FCC Clarifies Lifeline Obligations for High-Cost ETCs

In a brief Order released last Friday, the Wireline Competition Bureau clarified that recipients of high-cost funding were not required to create any standalone Lifeline-specific broadband service offerings.

After the FCC issued the Lifeline Modernization Order in April 2016 there was some ambiguity regarding the obligations of ETCs receiving high-cost support from the federal USF.  Specifically, footnote 133 of that order stated that “ETCs receiving high-cost support are required to offer a Lifeline-supported standalone broadband offering where the ETC is required to offer Lifeline-supported BIAS.”  Many rural carriers interpreted this language to mandate ETCs receiving high-cost USF support to create and offer Lifeline-supported standalone broadband service even in areas where high-cost ETCs only offered broadband bundled with other services.  Therefore, NTCA and WTA, both of which represent rural providers, filed a petition for temporary waiver of the requirement on October 24, 2016.

The Bureau’s Order clarified that high-cost ETCs must allow eligible consumers to apply the Lifeline discount to standalone broadband service only to the extent that the high-cost ETC already offers standalone broadband service.  It also stated that it would not have effectuated such a radical regulatory and policy shift without further explanation and justification.