New FCC Lifeline Rules: Effective Dates Clarified Multiple Times But Some Discrepancies Remain

Update: The FCC corrected the discrepancies previously noted in our post by publishing corrections in the Federal Register

The Lifeline Modernization Order was published in the Federal Register on May 24, making the effective date of the Order June 23, 2016.  Most of the rule changes, however, cannot take effect until the Office of Management and Budget (OMB) agrees that the edits meet the requirements of the Paperwork Reduction Act.  This includes changes to authorize Lifeline funding for the offering of broadband Internet access services, and the new minimum service requirements for Lifeline-supported voice and broadband services.  The bulk of the edits will not become effective until at least Dec. 1, 2016, or later if publication of OMB approval comes after that date.  A few of the changes will become effective immediately upon publication of OMB approval, others 60 days thereafter.

We provide a handy “Track Changes” version of the FCC’s revised Lifeline rules showing when each of the rule changes, or proposed rule changes, will become effective.  The major rule changes that will become effective June 23 include:

• Imposition of a “soft cap” on overall program spending. New section 54.423 will implement the $2.25 billion soft cap, and requires the FCC’s Wireline Competition Bureau to prepare a report if Lifeline disbursements exceed 90 percent of that level in one year, with an “expectation” that the FCC will act within six months of the report being issued.
• Clarification in section 54.201 that state commissions may not designate Lifeline Broadband providers (54.201(j)), although the states have appealed rule change and that appeal is still pending.

The Order had incorrectly listed the effective date of the changes to the definitional section of the FCC’s Lifeline rules, section 54.400, as the date of the Order’s publication (i.e., June 23).  However, an erratum released last week clarifies that the changes to this section require OMB approval and therefore cannot take effect immediately.  Most of the changes to this section will become effective the later of December 1, 2016 or upon OMB approval of the relevant rule sections.  The addition of broadband Internet access service (“BIAS”) as a definition will occur immediately upon publication in the Federal Register of OMB approval.

The erratum also revises the effective date of section 54.410(f), the annual eligibility recertification process, to the later of Dec. 1, 2016 (rather than Jan. 1, 2017) or OMB approval (although it failed to eliminate all references to January 1).

The erratum was released after discrepancies were identified between the effective dates in the Order and the effective dates in the Federal Register notice, some of which remain.  There are also some discrepancies within the Order itself.  Our annotated version of the rules notes discrepancies and attempts to provide a practical guide to the new rule changes, but it is not definitive nor a substitute for seeking legal advice.  Finally, some of the rules are subject to a pending appeal and multiple petitions for reconsideration, which could alter the final rules in significant ways.  DWT will closely monitor the dates and keep you apprised of any changes.