[Senate Hearing 114-140]
[From the U.S. Government Publishing Office]
S. Hrg. 114-140
LIFELINE: IMPROVING ACCOUNTABILITY
AND EFFECTIVENESS
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON COMMUNICATIONS, TECHNOLOGY, INNOVATION, AND THE
INTERNET
OF THE
COMMITTEE ON COMMERCE,
SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE
ONE HUNDRED FOURTEENTH CONGRESS
FIRST SESSION
__________
JUNE 2, 2015
__________
Printed for the use of the Committee on Commerce, Science, and
Transportation
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SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
ONE HUNDRED FOURTEENTH CONGRESS
FIRST SESSION
JOHN THUNE, South Dakota, Chairman
ROGER F. WICKER, Mississippi BILL NELSON, Florida, Ranking
ROY BLUNT, Missouri MARIA CANTWELL, Washington
MARCO RUBIO, Florida CLAIRE McCASKILL, Missouri
KELLY AYOTTE, New Hampshire AMY KLOBUCHAR, Minnesota
TED CRUZ, Texas RICHARD BLUMENTHAL, Connecticut
DEB FISCHER, Nebraska BRIAN SCHATZ, Hawaii
JERRY MORAN, Kansas EDWARD MARKEY, Massachusetts
DAN SULLIVAN, Alaska CORY BOOKER, New Jersey
RON JOHNSON, Wisconsin TOM UDALL, New Mexico
DEAN HELLER, Nevada JOE MANCHIN III, West Virginia
CORY GARDNER, Colorado GARY PETERS, Michigan
STEVE DAINES, Montana
David Schwietert, Staff Director
Nick Rossi, Deputy Staff Director
Rebecca Seidel, General Counsel
Jason Van Beek, Deputy General Counsel
Kim Lipsky, Democratic Staff Director
Chris Day, Democratic Deputy Staff Director
Clint Odom, Democratic General Counsel and Policy Director
------
SUBCOMMITTEE ON COMMUNICATIONS, TECHNOLOGY, INNOVATION, AND THE
INTERNET
ROGER F. WICKER, Mississippi, BRIAN SCHATZ, Hawaii, Ranking
Chairman MARIA CANTWELL, Washington
ROY BLUNT, Missouri CLAIRE McCASKILL, Missouri
MARCO RUBIO, Florida AMY KLOBUCHAR, Minnesota
KELLY AYOTTE, New Hampshire RICHARD BLUMENTHAL, Connecticut
TED CRUZ, Texas EDWARD MARKEY, Massachusetts
DEB FISCHER, Nebraska CORY BOOKER, New Jersey
JERRY MORAN, Kansas TOM UDALL, New Mexico
DAN SULLIVAN, Alaska JOE MANCHIN III, West Virginia
RON JOHNSON, Wisconsin GARY PETERS, Michigan
DEAN HELLER, Nevada
CORY GARDNER, Colorado
STEVE DAINES, Montana
C O N T E N T S
----------
Page
Hearing held on June 2, 2015..................................... 1
Statement of Senator Wicker...................................... 1
Statement of Senator Schatz...................................... 2
Statement of Senator Nelson...................................... 3
Prepared statement........................................... 4
Statement of Senator Ayotte...................................... 37
Statement of Senator Booker...................................... 39
Prepared statements from industry, civil rights and advocacy
groups supporting the Broadband Adoption Act of 2015....... 41
Statement of Senator Fischer..................................... 62
Statement of Senator Markey...................................... 64
Statement of Senator Daines...................................... 65
Statement of Senator Blumenthal.................................. 67
Statement of Senator Manchin..................................... 69
Statement of Senator Sullivan.................................... 71
Witnesses
Ronald A. Brise, Commissioner, Florida Public Service Commission,
National Association of Regulatory Utility Commissioners
(NARUC)........................................................ 5
Prepared statement........................................... 6
Michael Clements, Acting Director, Physical Infrastructure
Issues, U.S. Government Accountability Office.................. 15
Prepared statement........................................... 17
Scott Bergmann, Vice President, Regulatory Affairs, CTIA--The
Wireless Association.......................................... 21
Prepared statement........................................... 23
Randolph J. May, President, The Free State Foundation............ 28
Prepared statement........................................... 29
Jessica J. Gonzalez, Executive Vice President and General
Counsel, National Hispanic Media Coalition..................... 32
Prepared statement........................................... 34
Appendix
Response to written questions submitted to Commissioner Ronald A.
Brise by:
Hon. Hon. John Thune......................................... 77
Hon. Joe Manchin............................................. 78
Hon. Amy Klobuchar........................................... 79
Response to written questions submitted to Michael Clements by:
Hon. John Thune.............................................. 81
Hon. Joe Manchin............................................. 82
Response to written questions submitted to Scott Bergmann by:
Hon. John Thune.............................................. 82
Hon. Roger F. Wicker......................................... 84
Hon. Joe Manchin............................................. 85
Hon. Amy Klobuchar........................................... 86
Response to written questions submitted to Randolph J. May by:
Hon. John Thune.............................................. 86
Hon. Roger F. Wicker......................................... 87
Hon. Hon. Joe Manchin........................................ 88
Response to written questions submitted to Jessica J. Gonzalez
by:
Hon. John Thune.............................................. 88
Hon. Joe Manchin............................................. 89
Hon. Amy Klobuchar........................................... 91
LIFELINE: IMPROVING ACCOUNTABILITY
AND EFFECTIVENESS
----------
TUESDAY, JUNE 2, 2015
U.S. Senate,
Subcommittee on Communications, Technology,
Innovation, and the Internet,
Committee on Commerce, Science, and Transportation,
Washington, DC.
The Subcommittee met, pursuant to notice, at 9:31 a.m. in
room SR-253, Russell Senate Office Building, Hon. Roger Wicker,
Chairman of the Subcommittee, presiding.
Present: Senators Wicker [presiding], Ayotte, Fischer,
Moran, Sullivan, Gardner, Daines, Schatz, Nelson, McCaskill,
Blumenthal, Markey, Booker, Manchin, and Peters.
OPENING STATEMENT OF HON. ROGER F. WICKER,
U.S. SENATOR FROM MISSISSIPPI
Senator Wicker. This subcommittee hearing on
Communications, Technology, Innovation, and the Internet will
come to order.
I think we will go ahead. We have a vote at 10:30, and we
will probably be able to extend past that. Senator Schatz will
be here shortly, but I don't think he will mind us going ahead
and taking care of some of the preliminaries.
Today, we examine the state of the FCC's Lifeline program,
focusing our attention on two key issues: Is the program
effective in reaching those it is meant to serve? And what more
needs to be done to root out waste, fraud, and abuse in order
to ensure the program is accountable to the consumers who fund
it and, of course, ultimately, to the American public?
The Lifeline program was established as part of the
Universal Service Fund in 1985. The goal of the Universal
Service Fund has always been to achieve universal service
throughout the Nation. Lifeline, specifically, is intended to
make telephone service available to qualifying low-income
households. As mobile phone usage spiked in the early 2000s,
Lifeline was extended to cover the cost of prepaid wireless
service plans in addition to traditional landline service.
