Thursday, May 24, 2012

What Is So Difficult About Sharing A Database?

by Deborah Taylor Tate

Access to voice services is important. Lifeline is a federal program for ensuring that low-income consumers have the same access we all do. This is one of the few federal programs that is transparent and targeted directly to low-income users themselves. These features distinguish Lifeline from other, more opaque Universal Service Fund (USF) programs that annually transfer billions of dollars in indirect subsidies to voice carriers for the ostensible purpose of providing service in high-cost areas – often where there are multiple carriers who don't receive this subsidy.

The FCC is now in the process of reforming USF. Those long-overdue reforms include transitioning USF from voice services to broadband, using market mechanisms to limit and discipline subsidies, and cutting waste, fraud, and abuse. All of which, as a former FCC Commissioner, I applaud, but, more importantly, as a contributing taxpayer.

The FCC is already taking several important steps to make Lifeline more efficient by curbing waste, fraud, and abuse. For instance, in its February Lifeline Report & Order, the FCC limited Lifeline subsidies to one per-household. By the end of 2013, the FCC plans to establish a nationwide accountability database. This will enable carriers participating in the Lifeline program to check for and prevent multiple carriers from being reimbursed for serving the same low-income consumers. Also, a nationwide eligibility database under consideration by the FCC would enable carriers to ensure that low-end consumer applicants satisfy Lifeline’s low-income criteria. These Lifelines reforms are welcome.

Unfortunately, the FCC is about to implement other administrative requirements that could potentially cut thousands of eligible low-income consumers off from Lifeline.

Starting in June the FCC will require carriers enrolling low-income consumers in Lifeline to access available state or federal social services eligibility databases to verify eligibility. Otherwise, carriers must themselves review consumers’ documentation to verify eligibility.

This new administrative requirement for so-called “full certification” is problematic. Many states do not have accessible databases or workable arrangements in place with carriers to conduct such verification. At the very least, a reasonable postponement – perhaps a year's time – of the state database access requirement is necessary to allow states and carriers to work out the implementation details.

Moreover, tying Lifeline eligibility to state database access now overly-complicates the verification process; precisely the opposite result the reform intended. The FCC is looking to establish a federal eligibility database, which would effectively make its requirement of accessing state databases a temporary measure until the federal database is set up. As an administrative matter, the simpler approach is to implement any future “full certification” or verification process after a federal database is in operation.

There is evidence that in states currently requiring “full certification,” many low-income consumers who are intended beneficiaries of the Lifeline program never complete the process.

Carriers like TracFone have had to deny enrollment – or worse – stop the service to thousands of Lifeline applicants even though consumers disclose their full name, address, date of birth, and the last four digits of their social security number. The FCC should permit this kind of simpler verification process to continue as it works to ensure eligibility. In addition, there are conversations with other federal agencies who already have established databases for other federal low income services, such as the Department of Agriculture-ASID (food stamps), DOE (school lunch programs) and HHS (healthcare). It seems that this might be a terrific and efficient intra-governmental solution: sharing all these various eligibility databases – already in existence.

Recently, the USF reforms being implemented by the FCC have undergone attack from certain members of Congress and others who want to preserve the outdated, analog-era, rate-of-return regulation and subsidy system that has benefited voice carriers. A strong Lifeline program should be helpful to reform-minded members of Congress and the FCC in resisting entreaties to walk away from these needed reforms. With USF high-cost fund subsidies to carriers exceeding $4 billion in the year 2010 alone, and consumers now paying a USF surcharge or “tax” of 17.4% on the long-distance portion of their bills to pay for those subsidies, USF reform remains imperative.

In launching its long-term USF reforms last year, the FCC sought to avoid “flash cuts” in indirect subsidies to carriers. Hopefully, a reformed Lifeline regime will one day become the exclusive mechanism for ensuring universal service and replace opaque, indirect subsidies to carriers. To this end, reforms that avoid quick “flash cuts” in services to low-income consumers who might get lost in paperwork and processing are more important.

But rather than risk access to thousands of low-income consumers by tying Lifeline eligibility to a haphazard and perhaps temporary state database process, the FCC should permit simpler self-certification processes, implement its other Lifeline efficiency reforms, and focus on building a national eligibility database.

At the very least, the FCC should postpone its deadline to more time for states, other federal agencies, and carriers to work out efficient arrangements for sharing information and certifying eligible low-income consumers, rather than building yet another bureaucracy under the name of "reform."