Tag Archives: lifeline

U.S. house democrats propose $50 monthly broadband subsidy for low income homes, AT&T and Comcast will be happy to take it

by Steve Blum • , , , ,

With covid–19 pandemic lockdowns continuing in most states, albeit with gradual loosening underway, democrats in the house of representatives in Washington, D.C. want to pump $5.5 billion into broadband access subsidies to ensure that people and institutions can remain connected to the online resources they will be depending on, likely for months to come. It’s one of the opening shots in the negotiations over what might be a second stimulus bill in the trillion dollar range to keep the U.S. economy afloat.

It’s a big leap from the $375 million for broadband that was included in the first, $2 trillion pandemic stimulus bill approved by congress in March. But it’s also broadband funding of a different sort. In March, the money went to supply-side uses, such as $100 million for broadband infrastructure via the federal agriculture department’s ReConnect program. This time around, house democrats want the money to feed the demand side – $4 billion is earmarked to subsidise monthly Internet bills for low income families, up to $50 per month per household. The remaining $1.5 billion would go to school and libraries to pay for mobile network-enabled WiFi devices and service, and other expenses necessary for keeping kids connected to school lessons.

Ultimately, that money will hit the bottom lines of major, monopoly model incumbent Internet service providers like AT&T, Comcast, Charter and the rest. If the bill sets a de facto base price of $50 per month for Internet service, then that’s what those companies will charge. It’s a lot easier to up sell customers from what are, in effect, low income loss leader promotions such as the $10 per month Comcast Internet Essentials or Access from AT&T packages, and move them into expensive long term contracts when someone else is picking up the tab. But $4 billion only lasts so long. When the subsidies run out, those households will be stuck with higher bills for a long time.

The odds of this latest proposal making it into law as is are pretty slim, though. What house democrats seem to doing is setting up for negotiations with U.S. senate republicans and the white house. The D.C. beltway sausage machine is about to crank into high gear.

Sprint takes half billion dollar revenue hit after ending improper California, federal subsidies

by Steve Blum • , , , ,

Sprint booth mwc la 2019 22oct2019  Klovia 2 att net s conflicted copy 2019 11 04

Losing California and federal subsidies it took for inactive Lifeline accounts smacked Sprint hard in the third quarter of 2019. The company released financial results yesterday, reporting that its third quarter revenue dropped to $5.0 billion, compared to $5.3 billion in the second quarter, and $5.4 billion in the third quarter last year.

Cutting off, and perhaps reimbursing, the money it was collecting for 885,000 Lifeline customers nationwide – and an estimated 145,000 in California – who were no longer using the service was number one of two reasons for the slide, according to a statement released by chief financial officer Andrew Davies

We recently notified the FCC that we had claimed monthly subsidies for serving subscribers even though these subscribers may not have met usage requirements under Sprint’s usage policy for the Lifeline program. We are committed to reimbursing federal and state governments for any subsidy payments that were collected incorrectly. While not material to overall results, net operating revenue, wireless service revenue, adjusted EBITDA*, operating income, and net loss in the quarter were all negatively impacted by this issue.

Wireless service revenue of $5.0 billion in the quarter was down $453 million year over year, mostly due to both lower Lifeline revenue as a result of the associated usage issue discussed above and the continued amortization of prepaid contract balances as a result of adopting the new revenue standard last year.

The Federal Communications Commission initially pegged Sprint’s liability at “tens of millions”, but that was just starters. It didn’t include co-subsidies from state programs or fines. One investment analyst group estimates the total liability in “the low billions of dollars”.

So far Sprint’s, um, oops hasn’t surfaced in the California Public Utilities Commission’s review of the pending Sprint/T-Mobile merger, although the Communications Workers of America tried unsuccessfully to make it an issue at the FCC.

Sprint took megabuck subsidies for inactive lifeline customers, federally and in California

by Steve Blum • , , , ,

Sprint mwca 2018

Sprint could be collecting payments from California’s broadband and telephone lifeline subsidy program for hundreds of thousands of inactive accounts. A Federal Communications Commission press release accuses Sprint of taking “tens of millions of dollars” for 885,000 federally subsidised customers who weren’t using the service anymore. That represents 30% of Sprint’s national lifeline customer base, says the FCC.

Sprint is the 500 pound gorilla of the California Public Utilities Commission’s lifeline program, which supplements the $9.25 monthly federal subsidy with up to $15 per month. According to a brief submitted by the CPUC’s public advocates office during the ongoing review of Sprint’s proposed merger with T-Mobile…

Sprint, through its Virgin Mobile brand, is the only [facilities-based mobile network operator] that participates in the California LifeLine program. Under the trade name of “Assurance Wireless brought to you by Virgin Mobile,” Virgin Mobile serves roughly 482,000 LifeLine wireless customers in California, over 200,000 more customers than the next largest LifeLine wireless carrier, and more than all other LifeLine wireline carriers combined.

