Georgia PSC Rescinds Minimum Lifeline Rate Rule; Oklahoma Commission Proposes One

On August 5, the Georgia PSC adopted an order rescinding its rule that would have required Lifeline ETCs to either bill and collect a $5 minimum monthly Lifeline rate or offer a Lifeline plan that includes 500 monthly minutes.   The rule was adopted last October but never actually took effect, because it was immediately challenged in a Georgia federal district court by CTIA on the ground that such a rule violates the federal Communications Act’s prohibition of state regulation of wireless phone rates.  Last December the district court issued a preliminary injunction against the rule.

The very same day, however, yet another state (Oklahoma) initiated a rulemaking proposing a $3 minimum monthly Lifeline rate.  As described by the Oklahoma Corporation Commission (“OCC”), the rule would “require that wireless Lifeline customers pay a minimum of $3.00 per month for Lifeline service, to encourage the reduction of waste, fraud and abuse in the Lifeline program.”  The new Oklahoma rulemaking also proposes, among other things, to assess a percentage of prepaid wireless revenues for contribution to the Oklahoma state USF fund; require Lifeline ETCs to retain Lifeline subscribers’ eligibility documentation for 90 days; prohibit door-to-door solicitation for Lifeline services; and prohibit cash incentives for customers signing up at Lifeline mobile marketing events.  We believe that the minimum rate proposal would violate federal law just as the Georgia rule did, and that the eligibility documentation retention proposal probably violates FCC rules.

Four technical conferences (basically hearings conducted by OCC staff) will be convened on these rulemaking proposals, with the first scheduled on August 12.  Each technical conference will be followed by an opportunity for public comments on the proposals, with the first comments due on August 25.  Final rules could be adopted by the OCC on January 25, 2015.