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FCC claims Lifeline program reforms will save $2 billion by 2014

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The FCC reported on Wednesday that its efforts to reform its Lifeline voice program will enable it to save an estimated $400 million this year, complementing the $214 million it saved in 2012 by cracking down on abuse of the system.

Julie Veach, FCC Wireline Competition Bureau Chief, said in a release that although the Lifeline program has been successful in providing basic phone service, "the program rules we inherited were designed for the age of the rotary phone and failed to protect the program from abuse."

In addition to traditional wireline voice service, the regulator extended the program to subsidize wireless service. As the program rapidly grew, it faced a great deal of waste and fraud.  

Last January, the FCC began made it a requirement that Lifeline customers certify their eligibility with their service providers every year. Service providers were required to de-enroll any customer who did not recertify or was deemed no longer eligible to participate in the program.  

The FCC found in its analysis of six major service providers that 33 percent of their Lifeline subscribers—or 3.3 million subscribers—did not recertify.

As a result of the 2012 annual recertification requirement, the FCC said that "as many as 4 million subscribers may be de-enrolled," which will save "over $400 million in 2013 in payments for ineligible subscriptions."

With the money it saved from Lifeline reform, the regulator helped fund 14 pilot projects in 21 states and Puerto Rico that will test approaches to use the Lifeline program to increase broadband adoption by lower-income residents.

For more:
- see the release

Related articles:
FCC appoints UBB supporter Steven Wildman as chief economist
FCC says it will use savings from Lifeline program to fund broadband adoption
FCC's Lifeline reforms enable it to save $214M on the program

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