Lifeline Program in ‘Desperate Need’ of Fiscal Discipline, Walden Says

"Like the entire USF, Lifeline and Linkup programs are in desperate need of fiscal discipline,” Walden, R-Ore., told us in an email. “They have tripled in size in just four years. Before the Commission considers expanding the programs, they must identify where the money is going, eliminate duplicative subsidies, and curtail waste, fraud and abuse.” Walden said his committee will look closely at the order after its release “to make sure the FCC cleans up the program and ensures taxpayer dollars are used wisely."

In meetings at the FCC Monday, with advisers to all three commissioners, AT&T representatives warned that growth of the Lifeline program puts the rest of the Universal Service Fund at risk as well. If every eligible person enrolled, the fund would swell to over $5 billion a year, AT&T warned, according to an ex parte filing on the meetings (http://xrl.us/bmpsxu). “Is asking American consumers to pay $5 billion to support a Lifeline voice program the best use of their dollars?” AT&T asked.

The FCC needs to look closely at how the program is used by low-income customers, AT&T said. “To date, 84 percent of AT&T customers who were de-enrolled from Lifeline as result of recent Duplicate Resolution Process took NO action in response to loss of discount,” AT&T said. “Only 13 percent requested disconnection from wireline service.” The data was collected from the first four states that went through the de-enrollment process.

Meanwhile, four governors expressed concerns that proposals to place a cap on the fund, as well as placing a minimum monthly fee, would have a major impact on the accessibility of the program by qualified applicants. In a letter, Democratic governors Martin O'Malley of Maryland, Pat Quinn of Illinois, Peter Shumlin of Vermont and John deJongh urged the FCC to establish and implement a central database and a 60-day non-usage/non-payment policy.

The central database would enable ETCs to determine on a real time basis whether applicants are enrolled in other providers’ Lifeline programs, they said. The FCC should adopt a 60-day non-usage policy for ETCs offering prepaid Lifeline services and a 60 day non-payment policy for ETCs offering post-paid or billed Lifeline services, the governors said. The USF Federal/State Joint Board had asked the FCC to seek comment on whether to adopt a national database, potentially requiring interaction with state and/or regional database and resources. The question is who bears the cost, a state official said.

The consumer advocates tend to agree with the governors, said Wayne Jortner with the Maine public advocate’s office, a member of NASUCA’s telecom committee. It doesn’t make sense to cap a program that still serves only a fraction of the total number of eligible households, he said. Similarly, the consumer advocates oppose a minimum monthly fee requirement, he said. Consumer advocates support making accommodations for shelter residents or multiple families within a single residence, where routine screening may prevent such families from getting Lifeline, he said. But consumer advocates fully support reforms aimed at reducing waste and improving efficiency of the program, he said.

The FCC should take no steps to cap or otherwise decrease the size of the Lifeline program, AARP said (http://xrl.us/bmps47). “It is our view that efforts to reduce spending on safety-net programs are often shortsighted,” the group said in an ex parte filing. “They worsen the difficulties low-income people have in acquiring food, health care, shelter and education, thereby increasing long-term societal costs such as emergency room visits by the uninsured and a less-educated and productive workforce.”