If the FCC’s 30% “inactive” rate applies equally to Sprint’s California lifeline base, then the CPUC gave the company subsidies for 145,000 non-existent customers. There isn’t enough information available yet to figure out how much money that represents, but on a back of the envelope basis, 145,000 inactive accounts subsidised at $15 each comes out to about $2.2 million per month. Even given that every payment wasn’t the $15 max, it doesn’t take too many months for California’s outlay to land in the FCC’s “tens of millions of dollars” ballpark too.

The Communications Workers of America union is one of the leading opponents of the T-Mobile/Sprint merger, in California and federally, and has already asked the FCC to put everything on hold “until [Sprint’s corporate] character issue is investigated and resolved”. It’s a fair bet that T-Mobile and Sprint will have to answer for the false billing – Sprint is calling it an “error” dating back to 2016 – as they try to gain CPUC approval for their merger. A hearing to decide next steps in the case is scheduled at the CPUC on 10 October 2019.

Dumb reasons don’t make mobile lifeline plans smart

by Steve Blum • , ,

Sorry, only one per household.

Lifeline broadband and telephone subsidies can be used to buy either mobile or wireline service. But that could end. Nineteen republican members of the U.S. house of representatives signed onto a draft bill that would scrap that option.

The lifeline program run by the Federal Communications Commission is routinely slammed by republicans – including those on the FCC itself – as a swamp of fraud and abuse, with wireless options frequently singled out as particularly problematic. On the other hand, democrats, on and off the commission, rush to its defence waving the battle flag of social justice just as quickly and reflexively.

The fraud and abuse mantra is chanted by republicans whenever income-based government subsidies are on the table, and need not be given any particular weight regarding telecoms lifeline programs.

The social justice argument cuts both ways, though. Despite the nonsense offered by telecoms lobbyists – and ignorantly parroted by members of both the FCC and the California Public Utilities Commission – mobile service is not a substitute for wireline broadband, now or in the foreseeable future.

For proof, look no further than the lifeline program rules, which allow far lower minimum speeds and stingier (and potentially very costly) data caps for subsidised mobile service. If the aim is social justice, mobile companies completely miss the target. The income gap between mobile-only and wireline-enabled homes is growing in California, and the lifeline program is perversely designed to make it worse.

The problem is compounded by the fact that lifeline subsidies are given out on a per-household basis. As a practical matter, that means that one person – typically an adult – gets the cell phone and everyone else, including kids vainly trying to do homework, have to beg or borrow Internet access as they can.

Hyped up claims of con jobs and complicit bureaucrats are the wrong reasons to clamp down on mobile lifeline subsidies. But it’s the right idea.

FCC concedes broadband lifeline decisions to state regulators

by Steve Blum • , , ,

Let the professionals do it.

Companies that want to offer subsidised broadband service to low income households will have to seek approval from state regulators, and not the Federal Communications Commission. That will be the result of a decision made public yesterday by FCC chair Ajit Pai. In effect, he’s conceding an appeals court challenge to the broadband lifeline program approved by the FCC in 2016 and, instead, will have the current commission – a very different beast from a year ago – rework it.

The key issue is whether the FCC or individual states will determine whether a given company can participate in the program. In the past, it’s been up to state regulators, like the California Public Utilities Commission, to make those decisions, but the FCC’s order said it would run the certification process on a national basis, but twelve states – California not among them – challenged that preemption in a federal appeals court. As the legal process continued, the FCC started taking applications from would-be lifeline providers, and approved nine in the final weeks of the Obama administration. Those were quickly rescinded once Pai took over chairman, and now he’s telling FCC staff to toss out the 36 applications still pending (h/t to Jon Brodkin at Ars Technica for the pointer).

There is a lot wrong with the FCC lifeline program as originally designed, with low standards for broadband service overall and abysmal minimums for service provided over mobile networks at the top of the list. It was controversial at the time, with a last minute attempt at bipartisan compromise between one democrat – Mignon Clyburn – and the two republicans – Pai and Michael O’Rielly – blown away by then-chair Tom Wheeler’s Beltway politicking. All three are still on the commission – for now, they are the commission – so it will be interesting to see if they can regain their former collegiality, at least in regards lifeline service.

Mobile data lifeline can’t hold its own weight

by Steve Blum • , , , ,

You need a thick line, not a slim thread.

