn't currently support standalone wireline plans.

Delay acting on the staff plan while the FCC mulls updating federal Lifeline, suggested CCTA. Rather than make "piecemeal changes," the CPUC should "complete a holistic view of the California LifeLine program, which may include re-focusing the support currently available."

In the CPUC’s inmate calling services proceeding, Administrative Law Judge Cathleen Fogel set an April 28, 10 a.m. PDT, virtual status conference on an updated schedule and next steps. Topics include voice- and video-calling bundles, video-calling rates and usage and network structure of phone and video calling services, said the Thursday ruling in docket R.20-10-002.