New Lifeline Rules Take Effect December 2 and Draft Plan Released for National Verifier

The Lifeline program, created more than 30 years ago to make telephone service more affordable for low-income families, has undergone its most radical change to date.  Effective last Friday, Lifeline has been expanded to cover broadband (including the broadband component of bundles containing both voice and broadband service).  It is the last of four USF programs to support broadband service. The change comes with some caveats.  First, Lifeline providers must meet minimum service standards for both voice and broadband service, which will be phased in between now and 2021.  Providers seeking forbearance (a waiver) of the broadband requirement may now begin notifying the FCC.  In addition, although currently voice is a Lifeline-supported service, the voice subsidy is scheduled to be phased out in stages beginning in 2019 so as to be eliminated completely in 2021.

Another asterisk on the modernized Lifeline program is the revised benefit port freeze rule.  Under most circumstances, a Lifeline customer who elects to apply his or her discount to broadband service (either standalone or bundled) will not be allowed to transfer the discount to another service provider for 12 months.  However, a customer who chooses to apply the discount to his or her voice service will be able to transfer the benefit to a new provider after only a 60-day period.  There are a few exceptions to this rule.  Most notably, a customer who has both voice and broadband service with the same Lifeline provider (generally as part of a bundle) may elect to switch the discount to the voice component, assuming it meets the minimum service requirements. That will immediately halt the 12 month freeze, but will trigger a new 60 day freeze.  In addition, customers are exempt from the port freeze rules if:

• they move;
• the service provider discontinues service;
• the customer incurs late fees that exceeds the monthly phone bill; or
• the service provider violates the Lifeline program rules.

Also effective today are changes to the eligibility criteria.  Specifically, Lifeline customers may only qualify for the federal discount if they meet the federal criteria; state specific criteria will no longer be considered except in certain states that have obtained a temporary waiver.  The federal program has also been revised to eliminate the Low Income Home Energy Assistance Program (LIHEAP), the National School Lunch Program’s free lunch program (NSLP), and Temporary Assistance for Needy Families (TANF) as eligibility criteria and include Veterans Pension or Survivors Pension Benefit.

Additional rules effective last Friday include:

• texting is now considered usage for Lifeline providers that do not assess fees to their customers;
• the non-usage period has been reduced from 60 days to 30 days (only applies to carriers who do not assess fees to Lifeline customers); and
• the phase-in of the requirement that wireless phones be hotspot enabled.

Lastly, USAC has been directed to move forward with a National Verifier which is intended to “reduce the administrative burden and cost to carriers, while at the same time facilitating consumer choice and ease of enrollment” and to establish procedures to enable “aggregation projects” which would allow community based organizations and housing associations to participate in the Lifeline program.  USAC has published a draft plan on its website and encourages interested parties to submit comments by December 30, 2016.

DWT will continue to provide details as additional changes mandated in the 2016 Lifeline Modernization Order take effect over the next several years.