Low income home broadband subsidies proposed by CPUC, but cable and telco cooperation needed

by Steve Blum • , , , ,

Tanimura and antle housing 13jul2016

Wireline broadband service for low income Californians will be subsidised by the state’s telephone “lifeline” program, if a draft decision released last week is approved by the California Public Utilities Commission. The plan depends on California’s ability to “exercise its bulk purchasing power to secure volume discounts for participants”, rather than on pure regulatory muscle.

Qualifying households would pay a discounted rate for broadband and phone service. Current voice-only wireline lifeline service typically runs between $7 and $11 per month. Mobile carriers also participate in the lifeline program, but the rules are different – service is generally free to qualifying households and some level of broadband service is usually included.

The draft plan would add California’s monthly lifeline phone subsidy of $14.85 a month to the $9.25 provided by the Federal Communications Commission’s program for bundles of wireline broadband and phone service, which may be delivered via voice over Internet protocol (VoIP) technology. Voice-only service would still be offered, but the monthly subsidy would be $2 less.

The big question is: what will telephone and cable companies do with it?

Comcast, likely the largest Internet service provider in California, doesn’t participate at all in the existing phone-only lifeline program and isn’t required to do so. Neither are Charter Communications and Cox Communications, although they do participate. So do AT&T, Frontier Communications and other incumbent telcos, which are required to offer lifeline service, and competitive telephone companies, which can choose to participate or not.

But.

Big telecoms companies reflexively fight any attempt by the CPUC to lay down requirements on services that move via Internet technology. AT&T was recently fine $3.5 million for blowing off CPUC rules regarding next generation 911 service and mobile carriers are challenging disaster readiness obligations, for example. The success of this broadband lifeline initiative depends on cooperation from ISPs that often prefer scorched earth resistance.

The minimum wireline broadband speed would be 25 Mbps download and 3 Mbps upload, with a monthly data cap of 1 terabyte. Unless the ISP involved doesn’t have the capability of delivering that speed level to a home, in which case best effort would be good enough, down to a hard minimum of 4 Mbps down/1 Mbps up.

That’s the “minimum service standard” set by the Federal Communications Commission, effective 1 December 2020. The FCC began setting lifeline standards for wireline broadband in 2016 at 10 Mbps down/1 Mbps up and has increased it every year based on typical usage and subscription levels in the U.S.

The draft decision would also end support for deeply discounted legacy voice packages that limit the number of calls that can be made each month and allow mobile carriers to offer optional “bolt on” upgrades to free plans that would be paid for by the customer. If a customer buys an upgraded plan, then can’t pay for it, they still get basic service. The mobile carrier can remove the bolt ons, but still has to provide the minimum free service, which is unlimited talk and text, plus 4GB to 6 GB of monthly data at the FCC’s current ill defined speed standard of “3G mobile technology”.

The CPUC is accepting comments on the draft decision, with a vote possible in October.