Lifeline, like the entire Universal Service Fund, is paid
for through a charge on consumers' phone bills. This major
expansion of the program to wireless brought with it a dramatic
increase in Lifeline disbursements, from $800 million in 2009
to $2.2 billion at its peak in 2012.
The FCC implemented reforms in 2012 to address the rising
cost of the program as well as problems identified by a 2010
GAO study. This has revealed a significant lack of agency
control over waste, fraud, and abuse.
Since the FCC's report in 2012, positive strides have been
made, including a reduction in the size of the program from
$2.2 billion in 2012 to $1.7 billion by the end of 2014.
Certain reforms, however, still have yet to be implemented,
contributing to lingering problems with the program.
To examine the problems that persist with Lifeline,
Chairman Thune requested that GAO study and report on the
status of the FCC's reforms and the extent to which the FCC has
evaluated the program's effectiveness. GAO's study, which was
released earlier this year, revealed major outstanding issues.
These include verification of eligibility, program growth, and
extremely low participation in the FCC broadband adoption pilot
program, the Commission's first step toward expanding Lifeline
to cover the cost of broadband services.
There are many benefits of broadband, which we saw at our
last subcommittee hearing on connecting patients through
telehealth.
But today we are here to focus on our oversight role to
ensure the Lifeline program is furthering its intended purpose
and providing connectivity to those who cannot afford it.
Before again expanding the program, we need to consider what
problems remain and how we can address them, since consumers
are bearing the cost of funding the program with increasing
phone bills. Today we will examine outstanding reform issues
and explore what can be done to curb issues.
I look forward to the testimony of our distinguished panel,
and I now turn to my distinguished colleague, the Ranking
Member, Mr. Schatz.
STATEMENT OF HON. BRIAN SCHATZ,
U.S. SENATOR FROM HAWAII
Senator Schatz. Thank you, Chairman Wicker. Good morning.
And I thank the witnesses for participating in today's hearing.
When Lifeline began almost three decades ago, the goal was
to make sure that all Americans had the securities and
opportunities that came with phone service, whether you needed
to call an ambulance or call for a job interview.
Just like that landline was necessary in the 1980s,
everyone needs a broadband connection to participate in today's
society, to perform the most basic tasks, like a video chat
with your doctor, applying for a job, doing your homework, or
paying for a parking ticket. Expanding Lifeline subsidies to
broadband simply recognizes the reality of how people
communicate today. Being connected today means being connected
to the Internet.
However, the program does need an overhaul. We must learn
from the mistakes of the past, and we have to work on parallel
tracks. That means reforming Lifeline and expanding it to
broadband at the same time.
Before discussing how to improve Lifeline, I also want to
recognize, as does the GAO, that the FCC has made important
progress since 2012. Reforms have helped to reduce Lifeline's
spending by nearly 24 percent in the last 3 years. The FCC
initiated 16 enforcement actions against ETCs, which led to
more than $1 million in plan penalties.
While progress has been made, we all agree Lifeline must be
executed more efficiently, and the FCC recognizes that as well.
In fact, last week, Chairman Wheeler circulated a set of
proposals to revamp Lifeline. Based on the information we have
seen so far, it seems that all of the tough issues are on the
table for discussion.
The FCC is proposing to overhaul the way they determine
eligibility. The FCC will seek feedback on the right amount for
the subsidy and whether subscribers should contribute
themselves. The FCC will also be reviewing the need for a
budget. Lifeline is the only USF program operating without one
today.
These reforms are necessary to ensure that Lifeline works
well, but as we expand Lifeline to broadband, other
considerations might come into play. For example, if the
subsidy amount is the same for voice and broadband, we might
assume that broadband services will cost the Lifeline
subscriber more than a voice connection. We can also assume
that faster service will be more expensive. We must consider
how these program decisions will influence subscriber
decisions.
Most importantly, we need to consider training. The FCC and
others have recognized that the cost of the service is only one
of the barriers to broadband adoption, and study after study
shows that simply making technology available is not enough.
Successful programs provide training and tools so that people
know how to use the technology in a way that is relevant to
their life.
The Internet Essentials program is the largest broadband
adoption program for low-income Americans. That program seems
to have successfully addressed this skills gap, and we need to
take a look at this to make sure that Lifeline can do the same.
We have to revamp Lifeline in order to make it an efficient
program for participating carriers and for the contributors who
help to pay for the program. Most important, we must make it
work for the people who need it the most. This program, if done
well, can empower low-income Americans with the access and the
skills that they need to participate in the 21st century.
I thank the Chairman.
Senator Wicker. Thank you, Senator Schatz, for a very
insightful and appropriate opening statement.
I now turn to the distinguished Ranking Member of the full
committee, Mr. Nelson, for his opening statement.
STATEMENT OF HON. BILL NELSON,
U.S. SENATOR FROM FLORIDA
Senator Nelson. Thank you, Mr. Chairman. And I will make it
very concise so we can get on. I am delighted to see our
Commissioner from Florida here.
It has been stated that the concept of universal service is
the foundation of our Nation's communications policies. And,
therefore, it is critical that we not forget the importance of
the FCC's Lifeline program to keeping that universal service
goal.
We have seen now for over 30 years Lifeline provide basic
telephone service. Without this relatively small subsidy, many
of those families would go without and find themselves cutoff
from any kind of communication with family and friends and
employers and emergency services.
In the intervening time, there have been attempts at
modernization of the program to eliminate waste and fraud and
improve accountability--and where there have been cases of
abuse, the FCC has responded with targeted programs. But now
the FCC is contemplating how to improve it to better meet 21st-
century communications needs, including what has been
mentioned, broadband. And so I commend the FCC for beginning
this inquiry.
As this digital economy continues, access to broadband is
absolutely necessary. And at a time when a lot of employers
require--an overwhelming number of employers require, if you
are going to apply for a job, you have to apply online, then
those that are economically disconnected, we have to provide
for them to be able to do this.
When 7 out of 10 teachers assign homework that requires
access to the Internet, obviously we must close the homework
gap to address those low-income students who cannot do their
homework because they don't have a broadband connection.
At the same time, basic voice telephone service is
essential as well. Any modernization of Lifeline should keep in
mind the need for the balance between the voice and the
broadband. And I have stated this as we have visited with the
FCC. I am confident that the FCC will keep this critical
balance in mind.
Thank you, Mr. Chairman.
[The prepared statement of Senator Nelson follows:]
Prepared Statement of Hon. Bill Nelson, U.S. Senator from Florida
I want to welcome all of our witnesses. In particular, I would like
to thank Commissioner Ronald Brise for coming up from Tallahassee. You
have been deeply involved in Lifeline and other universal service
issues both during your time in the Florida House and on the Florida
Public Service Commission.
The concept of universal service has long been a foundation of our
Nation's communications policies. With this enduring principle in mind,
it is critical that we not forget the importance of the FCC's Lifeline
program to advancing our universal service goals. For three decades, we
have seen Lifeline provide basic telephone service to millions of
vulnerable Americans. Without this relatively small subsidy, many of
these families would go without and find themselves cut off from
family, friends, employers and emergency services.
