TracFone Wireless has just filed an “Emergency
Petition for an Declaratory Ruling,” asking the FCC to declare that states
may not impose 911 taxes and fees on low-income customers who receive
TracFone’s Lifeline wireless service at no charge. TracFone wants the FCC to
preempt enforcement of such state laws as inconsistent with the Constitution’s
Supremacy Clause and the Communications Act.
I’ve argued, on both policy and legal grounds, against the
notion that the Commission can or should preempt state bans on municipal
provision of broadband services. But, with TracFone’s petition, the Commission
has before it what appears to be a good candidate for preemption if it is
looking for one.
Putting aside the legal question, which TracFone’s lawyers address
in the petition, it seems to me a matter of common sense – or sound policy, if
you prefer – that the FCC should not allow states to impose taxes or fees on
no-charge Lifeline service that the FCC has sanctioned by rule for the purpose
of promoting access to communications services for those who otherwise cannot
afford service.
As readers of this space know, I am no fan of FCC
regulations and programs that have outlived their usefulness or which no longer
serve a purpose in today’s competitive communications environment. But for well
over a decade I have been supportive of maintaining an effective, well-run
Lifeline program as a safety net to help ensure access to communications
services by low-income persons. (I’ve also urged that the FCC take measures to
help ensure the program is run, to the extent possible, without fraud and
abuse.)
Here’s the problem: Under Commission rules, eligible
carriers like TracFone and others receive $9.25 per month per enrolled Lifeline
customer from the FCC’s Universal Service Fund as long as this full amount is
passed along to Lifeline subscribers. TracFone provides its qualifying
subscribers with no-charge monthly service. This includes a specified amount of
airtime minutes. Now, two states, Alabama and Indiana, propose to impose 911
taxes or fees on the Lifeline service. In the case of Alabama, the tax is $1.75
per month. This tax obviously represents a large percentage (19%) of the
Lifeline benefit valued at $9.25. While Indiana’s monthly fee of $.50 is less,
it is not insignificant.
Imposing 911 taxes and fees on a service provided at no
charge to low-income consumers under a federal program intended to enhance
their access to communications services seems illogical. One way of the other,
whether the state contemplates that the fee will be paid directly by the
consumer or by the provider on the consumer’s behalf, the amount of funds
available to support Lifeline services is diminished. It is even possible that
imposition of such fees may cause providers like TracFone to cease providing
Lifeline service in states that impose such fees. This would frustrate the
purpose of the federal government’s Lifeline program.
Certainly, provision of E911 service is important and must
be supported in one way or another. But the route followed by Alabama and
Indiana does not seem like the proper way to go about it. In the interest of
achieving the federal objective of the Lifeline program, it would seem to make
sense for states to exempt Lifeline service subscribers from responsibility for
payment of any 911 fees or taxes.
Unless Alabama and Indiana rescind their requirements for
imposing 911 fees on Lifeline service, and other states forbear from adopting
such fees, the Commission should take up TracFone’s petition and consider it
with dispatch.
Posts
