Genachowksi Circulates Lifeline Order, But Some Groups Say It’s Not Enough

Genachowski said his reforms will “successfully eliminate unnecessary spending while the program continues to provide enough support to connect eligible consumers to our communications networks.” In prepared remarks at the Third Way Foundation in Washington, he said: “To ensure accountability, every carrier that receives more than a specified annual amount of support from the program would be subject to independent audits every two years. The order would establish national eligibility criteria to ensure access to Lifeline service for all low-income consumers who meet federal standards for participation in the program, with the recognition of the unique circumstances facing tribal communities."

The order would establish pilot programs that Genachowski said he hopes will increase broadband adoption by the poor. “Starting this year, the program will solicit applications from broadband providers and will select a number of projects to fund,” the FCC said in talking points circulated with Genachowski’s speech. “Lifeline will help reduce the monthly cost of broadband service, but applicants will be expected to help address other challenges to broadband adoption, including the cost of devices and digital literacy."

Genachowski’s efforts got immediate endorsements from Reps. Anna Eshoo and Doris Matsui, both Democrats from California. “For many years the Lifeline program has provided low-income Americans across the country with affordable access to basic monthly telephone service,” Eshoo said. “It has also been beset with many problems. It’s time to modernize the program by bringing it into the 21st Century, with support of broadband access for low-income Americans.” Matsui applauded the FCC’s “on-going efforts to modernize the Universal Service Fund,” she said in a written statement. “The current Lifeline and Link-up programs should be reformed to prevent any waste and abuse from occurring, while continuing to ensure low-income Americans receive the assistance they need to communicate with everyone from their friends and families to their doctors and jobs."

State regulators appreciated the chairman’s mentioning of the Federal-State USF Joint Board in his speech, but had some concerns. It’s positive that the FCC set a “floor” instead of a “ceiling,” in the FCC’s plan to set a budget for Lifeline, while acknowledging the size of the program should fluctuate, said John Burke, board member of the Vermont Public Service Board and chair of the NARUC telecom committee. The Lifeline program does get “gamed” sometimes, Burke told us. But one size doesn’t fit all, he said. It’s important to allow the states to make some decisions on state-specific issues while ensuring the consistency of the program, he said.

Commissioner Larry Landis with the Indiana commission remains skeptical that the FCC can provide continuing support for existing, extensive broadband buildout, layer on new programs, support both the traditional voice for Lifeline and “addressing digital literacy and the value perception,” he told us. Additionally, it’s essential that the FCC not adopt technology-prescriptive solutions or favor content providers, for example, over facility-based providers, he said.

The Leadership Conference on Civil and Human Rights said it was “gratified” that Genachowski would allow Lifeline customers to use their subsidy to buy bundled broadband, but said the order “puts the program years away from having a notable impact on narrowing the digital divide. The pilot programs the Chairman intends to launch later in the year won’t help the millions of Americans struggling right now to get a leg up in today’s economy."

And the Leadership Conference said it was worried that Genachowski was issuing “preemptive budget controlling” measures without knowing how Lifeline can be modernized. “We should not confuse questions about the program’s size with the limited problem of fraud and abuse,” the Leadership Conference said. “According to the FCC’s own data, the Lifeline program has about 10 million participants, and only reaches about 32 percent of eligible households. There are 100 million people who do not subscribe to broadband at home today, and according to the FCC’s research, a predominant reason for that is cost. The Lifeline program is the only program that can address this problem by systematically addressing the cost of modern telecommunications for low-income people. Limiting a program that only reaches one-third of its eligible participants before the FCC can fully assess the changes it announced today to eliminate fraud would seem counterproductive."

Free Press said the proposals may not do enough to bring poor Americans into the 21st Century. “While preliminary steps in that direction are encouraging, pilot programs and private initiatives will not be enough to solve all of our nation’s broadband-adoption problems,” Policy Director Matt Wood said. “Corporate efforts like [Genachowski’s adoption program] Connect to Compete may be a net positive, but they promise nothing more than bare minimum download speeds to a very limited set of eligible recipients. The FCC can and should put its own house in order to set Lifeline on solid ground and reshape it as an efficient program focused on this century’s technology."

Capping Lifeline and Link-Up when its penetration rate is so low “would be a serious mistake,” Minority Media and Telecommunications Council founder David Honig said in an email. “Universal connections to the network is a valuable public good, and no initiative is more vital to delivering universal connections than Lifeline Linkup,” he added. “It is certainly puzzling, since the Commission has been taking laudable steps to promote adoption. This could be one step forward and one or two steps back.” Genachowski’s staff didn’t respond to follow-up questions.

The states have cautioned the FCC for a long time that the use of end-user consumer eligibility “self-certification” for Lifeline services, especially prepaid wireless Lifeline services, is problematic, a state official said. Certain states have already implemented their own -- and “rather expensive” -- data base programs in order to police the problem of duplicate Lifeline support, he said, citing states like California, Florida and Texas. Nonetheless, states will continue to cooperate with the FCC on the Lifeline and Link-Up programs, he said. States are waiting for the text of the order to see what role if any they might have when retail broadband access to the Internet is introduced as a component of Lifeline service and is supported by the federal USF, he said. It’s also uncertain if the proposed National Lifeline Accountability Database would create any requirements for states, he said.