Over the past few years, the FCC has undertaken modernization of
the Lifeline program to eliminate waste, fraud, and abuse, and improve
accountability. Where cases of abuse in the program have been
identified, the FCC has responded with targeted reforms and robust
enforcement actions against bad actors.
Now, the FCC is contemplating how to improve the Lifeline program
to better meet 21st century communications needs, including improving
access to broadband. I commend the FCC for beginning this inquiry.
There is no denying that, as we move to a digital economy, access
to broadband has become essential. At a time when an overwhelming
majority of employers require online job applications, we must help the
economically disconnected have the opportunity to compete in the
digital economy. When seven out of 10 teachers assign homework that
requires access to the Internet, we must work to close the so-called
homework gap to address those low-income students who cannot do their
homework because they lack a broadband connection.
At the same time, basic voice telephone service remains an
important communications service for many of our most vulnerable
populations, including the poor and elderly.
Any modernization of Lifeline should keep in mind the need to
balance preserving support for voice service with a proposed expansion
to cover broadband. I am confident the FCC will carefully consider this
critical balance.
Finally, the Lifeline program has always been a bipartisan program.
It was created during the Reagan administration and expanded to
wireless services in the Bush administration. In Florida, this program
has enjoyed the support of governors of both parties and the state
legislature. We should not lose sight of the broad support for the
goals of this important program.
I look forward to hearing from the witnesses here today.
Senator Wicker. And thank you very much, Mr. Ranking
Member.
We now proceed to the opening statements of our witnesses.
And I think we will go from left to right as I look out over
the audience.
Our first witness will be Commissioner Ronald A. Brise,
Florida Public Service Commission, Member of the Board of
Directors of the National Association of Regulatory Utility
Commissioners.
He will be followed by Mr. Michael Clements, Acting
Director for Physical Infrastructure Issues at GAO, and then
Mr. Scott Bergman, Vice President, Regulatory Affairs, CTIA--
The Wireless Association. Our next witness will be Mr. Randolph
May, President of The Free State Foundation. And our fifth
witness will be Ms. Jessica Gonzalez, Executive Vice President
and General Counsel, National Hispanic Media Coalition.
We very much appreciate each of the witnesses being with us
today. And we hope that they will be as successful as previous
panels have been in adhering to the strict 5-minute rule for
opening statements.
Of course, your entire statement will be submitted to the
record and will be printed therein.
So let's begin by hearing from Commissioner Brise.
STATEMENT OF RONALD A. BRISE, COMMISSIONER, FLORIDA PUBLIC
SERVICE COMMISSION, NATIONAL ASSOCIATION OF REGULATORY UTILITY
COMMISSIONERS (NARUC)
Mr. Brise. Good morning, Chairman Wicker, Ranking Member
Schatz, and all the members of the Subcommittee. And to my
Senator, Senator Nelson, thank you for allowing me to be here
this morning testifying today.
I am representing NARUC, the National Association of
Regulatory Utility Commissioners, the state commission experts
on these topics in your states.
You, Congress, established the universal service and the
low-income Lifeline program as shared responsibilities of
Federal and state regulators. I take this responsibility
seriously as an individual, as do my colleagues across this
nation.
There are three points that I would like to make this
morning.
First, as my written testimony demonstrates, NARUC's member
commissions have proven time and time again to be a crucial
bulwark against fraud, waste, and abuse. Neither Congress nor
the FCC should do anything to these state cops off the beat or
diminish their authority.
Continued coordination is absolutely crucial. The explosive
growth in the program in the past decade shows what happens
when proper safeguards are not in place. Florida, like many
other states, implemented a real-time verification procedure
before the FCC revised its rules. We also, like other states,
have stopped some abuse through revoking or, in some cases, not
granting the ETC designations.
Second, it is time for policymakers to formally consider
expanding the Lifeline program to cover broadband. But that
involves building a solid record, and there are a myriad of
questions that need examination.
Which takes me to my last point. The joint board process
established by Congress should be used again because it works.
Indeed, state experience filtered through the joint board
process was the basis for the last set of changes that the FCC
made to its Lifeline rules--changes that clearly eliminated
quite a bit of fraud and inefficiency in the program.
Any expansion raises a host of questions that should be
first examined by a Federal joint board to appropriately
balance the interests of those that pay the costs of the
program with the program's policy goals.
Whether Congress or FCC acts, the joint board process will
improve any final action. Lifeline certainly is a program that
we all support, and the joint board process will be useful as a
starting point in any discussions as the reforms move forward.
As a nation, we should not continue to subsidize access to
voice services alone. Broadband is vital to the economic growth
and opportunity. I, my state colleagues, and NARUC stand ready
and willing to work with you, the FCC, industry, the low-income
community, and you in Congress on these issues.
Thank you for the opportunity to testify, and I look
forward to answering your questions.
[The prepared statement of Mr. Brise follows:]
Prepared Statement of Commissioner Ronald A. Brise, Florida Public
Service Commission on behalf of the National Association of
Regulatory Utility Commissioners (NARUC)
Chairman Wicker, Ranking Member Schatz, and Members of the
Subcommittee, thank you for the opportunity to testify today on the
low-income Lifeline Program.
I am a Commissioner with the Florida Public Service Commission
(PSC) and currently serve as a NARUC representative on the Federal
State Joint Board on Universal Service, the Board of Directors of the
Universal Service Administrative Company, and on the FCC's
Intergovernmental Advisory Committee. NARUC--like Congress--is a
bipartisan organization. NARUC's members include public utility
commissions (PUCs) in all of your states, the District of Columbia and
U.S. territories with jurisdiction over telecommunications,
electricity, natural gas, water and other utilities. NARUC member
commissioners are the in-State experts on the impact of FCC programs in
your state and on your constituents. The Universal Service Fund (USF)
and the low-income Lifeline program we are discussing today are shared
responsibilities of Federal and State regulators. I personally take
this responsibility seriously, as do my colleagues across the country.
Currently, Lifeline provides low-income consumers with discounts on
monthly telephone service enabling them to connect to the vital
telecommunications network. Established in 1985, the Federal program
provides discounts for voice communications on monthly wireless or
wired phone bills ($9.25 a month) to low-income households. At least
half the states provide matching Lifeline funds ranging from $.75 to
$8.50 a month with most states averaging about $3.50.
NARUC has a long history of supporting this vital social
program.\1\
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\1\ See, NARUC's July 2000 Resolution regarding Universal Service
for Low Income Households at: http://www.naruc.org/Resolutions/
lifeline_summer00.pdf; July 2005 Resolution Supporting the efforts of
the FCC and NARUC to promote Lifeline Awareness at: http://
www.naruc.org/Resolutions/LifelineAwareness_s0705.pdf; July 2009
Resolution Proclaiming National Telephone Discount Lifeline Awareness
Week, at http://www.naruc.org/Resolutions/Resolution%20on
%20Lifeline%20Awareness%20Week.pdf.
