FCC agrees to revamp Lifeline and include broadband service

The FCC voted to reboot and modernize the Universal Service Fund's Lifeline program by adding broadband service to the mix and having a third party establish eligibility for the program, which is intended to provide discounted telecom services to low-income consumers. The vote was 3-2, with Republican Commissioners Ajit Pai and Michael O'Rielly dissenting.

Lifeline historically has provided subsidies for phone service (both wireless and wireline) for low-income consumers.  The new proposal calls for broadband service to be included in that subsidy as well as the establishment of a third party to determine eligibility for Lifeline (as opposed to the current structure in which telecom providers determine eligibility).  It also calls for a minimum service standard for both phone service and broadband service. The FCC is seeing input on those minimum requirements.

But the new proposal did not address how the Lifeline service should be paid for. Currently the subsidies are paid by consumers when they pay their Universal Service Fees that are attached to their telecom bills. The FCC did not say whether broadband providers would start attaching USF fees to their bills to pay for the subsidy. That is going to be determined by another proceeding with input from the USF joint board.

However, the FCC did say it was going to maintain the existing Lifeline subsidy of $9.25 per month for either phone service or broadband but is also looking for input on that pricing scenario.  

Commissioner Mignon Clyburn, an advocate for the Lifeline reboot, said that the old Lifeline program was inconsistent with today's services and that low-income residents need access to advanced services like broadband. She also said that the new Lifeline program should prevent "inferior" service from being eligible for subsidies.

Commissioner Pai, in his dissent, said that he believes the revamped Lifeline lacks fiscal reform such as a budget for spending. Without a budget, Pai said, the program could double in size again, noting that it has already doubled in spending since 2008.

Fellow Commissioner O'Rielly also dissented because he said there were not enough safeguards against waste and no spending cap. He also disagreed with including broadband in the service mix because he doesn't believe broadband is a telecommunications service.

Meanwhile, TracFone, the largest provider of wireless Lifeline services, said in a statement that it would work with the FCC to further evolve the program.

For more:
- see this FCC release
- see this TracFone statement
- see this Broadcasting & Cable article

Related articles:
Lifeline Assistance Program needs broadband in reform, legislators say
FCC Chairman Wheeler unveils $1.7B plan to extend broadband to the poor
AT&T: FCC's CAF-II should just support broadband services
Local Choice pulled from Senate bill

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