Sticky Details Lurk Beneath Lifeline Conceptual Consensus, Comments Suggest

Beneath the conceptual consensus, substantive divisions could complicate the commission’s efforts to carry out the broadband expansion and administrative restructuring. Deep differences over whether Lifeline spending should be capped in some way are a major issue. “Realistically, any expansion of the Lifeline program to include broadband, if it is to meet the objectives of its proponents, is likely to be very costly,” said Free State Foundation President Randolph May, who backs an adjustable budget. Even a popular proposal for “coordinated enrollment” to simplify and boost Lifeline subscribership drew substantial concerns from a key U.S. Department of Agriculture agency that oversees existing federal assistance programs.

There is broad backing from commenters for allowing low-income consumers to use Lifeline subsidies to purchase wireline or wireless voice, broadband or bundled service of their choice, but cost is a contentious issue. Some such as Verizon and ITTA called on the FCC to keep its current Lifeline support at $9.25/month per household. Georgetown Center for Business and Public Policy scholars said the commission should target the support to “marginal subscribers” who wouldn’t otherwise have service, and they were among those backing an overall Lifeline funding cap or at least “budget.” Without some sort of program constraint, the parties fear annual Lifeline spending could explode way above its current $1.6 billion. “Simply put, far too many people can claim Lifeline subsidies,” Tech Freedom said.

But many consumer groups, advocates for minorities and others oppose a cap or budget. “We strongly oppose any budgeting proposals that would prevent eligible participants from using the Lifeline program,” said a dozen major members of The Leadership Conference on Civil and Human Rights. “The Lifeline program has never approached full participation rates by eligible populations. The Commission rightly objects to any proposals that would halt payments to eligible consumers mid-stream. Likewise, we oppose proposals that would result in waiting lists for eligible households or other unreasonable and administratively cumbersome mechanisms.”

AARP and others also said the $9.25/month subsidy won’t be enough to boost broadband adoption, and could create troublesome tradeoffs on voice service, already a struggle for many wireless Lifeline users due to monthly usage caps of 250 or 300 minutes. Consumer Action said it was “gravely concerned” the subsidy would cover only a fraction of the broadband cost and present consumers with a “Hobson’s choice” between voice and broadband service unless the programs are separated.

Free State’s May questioned whether a $9.25 subsidy was “realistic to achieve the objectives” in the NPRM. “This is why I urge the Commission to ensure that the measures to reduce waste and fraud are put in place and monitored, and that the benefit (regardless of the amount) be limited to those persons either at or close to the federal-defined poverty level,” he said. May urged a budget the FCC would set every year or two and then review before the next cycle. “In the event of a severe economic downturn, which is not necessarily predictable, there may be more persons who qualify to receive subsidies in one period than projected when formulating the budget,” he said: Those people shouldn't be denied support due to a cap, but “the parameters of the program” should be periodically reevaluated and adjusted “to ensure that it is operated in a fiscally responsible manner.”

On administering the program, numerous parties agreed with the FCC proposal to overhaul the process of verifying consumer eligibility for Lifeline by lifting responsibility from telecom service providers. Many backed shifting to a national third-party verifier working with other federal and state agencies overseeing existing assistance programs, including through possible methods to coordinate Lifeline enrollment with enrollment in those programs.

But the USDA’s Food and Nutrition Service, which oversees the three nutritional-assistance programs the FCC proposed using to increase Lifeline enrollment coordination, voiced concerns. The FNS said coordinating Lifeline with the Supplemental Nutrition Assistance Program (SNAP), National School Lunch program and the Food Distribution Program on Indian Reservations “would be challenging on a nationwide basis.”

The FNS said it had “serious concerns” with the FCC’s proposals on SNAP (also known as food stamps), given state agency administration with "significant local control." The commission “would have to approach each State agency individually and get their assent and cooperation to proceed,” said the FNS. State agencies already “face tremendous pressures to maintain or improve existing services with limited resources,” the FNS said. “Adding Lifeline to the administration of existing programs and to the existing eligibility systems would likely create considerable additional costs for States, and potentially tax their ability to maintain current operations and make needed improvements for existing programs.” The FNS had concerns over “any diversion of resources” that would harm SNAP administration. The FNS also said “SNAP regulations are not wholly consistent with Lifeline’s goals” and “disbursement of Lifeline benefits on SNAP” cards would present challenges. In addition, the FNS has “significant concerns” about FCC proposals regarding the school lunch program.