FCC Chairman Tom Wheeler released some details of his plan to modernize the federal Lifeline program for the 21st century. The plan, developed with Commissioner Clyburn, is being circulated to the other three Commissioners and is expected to be considered at the FCC’s March 31, 2016, Open Meeting.
Noting that affordability is still the largest single barrier to broadband adoption in low income households, Wheeler said the draft Order “would reboot Lifeline to enable all Americans to share in the opportunities broadband connectivity provides, while building on recent reforms to the program.” The proposal would allow low income consumers to apply the current, $9.25 per month, Lifeline subsidy to either: (1) stand-alone fixed or mobile broadband service; or (2) bundled voice and data packages (both fixed and mobile).
The program would support mobile voice with unlimited talk only through the end of 2019. Support for standalone mobile voice would be gradually phased down over three years: reduced from $9.25 per month to $7.25 on December 1, 2017, $5.25 on December 1, 2018, and no support after December 1, 2019. After that time, mobile Lifeline providers would have to include broadband as part of the supported service. However, support for fixed-only voice service would remain in place.
The draft Order also sets minimum standards for broadband service, including the following:
- A fixed speed standard based on what a substantial majority of consumers receive (currently 10 Mbps downloads/1 Mbps uploads)
- A minimum monthly fixed broadband usage allowance standard of 150 GB;
- Phased-in minimum standards for mobile broadband service, starting at 500 MB per month of 3G data, increasing to 2 GB/per month by the end of 2018; and
- Unlimited minutes for mobile voice service, starting in December 1, 2016, reflecting typical plans in the market.
To encourage broader participation by broadband providers the proposal also includes:
- A streamlined, nationwide entry for a new category of providers, called Lifeline Broadband Providers; and
- Establishment of a third-party National Eligibility Verifier, reducing cost to providers of verifying subscriber eligibility.
To further reduce waste, fraud and abuse, the proposal would:
- Establish a National Eligibility Verifier as neutral third-party entity (this removes the opportunity for providers to enroll ineligible subscribers);
- Refine the list of federal programs that may be used to validate Lifeline eligibility to those that support electronic validation, are most accountable, and best identify people needing support (SNAP, SSI, Medicaid, Veterans Pension, Tribal), along with income-based eligibility; and
- Increase transparency by making program data publicly available and understandable, including subscriber counts by provider and uniform disclosure of annual subscriber recertification data.
Finally, the proposal would set a budget of $2.25 billion, indexed to inflation. The FCC’s Wireline Competition Bureau would be required to notify the Commission when spending reaches 90% of the budget and to prepare an analysis of the causes of spending growth, followed by Commission action within six months. The current $9.25 monthly household subsidy would be maintained.
The Commissioners also posted a blog focusing on the public interest aspects of their proposal and emphasizing the three central facets of the proposed reform: re-orienting Lifeline for the broadband era; improving Lifeline’s management and design; and shutting the door on the program’s final remaining vulnerabilities to waste, fraud, and abuse. They concluded by saying: “This is good-government reform that puts consumers and ratepayers first by creating a market-based climate for competition, with the controls needed to guard against market abuse. We’re pleased to offer this plan to provide a pathway out poverty for low-income consumers by modernizing Lifeline for the 21st Century.”