Much Support for FCC Lifeline Move to Broadband, New Program Oversight

Consumer groups, industry parties and others said Lifeline’s current $1.6 billion in annual support for low-income consumers should be extended from voice to broadband service. The expansion would not only drive broadband adoption among low-income consumers, but also help narrow the “homework” gap affecting students without high-speed Internet access at home. New America’s Open Internet Institute was among those strongly supporting the FCC push to subsidize broadband and “modernize” the program. “Doing so will require a thoughtful balance of reforms that increase competition within the fund; ensure access to reliable, high-quality, and unfettered service for low-income consumers; protect user privacy; and provide sustainable support that ensures no eligible user is left behind,” OTI said.

Many commenters, including AT&T and NCTA, urged the FCC to give consumers flexibility to use the subsidy as they saw fit, whether to buy mobile or fixed voice and/or broadband service. AT&T proposed comprehensively revamping the program into a “New Lifeline” that would give low-income consumers increased choice and service portability through direct subsidies and centralized administration. “Fortunately, the Lifeline program need not reinvent the wheel,” said AT&T, which proposed handing administrative duties over to Universal Service Administrative Co., working with state agencies that oversee the Supplement Nutrition Assistance Program (food stamps) to coordinate Lifeline enrollment and de-enrollment.

The Internet Innovation Alliance backed automatic Lifeline enrollment tied to enrollment in SNAP, a “single mature assistance program,” in order to improve administrative efficiency and consumer participation. "If we just made that one change, I think we’d see a significant uptick in subscribership,” IIA Honorary Chairman and former Rep. Rich Boucher, D-Va., told us. He noted there were many more food stamp users than Lifeline subscribers. But others urged the FCC to continue to use eligibility in Medicaid and other federal programs as criteria for Lifeline enrollment.

Verizon urged the FCC to act incrementally if it expands to broadband. “The Commission should streamline Lifeline administration and reject proposals that are unworkable or only add complexity and costs with little benefit,” said Verizon. It backed creating a national Lifeline eligibility verifier that participating carriers would have the option to use.

The wireless industry is the largest collective contributor to USF program in general and has a vested interest in ensuring an efficient and effective Lifeline program, CTIA said. The FCC should make the program more efficient through coordinated enrollment and automatic de-enrollment, the wireless association said. The rules should encourage wireless carriers to offer Lifeline service, it said. Competition in the wireless industry allows the commission to maximize the value of its universal service support and for consumers to achieve the highest level of benefit, with wireless especially important to the nation’s poor, CTIA said. The Centers for Disease Control’s most recent data show 60 percent of adults living in poverty live in households that have only wireless service, compared with an overall rate of 44 percent of all adults, the association said. The poor are more likely to use their wireless phones to search for a job or get information on a medical condition, CTIA said.

Low-cost wireless carrier TracFone said any reforms should keep in mind the importance of the Lifeline program to the poor and must avoid well-meaning but ill-informed or poorly implemented changes. TracFone backed two changes not proposed by the FCC: barring in-person handout of Lifeline phones at public events and prohibiting third-party agents -- subject to incentive-based compensation arrangements -- from marketing Lifeline services and distributing handsets. The two changes would minimize fraud in the program, TracFone said.

State and local officials continued to weigh in heavily (see 1508310058). Most of the comments came from California, Florida, Maryland, New York, North Carolina, Oregon and Texas. Their comments generally followed the same template: “wholeheartedly” supporting the FCC proposal to modernize Lifeline, which they called “important for underprivileged households,” while expressing concern that changes “should not come at the expense of traditional phone services.” They said the commission’s current $9.25/month Lifeline subsidy isn't enough to buy broadband or solve communications issues. They also voiced concerns about giving Lifeline users vouchers.

TechFreedom was perhaps the most critical of the FCC broadband push, accusing the commission of “rushing headlong into expanding the program still further without any clear sense of how to address” various questions, including those GAO had raised in March. In a release, Tech Freedom President Berin Szoka called Lifeline a “broken, bloated program, funded by the most regressive tax in America.”

Tech Freedom was among those seeking budgetary constraints. Policy Counsel Tom Struble said that “Lifeline is the only USF program without a budget or any cap; there is simply no excuse for this.” The Technology Policy Institute said that “the lack of a budget creates the illusion of unlimited and costless funding.” ITTA proposed that the FCC set a budget at Lifeline’s current $1.6 billion. Some urged a “flexible cap,” to account for economic downturns, when Lifeline would be even more needed. But Common Cause, the Communications Workers of America, CompTel, Free Press and OTI were among those opposing funding caps or a budget.