john j. heitmann by ecfs

John J. Heitmann

Kelley Drye & Warren LLP Washington Harbour, Suite 400 3050 K Street, NW Washington, DC 20007

Tel: (202) 342-8544 Fax: (202) 342-8451 [email protected]

November 3, 2020

BY ECFS Marlene Dortch, Secretary Federal Communications Commission 45 L Street NE Washington, DC 20554

Re: National Lifeline Association Notice of Oral Ex Parte Presentation, WC Docket Nos. 17-287, 11-42, 09-197, 10-90

Dear Ms. Dortch:

On Monday, November 2, 2020, John Heitmann and Joshua Guyan of Kelley Drye & Warren LLP spoke on behalf of the National Lifeline Association (NaLA) by phone with Allison Baker, Economic Advisor to Chairman Ajit Pai and Trent Harkrader from the Wireline Competition Bureau. We discussed NaLA’s positions1 on the Public Notice setting the December 1, 2020 mobile broadband minimum service standards (MSS) at 11.75 GB per month,2 the Chairman’s press release about a draft order circulated regarding the Lifeline mobile broadband MSS to be set at 4.5 GB per month3 and NaLA’s Petition for Waiver of the Lifeline Mobile Broadband Minimum Service Standard and Voice Support Phase-Down requesting that the Commission waive the Lifeline mobile broadband MSS increase and voice support

1 See, e.g., National Lifeline Association Notice of Oral Ex Parte Presentation, WC Docket Nos. 17-287, 11-42, 09-197, 10-90 (Oct. 19, 2020); National Lifeline Association Notice of Oral Ex Parte Presentation, WC Docket Nos. 17-287, 11-42, 09-197, 10-90 (Oct. 8, 2020); National Lifeline Association Notice of Oral Ex Parte Presentation, WC Docket Nos. 17-287, 11-42, 09-197, 10-90 (Sept. 21, 2020); National Lifeline Association Notice of Oral Ex Parte Presentation, WC Docket Nos. 17-287, 11-42, 09-197, 10-90 (Aug. 24, 2020) (NaLA August 24 Ex Parte); National Lifeline Association Written Ex Parte Presentation, WC Docket Nos. 17-287, 11-42, 09-197, 10-90 (Aug. 17, 2020); National Lifeline Association Notice of Oral Ex Parte Presentation, WC Docket Nos. 17-287, 11-42, 09-197, 10-90 (Aug. 6, 2020) (NaLA August 6 Ex Parte); National Lifeline Association Notice of Oral Ex Parte Presentation, WC Docket Nos. 17-287, 11-42, 09-197, 10-90 (Aug. 5, 2020); National Lifeline Association Notice of Oral Ex Parte Presentation, WC Docket Nos. 17-287, 11-42, 09-197, 10-90 (Aug. 3, 2020). 2 See Wireline Competition Bureau Announces Updated Lifeline Minimum Service Standards and Indexed Budget Amount, WC Docket No. 11-42, Public Notice, DA 20-820 (July 31, 2020). 3 News Release, “FCC Chairman Pai Circulates Order to Ensure Predictable Increases in Minimum Standard for Lifeline Mobile Broadband Service” (July 30, 2020) (MSS Press Release).

Marlene Dortch November 3, 2020

KELLEY DRYE & WARREN LLP 2

phase-down scheduled to take effect on December 1, 2020.4

The Chairman’s Withdrawn 4.5 GB MSS Proposal

Ms. Baker and Mr. Harkrader confirmed our understanding that the draft order circulated regarding the Lifeline mobile broadband MSS to be set at 4.5 GB per month was withdrawn from circulation last week, which we understand was because a majority of commissioners opposed it and were unwilling to vote for it.

Mr. Harkrader asserted that the draft order would have provided “certainty” and “fixed” the mobile broadband MSS problem. We respectfully disagreed noting that not a single filing was made in support of that draft order. This was because a mobile wireless service including 4.5 GB mobile broadband MSS would cost carriers more to provide than the $9.25 subsidy and would result in the replacement of “free” Lifeline service offers with plans that require co-pays. We reminded Ms. Baker and Mr. Harkrader of evidence on record regarding the inability of Lifeline subscribers to pay a co-pay because they are largely unbanked, unemployed and are the neediest of all Americans battling poverty, especially in the midst of the COVID-19 health and unemployment crisis.5

We asserted that the only thing certain about the 4.5 GB MSS proposal was that it would break rather than fix things for Lifeline subscribers who, if the proposal were adopted, would have less access to broadband because they could not afford Lifeline broadband service plans that include that amount of data, which no record evidence suggests would be affordable.

The “Pause at 3 GB and Study” Alternative Which Everyone Else Supports

We asked whether the Chairman’s office would circulate for a vote the NaLA Petition for Waiver to retain the mobile broadband MSS at 3 GB and protect Lifeline service for millions of Lifeline subscribers during the COVID-19 health and economic crisis. Ms. Baker and Mr. Harkrader were unable to answer the question other than to say that had no information to provide on that point.

