Stubborn FCC Again Tries to Fix Lifeline Program

November 21, 2019 | by Andrew Regitsky

Stubborn FCC Again Tries to Fix Lifeline Program

This FCC never fails to amaze me. Already taking heat for its net neutrality decision, the Commission once again ventures into the dangerous waters of another hot button telecom issue – the Lifeline program. Lifeline is designed to give low income Americans low or no cost dial tone and broadband service to enable them to communicate with emergency services, potential employers and family.

While the Program has existed for years it has been plagued by abuses such as nonexistent subscribers, claims for subscribers who were not using their Lifeline service, and the enrollment of duplicate subscribers in a single residence. In response, the Commission made several attempts to fix Lifeline.

In 2011, the agency issued the Duplicative Payments Order, which clarified that each eligible Lifeline consumer is entitled to only one Lifeline benefit.

The following year the Commission issued the 2012 Lifeline Order, which comprehensively reformed the Program, including the establishment of the National Lifeline Accountability Database (NLAD) to “both eliminate existing duplicate support and prevent duplicative support in the future,” directed the Universal Service Administrative Company (USAC) to continue in-depth data validations to check for duplicates until the NLAD was operational, codified a rule limiting Lifeline support to a single discount per household, prescribed certain duties that Eligible Telephone Companies (ETCs) and USAC should take to eliminate the submission to USAC of duplicative claims for support; and established a non-usage rule, which required ETCs providing free-to-the-end-user Lifeline service to de-enroll subscribers who failed to use their service during the prescribed period.

The 2016 Lifeline Order established a National Verifier to directly verify Lifeline applicants’ eligibility. It also created the Lifeline Broadband Provider ETC category, which allowed an ETC to offer a single supported Lifeline service (broadband Internet access service) rather than both the supported services (voice and broadband). Strangely, the FCC chose to preempt states from designating Lifeline Broadband Providers. This decision was promptly challenged in court by state commissions and was remanded back to the FCC.

In a 2017 Lifeline Order and Notice of Proposed Rulemaking, to reduce incentives for enrollment of ineligible subscribers, the Commission proposed and sought comment on prohibiting agent commissions related to enrolling subscribers in the Lifeline program. The Commission also proposed codifying the requirement that ETC Lifeline enrollment representatives register with USAC, which would improve the ability to monitor and stop potentially fraudulent or improper enrollments by enrollment representatives.

While these actions have reduced Lifeline abuse, the Commission believes further improvements are needed. That is why on November 14, 2019, in a 3 to 2 partisan decision, it released the Lifeline Fifth Report and Order, Memorandum Opinion and Order, and Order on Reconsideration and Further Notice of Proposed Rulemaking in Docket 17-287 (Fifth Order). In the Fifth Order the Commission announced additional actions to strengthen the Program’s “enrollment, recertification, and reimbursement processes so that limited Universal Service Fund dollars are directed only toward qualifying low-income consumers.” These actions include:

  • Prohibiting participating carriers from paying commissions to employees or sales agents based on the number of consumers who apply for or are enrolled in the Lifeline program with that carrier.
  • Requiring participating carriers’ employees or sales agents involved in enrollment to register with the program administrator, USAC.
  • Codifying a rule that strengthens prohibitions barring Lifeline providers from claiming “subscribers” that are deceased.
  • Taking additional steps to better identify duplicate subscribers, prevent reimbursement for fictitious subscribers, and better target carrier audits to identify potential FCC rule violations.
  • Increasing transparency by posting aggregate subscribership data, including data broken out at the county level, on USAC’s website.
  • Increasing transparency with states by directing USAC to share information regarding suspicious activity with state officials.

In response to the court remand, the Commission restores the traditional and lawful role of the states in designating carriers to participate in the Lifeline program.

In the Further Notice, the Commission seeks industry comments on additional measures to combat waste, fraud, and abuse, including ways to ensure the accuracy of carriers’ claims that subscribers are using their Lifeline service on an ongoing basis and whether providers’ practice of providing free cell phones during in-person Lifeline enrollment events encourages ineligible applicants to attempt to enroll in the program.

It also seeks comments on appropriate program goals and metrics for a modernized Lifeline program.

The two FCC commissioners that are Democrats dissented from most aspects of the Fifth Order. Commissioner Jessica Rosenworcel noted her concerns about Lifeline began when the Republicans assumed control of the FCC:

But in 2017, the FCC abruptly changed course. Right out of the gate it cut the Lifeline reforms designed to refocus the program on broadband, rescinding the ability of a bunch of companies seeking to offer internet access through the program. Next, it proposed slashing the program by as much as 70 percent. On top of this, it took a cruel swipe at the program on Tribal Lands, where it cut off providers and acted like up is down by suggesting that this would increase access to communications in our least connected communities. Thankfully, a court saw through this dishonesty and vacated the FCC’s effort to dismantle the program on Tribal Lands. It found that the agency acted in an arbitrary and capricious fashion by “not providing a reasoned explanation for its change of policy that is supported by record evidence.” At the same time, the FCC’s proposal to gut the program has been panned by everyone from the AARP to the American Association of People with Disabilities to the National Network to End Domestic Violence to the NAACP and the National Grange. (Dissent of Jessica Rosenworcel)

She also pans the current decision.

I believe the cruelty that has informed the FCC’s approach to Lifeline is unacceptable. The desire to demonize those who rely on it fails to recognize the humanity of those who count on this program, including the elderly, veterans, those recovering from disaster, those suffering from domestic violence, and homeless youth. That is why I called for the FCC to shut down this proceeding and start over. Because we do not, I dissent. In addition, I dissent because the missteps this decision makes with respect to the future of this program are problematic.

For starters, the effort to put eligible telecommunications carrier designation for Lifeline with state public service commissions, grants those closer to service with an important role. But it doesn’t clearly square with the FCC’s decision to reclassify broadband and roll back net neutrality...

This decision also requires that eligible telecommunications carriers offering Lifeline service register the personally identifiable information of their workforce in a new database. That means we will entrust the Universal Service Administrative Company with holding information about employees from companies providing Lifeline service that range from names to dates of birth to residential addresses to even social security numbers. This presents an unnecessary risk for data breach...

I further dissent because the rulemaking appended to this decision adds to the uncertainty hanging over this program—and more importantly, the people who count on it...

I dissent because instead of taking this four-decade-old program and modernizing it, our approach has been to diminish it—with cruel disregard for those who need it most. (Id.).

Industry comments on the Further Notice are due 30 days after is publication in the Federal Register.