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FCC's Lifeline reforms enable it to save $214M on the program

Named 14 broadband projects using leftover lifeline funds
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The FCC on Thursday said that the reform of its Lifeline program enabled it save $214 million.

This is $14 million more than the $200 million goal it had set when it announced program reforms at the beginning of the year.

Besides cutting down on waste and fraud, the regulator also selected 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.

Although the Lifeline program, which was developed in 1985, has provided discounted phone service to qualifying low-income consumers, the FCC this year decided to clamp down on waste, fraud and abuse. Likewise, the regulator wanted to incorporate broadband support into the program as a way to encourage residents to use the Internet for education and pursuing job opportunities.   

By allocating the $14 million in savings it got due to the result of its reforms, the FCC's Wireline Competition Bureau said, the 14 pilot projects will provide data and analysis on how the Lifeline program can "increase broadband adoption and retention among low-income consumers." With the program in place, these pilots will provide broadband for almost 75,000 low-income consumers who currently don't have service.

Despite the fact that most employers require online job applications, the U.S. Census Bureau revealed that fewer than 36 percent of families with incomes of less than $25,000 have a broadband subscription versus 92 percent of families that have incomes of $75,000.

Each of the pilots, which will begin on Feb 1, 2013 and run for 18 months, will test how to use Lifeline to support broadband adoption by gathering data and provide analysis on a wide a range of geographic, technological, and programmatic variables. Some of the participants include Frontier Communications (Nasdaq: FTR) and Tracfone Wireless and a number of smaller independent rural ILECs.

Projects include five wireless broadband projects, seven wireline broadband projects, and two offering  wireline or wireless technologies. Seven of the participants will test low-cost service in rural areas, including two on tribal lands, and seven will test discounted service in urban and suburban areas.

Despite showing some positive results, a number of consumer groups questioned whether they go far enough to serve a large population of low-income consumers.

For more:
- see the release

Related articles:
FCC opens $300M fund to boost rural broadband access
Consumer groups question whether FCC's Lifeline program reforms go far enough
FCC asks PUCs to help it reduce fraud in Lifeline program
USF voice service subsidy comes under FCC scrutiny

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