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We have also supported transitioning the program to include
broadband service.\2\ Specifically, NARUC supports changes to ``defray
a meaningful amount of the program participant's average cost for the
installation/activation and monthly charges for broadband service and
acquisition of enabling devices.'' \3\ We also believe a Joint Board
referral on lifeline issues to, among other things, as per our February
2009 Resolution, evaluate the FCC's Pilot program \4\ and ``to make
recommendations regarding its continuation and configuration as a
national program,'' should precede final FCC action.\5\ Our subsequent
July 2011 Resolution specifically ``urges the FCC . . . and the states
to work within the existing Federal Universal Service Fund's budget . .
. to improve broadband service adoption . . . through coordinated
Lifeline and Link-Up Broadband Service Pilot Program projects.''
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\2\ See, NARUC's February 2008 Resolution to Support Equal Access
to Communication Technologies by People with Disabilities, at http://
www.naruc.org/Resolutions/People%20with%20
Disabilities%20Resolution1.pdf; February 2009 Resolution on Lifeline
and Link-Up Program Support for Broadband Internet Access Services and
Devices, at: http://www.naruc.org/Resolu
tions/TC%20Resolution%20on%20Lifeline%20and%20Link-
Up%20Program%20Support%20for%
20Broadband%20Internet%20Access%20Services%20and%20Devices.pdf;
November 2009 Resolution on Legislation to Establish a (Permanent)
Broadband Lifeline Assistance Program, at http://www.naruc.org/
Resolutions/Resolution%20on%20Legislation%20to%20Establish%20a%
20Broadband%20Lifeline%20Assistance%20Program.pdf.
\3\ See, NARUC's July 2011 Resolution Supporting Low-Income
Broadband Adoption Program, at http://www.naruc.org/Resolutions/
Resolution%20Supporting%20a%20Low-Income%20Broad
band%20Adoption%20Program.pdf
\4\ See, Veach, Julie, Chief, FCC Wireline Competition Bureau,
Driving Lifeline Updates with Data: FCC Blog (May 22, 2015--1:10 PM)
at: https://www.fcc.gov/blog/driving-life
line-updates-data. See also, the FCC's Low-Income Broadband Pilot
Program data sets at: https://www.fcc.gov/encyclopedia/low-income-
broadband-pilot-program and the WCB Low-Income Broadband Pilot Program
Staff Report (May 22, 2015) at: https://www.fcc.gov/document/wcb-low-
income-broadband-pilot-program-staff-report.
\5\ The recent GAO Report suggests some additional review may be
warranted. See GAO-15-335 Report to the Chairman, Committee on
Commerce, Science, and Transportation, U.S. Senate: Telecommunications:
FCC Should Evaluate the Efficiency and Effectiveness of the Lifeline
Program (March 2015) http://www.gao.gov/assets/670/669209.pdf (``The
usefulness of information FCC gathered through its broadband pilot
program may be limited due to the lack of an evaluation plan and other
challenges . . . Although GAO previously recommended in 2010 that FCC
develop a needs assessment and implementation and evaluation plans for
the pilot, FCC did not do so and now faces difficulties in evaluating
the program without established benchmarks.'')
---------------------------------------------------------------------------
As technology continues to move forward, it is critical to the
economic well-being of our Nation that all Americans can communicate
effectively. Broadband has become a vital communications conduit. It is
time for Congress and the FCC to consider expansion.
However, our experiences during the rapid expansion the Lifeline
program since 2005 illustrates why sound safeguards, careful
consideration, and continued oversight are necessary.
NARUC and its members were quick to identify many of the concerns
policymakers continue to focus on today.
The Lifeline program grew from about $800 million in 2008 to $2.2
billion in 2012.
This explosive growth in the program indicated the business plans
of the new prepaid wireless ETCs were both profitable and popular.
Unfortunately, as later FCC enforcement actions would demonstrate,\6\
the framework in place was not adequate to shield the program from
extensive fraud and abuse. The FCC's recent reforms, based on a
Federal-State Joint Board recommended decision, were a significant step
forward. But some problems still remain.\7\
---------------------------------------------------------------------------
\6\ According to the FCC, by November 1, 2013, ``over 2 million
duplicate subscriptions were eliminated, and the FCC's reform's are on
track to save the fund over $2 billion over three years.'' FCC Proposes
Nearly $33 Million in Penalties Against Lifeline Providers That Sought
Duplicate Payments for Ineligible Subscribers, FCC Press Release
(November 01, 2013), at https://transition.fcc.gov/eb/News_Releases/
DOC-323858A1.html; FCC Proposes Nearly $44 Million in Fines Against 3
Lifeline Providers, FCC Press release (December 11, 2013) at https://
transition.fcc.gov/eb/News_Releases/DOC-324620A1.html; FCC Proposes
$14.4 Million Forfeitures to Protect Lifeline Service, FCC Press
Release (June 25, 2013) at https://transition.fcc.gov/eb/News_Releases/
DOC-323565A1.html.
\7\ See, e.g., AT&T and SNET to Pay $10.9 Million for Overbilling
Federal Lifeline Program, FCC Press Release (April 29, 2015), at:
https://transition.fcc.gov/eb/News_Releases/DOC-333257A1.html See also,
Notice of suspension and initiation of debarment proceeding, to Mr. Wes
Yui Chew from Jeffrey J. Gee, Chief, Investigations and Hearings
Division, FCC Enforcement Bureau, File No. EB-IHD-15-00019046, DA 15-
630 (May 26, 2015), at: https://apps.fcc.gov/edocs_public/attachmatch/
DA-15-630A1.docx, disbarring the addressee for his conviction of money
laundering for transferring $20,455,829.10 to his personal bank account
while knowing that Icon had thousands fewer lifeline customers than it
reported. See also, footnote 5, supra.
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States Remain a Crucial Safeguard Against Waste, Fraud and Abuse
As both Congress and the FCC consider whether to expand the program
to include broadband service, it certainly would be prudent to
reevaluate current safeguards and consider possible improvements.
A 2009 NARUC resolution, responding to the post-2005 expansion,
pointed out that ``some states are developing real-time access to
information necessary to verify household eligibility and ensure that a
household receives only one Lifeline Subsidy'' and called upon both
states and the FCC to ``review existing procedures to verify
eligibility. . .including consideration of real-time verification.''
\8\
---------------------------------------------------------------------------
\8\ See, Resolution on Lifeline Service Verification (November
2009), available online at: http://www.naruc.org/Resolutions/
Resolution%20on%20Lifeline%20Service%20Verification.pdf.
---------------------------------------------------------------------------
My State, Florida, was one that implemented a real-time
verification procedure in 2007. Consumers participating in the
Supplemental Nutrition Assistance Program, Medicaid, or Temporary
Assistance for Needy Families programs can electronically apply for
Lifeline through the Florida Department of Children and Families or on
the Florida PSC Website. In either case, applicants are verified as
participants in one of those qualifying programs in real-time.
Implementation of the electronic Lifeline Coordinated Enrollment
Process in Florida has been a major success with over 734,000
applications received since 2007.
Our federalist system allows states like Florida to act as
laboratories for programs providing useful and tested templates to
guide Federal (and other State) policy makers' decisions.
