We Can't Afford to Stall on Lifeline Modernization

OTI has long been a steadfast supporter of the Federal Communications Commission’s Lifeline program, especially earlier this year when the FCC modernized the $9.25 per month subsidy program to include broadband-only services. Critics (CTIA, TracFone, and a group of “Lifeline ETC Petitioners”) recently petitioned the FCC to halt implementation of this effort, arguing that the FCC’s approach is unaffordable. This argument is without merit and risks delaying an important effort to bridge the digital divide, which is why OTI filed comments this week to defend the FCC and low-income Americans against these challenges.

Throughout the Lifeline modernization process, the FCC was motivated by two policy goals: to ensure the program is (1) affordable and (2) reasonably comparable to broadband services that are available to all Americans. Affordability is clearly an important goal; Lifeline services should be affordable to those who rely on them. However, it is also extremely important that Lifeline does not become a second-tier internet service that is so slow and unreliable that subscribers can’t participate in all the internet has to offer. Balancing these two goals is difficult: set the standards too high and the cost will be unmanageable for low-income communities; set the standards too low and low-income communities will lack robust internet access.

After a long rulemaking proceeding that involved extensive input from industry, consumer advocates, and social justice groups, the FCC adopted an order in March that sets minimum standards for mobile broadband that are phased in as follows:

One way in which the FCC balanced affordability and comparability is through this phase-in. The FCC noted that, based on its formula, it could have imposed a minimum standard of 2 GB beginning this year, but chose not to so the market could adjust to the new standards.

The FCC also made several rule changes that will significantly reduce Lifeline providers’ costs, therefore allowing for lower Lifeline prices. For instance, broadband providers will no longer be responsible for determining who is eligible for Lifeline subsidies — that will be handled by a third-party authority called the National Lifeline Eligibility Verifier. Further, the application process for Lifeline broadband providers has been streamlined and takes place solely at the FCC rather than at each individual state. These changes are designed to increase competition between Lifeline broadband providers and lead to better services at lower prices for low-income communities.

The minimum standards will also be reviewed periodically going forward. Annual reviews begin in 2019, and the FCC will study the entire market and make recommendations as part of its State of the Lifeline Marketplace Report, due in June 2021. If the minimum standards are harming affordability at that time, the FCC is empowered to adjust the rules accordingly.

The arguments made against Lifeline modernization should be rejected to ensure they do not delay implementation and enforcement of the Lifeline Order. Millions of low-income Americans can’t afford to wait.