Verizon is kicking heavy bandwidth users off of its unlimited mobile data plans. That begs the question of what exactly unlimited means, but that’s for another time. The justification Verizon offers, though, shows why the Federal Communications Commission’s plan to include grossly inferior mobile service in its broadband lifeline program is nonsense. As reported by Fierce Wireless, Verizon said it can’t handle the load

“Because our network is a shared resource and we need to ensure all customers have a great mobile experience with Verizon, we are notifying a very small group of customers on unlimited plans who use an extraordinary amount of data that they must move to one of the new Verizon Plans by August 31, 2016. These users are using data amounts well in excess of our largest plan size (100 GB),” a Verizon spokeswoman wrote. “While the Verizon Plan at 100 GB is designed to be shared across multiple users, each line receiving notification to move to the new Verizon Plan is using well in excess of that on a single device.”

The FCC’s mobile broadband lifeline cap is 500 megabytes – half a gigabyte – as compared to the 150 GB cap it allows customers taking wireline service. The mobile cap will rise to 2 GB over a couple of years, but that’s still far below any reasonable minimum for a family’s monthly usage. Assuming the entire family actually gets to share the single phone the program allows per household.

What Verizon’s statement tells us is 1. very few customers use mobile bandwidth at the same level most of us consume wireline service, and 2. if mobile lifeline customers did try to use it for everyday purposes – say, homework, the FCC’s marquee example – they would quickly rack up huge excess data charges. Its plans for that kind of shared use have data caps in the same ball park as wireline service, albeit at many times the price.

Mobile lifeline fraud will only get worse

by Steve Blum • , , , ,

No carrier left behind.

An FCC commissioner wants Californian regulators, along with their counterparts in Oregon, Vermont and Texas, to answer questions about how eligibility for lifeline telephone service subsidies is managed. All four states have their own process for determining whether a subsidised lifeline customer meets income eligibility standards and verifying that any given household only receives one subsidy.

Republican commissioner Ajit Pai sent largely identical letters to the heads of the four public utilities commissions, including California Public Utilities Commission president Michael Picker, asking, among other things how they “determine whether the one-per-household rule is being enforced?”

In his letter – which largely tracks with earlier ones sent to the company that handles verifications for the other 46 states – Pai points to “waste, fraud, and abuse that has riddled the Universal Service Fund’s Lifeline program since wireless resellers began participating in this program” and claims that 5.9 million subsidised wireless phones were given out using poorly supervised eligibility overrides, at an annual cost of $650 million.

How many of those overrides met the strict standard of the rules is an open question. But regardless, it points to a disconnect between the FCC’s one-subsidy-per-household rule and the realities of mobile service. Does anyone at the FCC – or the CPUC – really think that a mobile lifeline customer will leave his cellphone hanging on the wall, so the whole family can use it?

That’s an increasingly urgent question as the FCC implements its plan to include broadband in subsidised lifeline service. Mobile carriers are eligible for subsidies too but, unlike with voice service, have dramatically lower standards to meet – 500 megabytes of data per month at “3G” speeds (whatever that means), versus 150 gigabytes at 10 Mbps down/1 Mbps up for wireline providers.

The marquee goal of the broadband lifeline program is to make it possible for students to do their homework. Slow and often spotty service capped at 500 megabytes a month won’t cut it for one kid, let alone a whole family, even assuming the phone is around when it’s needed or isn’t being used to make a voice call. Whatever the actual level of fraud, the FCC’s poorly provisioned broadband lifeline program will only increase the pressure to illegally double and triple up on subscriptions.

Does FCC broadband lifeline program make the grade for homework?

by Steve Blum • , , ,

3G gets an F for homework.

The Federal Communication Commission’s new broadband lifeline program is intended as a means of closing the digital divide between affluent and low income households in the U.S. There’s sufficient consensus around that goal that a bipartisan compromise was nearly worked out between commissioners. But in the end, the vote was 3 to 2 on strict party lines.

There are many points of disagreement between democrat and republican commissioners, but one that sticks out is whether the program standards – 10 Mbps download and 1 Mbps upload for wireline (and fixed wireless) service and a vague “3G” reference for mobile service – will do any good. Jessica Rosenworcel, a democrat, thinks small improvements will matter

Today’s decision includes steps designed to help close the Homework Gap. By incorporating broadband into the Lifeline program, we open the doors of digital opportunity. This simple change can help bring more broadband to low-income households with school-aged children. But significantly, we do not stop here. Our decision also modernizes Lifeline by making sure that the devices used for Lifeline broadband services are able to access Wi-Fi signals and that these devices can be turned into Wi-Fi hotspots. For a student with a computer but no way to connect at home, a hotspot can be the difference between keeping up in class and falling behind. It can be the difference between being a digital consumer and becoming a digital creator. It can help put more students on the pathway to science, technology, engineering, and math—a road that suffers today from an unacceptable lack of diversity. So it may seem small—but giving more students the tools to do digital age homework—can yield big results.

