Wheeler Proposes Expansion of Lifeline Program To Support Internet Access

“The reforms of 2012 put the program on a more stable footing,” the FCC said in a fact sheet released Thursday. “These and other reforms reduced Lifeline spending by nearly 24 percent as they became fully effective in 2013-14. Now is the time to ‘reboot’ Lifeline to ensure all Americans can share in the opportunities presented by 21st century communications.” Wheeler conceded Thursday in a blog post that it won't be easy to overhaul the program. “Fortunately, Lifeline reforms adopted in 2012 put the program on stable footing and laid the foundation for a comprehensive overhaul,” he said. "I look forward to working with my colleagues to resolve the difficult questions before us."

A Further NPRM circulated by Wheeler seeks comment on how a retooled Lifeline program would work. The agency seeks general comment on how to make Lifeline more competitive and whether nontraditional players should be able to participate in the program, FCC officials said Thursday. It seeks comment on how states could be encouraged to increase Lifeline support and whether a Lifeline accountability national database could be used to calculate how much support providers should receive, officials said. It also asks about the level of service that could be provided under the current $9.25 monthly subsidy.

A report and order that circulated by Wheeler builds on Lifeline reforms approved in 2012, officials said. It requires providers to retain documentation on the eligibility of their Lifeline customers to “facilitate oversight and audits,” extends record retention requirements from three years to 10 and would increase program transparency “by making key performance data easily available to the public,” said the fact sheet.

House Commerce Chairman Fred Upton, R-Mich., and Communications Subcommittee Chairman Greg Walden, R-Ore., questioned whether the Wheeler approach offers the necessary fixes for the USF program. Broadband adoption creates jobs, but “unfortunately, this proposal misses the mark on the reforms we need,” the two said in a joint statement. “We have long called for the need to cap the USF, and each fund within it, to ensure that ratepayer dollars are spent wisely. Simply expanding the program without ensuring its effectiveness or longevity is the wrong approach if we're going to do right by those who pay for the program, and those who depend on it.”

Expanding the program is an "absurd idea," Sen. David Vitter, R-La., said in a news release. “It’s no great secret that the Lifeline program is full of fraud and has very few accountability standards in place to prevent abuse," he said. "Why the FCC wants to expand this program before addressing the regular reports of ongoing fraud is beyond me."

Commissioner Mignon Clyburn has called repeatedly for expanding Lifeline to support broadband (see 1505220044). But Wireline Bureau Chief Julie Veach last week sounded a note of caution in a blog post. “Let's be clear that Lifeline is focused on ensuring services are affordable, not to solve the broadband adoption challenge,” she said. "There should be adequate controls and deterrents in place before considering a revamp of the program,” Commissioner Mike O’Rielly said February in a blog post (see 1502130053).

“The FCC is dodging the obvious: expanding Lifeline means new broadband taxes and higher taxes overall on telecom services,” said Berin Szoka, president of TechFreedom, in a news release. “The FCC made broadband taxes inevitable when it reclassified broadband as a telecom service -- it’s just a question of the FCC’s Joint Board finding the least awkward time to make it official. USF taxes are the most regressive taxes in America, so families just above the eligibility threshold will suffer most.”

“Research shows that Internet adoption follows the perception of relevance and is not held up by service costs in most cases,” emailed Richard Bennett, network engineer and visiting fellow at the American Enterprise Institute. “Lifeline is an entitlement program that should be financed from the general treasury rather than by taxes and fees on Internet users. It should be means-tested and limited to the low broadband speeds required for VoIP, email, and basic web service. We should not be subsidizing Netflix on the backs of the poor.”

But Kristine DeBry, vice president-Policy Strategy Center at Public Knowledge, welcomed the plan. “The proposal to ‘reboot’ the Lifeline program to include broadband subsidies for our most poor and vulnerable follows in a long, bipartisan tradition of ensuring that all Americans have access to basic communications services,” she said. The Benton Foundation welcomed steps to make broadband more affordable, as did Consumers Union. “We applaud the Commission's work to get affordable broadband to as many people as possible,” said Delara Derakhshani, CU policy counsel.

“The Lifeline program provides millions of low-income Americans the ability to be connected to work, health care and 911,” said Scott Bergmann, vice president-regulatory affairs at CTIA. “We look forward to working with the FCC as it evolves this critical program in a manner that is fiscally responsible as well as responsive to Americans’ reliance on mobile solutions.”