MCN Guest Blog

A Lifeline Argument Not Rooted in Reality

Subsidy Program Needs to Be Broadened, Offer More Choice 9/28/2015 2:00 PM

The Federal Communications Commission is now modernizing its Lifeline program, originally designed to connect low-income Americans to the telephone network.

 

Lifeline was created in the mid-1980s and reflects the pre-broadband era, when Americans communicated primarily by wired or wireless telephone. The reform now underway would broaden the program to cover high-speed Internet service.

 

That change is urgently needed. Only 36% of individuals with incomes below $10,000 have access to broadband, even though broadband is the bridge to success in today’s economy.

 

Lifeline is unique in that service providers, and not the government, today determine whether consumers qualify for and remain in the program. That means service providers maintain an incentive to qualify as many subscribers as possible, which can lead to waste and misallocation of program resources.

 

That’s why my organization, the Internet Innovation Alliance (IIA), has joined FCC commissioner Mignon Clyburn and many others in calling for fundamental reform of the Lifeline program. We seek to enhance consumer choice, expand the number of carriers willing to offer Lifeline-supported services and promote greater financial accountability to ward off waste, fraud and abuse. To enhance accountability, IIA supports having states, not self-interested companies, determine who is eligible to receive Lifeline service. A state agency determination that an individual is eligible for other federal benefit programs, such as food stamps, would automatically qualify that person in the Lifeline program.

 

TIME FOR AN EBT

To spur competition by encouraging a larger number of carriers to participate in the program and to give consumers the most flexible way to choose from among competing carriers, we support moving the Lifeline subsidy to an electronic benefit transfer (EBT) card.

 

Putting the Lifeline benefit on an EBT card and asking the states to confirm eligibility would empower consumers in the marketplace and help prevent fraud. Yet even as many states have adopted the convenience and accountability of moving government-provided benefits to an EBT card, some still resist this change for Lifeline.

 

They contend that EBT cards would burden certain beneficiaries, such as the elderly, disabled and rural poor, based on an incorrect assumption that the cards would have to be swiped at a retail location on a regular basis.

 

Let’s review how eligibility determinations and EBT cards would work in practice under a new Lifeline program.

 

First, Lifeline eligibility would be determined through “coordinated enrollment,” with states performing Lifeline enrollments as they judge eligibility for a number of other federal programs (such as the Supplemental Nutrition Assistance Program, or SNAP). Lifeline could be added to this process to ensure that only those eligible for benefits actually receive them. Upon a determination of eligibility, the low-income consumer would receive a “Lifeline EBT Card,” similar to food stamp cards, allowing them to apply the subsidy to the telephone or broadband service of their choice.

 

State agencies that approve eligibility for Lifeline would also provide to the beneficiary a list of registered Lifeline service providers in that area. Individuals could then sign up for Lifeline by visiting a retail location or by using their electronic benefit to order service by phone or over the Internet.

 

Consumers with EBT cards could apply their $9.25 Lifeline monthly discount toward basic telephone or basic wireless service, or they could decide to apply the discount toward Internet service.

 

When consumers are satisfied with their service option and want it to continue, they should be able to set up automatic monthly payments of the Lifeline subsidy through an agreement with the carrier, revocable by the customer at any time.

 

There’s no need to go to a storefront every month unless the consumer wants to switch Lifeline providers (which could also be done online or over the telephone).

 

WORKS IN THE STATES

Thirty-seven states have put federal benefits on some form of debit card. It’s efficient, and it’s working well. There’s no reason why it should not be extended to the Lifeline program.

 

Those who argue against EBT cards and want to maintain the status quo are obliged to frame their arguments in the realities of how the program would actually function in practice. In particular, claims that placing the Lifeline benefit on an EBT card would impose logistical burdens on subscribers by requiring that they visit physical store locations on a regular basis are simply inaccurate and do nothing to advance the reform dialogue. Moreover, those who oppose moving Lifeline eligibility determination authority to the states and removing self-interested carriers from the process should spell out how the government can stop Lifeline enrollment abuse that weakens popular support for the current program.

 

An EBT card as part of coordinated enrollment with other federal programs is the best way forward. Giving consumers more choices, including both the choice of broadband and greater choice among providers, will empower consumers to take maximum advantage of their Lifeline benefit and to encourage the nation’s transition to broadband. That is the key not only to Lifeline reform, but to its success in the 21st century.

 

Rick Boucher was a member of the U.S. House for 28 years, chaired the Subcommittee on Communications, and the Internet, and is honorary chair of the Internet Innovation Alliance (IIA). He is a partner in the Washington office of law firm Sidley Austin.