On the other hand, republican Ajit Pai believes the program will create a permanent digital underclass

When it comes to actually delivering for America’s low-income families and students, the Commission majority takes a far different tack. 10 Mbps fixed broadband is deemed sufficient for a poor family’s home. 3G mobile broadband—service so slow the Commission didn’t even bother to measure it in the 2016 Broadband Progress Report—is all the impoverished need get. The Order goes out of its way to give Lifeline subscribers the opportunity to buy hotspot-enabled smartphones (for all the good that will do them over a 3G network). But it doesn’t do a thing to make sure that Lifeline subscribers have the option to purchase the 25 Mbps fixed and 4G LTE mobile broadband that many other Americans take for granted—and that the majority happily lectured us last year was a digital floor…For all the kerfuffle about fast lanes, the FCC has decreed that Lifeline subscribers will be stuck in the slow lane.

Rosenworcel is correct to the extent that properly provisioned 10 Mbps down/1 Mbps up wireline service with WiFi capabilities will meet the homework needs of most students. But Pai is right that the standard for mobile service all but guarantees no homework will get done.

Broadband lifeline program unjustly slow but has room to improve

by Steve Blum • , , ,

You’ll have to wait and see what next year’s model looks like.

There’s good news and bad news in the full text of the Federal Communications Commission’s lifeline subsidy program for broadband service, which was released yesterday. The bad news is that previous summaries were correct about the low performance standards for subsidised broadband:

  • 10 Mbps download and 1 Mbps upload speeds for fixed service (wireline or wireless), except where existing networks can’t support that level. Then the download standard slips to 4 Mbps.
  • Mobile broadband only has to deliver “3G” service levels, without defining what that might be.
  • Monthly caps are set at 150 GB for fixed service and 500 MB for mobile.

The good news is that speed and usage standards for fixed service will be reviewed every year using quantitative and reasonably objective benchmarks. Fixed service speed levels will be calculated using the subscriber data that ISPs are required to submit to the FCC, with the standard “based on the service to which a ‘substantial majority’ of consumers subscribe”. Substantial majority is described as 70% of consumers. There’s more than a few weasel words in the upgrade criteria, including an escape hatch if FCC staff miss deadlines, but there’s at least a defined process and schedule.

Fixed service data caps reviews will follow the process used in the Connect America Fund subsidy program for service providers. That’s benchmarked against a regular assessment of urban data consumption.

Mobile speed and data caps won’t be as rigorously reviewed. FCC staff will only have to “consider updating the mobile broadband speed standard” annually, with the suggestion that the same kind of data be used as with the fixed service review. Mobile data caps will ramp up to 2 GB by the end of 2018, with further increases more or less based on the usage level of 70% of mobile subscribers.

What started out as a 150-page broadband lifeline rulebook has grown to more than 200 pages. It allows ample room for mischief by industry lobbyists, but it also offers possible ways to counter that kind of deep pocketed political influence at the FCC as the years go on.

Something about broadband is a laughing matter

by Steve Blum • , , ,

The good stuff is no joke.

It was hard to tell which post on the Google Fiber blog yesterday was the April Fool’s joke, and which was the sober look at the world ahead. On the one hand, a Google engineer, Pál Takácsi, reflected on the need to boost broadband speeds by a billion times

While gigabit speeds are fast, we have come across an application where 1,000 Mbps is actually quite slow. Terribly slow. Research organizations that wish to remain anonymous have been working on an application that would enable the teleportation of a 160 pound person a distance of 60 miles in 1.2 seconds. This application requires a tremendous amount of bandwidth, because a 160-pound person represents a vast amount of data.

I believe it. It took a whole starship worth of memory to store Scotty in a pattern buffer for 100 years, before being rescued by that bald guy’s Enterprise. Try doing that on your DSL connection.

On the other hand, another post lavished praise on the FCC’s new broadband lifeline program

Yesterday, the FCC adopted its Lifeline modernization order, an essential move to encouraging broadband adoption nationwide. Until now, Lifeline has provided funds to enable providers to deliver voice service to consumers at affordable rates…For the first time, low-income consumers can apply the $9.25 Lifeline subsidy to lower the cost of qualifying broadband plans.

Except no one at Google should have seen the actual order, which is now reported to have grown to 200 pages, up from 150 earlier last month. The FCC put out a happy, happy, joy, joy press release, but so far has kept the details secret.

Let’s save the celebration until we’ve read the fine print. Lifeline subsidies for broadband service are a fine thing, but doing it poorly can do more harm than good. As a wise man once said, fool me once shame on you, fool me twice shame on me.