TracFone Applauds FCC’s Lifeline Modernization Push, Outlines Key Issues That Will Need To Be Addressed To Avoid Pitfalls

MIAMI, Sept. 1, 2015 — TracFone Wireless Inc. (TracFone) submitted comments today to the Federal Communications Commission (FCC) supporting efforts to reform and modernize Lifeline, but also cautioned that “negative unintended consequences easily could result from well-meaning, but misguided or poorly implemented, changes” to the vitally important program. With about 4.4 million qualified low-income households currently enrolled in its SafeLink Wireless® Lifeline program, TracFone is the nation’s leading provider of Lifeline-supported services.

TracFone underscored its key role in Lifeline and close working relationship with the FCC: “Over the past decade, TracFone has been a steadfast FCC partner in ensuring that the Lifeline program fulfills its intended purpose of providing our nation’s most impoverished households with a ‘connectivity safety net’ that can lift them out of the cycle of poverty. The result is a system that has evolved and improved steadily, working well for millions of eligible beneficiaries. TracFone stands ready and willing to work with the Commission to undertake the latest endeavor to modernize and reform the invaluable Lifeline program without harming the existing beneficiaries.”

TracFone proposed two important reforms which would prevent program fraud. First, TracFone renewed its prior recommendation that the FCC prohibit in-person handing out of cell phones on street corners, out of car trunks, in front of government offices and other public locations. Second, TracFone has asked the FCC to forbid incentive-based compensation for agents marketing Lifeline services to consumers.

TracFone noted that imposition of mandatory service standards — especially standards which require low-income households to pay for a portion of their Lifeline service — will make the service unaffordable for many. “When modernizing the Lifeline program, it is imperative for the Commission to preserve the availability and affordability of Lifeline services relied upon by existing low-income customers who use free mobile voice connectivity provided by Lifeline carriers for critical communications needs, such as dialing 9-1-1, setting up job interviews, and contacting health care providers. … Expanding the Lifeline program to cover broadband must therefore be conducted in a responsible manner that fully recognizes the financial realities of such an expansion while taking into consideration the need to preserve the types of voice services that many Lifeline customers need and have come to rely upon.”

TracFone also cautioned that any voucher-like requirement for beneficiaries would be both unnecessary and unduly burdensome on consumers.  “… TracFone is concerned that the benefits of increased portability through a voucher-style distribution mechanism could be greatly outweighed by the burden imposed on Lifeline customers (particularly the disabled, elderly, rural poor, and those without ready access to transportation) due to the need to redeem Lifeline benefits on a monthly basis under such a system, whether online or at a physical store. TracFone believes the goals of increasing consumer choice and reducing incentives for fraud could more easily be served by enhancing the existing National Lifeline Accountability Database (NLAD) and to (1) simplify the process of transferring Lifeline benefits between carriers and (2) allow USAC to assume the responsibilities of a national third party eligibility verifier.”

The TracFone comments indicate that a third-party verification system for program participants could end up being both costly and duplicative. “… TracFone is concerned that the purported benefit of the FCC’s effort to eliminate Lifeline carriers from the process of verifying customer eligibility is insufficient to justify the total cost, complexity, and inefficiency of a national third party verification system. TracFone does not oppose the concept of a national third party eligibility verifier, but how the FCC implements such a system remains a source of concern for TracFone. TracFone urges the Commission to be mindful of wasteful duplication of existing state-run efforts and a delay in the delivery of Lifeline benefits to customers. TracFone also urges the FCC to improve the accuracy of applicant identity verification by adopting additional rules.”

The full text of the TracFone comments to the FCC is available online at http://216.30.191.148/tracfone83115.pdf.

ABOUT TRACFONE

With over 25 million subscribers, TracFone Wireless, Inc. is the largest no-contract cell phone provider in the U.S.  For more information, visit http://www.tracfone.com.

 

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