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ACA: FCC's Reform Of Lifeline Program Should Encourage Participation By Wireline Voice And Broadband Providers

Trade Group Also Seeks To Ensure Fiscal Accountability

PITTSBURGH, September 2, 2015 - As the Federal Communications Commission seeks to expand the Lifeline program to provide support for broadband Internet service for eligible low-income users, the American Cable Association called on the agency to adopt reforms to ensure fiscal discipline and encourage broader provider participation by wireline voice and broadband providers.

"While the ACA supports the aim of the Lifeline program to provide essential communications capabilities to low-income consumers, the FCC must -- if it wants to attract cable operators that have not traditionally participated in the program -- adopt reforms that make signing up and serving a Lifeline customer as attractive as any other customer," ACA President and CEO Matthew M. Polka said.

ACA's views were expressed in an Aug. 31 filing with the FCC as the agency seeks to ensure that all Americans, regardless of income, have access to broadband Internet technology to expand their range of educational, employment and commercial opportunities.

As a threshold matter, ACA said the FCC should not expand Lifeline from its voice-centric focus without adopting measures to ensure fiscal responsibility, including a cap on the annual amount of support for the program. Lifeline funding has doubled since 2005, even in the wake of reforms adopted several years ago. Capping the program will respond to ACA's concerns about the growth in the overall budget of the Universal Service Fund (USF) and the large, direct burden it places on consumers, especially those least able to afford it.

Many of ACA's telephone company members are Lifeline participants and have been for many years because of their receipt of subsidies to provide phone service in costly-to-serve areas; yet most find their participation in the program to be increasingly unappealing.  ACA cable operator members, which do not receive subsidies, have chosen not to be involved because they believe the costs of signing up and serving a limited number of Lifeline customers far exceeds the costs of other customers.

To stimulate greater cable operator interest in the Lifeline program as broadband comes online as a funded service, ACA recommended the following steps:

  • Providers Should Be Able To Require Pre-Payment For Services - A provider should be able to charge Lifeline subscribers for recurring and one-time costs on a prepaid basis;
  • Support For Broadband Should Cover Recurring And One-Time Costs - As with voice service, support for broadband service should cover recurring costs for the provision of service but should also provide support to cover one-time costs, such as installation fees and modem rental or purchase;
  • Lifeline Customers Should Be Able To Subscribe To Any Broadband Service Offered, And The FCC Should Not Impose Any Service Requirements - Low-income consumers should be able to subscribe to voice and broadband services offered by wireline providers to all customers; accordingly, because these services are standard market offerings and to provide incentives for wireline providers to participate, the FCC should not establish any minimum (or maximum) service requirements or requirements as to affordability; and
  • Eligibility Verification Should Be Handled By Third Parties And Not Service Providers - Providers should not be responsible for verifying the eligibility of a low-income consumer for participation in the program or for recertifying eligibility; this task should be performed by one or multiple third party verifiers:
  • Lifeline Customers Should Directly Receive Benefits - Support should be transferred directly to eligible low-income consumers, who can then shop among eligible service providers to subscribe to voice and broadband service; and
  • The Eligible Telecommunications Carrier Designation Process Should Be Eliminated Or Streamlined - The FCC should either eliminate the ETC requirement or should streamline the process for becoming a Lifeline ETC.

"The FCC should recognize that half-measures will not suffice in addressing basic problems in the Lifeline program. Major reforms are required, and ACA urges the FCC to undertake them promptly," Polka said.

About the American Cable Association: Based in Pittsburgh, the American Cable Association is a trade organization representing nearly 850 smaller and medium-sized, independent cable companies who provide broadband services for nearly 7 million cable subscribers primarily located in rural and smaller suburban markets across America.  Through active participation in the regulatory and legislative process in Washington, D.C., ACA's members work together to advance the interests of their customers and ensure the future competitiveness and viability of their business.  For more information, visit http://www.americancable.org/

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