AB 1409 would make harmful changes to Lifeline telephone program (vetoed)

Update: AB 1409 was vetoed by Governor Brown on October 10.

Consumer Federation of California opposes AB 1409 (Bradford), which would harm low-income consumers who are eligible for the California LifeLine program by delaying the roll-out of discounts for VoIP- or IP-enabled telephone services. The delay would be a direct consequence of the new bill language, which confuses regulatory jurisdiction and would create implementation hurdles.

California LifeLine is a statewide program that provides discounted basic telephone service to eligible low-income customers. LifeLine is funded by a surcharge on telephone customers’ bills and is currently offered for landline service only.

The rapid migration from landline to wireless telephone service prompted the California Public Utilities Commissions (CPUC) to open a new rulemaking to modernize LifeLine. A decision to expand the program to wireless customers is expected to be adopted by November of this year, with an expansion to Voice over Internet Protocol (VoIP)- and Internet Protocol (IP)-enabled services to follow soon thereafter.

AB 1409 would require the CPUC to adopt rules allowing for providers that offer “alternative technologies,” such as VoIP or IP-enabled services, to participate in the Lifeline program. This bill would prohibit the CPUC from denying a provider’s application to join the program on the basis of the type of services it offers.

Current state and federal law, however, limit the CPUC ability to oversee VoIP- or IP- enabled services. Because of that limitation, the CPUC would not be able to evaluate a carrier’s eligibility for the Lifeline Program, unless the carrier is subject to CPUC oversight as a common carrier with a certificate of public convenience and necessity. Moreover, the bill allows for a non-telephone provider offering services other than VoIP- and IP-enabled services, which would not otherwise be eligible, to collect subsidies for those unapproved services.

While the bill’s stated goal of offering more modern services for the low-income consumers who participate in Lifeline is laudable, it is unnecessary. Steps to modernize the program by allowing wireless customers to participate are already underway by the CPUC.

The changes made by AB 1409 would only generate confusion and potentially create delays in the program.