FCC Approves Lifeline/Link-Up Rulemaking
The FCC unanimously adopted a rulemaking notice Thursday that begins the process of overhauling the Lifeline/Link-Up programs. Chairman Julius Genachowski said the two programs had grown in recent years but were too full of waste, fraud and abuse that threatened to undermine the Universal Service Fund reforms he’s championing. “Increases in the contribution burden are particularly concerning for the tens of millions of Americans at or near the poverty line who pay for phone service but don’t participate in Lifeline,” the chairman said. Thursday’s notice includes proposals that would cap the fund, allow the poor to buy bundled services with their monthly subsidies and create a separate “National Accountability Database,” administered by separate officials, to make sure customers receiving the monthly stipends are actually qualified to receive them.
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Despite the 5-0 vote, Democratic Commissioners Michael Copps and Mignon Clyburn each said they weren’t sold on capping the fund. “Given the expansive modern communications needs of low-income Americans, we would be on a fool’s errand if we think that we can address both voice and broadband requirements, while simultaneously capping the fund,” Clyburn said. Copps said he was “concerned” about capping the fund. “Our challenge is to close the stubborn and persistent gap of low-income Americans who remain without even basic voice service while transforming the program to provide support for the advanced telecommunications services that all Americans need in order to compete in the 21st century economy,” which is “a tall order,” Copps said. “As we tee up proposals about how to provide support for broadband, capping today’s program would be at best imprecise,” Copps added. “How can we intelligently cap a program when we don’t know how much meeting the challenge is going to cost? At worst, we risk compromising the future of low-income Americans who may never be connected without Lifeline."
Republican Commissioners Robert McDowell and Meredith Baker did not explicitly endorse a cap on the fund, but each said they were gratified that the commission was tackling the growth of the fund. Each pointed out that the fund had more than doubled over the past decade -- from $577 million 10 years ago to more than $1.3 billion in 2010. “I support our efforts to address the need for real cost containment, and to recognize that -- in difficult economic times -- escalating contribution burdens on consumers can create their own affordability challenges undermining our efforts,” Baker said. McDowell said the fund’s growth was “unsustainable” and said the larger Universal Service Fund remake was “a bit like painting the Golden Gate Bridge: a project that is always underway and never seems to end.”
Various state officials, prompted by industry, have already started writing letters urging the FCC not to cap the fund (CD Feb 25 p7). Free Press condemned Thursday’s rulemaking notice as “piecemeal.” “Moving the needle on broadband adoption requires more than just well-named PR ploys like NCTA’s ‘Adoption-Plus’ program which has been collecting dust on a shelf since its announcement,” Research Director Derek Turner said. “It’s going to take policymakers to stand up for the good of the nation by requiring the phone and cable companies -- which receive billions in tax perks each year -- to do their part to ensure universal adoption through reasonable public service obligations.”
But the Adoption-Plus model received a key endorsement just the day before Thursday’s vote, when National Broadband Plan architect Blair Levin said the commission ought to scrap Lifeline/Link-Up and start over (CD March 3 p7). The National Association of Regulatory Utility Commissions said it was “pleased” with Thursday’s vote. Pennsylvania Public Utility Commissioner James Cawley, who chairs the state representatives on the Federal-State Joint Board on Universal Service, said Thursday’s notice “advances the goals of universal telecommunications and communications services for eligible low-income Americans.”