Prospects for Lifeline Cap Legislation Dismissed as Nothing but Messaging

HR-4884 would cap the Lifeline budget at $1.5 billion, far lower than the $2.25 billion budget contemplated by last week’s 3-2 party-line agency vote, and prevent purchase or subsidy of devices such as smartphones, tablets and laptops. “It is simple good governance to rein in programs, like Lifeline, that have vastly expanded in scope and have done so with an ever-increasing share of Americans’ hard-earned dollars,” Scott, who isn't a Commerce Committee member and has no co-sponsors, told us in a statement Monday. “The lack of accountability in the Lifeline Program has gone largely unchecked, and the program has ballooned from fraud and abuse; the price of which has been paid by Americans across the country. My legislation will protect American citizens by placing a reasonable budget cap on Lifeline and rooting out the program’s waste, fraud, and abuse. ... It is clear from the FCC’s partisan vote last week to expand Lifeline that Congress must act to impose fiscal discipline to ensure increased costs are not shouldered by Americans.”

Committee Democrats would likely oppose the bill for several reasons, a Democratic staffer told us Monday. That staffer cited the cap, the prohibition on any funding for equipment and the faster phase-out of voice support as key reasons of concern. The $1.5 billion figure is also an extremely low cap, the staffer added, noting it’s even lower than the $1.75 billion proposal put out by Commissioner Ajit Pai. The staffer dismissed the legislation as no more than a message bill, with no efforts of negotiating underway behind the scenes.

“Congressional Democrats probably would block any stand-alone Lifeline cap bill,” said Guggenheim Partners analyst Paul Gallant. “But if Congress decides to do something on net neutrality after the D.C. Circuit rules, perhaps Republicans would try to add Lifeline to those negotiations.”

Democrats in the House and Senate are on record slamming the concept behind Scott’s legislation. Some Democratic staffers on the House Commerce Committee emailed objections Thursday to the developing deal between Commissioner Mignon Clyburn, a Democrat, and Republican Commissioners Pai and Mike O’Rielly. Those negotiations involved a Lifeline budget cap and delayed the start time of Thursday’s FCC meeting. The deal fell apart before the meeting’s partisan FCC vote. Clyburn’s office revealed the specific emails in an ex parte filing posted Monday. “We now know Dems used phone calls and e-mails to pressure Clyburn to renege on deal,” tweeted Matthew Berry, chief of staff to Pai, Monday. “What's next shoe to drop? Telegrams? Carrier pigeons?”

“This is a very bad deal,” emailed Margaret McCarthy, legislative staffer for Rep. Doris Matsui, D-Calif., to Clyburn aides Rebekah Goodheart and David Grossman, a former Commerce Committee Democratic staffer. “Please call me.”

“My boss would not support a hard cap on lifeline,” emailed Philip Murphy, legislative director for Rep. Mike Doyle, D-Pa., to Goodheart and Grossman. “This is a huge concession that will bind future commission action and could significantly constrain the program. More than that, the growth of this program is linked to unemployment and the general state of the economy. If shit hits the fan, there can be no question that everyone who qualifies will be able to take advantage of this program. There simply cannot be a situation where people are turned away because the program has run out of funds or people are waiting on the commission to act to change the cap.”

Murphy linked the program to broader Democratic policy positions: “More than that, the very idea of capping a social safety net program is against everything democrats have fought for,” he said. “This sends a terrible message more broadly that democrats are willing to negotiate the long term viability of these programs for a policy victory.”

As revealed last week (see 1604010042), Doyle and Matsui signed a letter Commerce Committee Democrats sent to the FCC Thursday, led by Rep. G.K. Butterfield, D-N.C., opposing a Lifeline cap. Also signing were Commerce Committee ranking member Frank Pallone of New Jersey, Communications Subcommittee ranking member Anna Eshoo of California, Yvette Clarke of New York, Ben Ray Lujan of New Mexico, Jerry McNerney of California and Bobby Rush of Illinois. The Obama administration didn’t rule out a budget for Lifeline when commenting to the FCC through NTIA earlier in March. “If the Commission finds that an overall budget is required to control costs, it should establish appropriate targets to ensure that all qualified subscribers that seek the benefit can receive it,” the administration said.

The National Hispanic Media Coalition “opposes the legislation because it could result in needy families being turned away from Lifeline service,” General Counsel Jessica Gonzalez told us Monday. She lauded the FCC’s initial budget now thanks to last week’s overhaul: “The FCC has created mechanisms to revise that budget as necessary and appropriate. This legislation removes that flexibility and sets an arbitrary cap before even evaluating the efficacy of the budget that the FCC created just last week. Congressman Scott’s statement misleadingly suggests that Lifeline is wrought with waste, fraud and abuse, despite that the FCC enacted sweeping reforms to address those exact concerns back in 2012.”

Chances of the bill’s passage are “likely nil,” said Public Knowledge Government Affairs Counsel Phillip Berenbroick. “I have a hard time imagining a bill that would undermine the Lifeline program a) getting Democratic support, and b) getting very far in the Senate.” He pointed out the lack of support among a wide variety of industry and public interest stakeholders for such a hard cap. Berenbroick suspected any Commerce Committee consideration could be a way for Republicans to “hash out” process concerns, such as those surrounding the bipartisan commissioner deal that fell apart.

Clyburn’s ex parte filing also showcased email exchanges with Senate Democratic staffers. Scott Wilson, a staffer for the Senate Judiciary Committee, told Grossman “a hard cap on Lifeline would probably raise some concerns over here.” Nick Choate, a legislative staffer for Sen. Claire McCaskill, D-Mo., was the one Democratic staffer known to be encouraging the possible bipartisan deal among commissioners Thursday. “We were obviously thrilled to hear this morning that there might be a deal on the budget issue that would have gotten the Republican commissioners on board with the order and potentially defused some of the partisanship surrounding the issue,” Choate emailed Goodheart and Grossman. “Now we’re hearing that might not be the case. Senator McCaskill would certainly encourage the commissioner to continue working toward such a compromise.”

President Barack Obama “is on the record in support of Lifeline modernization,” Gonzalez said. “I doubt that he would sign this bill given that a budget is already in place and that an arbitrary cap could result in failing to connect eligible families who need broadband to meet basic needs, such as healthcare, education, housing, employment, etc. Nor do I expect many Congressional Democrats to support such poor public policy that fails to consider vulnerable Americans. I think that the FCC will move forward, as planned, and that this bill will die. I hope that the extreme rhetoric around Lifeline dies along with the bill.”