We commend the FCC for its 2012 reforms \9\ and aggressive
enforcement to reduce waste, fraud and abuse, as well as its
coordination with NARUC and States. Coordinated action removed more
than 2 million duplicate subsidies, and brought the fund down to about
$1.6 billion in 2014. At the same time, the Federal USF contribution
factor remains in double digits--currently set at 17.4 percent of
interstate revenues.
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\9\ See, FCC Reforms, Modernizes Lifeline Program for Low-Income
Americans, FCC Press Release, (January 31, 2012), at: https://
www.fcc.gov/document/fcc-reforms-modernizes-lifeline
-program-low-income-americans.
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Florida was not alone. Both before and after the FCC's 2012 action,
several states enacted prophylactic measures such as databases on
duplicates and eligibility and periodic compliance audits of carriers.
According to an informal survey of our members, at least five
states established programs to eliminate duplicative support and have
been allowed to opt out of the FCC's National Lifeline Accountability
Database.\10\ At least 15 of the states that responded to our informal
surveys use State social service databases to confirm consumer
eligibility for participation in the Lifeline program.\11\ At least one
(more) state has initiated a pilot program. In two more, the largest
Incumbent Local Exchange Carrier has a contract to access the social
service database to confirm eligibility. But the costs of establishing
these verification systems can be high. States, like the Federal
government, are not immune to current economic conditions and fiscal
restraints. As often happens, the FCC's announcement that it was
creating databases was likely an incentive for other states to defer
expending scarce resources to create a State-specific database.
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\10\ States establishing their own program to eliminate duplicates:
California, Texas, Vermont, Oregon, and Puerto Rico.
\11\ States responding to either the 2013 or 2015 they have a
system or program in place to confirm the eligibility of Lifeline
subscribers by using social service agency databases: CA, FL, ID, IL,
IN, KS, MI, NE, NC, NY, OR, PA, WA, WI, WY. MN has a pilot program
ongoing. In AZ & GA the largest ILEC in the state has contracted for
access to the social service database but no other ETC has access at
this point.
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Also, in many States, including mine, Eligible Telecommunications
Carriers (ETCs) have been reluctant to take the steps and incur costs
necessary to utilize available State social service databases for
verification. This problem remains despite a specific FCC rule
requiring all ETCs to utilize existing State databases.\12\ Though some
may ascribe more venial motivations, it is clear that carriers are also
hoping to avoid some compliance costs by waiting for a national
database. This is a problem for states that offer eligibility
verification resources. We have been unable to locate any formal agency
action to enforce this rule.
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\12\ See 47 C.F.R. Sec. 54.410(c)(i)(A).
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Thirteen responding states have programs to periodically conduct
compliance audits on ETCs and/or of Lifeline recipients.\13\ For
example, California, in addition to financial and compliance audit
provisions, has had annual renewal/recertification requirements since
2006.
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\13\ States responding to either the 2013 or 2015 surveys that have
requirements for requiring periodic compliance audits on lifeline
carriers or recipients: CA, CO, FL, KS, ME, MA, MO, MS, NE, NJ, OH, OR,
WI.
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In some cases, states have revoked or refused to grant an ETC
designation pursuant to Section 214(e) of the 1996 Act. This capability
is a crucial component for policing the fund to eliminate bad actors.
Six states responding to our survey have refused an application for ETC
designation filed by a carrier. Seven others, including Florida,
revoked designations for questionable practices and/or violating
program rules.\14\ But these numbers do not tell the whole story. In
many cases, a carrier whose ETC application or existing ETC designation
is being challenged will withdraw its application or relinquish its ETC
status once it becomes clear it will not be granted or may be revoked.
Such actions are not reflected in any statistics. Florida, for example,
has had 19 ETC filings withdrawn. Moreover, many states require ETCs to
certify--when they are seeking designation or submitting annual
filings--that it is in compliance with all Federal and State rules and
whether the provider's ETC designation has been suspended or revoked in
any jurisdiction.
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\14\ States responding they had revoked a carrier's ETC
designation: FL, KS, KY, MI, MN, WA, WI. Florida revoked the
designations of two companies for abuse of the Lifeline program, one of
which faces criminal charges in Tampa Federal court this summer. See
Florida PSC Docket No. 080065, Investigation of Vilaire Communications,
Inc.'s eligible telecommunications carrier status and competitive local
exchange company certificate status in the state of Florida, and Docket
No. 110082-TP, Initiation of show cause proceedings against American
Dial Tone, Inc., All American Telecom, Inc., Bellerud Communications,
LLC, BLC Management LLC d/b/a Angles Communication Solutions, and
LifeConnex Telecom, LLC for apparent violations of Chapter 364, F.S.,
Chapters 25-4 and 25-24, F.A.C., and FPSC Orders.
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Unfortunately, the ability of our members to audit and investigate
waste, fraud, and abuse by wireless ETCs is hampered in some states
because of current (but reversible) limitations on oversight over
wireless carriers.\15\ For others, the ability to effectively oversee
any broadband Internet access Lifeline providers might be hampered by
other State laws targeting IP-based services.\16\ Questions remain: Can
the FCC marshal the resources to properly oversee the program for all
States? Should Congress encourage states to play a stronger compliance
role? These are questions for Congress and this committee to consider.
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\15\ State Commissions generally designate carrier participation in
the Lifeline program for wireline carriers. That is not always the case
for wireless providers. Ten states and the District of Columbia do NOT
grant ETC status for wireless carriers because they lack the
jurisdiction under State statute, i.e., Alabama, Connecticut, Delaware,
New Hampshire, North Carolina, New York, Tennessee, Texas, the
Commonwealth of Virginia, Florida and the District of Columbia. In
these jurisdictions a crucial line of defense against abuse--State
oversight--is non-existent or at least more limited.
\16\ Several states continue to designate wireless ETCs despite not
having specific authority over them. It is anticipated that this will
also be the case if the program is expanded to cover broadband.
Additionally, many states with limited regulatory authority often work
informally to resolve consumer complaints.
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Partnership, Not Preemption
The Lifeline program, however modified, will continue to benefit
from coordinated Federal and State oversight. There is simply no reason
to reduce the number of State regulatory ``cops'' on the beat or
further limit their enforcement/oversight authority.
Managing the total size of the USF, and eliminating fraud and
waste, is important to protect the consumers who pay for these programs
through bill surcharges. Those surcharges burden consumers and can
directly undermine and negatively affect the competitive market if
effective accountability/screening mechanisms are not in place.
NARUC represents states that are both net donors to and net
recipients from the Federal lifeline programs. However, I come from a
net donor State. As you might expect, I am personally and particularly
sensitive to the clear need to balance the growth in the fund with the
program's policy goals. Like all net donor States, Florida is
necessarily concerned about the disparity between what Florida
customers pay into the Federal USF versus what that USF disburses to
our citizens. In 2013, for all Federal USF programs--including
lifeline, Floridians paid-in $539 million but only received back $256
million--leaving Florida as a net contributor of $283 million.