We asserted that, if the Chairman’s office would put the NaLA Petition for Waiver up for a vote, it would almost certainly attract at least three affirmative votes and would preserve access to broadband by adopting the “pause and study” approach called for by every stakeholder to file on the issue to date. The exhibit included herein lists all of the Lifeline stakeholders, including Lifeline service providers, public

4 See National Lifeline Association Petition for Waiver of Lifeline Mobile Broadband Minimum Service Standard and Voice Support Phase-Down, WC Docket Nos. 11-42, 09-197, 10-90 (filed Aug. 27, 2020) (NaLA Petition for Waiver); Wireline Competition Bureau Seeks Comment on National Lifeline Association Petition for Waiver of Mobile Broadband Minimum Service Standard and Voice Support Phase-Down, WC Docket Nos. 11-42, 09-197, 10-90, Public Notice, DA 20-995 (Aug. 31, 2020). 5 NaLA August 6 Ex Parte at 4-5 and Exhibit.



interest, consumer and civil rights groups, state commissioners, and policymakers from both parties, that are in agreement that the Commission should not increase the mobile broadband MSS, but rather should pause the mobile broadband MSS at 3 GB and study the Lifeline marketplace next year in conjunction with the State of the Lifeline Marketplace Report.

The 11.75 GB MSS – Which Is Set to Go Into Effect on December 1, 2020 – Will Result In Millions of Lifeline Subscribers Being Denied Access to Affordable Mobile Broadband

As the 11.75 GB mobile broadband MSS is set to go into effect in less than 30 days on December 1, 2020, we asked what the Commission expected Lifeline ETCs to include in notices to their customers about what will happen to their service on December 1, 2020 (because the Chairman publicly rejected the 11.75 GB MSS but has not yet permitted a vote on a viable alternative that would preserve affordable broadband access for Lifeline subscribers at a time when it has never been more needed). Ms. Baker and Mr. Harkrader had no information to provide on that point and could provide no timeline for a decision or further discussion.

We respectfully shared our profound disappointment with the Commission having once again failed to act in time to avoid imposing confusion and hardship on Lifeline service providers – and more importantly – Lifeline subscribers. We noted that Chairman Pai himself stated in the MSS Press Release with respect to 11.75 GB that “the formula the FCC adopted back in 2016 to update the minimum standard for Lifeline mobile broadband data capacity is flawed. It results in drastic year-over-year increases that could impact the ability of Lifeline carriers to continue providing affordable service.”

We explained that the Chairman was correct in his assessment of the 11.75 GB MSS. We informed Ms. Baker and Mr. Harkrader that NaLA member ETCs have confirmed that providing 11.75 GB of mobile broadband each month to Lifeline subscribers would cost significantly more than the $9.25 reimbursement in network costs alone. It is not in the ballpark or even the same sport. The network costs alone would be up to six times the $9.25 reimbursement.

As a result, Lifeline service providers would be forced to impose co-pays of up to $40 on Lifeline eligible, low-income Americans.6 We once again pointed to a recent NaLA consumer survey finding that 80 percent of respondents stated that they could not make a monthly co-pay of any amount, over 63 percent responded that they are unbanked (do not have a checking or savings account), nearly 60 percent do not have a debit or credit card, and over 80 percent are not currently employed,7 as the basis for reasonably concluding that an 11.75 GB MSS mandate would result in very few Lifeline subscribers getting mobile-

6 See National Lifeline Association Notice of Oral Ex Parte, WC Docket Nos. 17-287, 11-42, 09-197, 10-90 at Exhibit NaLA Mobile Voice and Broadband Retail Price Survey (July 7, 2020) (NaLA July 7 Ex Parte) (showing 10-15 GB plans are priced at retail between $35-$45). 7 See NaLA August 6 Ex Parte at 4-5 and Exhibit. The survey responses indicate that 35.72 percent are unemployed, another 34.5 percent are not employed due to disability and another 10.25 percent are retired. Therefore, in total 80.47 percent are not currently employed.



broadband at that level and would push nearly all currently on 3 GB plans to 1,000 minute voice plans that include little or no broadband service.

We emphasized that an increase to 11.75 GB will not only result in the end of free Lifeline broadband MSS service (with a one-year path to the end of all free Lifeline service), it will mean that tens of millions of eligible low-income Americans will be unable to utilize Lifeline mobile broadband to connect to schools, healthcare providers, emergency and other government services, employers, community and family during and after the COVID-19 crisis. Such action will drastically widen the digital divide at a time when it has never been more important to take action to close it.

The National Verifier Continues to Fall Short and Is Not Yet a Success

Finally, we explained that the Lifeline ETCs that use the National Verifier on a daily basis have a different view of its “success” than the Universal Service Administrative Company (USAC) and recently have relayed those views to the auditor hired to assess the National Verifier. We shared the industry’s consensus view that he National Verifier works well when it works and it fails miserably when it doesn’t; and it fails too often.

The National Verifier works well when access to federal and state Medicaid and state Supplemental Nutrition Assistance Program (SNAP) databases enables an electronic verification of the subscriber. It also works reasonably well when access to federal Medicaid and state SNAP databases enables an electronic verification. But it works only about half the time when only access to federal Medicaid and Housing and Urban Development (HUD) databases are available, which is the case in most states. We asserted that fresh thinking and perhaps fresh funding were needed to secure more access to state SNAP databases.

