FCC Lifeline Draft Would Curb 'Waste,' Seek to Cap Funding and Better Target Support

Pai "has moved to an outright assault" on Lifeline after seeking "death by a thousand cuts," said Rep. Frank Pallone, D-N.J., Commerce Committee ranking member, in a Friday statement. He vowed to fight to "stop this brutal plan." FCC Commissioner Mignon Clyburn said the "so-called proposal ... promises to jeopardize our efforts at ubiquitous and affordable services" for people in New York and elsewhere.

A report and order would target enhanced tribal Lifeline support to rural tribal areas (the tribal subscriber monthly subsidy is $34.25 versus the standard $9.25). The item would conclude that providing enhanced support to tribal members in cities and suburban areas "wastes scarce resources." It would also employ mapping to identify tribal lands, require independent certification of tribal land residency, and direct the support to facilities-based providers, as Smith Bagley recently argued (see 1710240015).

A reconsideration order would eliminate "port freezes" that lock Lifeline subscribers into provider broadband services for one year and voice services for 60 days. It also would clarify the application of Lifeline broadband support without eliminating a rule targeted by USTelecom, and "minimize unnecessary document retention by providers in states where" a national verifier of consumer low-income eligibility has launched.

A memorandum opinion and order would clarify that Wi-Fi delivery of broadband service isn't eligible for Lifeline mobile broadband support, and continue to require eligible mobile broadband to be at least 3G capable. It also would clarify that a provider doesn't directly serve a customer with Lifeline fixed broadband if the customer can't access the service at home, meaning "premium Wi-Fi" wouldn't qualify for fixed-service support.

An NPRM would propose a self-enforcing annual funding cap to replace the $2.25 billion "budget" that's indexed for inflation and can be adjusted. The draft didn't propose a cap amount, but noted Lifeline funding had grown from $820 million in 2008 to over $2.1 billion in 2012, and then dropped to about $1.5 billion in 2015 under agency controls. It asked: "If the Commission adopted a previous disbursement level as the annual ... cap," which level should it be, and should it be adjusted in subsequent years or indexed for inflation?

The notice would propose to target funds to facilities-based broadband-capable networks that also can offer voice service. The draft seeks comment on the continuing phasedown of Lifeline subsidies for voice-only service, which some want stopped. The voice phasedown is faithful to statutory mandates and supports the commission's focus on encouraging broadband investment, it said. It also seeks comment on ways to enable consumer choice, including on TracFone's request "to allow providers to meet minimum service standards through plans that provide subscribers with a particular number of 'units' that can be used for either voice minute or broadband service."

The NPRM would propose to scrap FCC "Lifeline broadband provider" designations and the "state preemption on which it was based." The draft seeks comment on ways to partner with the states to improve implementation of the national verifier's rollout state by state. It also seeks comment on proposals to remove unnecessary regulation, improve program audits and take additional steps to increase "program integrity in eligibility verification."

A notice of inquiry would explore possible changes "to more efficiently target funds to areas and households most in need of help" and digital opportunities. "We remain concerned about the well-documented digital divide for low-income Americans, and in particular, low-income individuals who have not adopted broadband service, and low-income Americans residing on rural Tribal and or rural lands," said the draft, suggesting ways to improve provider incentives to offer Lifeline service.

“If the goal of the current FCC majority is to widen existing divides, and ensure that our nation's most vulnerable are less likely to be connected, this item sets us on that path," Clyburn said at a Silicon Harlem conference. "It will harm those less fortunate, those who need to dial 911, stay in touch with their children's educators, keep a job, and stay healthy. The day we head down such a path is a sad one indeed."

Pallone said Pai intends to "dramatically downsize" Lifeline: “Struggling families across the country depend on this program. This proposal would rip the phones from their hands. He must know how deeply dangerous this proposal is; otherwise he would have mentioned his proposal during the Committee’s oversight hearing this week. This is another unfortunate example of the FCC trying to avoid congressional oversight when it chooses to act against the people it is sworn to help. Chairman Pai should realize these tactics will not work and we will fight to stop this brutal plan.”

The only thing the FCC is proposing to dramatically reduce is waste, fraud and abuse, said a senior agency official on a call with reporters. He said the item simply seeks comment on an appropriate budget cap.

Lifeline Notebook

The FCC teed up NTCA's request for relief from new minimum service standards for fixed, wireline broadband services eligible for support, which increase from 10/1 to 15/2 Mbps Dec. 1 (see 1710240015). Comments are due Nov. 27 and replies Dec.12 on the group's petition for a temporary waiver, said a Wireline Bureau public notice in Friday's Daily Digest.