In the Joint Board process, which includes State Commissioners from
both net donor and recipient States, Congress has provided an excellent
vehicle to:
limit unintended disruptions to State programs,\17\
---------------------------------------------------------------------------
\17\ See Appendix B ``Impacts on State.''
assure national policy decisions benefit directly from
States' experiences (as was reflected in the pragmatic reforms
the FCC adopted to the lifeline program--based--in part on
---------------------------------------------------------------------------
existing State compliance mechanisms),
critique proposals to update the program's policy goals, and
maintain the crucial enforcement and compliance partnership.
Our 2009 resolution suggests a referral would be a useful pre-
requisite to final FCC action expanding the program.\18\
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\18\ Over 8 years have passed since the November 2007 USF Joint
Board initially recommended broadband Internet access be a supported
service. Our 2009 resolution, which was after that referral (and cites
it in the 4th Whereas), recognized that the record was already stale
and specifically recommends that: ``the FCC direct the Federal State
Joint Board on Universal Service to conduct an evaluation of the
(Lifeline Broadband) Pilot program and make recommendations regarding
its continuation and configuration as a national program.'' It has been
almost 5 years since the last recommended decision on Lifeline
discussed, infra. See, e.g., footnote 19, infra.
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Indeed, the last 2010 Lifeline Recommended decision, in 76-
78,\19\ highlights the need for additional Joint Board input before
expansion of the Lifeline program to broadband services:
---------------------------------------------------------------------------
\19\ Federal-State Joint Board on Universal Service Recommended
Decision, November 4, 2010, at http://www.universalservice.org/_res/
documents/about/pdf/fcc-orders/2010-fcc-orders/
FCC-10J-3.pdf.
76. Although the Referral Order requested that the Joint Board
consider whether the extension of the Lifeline program to
include broadband services would alter its recommendations . .
. it is difficult to consider whether any of the instant
recommendations should be modified prior to the appropriate
consideration of the broadband services that might be included
in such an extension of the low-income program. Indeed, some
members of the Joint Board would have preferred a more
extensive referral on these issues, and at least one commenter
noted that the Joint Board should have a more extensive role in
the consideration of extending the Universal Service Fund's
support to broadband. [] At the same time, the Joint Board
recognizes the need to ensure continued support for existing
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voice networks.
77. Neither the Commission nor this Joint Board can adequately
address potential changes to create a Broadband Lifeline plan
without initially determining the definition of the broadband
services or functionalities to be supported, sources of
funding, the funding and contribution rules, and the overall
approach to using low-income support to achieve universal
broadband service. In fact, the Joint Board would like to
emphasize that, as the Commission moves forward with
considering the National Broadband Plan's recommendations on
these and other universal service related issues, there are
many practical issues to be considered. They include, but are
not necessarily limited to: Conceptually, how should
``broadband'' eligible for Federal USF Lifeline support be
defined and measured, including consideration of typical
(actual) versus advertised upload and download speeds;
Technology type and technology neutral funding mechanisms;
Price, affordability, subscribership, and penetration;
Broadband usage, when that usage is subject to some sort of
data or usage cap; How best to ensure availability of broadband
service in unserved and/or underserved areas; Terms and
conditions for data plans that include some form of broadband
Internet access or other broadband service; and Once broadband
is defined and a determination is made as to what to support
and how to provide that support, it would still be necessary to
determine whether the Lifeline discount would be applied as a
percentage or a fixed dollar discount off of some currently
undefined price, or some other measure.
78. Furthermore, given the lack of a definition for the term
``broadband'' as a supported service, and how such service
would be calculated and distributed, it would be extremely
difficult, if not impossible, to comply with even the
Commission's de minimis broadband-related requests that were
included in the Referral Order.[] In fact, NASUCA points out in
its comments that ``it is difficult to comment on `broadband
Lifeline' because the details have not been fleshed out, adding
further that reclassification is needed in order to ensure the
legality of broadband Lifeline support.'' [] The sheer number
of issues relevant to defining broadband creates a great deal
of uncertainty. This uncertainty is a significant issue, in and
of itself, because it makes it impossible to predict the impact
of adding support for broadband or the recommendations for
possible changes to eligibility, verification, and outreach, or
to measure the impact of such changes to the overall size of
the fund.'' (Footnotes omitted.)
Since this recommended decision, the FCC has issued several crucial
orders that could impact any changes to the program and suggest that a
referral is appropriate and will be a useful exercise.\20\
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\20\ See, e.g., In the Matter of Protecting and promoting the Open
Internet, GN Docket No. 14-28 (FCC No. 15-24) (rel. March 12, 2015),
published in the Federal Register April 13, 2015 (80 Fed. Reg. 19737),
at: https://www.federalregister.gov/articles/2015/04/13/2015-07841/
protec
ting-and-promoting-the-open-internet. The full text of the decision is
at: https://apps.fcc.gov/edocs_public/attachmatch/FCC-15-24A1.pdf.
(Among other things, reclassifying broadband as a Title II
``telecommunications service.''); Connect America Fund, Report and
Order and Further Notice of Proposed Rulemaking, 26 F.C.C. Rcd 17663
(2011); and Federal State Joint Board on Universal Service; Universal
Service Contribution Methodology; A National Broadband Plan For Our
Future, WC Docket Nos. 96-45, 06-122, GN Docket No. 09-51, Order, 29
FCC Rcd 9784 (2014).
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Certainly, the process works. I was pleased the FCC took action on
Lifeline in 2010. In May of that year the FCC asked the Federal-State
Joint Board on Universal Service to review the existing eligibility,
verification, and outreach rules for the Lifeline and Link-Up universal
service programs.\21\ The FCC also opened and maintains a robust and
open dialogue with NARUC and the States. I give the FCC, especially the
Wireline Competition Bureau, FCC Commissioner Clyburn--the former Chair
of the Federal State Joint Board on Universal Service, her staff and,
of course, the other sitting FCC Commissioners, much credit for
tackling this issue and seeking vital State input throughout the
process. This was a textbook example of how the Congressionally-
established Joint Board process can be properly utilized to address
issues quickly and provide an excellent basic template for FCC action
on this issue.
---------------------------------------------------------------------------
\21\ Federal-State Joint Board On Universal Service; Lifeline and
Link-Up, CC Docket No. 96-45, WC Docket No. 03-109, Order, 25 FCC Rcd
5079 (2010).
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The Universal Service Joint Board came back with a recommended
decision in record time--around six months--in November of 2010. It
addressed the Lifeline questions asked by the FCC and more--
recommending that the FCC take into consideration the additional issues
of broadband, overall fund size, and prepaid wireless Lifeline service
as it moved forward with universal service reform.\22\ In the January
31, 2012 Report and Order and Further Notice of Proposed Rulemaking,
the FCC either enacted or sought additional comments on all of the
Joint Board recommendations. Again, this is exactly how the
congressionally mandated Federal-State Joint Board process should be
used. The FCC should consider a referral here before taking final
action.\23\
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\22\ Federal-State Joint Board on Universal Service Recommended
Decision, November 4, 2010, at http://www.universalservice.org/_res/
documents/about/pdf/fcc-orders/2010-fcc-orders/
FCC-10J-3.pdf.
