The three current commissioners of the Federal Communications Commission voted to approve a comprehensive overhaul of the Lifeline universal service program, which helps tens of millions of low-income Americans afford basic phone service. The current Lifeline program, which was put in place in 1985, predated the rise of mobile phone service and gradually enabled perverse incentives for some carriers to continue an entrenched cost to the government.
The FCC estimates that its reforms will save the government $2 billion over the next three years. Key elements of the reforms include:
- Setting a savings target of $200 million for 2012, and putting the Commission in a position to adopt an appropriate budget for the program in early 2013 after review of a six-month report and one-year report on the effects of the Order.
- Creation of a National Lifeline Accountability Database to prevent multiple carriers from receiving support for the same subscriber. The database will build on FCC efforts in 2011 that eliminated nearly 270,000 duplicate subscriptions in 12 states following review of over
3.6 million subscriber records, saving $33 million.
- Creation of eligibility databases from governmental data sources, enabling fully automated verification of consumers’ initial and ongoing Lifeline eligibility. This would reduce the potential for fraud while cutting red tape for consumers and providers. A database based on
the three most common federal benefit programs through which consumers qualify for Lifeline will be created no later than the end of 2013.
- Establishing a one-per-household rule applicable to all providers in the program, defining household as an “economic unit�? so that separate low-income families living at the same address can get connected.
- Establishing clear goals and metrics to measure program performance and effectiveness.
- Phasing out support for services such as Toll Limitation – subsidies to carriers for blocking or restricting long-distance service—and ending Link Up – subsidies to carriers for initial connection charges. Link Up will continue in Tribal lands.
- Reducing burdens on carriers by establishing a uniform, interim flat rate of reimbursement, allowing carriers to obtain a subscriber’s signature electronically, and streamlining enrollment through uniform, nationwide eligibility criteria.
- Adopting an express goal for the program of ensuring availability of broadband for all low-income Americans.
- Establish a Broadband Adoption Pilot Program using up to $25 million in savings from other reforms to test and determine how Lifeline can best be used to increase broadband adoption among Lifeline-eligible consumers. Starting this year, the program will solicit applications from broadband providers and will select a number of projects to fund. 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.
- Proposes increasing digital literacy training at libraries and schools.