The National Verifier works poorly when electronic verification is not possible and consumers are asked to provide documentary proof of eligibility. This manual process is designed for failure and failure rates can be very high. We don’t know exactly how high because we understand that USAC has been barred by the Commission from providing any significant degree of transparency and shields the necessary data from ETCs or the public.

We asked that the Commission allow the service provider application programming interface (API) to facilitate document transmission and allow carriers to guide their applicants through the cumbersome verification process. We also suggested that USAC income and program eligibility, address and identity documentation requirements should be reviewed (with the input of ETCs, public interest and civil rights groups) because they too often serve as a barrier to program participation.

Further, we asked the Commission to allow USAC to put up a public facing dashboard with enrollment attempt and pass/failure rates by state and reason for pass and failure, and enrollment and participation rate data by zip code and congressional district. Increased transparency and stakeholder engagement is essential to building a better National Verifier that meets its goals of reducing burdens on



ETCs and consumers while facilitating rather than blocking program participation. It is time for the Commission to prioritize program participation and dismantle the barriers it has erected under the pretense of combatting waste, fraud and abuse that may or may not have happened years ago.

Pursuant to Section 1.1206(b) of the Commission’s rules, this letter is being filed electronically.

Respectfully submitted,

John J. Heitmann Joshua Guyan Kelley Drye & Warren LLP 3050 K Street, NW, Suite 400 Washington, DC 20007 (202) 342-8400 Counsel to the National Lifeline Association

Exhibit cc: Allison Baker

Joseph Calascione Trent Harkrader Travis Litman Arielle Roth Alisa Valentin

4819-2892-9488v.4

Exhibit

National Lifeline Association | November 2020

Unanimous Support for NaLA Petition for Waiver of the Lifeline Mobile Broadband Minimum Service Standard

All of the commenters on the NaLA Waiver Petition to address the issue, and all of the Lifeline stakeholders more broadly, including Lifeline service providers, the public interest, consumer and civil rights groups, and policymakers from both parties, are in agreement that the Commission should pause the mobile broadband MSS at 3 GB and study the Lifeline marketplace next year ahead of the State of the Lifeline Marketplace Report. There is no support for an MSS increase.

Industry Supports the NaLA Petition for Waiver of the Lifeline Mobile Broadband MSS Increase

o CTIA1, TracFone, Q Link, TruConnect, Telrite (Life Wireless), Amerimex (SafetyNet), Global Connection (StandUp Wireless), Assist Wireless, Easy Wireless, Boomerang Wireless, American Broadband (American Assistance), and TAG Mobile

Public Interest, Consumer and Civil Rights Groups Support the NaLA Petition for Waiver of the Lifeline Mobile Broadband MSS Increase

o The National Consumer Law Center, Access Humboldt, Access Now, Asian Americans Advancing Justice | AAJC, Benton Institute for Broadband & Society, Common Cause, Common Sense Media, Communication Workers of America, Greenlining Institute, MediaJustice, Multicultural Media, Telecom and Internet Council, National Consumers League, National Digital Inclusion Alliance, National Hispanic Media Coalition, Native Public Media, New America’s Open Technology Institute, Next Century Cities, Public Knowledge, and United Church of Christ, OC Inc.

Policymakers from Both Parties and Others Have Called on the Commission to Pause the Mobile Broadband MSS Increase

o Senator David Perdue (R-GA) (in a letter to FCC Chairman Ajit Pai on Oct. 2, 2020)

o Congressman Mark Green (R-TN) (in a letter to FCC Chairman Ajit Pai on Aug. 13, 2020)

o Congressman Jody Hice (R-GA) and Mark Green (R-TN) (in a letter to FCC Chairman Ajit Pai on Oct. 2, 2020)

o Senator Richard Blumenthal (D-CT) and 24 other Democratic Senators (in a letter to FCC Chairman Ajit Pai on Aug. 27, 2020)

o House Committee on Energy and Commerce (in a letter to FCC Chairman Ajit Pai on Aug. 13, 2020)

o House Appropriations Committee FSGG FY 2021 Funding Bill Report (July 2020)

o National Association of Regulatory Utility Commissioners (NARUC)

o The Oceti Sakowin Tribal Utility Authority

o The Phoenix Center2

1 CTIA’s membership includes T-Mobile, which operates the Assurance Lifeline service, AT&T, and Verizon, which has entered into an agreement to acquire TracFone.

2 The Phoenix Center did not comment on the NaLA Petition for Waiver, but has opposed increasing the mobile broadband MSS. See George S. Ford, PhD., Phoenix Center Policy Paper No. 55, A Fresh Look at the Lifeline Program, Phoenix Center for Advanced Legal & Economic Public Policy Studies, at p. 36, (July 2019), available at https://www.phoenix-center.org/pcpp/PCPP55Final.pdf (“raising minimum service standards is likely to raise the price for Lifeline services, thereby making service unaffordable to precisely those households the Commission seeks to target with its subsidies.”).

https://www.phoenix-center.org/pcpp/PCPP55Final.pdf

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