\23\ Questions such as confidentiality of a Lifeline applicant's
information, number of entities with access to the database, possible
``opt out'' provisions of the national eligibility database for States,
the interaction of State and Federal databases, and many other issues
require additional illumination--and the Joint Board process is an idea
vehicle to conduct the needed review.
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Responsibility and Review
Whatever else the FCC does, as both Congress and the FCC consider
expanding the program to include broadband service, it certainly would
be prudent to reevaluate current safeguards and consider possible
improvements in oversight.\24\
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\24\ On April 25, 2013, NARUC President (and Washington State
Commissioner) Phil Jones testified before the U.S. House of
Representatives Energy and Commerce Committee, Subcommittee on
Communications and Technology for NARUC on The Lifeline Fund: Money
Well Spent? The text of his testimony is available online at http://
www.naruc.org/Testimony/
13%200425%20NARUC%20Pres%20%20P%20%20Jones%20House%20CT%20Subcmte%20Life
line%20Testimony%20FINAL%20_2_.pdf. In response to a question from
Chairman Walden, Commissioner Jones said that when prepaid wireless
carriers came in to his commission to obtain ETC designation., he asked
them for cost information and they refused to give them data. The
carriers stated that the requested data dealt with ``rates'' and states
are preempted from regulating wireless rates. See, Archived Video,
April 25, 2015 House Energy and Commerce Committee Lifeline Hearing at:
http://energycommerce.house.gov/hearing/lifeline-fund-money-well-spent.
Certainly, in considering the efficient level of benefits that must be
offered to attract Lifeline service providers--one crucial input is the
actual carrier costs (or a reasonable approximation thereof) of
providing the service. Without such information, it is unclear how to
determine if current subsidy levels are either too generous or not
generous enough to assure carrier participation in the program.
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Continued coordination with states is crucial. And the FCC
generally has continued coordination and outreach with NARUC's member
commissions about possible new problems or compliance issues with the
Lifeline program, through, in part, the commendable efforts of its new
Enforcement Chief, Travis LeBlanc, USF Strike Force Director, Loyaan
Egal, former Wireline Competition Bureau (WCB) Chief Julie Veach and
her replacement Matt DelNero, WCB Deputy Bureau Chief Ryan Palmer,
Consumer and Governmental Affair Bureau Chief Kris Monteith, and CGB
Intergovernmental Affairs Chief Greg Vadas, among many other staff. The
Universal Service Administration Company should also be commended for
its recognition of the important role states necessarily play in this
process.
NARUC has not had an opportunity to formally consider specific
positions on the Chairman Wheeler's May 28, 2015 proposal to issue a
rulemaking on Lifeline services.\25\ And, while we have no resolution
on point, it certainly seems logical, as the NPRM suggests, for the FCC
to require providers to retain documentation of eligibility for a time
that is at least long enough to allow for effective oversight and
audits of the carriers' qualification procedures. That proposal also
seems to raise questions that would benefit from a Joint Board
recommended decision.
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\25\ FCC Chairman Wheeler Seeks Comment On Modernizing Lifeline To
Make 21st Century Broadband Affordable For Low-Income Households (May,
28, 2015), at: https://www.fcc.gov/document/chairman-seeks-comment-
modernizing-reforming-lifeline-broadband. See also, Wheeler, Tom, FCC
Chairman, A lifeline for Low-Income Americans: FCC Blog (May 28, 2015-
01:25 PM) https://www.fcc.gov/blog/lifeline-low-income-americans.
---------------------------------------------------------------------------
In preparation for my testimony here today, NARUC did a quick
informal (and necessarily incomplete) survey of our members to elicit
suggestions on improving the Lifeline program. The ideas provided by
those that responded to last week's survey (combined with a similar
survey conducted about a year ago under similar circumstances) are
shown in appendix A to this testimony.
None of these ideas have been considered formally by NARUC or any
specific State commission. Accordingly none are endorsed by the
association or any specific member of the association.
However, as they were offered by those most familiar with the on-
the-ground implementation of the Lifeline program, they certainly can
provide a useful starting point in any discussion of needed reforms.
The FCC's National Lifeline Accountability Database (NLAD) is up
and running. This is a major step forward and can only significantly
reduce duplicative support nationally. As with implementation of any
new process, issues arise. Some NARUC commissions received complaints
about the recertification process. For example, there are cases of
recipients being improperly de-enrolled for duplicative service after
they switched Lifeline providers or being told they were already in the
database despite only subscribing to one Lifeline service. This is
apparently an issue with how and when the database wasn't updated
promptly. These concerns have already been shared with USAC and they
have been very responsive. I am told corrections are in progress now.
Although NARUC has not formally taken any position on such access,
it does seem logical that providing State (read-only) access to the
NLAD database would also be a step forward. Such access allows State
PUCs to address such complaints as well as better monitor the in-State
activity within the program. Indeed, the USAC recently held a webinar
for State Commissions to learn what states would need and expect from
access to the database. It seems likely USAC will look for ways to
grant access to the duplicates database in the near future. Certainly,
USAC has been very responsive to State concerns.
I urge Congress to support the FCC and USAC efforts to complete the
national eligibility database. NARUC fully recognizes the heavy lift
facing the FCC in creating the much more complicated national
eligibility database. The FCC needs more input on this and as some
states have functioning databases, we are uniquely positioned to offer
vital input to achieve this monumental task. This is another of many
issues that would benefit from a Joint Board referral.
Lifeline will once again be a major topic of discussion at the
NARUC Summer Meeting this July in New York City. FCC Commissioners
Mignon Clyburn and Michael O'Rielly will attend to jointly discuss
their competing proposals for reforming Lifeline.\26\
---------------------------------------------------------------------------
\26\ See, Clyburn, Mignon, FCC Commissioner, Reforming Lifeline for
the Broadband Era: Speech to the American Enterprise Institute in
Washington, DC (November 12, 2014), online at: https://www.fcc.gov/
document/commissioner-clyburn-remarks-american-enterprise-institute;
O'Rielly, Michael, FCC Commissioner, Sound Principles for Lifeline
Reform: FCC Blog (February 13, 2015--03:51 PM), online at: https://
www.fcc.gov/blog/sound-principles-lifeline-reform.
---------------------------------------------------------------------------
I am proud to say that Florida has been a leader in Lifeline reform
and continues enforcing safeguards to prevent waste, fraud, and abuse
of the Universal Service Fund. Florida's leadership in instigating a
National ETC State Coordinating Group (SCG) to monitor prospective and
existing ETCs across the country, has fostered additional information
sharing with all 50 states and the District of Columbia. Chairman
Wheeler's FCC USF Strikeforce \27\ has reached out to both the SCG (and
NARUC's full and Staff Telecommunications Committees) in its efforts to
ensure the efficiency and viability of the Lifeline program.
---------------------------------------------------------------------------
\27\ See, FCC Chairman Wheeler Announces Universal Service Fund
Task Force, FCC Press Release (July 14, 2014), at https://www.fcc.gov/
document/fcc-chairman-wheeler-announces-universal-service-fund-strike-
force.
