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Lifeline order sets new standards for supported broadband, strengthens verification process

By Colin Sandy  

Lifeline is an important component of the Universal Service Fund. It provides support to low-income households to make telephone service more affordable. As broadband has become a more essential method of communication, the FCC decided it is good policy to support not only traditional voice, but broadband connectivity as well.

With that goal in mind, the FCC adopted an Order at its March 31 Open Meeting that refocuses Lifeline support on broadband. While the text of the Order has not been released, the Commission published a news release with details about how the Lifeline program will change. First, the new rules explicitly support standalone broadband. The Order goes even further by mandating mobile devices enable WiFi and hotspot capabilities to be considered eligible for support. Previously, rules required the addition of a voice service to broadband Internet access service to receive support and allowed carriers to turn off WiFi and hotspot features.

The forthcoming rules set standards for supported broadband:

  • The rules require 10 Mbps down and 1Mbps up for customers to be eligible for support. 

  • Fixed broadband providers must offer a minimum of 150 GB of data per month for fixed broadband as a start.

  • Mobile broadband providers must offer a minimum of 500 MB per month of 3G data by December 1, 2016; 1 GB by December 1, 2017, and increasing to 2 GB per month by the end of 2018.

  • Eligible providers must offer a minimum of 500 voice minutes per month beginning on December 1, 2016; 750 minutes per month on December 1, 2017; and 1,000 minutes per month starting December 1, 2018.

  • Support for standalone voice decreases to $7.25 on December 1, 2019; to $5.25 by December 1, 2020; and no support by December 1, 2021, except in areas where there is only one Lifeline provider.

  • Voice remains eligible for full support as part of a voice and data bundle.

  • A full review of standards phase-in and report to the Commission is required by mid-2021.

Other key reforms include:

  • Establishes a National Lifeline Eligibility Verifier 
  • Streamlines eligibility, e.g. veterans are added as an eligible group
  • Maintains state eligibility while new Federal eligibility criteria are added
  • Introduces cost control budget mechanism of $2.25 million with a safety valve at 90 percent exhaustion

FCC reforms prompt Congressional action

The decision was not made without some controversy. The FCC voted in the reforms along party lines with a 3-2 vote. The agency’s action sparked House Republicans to introduce the CURB Lifeline Act. Its full title, the Controlling the Unchecked and Reckless Ballooning of Lifeline Act of 2016, makes the bill’s bias apparent.  An April 13 hearing by the Energy and Commerce Subcommittee on Communications and Technology examined the bill, which would reform the Lifeline program by capping the fund at $1.5 billion, prohibiting the use of Lifeline support for sale or lease of mobile devices, and phasing out support for voice-only service for mobile. 

Congress has also been concerned with waste, fraud and abuse in the past and has queried Commissioners about the problem at several hearings and in multiple letters to the FCC. In response to one letter from Sen. Claire McCaskill (D-Mo.), Chairman Wheeler noted successful program reforms the Commission has implemented since 2012 to prevent waste, fraud and abuse in the Lifeline program, such as creating the National Lifeline Accountability Database to prevent subscribers from receiving more than one benefit. These reforms have resulted in a decrease in Lifeline program disbursements from nearly $2.2 billion in 2012 to under $1.5 billion in 2015.

The FCC has also taken enforcement actions against entities who have been found to be abusing the system. Most recently, the FCC issued a Notice of Apparent Liability for Forfeiture and Order, which proposes to fine Total Call Mobile $51 million for apparently enrolling tens of thousands of duplicate and ineligible consumers into the Lifeline program since 2014.

The Order is expected to be released soon and will give details on effective dates of the new rules.

Colin Sandy is senior regulatory attorney in NECA’s Washington, D.C. office. He can be reached at csandy@neca.org .


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