FCC serves up reworked Lifeline program to weed out fraud, promote broadband adoption

The FCC voted unanimously Tuesday, 3-0, to reform its Lifeline phone subsidy program and reduce waste by preventing consumers from claiming services from multiple service providers.

A new National Lifeline Accountability Database will be created to prevent multiple carriers from receiving support for the same subscriber.  

The FCC said the new database builds on efforts it took in 2011 where it eliminated almost 270,000 duplicate subscriptions in 12 states following the review of over 3.6 million subscriber records, saving $33 million.

Under the reformed program, the FCC has also established a one-per-household rule, but defines a household as an "economic unit" so that separate low-income families living at the same address can get connected.

Service providers that participate in the Lifeline program are eligible for subsidy of up to $10 per month per subscriber, and the program is part of the $9 billion Universal Service Fund, which the FCC is currently reforming. AT&T (NYSE: T) and Verizon (NYSE: VZ) offer both wireless and wireline-based Lifeline phone plans to low-income subscribers.

Besides voice services, another important part of the reformed program focuses in enabling low-income residents can get access to broadband data services. A new Broadband Adoption Pilot Program will help it determine how Lifeline can be used to increase broadband adoption among Lifeline-eligible consumers.

Although the three commissioners did not agree on whether they should cap total Lifeline fund, which has grown from $488 million in 2000 to $1.3 billion in 2010, they did acknowledge the reforms are a critical first step.

For more:
- see the release
- see this Bloomberg article

Related articles:
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
Verizon, Sprint, USTelecom join challengers to USF reform plan

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