CUB Appointed to New Advisory Committee, Lifeline on Life Support

Editor’s Note: One August 10, 2018, the US Appeals Court for the District of Columbia issued a stay order on the FCC’s plan to restrict the parameters of the Lifeline program, starting with Tribal lands, described in this article. Watch for continuing updates on the CUB blog as this case unfolds.

Oregon Governor Kate Brown recently appointed CUB’s Outreach Manager, Samuel Pastrick, to represent CUB on a newly formed Oregon Telephone Assistance Program (OTAP) Advisory Committee. Legislation signed in 2017 created this particular advisory committee.

The overarching goal of the OTAP Advisory Committee is to increase participation in OTAP, Oregon’s telephone and Internet billing assistance program for eligible low-income households. OTAP operates alongside the federal Lifeline program.

The purpose of this blog is trifold: explain Lifeline and OTAP; review 2017 legislative history in relation to CUB’s appointment; and provide timely updates regarding the Federal Communications Commission (FCC) November 2017 decision to dismantle Lifeline.

Lifeline and OTAP
In 1985, Congress created the Lifeline program and instructed the FCC to help low-income home telephone customers pay for service. The FCC has enacted significant program reforms over the years:

1. In 2008, the FCC expanded Lifeline to include mobile voice customers;
2. In 2012, the FCC created a National Lifeline Accountability Database (NLAD); and
3. In 2016, the FCC expanded Lifeline once again to include eligibility for both fixed and mobile broadband customers, established a National Verifier program, and set a course to eventually phase out benefits for fixed and mobile voice customers.

In 1987, the Oregon Legislature created the Residential Service Protection Fund (RSPF) and directed the Public Utility Commission (PUC) to administer that fund to cover the cost of three assistance programs:

1. The Oregon Telephone Assistance Program (OTAP) delivers wireless and landline phone billing assistance to eligible low-income households;
2. The Oregon Telecommunications Relay Service provides phone connections for the deaf, deaf-blind, speech and/or hearing disabled; and
3. The Telecommunication Devices Access Program offers adaptive telephones and tablets, and speech generating devices to persons in need.

The current federal subsidy for eligible Lifeline participants is $25 per month on tribal lands and $9.25 per month in non-tribal areas. Phone companies collect a federal universal service charge on customer bills. The Universal Service Administration Company (USAC) administers the resulting fund, which pays for Lifeline.

The current Oregon subsidy for eligible OTAP participants is $3.50 per month. Landline and mobile phone customers are currently charged $0.07 to maintain the RSPF, which pays for OTAP.

While eligibility verification processes differ by state, all programs must adhere to current federal guidelines: Participants must be at or below 135 percent of the federal poverty line, or participate in one or more assistance programs including but not limited to Medicaid, Veterans Pension or Survivors Benefit programs, or Bureau of Indian Affairs General Assistance.

The application process begins with prospective Lifeline recipients applying to the eligible service provider of their choice. The company takes the first step to verify income eligibility and, depending on the state, either records the recipient in the NLAD or coordinates with the state entity with oversight over program eligibility verification. Oregonians jointly apply to Lifeline and OTAP, as they are complementary programs with a combined application and eligibility determination process. The PUC manages a Lifeline/OTAP database, and cross-references household data from the Oregon Department of Housing and Community Services. California, Vermont, and Texas also administer independent verification systems.

Once the PUC (or the NLAD in other states) confirms household identity, and that the household does not already receive a benefit, the provider can offer the federal $9.75 subsidy plus any state compliment. Oregon offers $11.75 per month ($9.25/Lifeline plus $3.50/OTAP) for wireless and landline telephone service, but cannot offer the $3.50 per month benefit for Internet service without a legislative fix. CUB will support such a fix in 2019.

The final step is that USAC reimburses companies for the federal portion, paid for from the federal Universal Service Fund, and the PUC reimburses companies for the Oregon-specific portion, paid for from the RSPF.

2017 legislative review in relation to CUB’s appointment
The Oregon Legislature passed HB 3268 in 2017, creating the OTAP Advisory Committee. CUB opposed early versions of HB 3268 because they would have precluded the PUC’s administration over Lifeline/OTAP and the RSPF. However, CUB was always supportive of the bill’s underlying goal to increase Lifeline/OTAP participation in Oregon. Shared interest among key stakeholders for this goal resulted in an amended bill to create the OTAP Advisory Committee. CUB has a designated seat on the Committee.

Update on the FCC November 2017 decision to dismantle Lifeline
Unfortunately, the creation of the OTAP Advisory Committee comes at a time when the Trump FCC has undertaken jarring steps to reduce the overall impact and modify the underlying mission of Lifeline. This damaging policy shift has already begun on tribal lands.

The backstory is that soon after assuming the position of FCC Chair in early 2017, Ajit Pai (known for his anti-consumer work as the principal architect of the FCC’s net neutrality repeal and role in eroding consumer privacy protections) began drafting plans to hamstring Lifeline. By October, the FCC released those plans. Chief among these is to bar “non-facilities based providers” aka “service resellers” (smaller companies who lease network capacity from much larger, national carriers such as AT&T or Verizon) from participating in the program. Approximately two thirds of current Lifeline recipients, on both tribal and non-tribal lands, receive their phone or Internet service from service resellers.

In response, CUB and hundreds of other consumer advocates promptly filed opposition comments. Small wireless carriers (service resellers) and tribal groups banded together to both sue the FCC and file a petition for the FCC to put a stay on their decision. Even traditional supporters of Pai and recent FCC policy support Lifeline in its current form.

In early July, the FCC denied the appeal, sticking with their November decision, and reducing the eligible recipient pool on tribal lands by two-thirds. Even worse, the FCC will soon eliminate subsidies altogether for urban tribal residents. Barring an unlikely shift in policy, these changes will take effect sometime this fall and likely spread to non-tribal areas thereafter.

Given this trend, the formation of the OTAP Advisory Committee is opportune. Oregon is uniquely poised to not only maintain, but also rethink and possibly expand OTAP if the FCC eliminates Lifeline altogether. CUB’s seat on the committee is incredibly important as the lone consumer advocate.

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