FCC Saves Lifeline for Voice-Only Service for Another Year
November 12, 2021 | by Andrew Regitsky
In a widely expected Order in Docket 11-42 released on November 5th, the FCC paused the scheduled phaseout of Lifeline support for voice-only service until December 31, 2022. It also postponed the scheduled increase in the mobile broadband data capacity minimum service standard for the Lifeline program until that same date. Both were scheduled to occur at the end of this year.
In 2016, the FCC decided that after December 1, 2021, Lifeline support for voice-only services would no longer be necessary. Support had already been phased down from the original amount of $9.25 a month, to $7.25 a month, and currently to $5.25 a month. In that Order, the FCC did take the wise step of providing Lifeline subsidies for broadband service, but only for customers that purchase mixed voice/broadband service.
The industry reaction to the planned phaseout was close to unanimous. Commenters said the Commission should keep Lifeline support available since there continue to be numerous Lifeline customers still utilizing voice-only service. The agency agreed.
On July 2, 2021, the [FCC’s] Bureau released the Marketplace Report, which highlighted the fact that, while Americans are increasingly relying on smartphones for their broadband needs, a persistent minority of Lifeline subscribers opt for voice-only Lifeline plans. Specifically, the Marketplace Report found that approximately 8% of Lifeline subscribers still subscribe to either a voice-only plan or a bundle plan that only meets the voice minimum service standard. The Marketplace Report further analyzed the impact that the phase-out in support for voice-only Lifeline service would have on Lifeline subscribers. In doing so, the Bureau noted that one implication for eliminating Lifeline support for voice-only service would be forcing consumers who only desire voice service to migrate to a potentially more expensive, broadband and voice bundled plan. The Marketplace Report questioned whether “the removal of Lifeline support for voice-only services may push some Lifeline consumers into bundled plans that they are unable to afford.” Further, based on available data, the Marketplace Report concluded that it was unclear if customers who could not afford a bundled plan would be able to find an affordable voice service absent their Lifeline discount. (Docket 11-42, Order released November 5, 2021, at para. 8).
In addition, the lingering pandemic has made Lifeline customers rely on voice service more than in the past.
The pandemic continues to dramatically disrupt many aspects of Americans’ lives, with low-income Americans facing a particularly difficult time, according to one commenter, as “[l]ow-income assistance program intake sites in many areas remain closed or have restricted ability to serve walk-in customers, thus [making] voice Lifeline minutes more critical than ever, particularly where call wait times are long. (Id., at para 9).
While the FCC will continue supporting voice-only services for at least a year, it also acted to ensure Lifeline customers using broadband have the minimum capacity needed. Absent any action, the minimum service standard for mobile broadband data capacity was scheduled to increase from 4.5 GB per month to 18 GB per month, threatening the affordability of Lifeline mobile broadband services. According to the Commission,
New data also indicate that most Lifeline subscribers do not require an increase in the usage allowance. Therefore, we find that pausing the usage standard for one year will best serve the public interest and allow the Commission to gather more relevant data and to consider whether a different long-term approach is warranted. (Id., at para. 19)
Companies impacted by this Order should note that in waiving the phase-down for Lifeline voice-only service. It is waiving section 54.403(a)(2)(iv) of its rules for one year. The agency is also waiving for one year the requirement at section 54.401(b) that Lifeline eligible telecommunications carriers must provide broadband Internet access service meeting the minimum service standards in every Lifeline offering after December 1, 2021