The FCC today adopted several reforms to the Universal Service Lifeline low-income program applicable in large part to tribal areas. In addition, the commission proposed broader Lifeline reforms that would impact all funding recipients – reforms that include imposing a budget cap on the program, eliminating free service and eliminating support for resellers.

Supporters, including FCC Chairman Ajit Pai, argue that the reforms will better target Lifeline support where it is most needed. Pai noted at today’s FCC meeting, for example, that while a typical low-income Lifeline customer receives $9.25 per month in support, that number increases to $34.25 in tribal areas, including urban areas such as Tulsa, Oklahoma and Reno, Nevada that include tribal lands. The reforms adopted today will eliminate the additional $25 a month in “enhanced” support for urban tribal lands, leaving it in place only for rural areas.

Opponents expressed major concerns about the additional reforms included in a notice of proposed rulemaking (NPRM) adopted today, however. FCC Commissioner Mignon Clyburn noted at today’s meeting that the typical Lifeline recipient is a middle-aged single woman who makes $14,000 a year and is responsible for at least one child. “Before us is a proposal that is more likely to rip that phone from her hands,” Clyburn said.

According to Clyburn, 70% of funding recipients would be unable to use their preferred carrier and plan, and some may not have a carrier to turn to if proposed reforms are enacted. Although Clyburn did not provide details, that statement may reflect the decision by several major facilities-based providers to limit participation in the Lifeline program until a national eligibility database is established. FCC Commissioner Michael O’Rielly said today that the database “won’t be completely in place for years if ever.”

FCC Lifeline Reforms
FCC Lifeline reforms adopted today include:

  • Limiting the $25 enhanced tribal support to facilities-based providers and to rural areas
  • Eliminating restrictions that barred Lifeline consumers from changing Lifeline providers for a year
  • Clarifying that Lifeline support is only available for mobile broadband at 3G or better levels
  • Barring support for “premium Wi-Fi services” that require use at a Wi-Fi hotspot

Reforms proposed in the NPRM go considerably further and would include:

  • Limiting all Lifeline support to facilities-based providers
  • Restoring the role of the states in approving participation of Lifeline-eligible providers (a move that opponents say will make it virtually impossible for a carrier to offer Lifeline service nationwide)
  • Imposing a budget cap on the program
  • Establishing a maximum discount level for Lifeline-supported services that would eliminate free service

Commissioners arguing in favor of a budget cap said it was necessary to curb fraud and abuse in the program. Pai pointed to a report from the Government Accountability Office released earlier this year that found that funding was going to some recipients who were deceased or otherwise ineligible. Pai estimated payments to ineligible recipients at $137 million annually in the $2 billion annual program.

Commissioner Jessica Rosenworcel criticized the current FCC administration for scrapping work on a national eligibility database that was begun under the previous administration.

Consumer Group Public Knowledge argued that actions taken today and the NPRM “collectively indicate that this FCC has no hesitation about the moral or economic consequences of stranding millions of low-income families without affordable basic communications.”