FCC Chairman Looks to 'Reboot' Lifeline Regime

June 01, 2015
By: Peter Bernstein

In case you missed it, on May 28, U.S. Federal Communications Commission (FCC (News - Alert)) Chairman Tom Wheeler set forth a series of proposals in a Notice designed to restructure and modernize the FCC’s Lifeline program. The objective is simple, the institution of an efficient and effective way to help low-income consumers afford access to essential communications services including broadband along with further combating waste and better targeting the program to those who need it most.

The proposals have been put out for comment and set for a vote by the other commissioners at its June 18 meeting. If approved, there will be a period of public before the commissioners would vote on a final order.

A 21st Century vision of providing Lifeline services

While the original enabling language that created the FCC in 1934 set out as its mandate to provide universal service at affordable rates, and the Lifeline Program since 1985 has given low-income Americans access to the basic voice services, it would be fair to say in a digital and broadband-centric world that the program has gotten long in the tooth and is in real need of an update. 

In fact, as the notice of the proposals highlights:

This is not the first time updating Lifeline has gotten FCC attention. In 2012 the program was adjusted to assure financing and better administration.  The result was a reduction of Lifeline spending of almost 24 percent when the rules become fully effective in 2013-14. However, there remains much work to be done as universal broadband access has gone from nicety to necessity. As the Chairman notes, it is time to “reboot.”

In a nutshell here is what has been placed on the table:

Building on 2012 Lifeline Reforms

The FCC adopted comprehensive reforms in January of 2012 to crack down on waste, fraud and abuse and protect ratepayer dollars, which include:

The Chairman is circulating a Report and Order that would build on and strengthen these reforms by:

In case you also missed it, the comments on the Notice came fast and furious and followed typical practices when these things happen.  Consumer groups hailed the effort while the industry chimed in with the obligatory statements about rebooting Lifeline being a laudable goal and how they are looking forward to working with the FCC on refining the proposals.

A word of caution is advised.  Kind words do not signal smooth sailing ahead.  For example, NTCA (News - Alert), the Rural Broadband Association, signaled more was needed. “As always, NTCA welcomes carefully constructed, well-coordinated updates that look to solve the challenges of universal service in all of its forms," said NTCA CEO Shirley Bloomfield. “At the same time, in high-cost areas, the Lifeline program and other USF programs can only be effective to the extent that a network for consumer use is there in the first instance and if the services offered on that network are reasonably comparable in price and quality to those in urban areas."

Plus, there are already rumblings about funding mechanisms including since universal broadband at affordable rates should be a national goal, bordering on a right, some are already wondering if the best way to get there is with the imposition of a national tax.  Let’s just say as with all FCC actions, it is a long way from notice to rule with a lot of speed bumps on an uncertain roadway.

As Chairman Wheeler commented on his blog: "Getting Lifeline reform right won’t be easy…I look forward to working with my colleagues to resolve the difficult questions before us." 

Edited by Stefania Viscusi