California LifeLine Program:
2016 Initiatives to Streamline Program

 

Background

The California LifeLine Program is a $480 million a year public purpose program that provides discounted telephone service for eligible low-income households, and is funded through surcharges on intrastate voice services. Customers can combine state and federal subsidies to further discount wireline and wireless telephone service.   

On April 27, 2016 the FCC released its Third Report and Order in the Matter of Lifeline and Link-Up Reform and Modernization that makes significant changes to the federal Lifeline program, which will now subsidize broadband service-only as of 2021. Only the federal government is permitted to surcharge broadband services. 

In September 2016, the Governor signed AB 2570 into law, which mandates the CPUC adopt a "Port Freeze" for the Lifeline program by January 15, 2017. A Port Freeze would require LifeLine customers to maintain service with a carrier for a certain amount of time before transferring service - in order to continue receiving the LifeLine subsidy. AB 2570 suggests that 60 days should be considered as the length of time for the portability freeze. The FCC’s Lifeline program will also introduce a 60 day Port Freeze on voice services starting December 2, 2016.  

On September 22, 2016, Commissioner Sandoval issued a Ruling in Proceeding regarding the resolution of critical issues related to the program’s inclusion of wireless service and the FCC Lifeline Modernization Order. The Ruling requests stakeholder to provide input on the following issues:      

  • How to define “low income” household 
      
  • How to define minimum communications needs for Californians 
      
  • Whether to introduce a Discount Transfer Freeze or “Port Freeze”
      
  • Rules regarding Voice and Data packages or “Bundled Service” 
      
  • Issues related to the FCC’s federal Lifeline Modernization Order 

 

 

ORA Position

ORA recommends aligning the state’s eligibility rules with the new federal rules, and grandfathering existing customers impacted by the new rules for at least two years. The CPUC should eliminate the current $39 service connection reimbursement to wireless providers or otherwise lower it to no more than $4, which is within the range of providers’ service activation cost. The CPUC should not subsidize any devices at this time, and instead should initiate a separate proceeding to fully investigate this issue.  

The CPUC should change its minimum service requirements to include unlimited nationwide voice and text for wireless LifeLine and unlimited nationwide service for landline LifeLine. Broadband should not be included in the CPUC’s minimum service requirements at this time, as the CPUC should first assess whether federal efforts to increase adoption of broadband among low-income customers is sufficient.
The CPUC should use great caution in increasing intrastate surcharge levels to ensure the continuation of the California LifeLine program.
 

See ORA’s:  

October 11, 2016  Comments on the Assigned Commissioner Ruling 

October 19, 2016 Reply Comments  

 

  

CPUC Proceeding

See the CPUC Proceeding docket for a record of the case.   

Visit the docket to subscribe to updates to the proceeding.    


 

Other Resources

California LifeLine Webpage     

CPUC LifeLine Webpage   

Universal Service Administration Company “USAC”  - Federal Lifeline Administrator