At its November 16 meeting, the FCC will consider changes to
its Lifeline program that provides subsidized communications services to low
income persons. As readers of this space know, for many years, even decades, I
have been a supporter of a properly run, efficient Lifeline program. So, as the
Commission considers certain rule changes, I offer these thoughts about what
the Commission has proposed.
First, I am unabashedly free market-oriented. For as long as
I have been a Lifeline supporter, at the same time, I also have been a forceful
(I hope) advocate of eliminating or curtailing unnecessary, costly FCC
regulations – of which there are too many.
Second, I do not consider my support for Lifeline to be
inconsistent with my free market disposition because I consider Lifeline
service a “safety net” for qualifying low income persons who otherwise might
not have access to communications services. But I emphasize, as I did in Senate
testimony in June 2015: “Lifeline should be a ‘safety net’ that operates
within boundaries to aid those truly in need, not another federal entitlement
program that is structured, or that evolves, in a way so that its subsidies
inexorably expand to subsidize those further up the income scale who are not
truly in need.”
Third, like other “safety net” programs, it is very
important that Lifeline be run efficiently and that waste, fraud, and abuse of
the program is absolutely minimized. To the discredit of the Commission, and especially
of those who knowingly abused the program, this has not always been the case in
the past. Yet, over the past few years, corrective measures have been initiated,
and they have had some positive impact. It is imperative that the Commission continue
these efforts, such as implementing the National Lifeline Eligibility Verifier,
to enhance and maintain the program’s integrity. At a time when the USF fee
(yes, a “tax”) paid by consumers on all interstate and international calls is
nearly 20%, the public will not long support one of the Universal Service
programs if waste and fraud is prevalent. Nor should they. So, the FCC must
continue the efforts it has begun in this regard, especially by targeting “bad
actors.”
Fourth, even though I have made clear on many occasions that
policies incenting facilities-based providers should be favored over those that
do not provide such incentives, the Commission’s proposal to eliminate non-facilities-based
providers from Lifeline participation gives me substantial pause. Approximately
70% of current Lifeline subscribers are served by resellers, and a large proportion
of those 70% are served by wireless providers. Moreover, surveys consistently
show a significant proportion of low-income households are “wireless only.”
For whatever reason – and the reason may well be that
Lifeline-eligible persons understandably are not as profitable to serve as
those with higher incomes – the evidence appears to show, at least thus far,
that facilities-based providers have not targeted this market segment. So, the
Commission ought to be concerned about its proposal to eliminate resellers from
participation in the program, at least at this time when they serve such a
large proportion of eligible subscribers.
Of course, the Commission should continue to pursue policies,
including reducing unnecessary regulations, to stimulate facilities investment
in all areas of country, particularly underserved rural areas. FCC Chairman Ajit
Pai deserves much credit for calling attention to the rural-urban “digital
divide” and for proposing ways to address it. But the primary objective of the
Lifeline program is to provide a “safety net” for those who demonstrate their eligibility.
The Commission shouldn’t lose sight of that objective.
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