Friday, October 30, 2009

Virgin Mobile Latest to Offer Lifeline in New York, but Will its Customers Be Protected?

On October 29, 2009, the FCC issued an order approving Virgin Mobile USA's compliance plan , which was submitted as a condition of its designation as a “Lifeline-only” eligible telecommunications carrier (“ETC”) in its licensed service areas in New York, Virginia, North Carolina, and Tennessee.

Virgin Mobile now joins Verizon Wireless, Sprint , and TracFone as authorized providers of wireless Lifeline service in New York State. As such, their ETC status permits reimbursement from the Federal Universal Service Fund for discounts provided to low income customers.

In the Order, the FCC granted Virgin Mobile’s request for forbearance from the requirement that Lifeline providers offer service at least partially over their own facilities. In so doing, Virgin Mobile agreed to:

(1) Provide its Lifeline customers with 911 and enhanced 911 (“E-911”) access, regardless of activation status and availability of prepaid minutes;

(2) Provide its Lifeline customers with E911-compliant handsets and replace, at no additional charge to the customer, non-compliant handsets of existing customers who obtain Lifeline supported service;

(3) Comply with conditions (1) and (2) as of the date it provides Lifeline service;

(4) Obtain a certification from each Public Safety Answering Point (“PSAP”) where Virgin Mobile provides Lifeline service confirming that Virgin Mobile provides its customers with 911 and E911 access or if, within 90 days of Virgin Mobile’s request for certification, a PSAP has not provided the certification and the PSAP has not made an affirmative finding that Virgin Mobile does not provide its customers with access to 911 and E-911 service within the PSAP’s service area, Virgin Mobile may self-certify that it meets the basic and E-911 requirements;

(5) Require its customers to self-certify at the time of service activation and annually thereafter that they are the head of household and receive Lifeline-supported service only from Virgin Mobile; and

(6) Establish safeguards to prevent its customers from receiving multiple Virgin Mobile Lifeline subsidies at the same address.

The rates that Virgin Mobile will charge, how many minutes will be included in the Lifeline package(s), and what kinds of phones will be included are yet to be determined.

While PULP supports the addition of new Lifeline providers to offer discounted service to New York State’s low income population, we remain concerned that with the proliferation of individuals “cutting the cord” and receiving their telephone service from wireless providers only, that the state’s consumer protections for telephone customers will lose their impact. New York’s Telephone Fair Practices Act still applies only to traditional landline telephone companies, not voice service provided by cable television companies or to wireless carriers, and has not been updated to follow the customers as they take service from providers using different facilities to provide essentially the same service. With Verizon-New York claiming that it has lost over half of its access lines in recent years to these intermodal competitors, the majority of New York’s phone customers lack these important consumer protections regarding billing, termination, and notices. With the entry of yet another wireless Lifeline provider, we expect this number of unprotected, vulnerable New Yorkers to increase. What will happen to a Virgin Mobile Lifeline customer who runs out of minutes before the end of the month or who has difficulty paying his or her bill?

For more information see PULP's web page on wireless consumer protection.

Lou Manuta

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