Genachowski to Put Low-Income Programs On ‘Budget,’ Telecom, FCC Officials Say
FCC Chairman Julius Genachowski plans to circulate an order on the Lifeline program as early as Tuesday, telecom and commission officials told us. As Genachowski did with the high-cost portion of the Universal Service Fund last fall (CD Oct 28 p1), the coming order is expected to put Lifeline on what the chairman will call “a budget.” It will not formally cap the Lifeline portion of USF, telecom and FCC officials said. It’s expected to address eligibility requirements and how to remove people from the Lifeline rolls if they're not eligible, telecom officials said.
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The goal is to have the item on the agenda for January’s open meeting, several telecom and FCC officials said. There may still be discussions on how to frame the budget ahead of Tuesday’s order, though, they said. Internal FCC calculations have found that if everyone who was eligible for Lifeline accepted the subsidy, the fund could grow as big as $5 billion, which would make it bigger even than the high-cost fund, telecom officials said.
In recent years, Lifeline enrollment has exploded, according to a monitoring report by the Federal-State Universal Service Joint Board. Between 2008 and 2010, Lifeline subscriptions jumped 54 percent to 10.6 million, the report said (http://xrl.us/bmnydn). Overall, Lifeline and Link-Up funds jumped from $822 million in 2008 to $1.32 billion in 2010, a 61 percent increase, the December monitoring report said. It said that more than half of the federal subsidies went to two carriers, America Movil and AT&T. America Movil owns TracFone, one of the largest Lifeline/Link-Up companies.
TracFone and Nexus sent the FCC a letter Thursday saying they had developed a formula for a database to monitor Lifeline and Link-Up to prevent fraud and waste. The companies have already opened “necessary discussions with JP Morgan Chase,” which runs federal food stamp databases in several states, TracFone and Nexus said (http://xrl.us/bmnya8).
Under the TracFone/Nexus proposal, eligible telecom carriers will collect the names, addresses, birthdays and the last four digits of Social Security numbers for its customers. The carrier would verify customers’ identities “via a data dip into Lexis/Nexis, Acxiom or Experian,” the companies said. They added in a parentheses that “TracFone and Nexus, and any other ETC that may participate in the future, will be required to pay for the services provided by the vendor. TracFone and Nexus will provide proof on a quarterly basis that it is utilizing one of these services to confirm the identity of new applicants."
After confirming a customer’s identity, carriers would refer the customer to “a third-party vendor,” which would create a “shadow database” that “will replicate the subscriber information contained in the ETC’s own data base for existing and former subscribers,” TracFone and Nexus said. The companies “will continue to work on establishing the ... database, and expect that they will have a mechanism in place for steps 1 through 3 in the next few months,” TracFone and Nexus said in their joint letter.
Genachowski will deliver a speech Monday morning on “agency efforts to deliver smart, responsible government,” an agency spokesman said in an email to reporters Friday. The spokesman couldn’t be reached for comment on the Lifeline order.