At the tipping point: Comprehensive reform of FCC’s Lifeline program

Today, few argue with the fact that broadband Internet access is a 21st-century necessity. It’s the modern passkey to healthcare, education, government services and economic opportunities. Unfortunately, some Americans still lack this essential bridge to success.

The overwhelming majority of wealthy Americans have high-speed Internet access, but close to two-thirds of those with the lowest incomes are have-nots. The statistics are stark: Using 2013 data, 93 percent of individuals with annual incomes over $150,000 had broadband compared to only 36 percent of individuals with incomes below $10,000. Lack of broadband availability among the lowest income families makes it ever harder for them to get ahead.

{mosads}Fortunately, the Federal Communications Commission (FCC) is at this moment working to transform its existing and successful Lifeline program, which was initially created to make essential telephone service affordable, by expanding the program to bring broadband within reach for our nation’s low-income residents. 

A forward-looking concept when introduced during the Reagan administration, Lifeline helped raise basic telephone subscribership for low-income households in the U.S. from 80 percent in 1984 to nearly 93 percent by 2013. Yet, the program only provides funding for stripped-down phone service at a time when consumers are rapidly shifting to broadband, whether fixed or wireless, as their preferred means to communicate.

With bipartisan support in Congress, the FCC now has a unique opportunity to completely overhaul and reshape the program for the 21st century. The central challenge is to add broadband as a Lifeline benefit without a significant increase in program costs. Tinkering with the existing program or making minor modifications to program administration at the edges will likely fail to deliver the promise of ubiquitous and modern high-speed broadband access for low-income consumers.

A thoroughgoing reform is needed, one that delivers a fundamentally new program based on core principles similar to those recently announced by FCC Commissioner Mignon Clyburn. For example, why not start by
putting the consumer in charge? Today’s program is centered around the carriers who receive the $9.25 per month Lifeline subsidy and also determine the eligibility of individuals for the program. A reformed Lifeline program should be consumer-centric, recognizing the power that consumers exercise in today’s competitive communications marketplace and building off of that recognition.

Instead of giving the subsidy to the carriers, it should be given directly to consumers who could then decide where it should be spent. To promote consumer choice, eligible individuals could be issued a “Lifeline Benefit Card,” similar to food stamp cards, which would allow them to easily apply the subsidy to broadband or basic telephone service or some combination of both. Consumers could also shop among the various service providers and submit their Lifeline Benefit Card to the one they choose. In theory, this change could be made with little increase in program costs.

Eliminating incentives that can lead to misallocation of program resources should result in cost savings for the program. The present approach of carriers determining eligibility for Lifeline participation carries incentives to qualify ineligible applicants, leading to inefficiency and waste of program resources. A better way to administer the program would be to share the responsibility for determining consumer qualification with state governments under a process known as “coordinated enrollment.”

At present, states handle verification of consumer eligibility for a number of federal programs, such as food stamps, school lunches and Medicaid. Adding Lifeline to that list would promote efficiency and would also cut down on the opportunities for waste in the program. Simply stated, when an individual is qualified by a state public assistance office for programs like food stamps or Medicaid, the individual could simultaneously be deemed qualified for the Lifeline program and could receive a Lifeline Benefit Card. Thirty-seven states currently provide federal subsidies, including food stamps, through a debit-card system. It works well; why not simply add Lifeline?  

Lifeline remains as important to achieving “full participation in our society and economy” as it was in 1985 when the program was started. If anything, Lifeline is even more critical today as broadband becomes increasingly central to American life. Those without it simply lack access to the tools necessary for success.

Winston Churchill once said that “a pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.” I believe that the optimists at the FCC recognize that only top to bottom reform of the Lifeline program can place it on a sustainable path for the nation’s broadband future. I’m also optimistic that they will prevail in initiating the wholesale changes necessary to make broadband an eligible service, strengthen program administration and protect against misallocation and waste of program resources. 

Fundamental — not half-hearted reform — is how to ensure that Lifeline remains relevant and opens the door to meaningful opportunities for low-income families in need of communications services.

Boucher served in the House from 1983 to 2011. He is honorary chair of the Internet Innovation Alliance (IIA) and is a partner in the Washington office of the law firm Sidley Austin, which has telecommunications companies among its clients.