The FCC’s Modernized Lifeline Program Will Subsidize Broadband

FCC's Lifeline gets revampThe newly updated Lifeline Program will now help low income Americans access high-speed Internet. Voted on by the Federal Communications Commission (FCC) March 31, the proposal will allow qualifying consumers to use the $9.25 monthly Lifeline subsidy for stand-alone broadband and bundled mobile voice and data plans.

In addition to expanding the reach of the program, the new order makes sweeping reforms to Lifeline implementation. Hoping to curb waste, fraud, and abuse, approved lifeline providers will no longer be responsible for verifying eligible customers. The order establishes a National Eligibility Verifier as a third-party resource for confirming program eligibility and ruling out household “double-dipping” that has previously plagued the program.

Both Lifeline applicants and service providers must meet certain eligibility requirements.  Households can qualify for the subsidy if annual income is at or below 135% of the federal poverty level, or if the household participates in certain federal or state public assistance programs.  Fixed broadband service must meet a minimum 10 Mbps download/1 Mbps upload speed and offer a 150 GB per month data allotment. Mobile broadband service must provide a 500 MB 3G data package, and mobile voice service must have at least 500 minutes per month.  Data and minutes allowances will need to increase based on the FCC’s timeline or providers will become ineligible.

The commission hopes changes to the program will help connect the 64.5 million Americans who cannot appreciate the same critical economic opportunities and quality of life benefits provided by access to high-speed broadband. The program sets a five and half year transition for requiring a voice/data bundle, as opposed to just a mobile data package. This policy is anticipatory of future mobile plans that may not require voice packages as necessity for consumers.

In his official statement, Chairman Wheeler explained how the new order meets the FCC’s congressional mandate “to ensure consumers in all regions of the country, including low-income consumers, . . . have access to . . . advanced telecommunications services.” The program was originally established in 1985 to help low income consumers afford access to telephone services, and in past years evolved to include mobile voice services.

The announcement of the new Lifeline order resulted in a 3-2 vote, with Commissioner Pai and Commissioner O’Reilly offering dissenting statements which can be found below.

Other stakeholders have also weighed in on the new order. Representative Scott Austin from Georgia introduced H.R. 4884, titled, “Controlling the Unchecked and Reckless Ballooning of the Lifeline Act of 2016,” or “CURB the Lifeline Act of 2016.” The National Governors Association (NGA) issued a statement on March 30th opposing the FCC’s proposal, believing the lifeline reform “would preempt states’ authority to protect consumer interest”, by “centralizing oversight within the FCC, which has the potential to allow eligible telecommunications carriers to circumvent state scrutiny.”

The full order is expected to be released sometime next week. The FCC’s press release can be found here:

https://transition.fcc.gov/Daily_Releases/Daily_Business/2016/db0404/DOC-338676A1.pdf

Official FCC Commission Statements can be found here:

The White House statement can be found here:

https://www.whitehouse.gov/blog/2016/03/31/everyone-needs-broadband-now-more-low-income-americans-will-be-able-afford-it