Carriers Say Market Too Competitive for CPUC Affordability Measures

The communications market doesn’t need affordability metrics, telecom industry groups told the California Public Utilities Commission in comments this week. The CPUC received feedback Wednesday on a 2020 affordability report released last month and possibly applying the agency’s metrics to communications (see 2210140036). In a separate docket, the state commission received mixed reviews on a proposed pilot program for stacking federal affordable connectivity program (ACP) funds on state LifeLine support (see 2210140068).

The CPUC affordability report found that “select census tracts across the state still contain communities that face affordability challenges due to low income, high cost of service, or both.” In the LifeLine proceeding, the CPUC proposed a pilot in which participants could “stack” up to $17.90 monthly of the California LifeLine specific support amount with the $30 ACP discount and $9.25 federal Lifeline subsidy for plans that meet the pilot criteria. All state LifeLine participants who meet ACP and federal Lifeline eligibility criteria would be eligible for the proposed pilot.

The CPUC "should be wary of imposing affordability constructs designed for monopoly utilities on an increasingly competitive and dynamic broadband marketplace,” warned the California Cable and Telecommunications Association: They could discourage internet spending. Turning the affordability metrics into conditions for California Advanced Services Fund (CASF) support "would create unnecessary delays, could jeopardize the receipt of federal funding, and could deter participation by prospective applicants,” CCTA said in docket R.18-07-006. Focus instead on promoting adoption and the ACP, it said.

AT&T questioned CPUC staff recommending that CASF and other public purpose programs (PPPs) use the affordability metrics without showing how they could be applied, operationalized or "fit into established Commission frameworks for regulating communications providers.” Such metrics can't be applied to PPPs that "address subsidies, not prices," AT&T said. The affordability report showed that the metrics, developed "to address issues raised in rate-setting proceedings for energy and water utilities operating in monopoly markets," aren't needed for competitive services like wireless, commented CTIA. “The 2020 Report shows that, unlike rate-regulated utility services, communications services became more affordable.”

Consumer groups supported applying affordability metrics to communications. Providers "insist that affordability is irrelevant and [refuse] to provide data about the actual costs of providing service,” despite "the clear and repeated determination by the Commission that it has the authority to consider affordability of communications services,” especially for closing the digital divide, said the Center for Accessible Technology (CforAT). The Utility Reform Network (TURN) urged the CPUC to quickly implement affordability metrics for CASF, High Cost Fund-A and California LifeLine programs.

Pilot Panned

The CPUC’s proposed low-income pilot would unnecessarily delay spreading ACP benefits to low-income Californians, the National Lifeline Association commented in R.20-02-008. Combining ACP with state LifeLine benefits "was already 'tested' and implemented for nearly a year with the combination of California LifeLine, federal Lifeline and Emergency Broadband Benefit (EBB) support in 2021 to great success,” said NaLA. All who are “eligible for California LifeLine, federal Lifeline and ACP should be receiving the benefits of all three discounts and to deny that opportunity to any eligible household would be arbitrary, discriminatory, unlawful and undermine the programs’ goals.”

CPUC needn't "limit the proposed improvements by fashioning this as a 'pilot' subject to temporal limitations, subscription restrictions, or prescriptive requirements,” said CalTel and other small RLECs: Calling it a pilot could confuse consumers about how long support will be available. The CPUC should instead change LifeLine rules “to permit carrier reimbursement for application of the [specific support amount] to any bundled -- or standalone -- broadband service that meets federal minimum standards.”

Verizon’s TracFone supported combining ACP and California LifeLine subsidies for a pilot plan that would include a smartphone, unlimited mobile data, voice and text messaging, 30 GB of hot spot data, and calls to Mexico and Canada. The carrier said its proposal would increase consumer choice and equity and could increase LifeLine participation.

TURN and the Greenlining Institute conditionally supported a pilot. It should "treat wireline and wireless services as distinctly different, align program rules to address wireless technology and growing wireless needs, remove one per household rule, and simplify requirements for wireline customers,” said the consumer groups: It should include unlimited data, combat "lowered perceptions of the program" and track enrollment and usage data. Some may benefit from combining all state and federal benefits for a single service, but "the approach adopted must still adhere to the Commission’s fiduciary duties for the California LifeLine program,” they said.

CforAT would support a pilot that lets households get fixed and wireless broadband and voice, it said. The advocate urged the CPUC to require metrics to measure the pilot's success or failure. "Providers have significant incentives to improperly influence and distort the results of the pilot program." The CPUC’s independent Public Advocates Office urged the commission to prioritize a stand-alone wired broadband plan, saying state and federal low-income programs are enough to cover wireless but not wireline broadband prices.