PSC Pulls Lifeline Tariff Language from Non-lifeline Providers

Back in February, PULP Network reported on a competitive local exchange carrier purporting to “Lifeline” telephone service even though it had not been certified as an “eligible telecommunications carrier” (“ETC”). See When Is Lifeline Not Lifeline?. ETC status makes the company eligible to be compensated for a large portion of the Lifeline rate reduction out of the federal Universal Service Fund (“USF”) and New York’s Targeted Accessibility Fund (“TAF”) . The federal USF is paid for by most telephone customers in the country who contribute to the fund through a surcharge on their monthly phone bills. The New YorkTAF is a mandatory contribution made by certified local exchange carriers in the state and is based on a percentage of their intrastate revenues. While the ETC is reimbursed for most (but not all) of its costs through the USF and TAF, true Lifeline customers pay a fraction of the normal installation charges (under the Link-Up program) and are exempt from most of the taxes and surcharges attached to the phone company’s charges, including the $6.50 subscriber line charge. These taxes and surcharges can add $15 or more to a typical phone bill.

In the situation reported in February, since the carrier in question is not an ETC and is not eligible for reimbursement, their “Lifeline” customers do not see these discounts; rather, they may “save” say $2 or $3 off the regular price of service (which is far less than true Lifeline), but the customer still must pay the subscriber line charge and the other taxes and surcharges not applicable to Lifeline customers. As a result, without any notice, these “Lifeline” customers are paying far more each month than they should.

PULP brought this situation to the attention of the staff at New York State Department of Public Service (“DPS”). We learned that many smaller carriers opt to just copy the DPS’s model local exchange and access tariff and treat this tariff as their own. While there is nothing inherently wrong with using the model tariff, it included Lifeline language even though the carriers can not offer Lifeline without ETC status. As a result of PULP’s input, the model tariff’s Lifeline language was changed to reflect ETC eligibility requirements and seven competitive carriers (in addition to the one initially reported on) deleted the Lifeline language from their individual tariffs this week.

While PULP supports as many providers offering Lifeline as possible, we are glad that these carriers decided to remove the Lifeline language from their tariffs as the current situation was confusing and cost customers wanting real Lifeline assistance more than they should have paid.

Lou Manuta