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Let me close by reiterating my support for the Lifeline program
with proper verification and accountability measures in place. This
vital program is supported by the FCC and State commissions for voice
services. It is time to consider how to migrate the program to some
level of broadband service. We appreciate the efforts of the FCC and
USAC working with states on these crucial issues. A continued
partnership will minimize fraud, waste, and abuse in the program.
NARUC's member commissions stand ready and willing to work with the
FCC, industry, the low-income community, and you in Congress on these
issues. Thank you for the opportunity to testify. I look forward to
your questions.
______
Appendix A
States suggestions on how to further improve the Lifeline program
Below is a list of ideas offered by individual NARUC members and
staff that work on Lifeline on a regular basis. The suggestions have
not been considered or endorsed by NARUC or any specific State
commission. NARUC specified that NARUC would not attribute particular
responses to any State or individual. This anonymity encouraged a
broader range of recommendations for the consideration of the
Subcommittee.
Databases:
The FCC should develop & implement the national eligibility
database as soon as possible as it will help eliminate much
waste, fraud and abuse.
FCC should work with states on ways to incentivize the
utilization of State social service databases to be used for
Lifeline eligibility verification.
Provide states access to the recently created National
Lifeline Accountability Database (NLAD, aka. Duplicates
database). Access to the database will allow State commissions
to resolve complaints regarding de-enrollment/duplicates and
better monitor enrollment/de-enrollment in the program with
specific states (USAC is apparently working on this now).
Marketing of Lifeline and Consumer Information:
Require ETCs to provide customers with consumer helpline at
the FCC and State level agencies.
The FCC/Congress should prohibit the practice of advertising
``free government cellphones'' and handing out free cellphones
from tents and temporary kiosks. Providing information on the
program and how to apply could be allowed at such temporary
locations but the customer should be directed to a permanent
facility before obtaining a phone after eligibility is
verified.
The FCC should require all ETCs to call their service
``Lifeline'' and prohibit the misleading practices used by some
carriers of ``doing business as'', e.g., Assurance Wireless and
SafeLink to avoid customer confusion.
Enforcement:
The FCC should prohibit someone that falsifies an
application from participating in the program for some period
of time and/or require reimbursements to the fund of any losses
caused by the fraud prior to re-qualifying for the program.
The FCC should impose significant fines and, when
appropriate because of the magnitude of the abuse (and the
threshold should be small) suspend companies AND their officers
from any participation in the Lifeline programs when ETCs or
their officers/principals/owners/third party vendors violate
rules. Repeat offenders should be permanently banned program
participation.
The FCC should prohibit any ETCs with a validation/
recertification rate of less than a reasonable benchmark, such
as 75 percent, from enrolling new customers and subject them to
an FCC/USAC/State audit.
The FCC should require more than one month of reimbursement
of lifeline funds whenever duplicate Lifeline recipients are
discovered.
The FCC should remind ETCs that where available they are
required to utilize State social service databases to verify
eligibility.
Eligibility Verification/Recertification Process:
Take the of verification of consumer eligibility out of the
hands of the ETC/carrier
The FCC should simplify the recertification process to
assure eligible customers are not de-enrolled from the program
mistakenly.
The FCC should consider requiring all ETCs located in a
particular State to use the same Lifeline application form that
lists all Lifeline providers in that State so applicants will
be more likely to ask questions if they already have service.
If an ETC elects to have USAC undertake recertification then
the carrier should notify the customer to expect USAC notices
on recertification.
ETCs using USAC for recertification should be allowed to
attempt contact with the customer after a specified time of
non-response to USAC.
The FCC should establish a program for retention of customer
eligibility verification documentation by all ETCs (TracFone
petition).
The FCC should prohibit the use of third-party agents hired
by carriers to sign up Lifeline subscribers
The FCC should grant the USTelecom petition filed April 2,
2012 for reconsideration of 47 C.F.R.
Sec. Sec. 54.410(b)(2)(ii) and 54.410(c)(2)(ii) to allow states
that administer the Lifeline program and determine eligibility
to provide lists to carriers of subscribers that qualify for
Lifeline instead of requiring that copies of application forms
be provided to carriers.
Transparency/Operational Changes:
The cost basis of Lifeline subsidy level should be
reexamined on a periodic basis to evaluate the subsidy against
the benefit (i.e., for wireless does the set number of minutes
align with the monthly Lifeline amount. A separate level for
wireless, wirelines voice and Broadband. For example, Should
the subsidy be less for prepaid wireless or the amount of
minutes increased?).
Require a customer to contact the ETC each month and verify
identity to receive their free allotment of minutes.
FCC should clarify FCC Form 555's (Annual Lifeline Eligible
Telecommunications Carrier Certification Form) filed by the
carriers are not confidential (if confidential ETCs can deny
State PUC access).
FCC should publish an annual report of the findings in the
annual FCC Form 555 FCC should conduct a cost study to
establish a subsidy level that appropriately reflects services
offered.
The FCC or USAC should create a list of customer service
contacts for each ETC for use by Federal and State officials.
Modify USF contributions before expanding program to
broadband
______
Appendix B
Impact of FCC Reform on States
This information illustrates the crucial role the states play in
Lifeline enforcement and why State input for any program changes is
vital to efficient implementation. The FCC reforms to address waste,
fraud and abuse also had some unintended consequences on states with
existing programs. NARUC again removed all attribution and indicia of
particular states to encourage responses. These comments are, like the
statements in Appendix A--not specifically considered or endorsed by
NARUC or any specific State Commission.
The expansion of the Lifeline eligibility criteria in the
FCC's reform order proved to be very costly to states.
Added social service programs were not in existing
state databases and it was costly to add the needed data
The state low income program database was not matching
the national database since the state has a different set
of eligibility requirements.
Programs added to eligibility lists were ones that the
State Lifeline administrator did not have control over or
access to.
Addition of ``income level'' to eligibility criteria
complicated process since there is no database, requiring
manual collection of sensitive personal financial
information to verify consumer eligibility.
Forced the State to spend hundreds of thousands of
dollars to expand the scope of our state database queries
and expand hours of access to it. For example, adding the
Free School Lunch program has required creating an
additional interface to obtain data from another database
The State required the ETC ``kick in'' a certain amount in
matching funds as a requirement of being an ETC. After the
reform the ETCs interpreted the FCC rules to mean this was no
longer required.
The changes, while adding complexity to our efforts given
the additional requirements, have enhanced our ability to
review Lifeline provider's activities and identify concerns.
As a result the State increased the amount of matching
support for landline Lifeline ETCs.
As a result some states reduced the State matching level.
The State expanded and strengthened requirements for ETC
applications and annual reporting.
Under the old system there were tiered levels and matching
effect. This was replaced with the flat Federal $9.25 monthly
subsidy. As a result, the State regulations no longer matched
the Federal regulations causing confusion. The State continues
to evaluate if and how to alter State laws and rules to reflect
the new Federal regime.
Senator Wicker. Thank you, Mr. Commissioner.
Mr. Clements?
STATEMENT OF MICHAEL CLEMENTS, ACTING DIRECTOR, PHYSICAL
INFRASTRUCTURE ISSUES, U.S. GOVERNMENT
ACCOUNTABILITY OFFICE
Mr. Clements. Chairman Wicker, Ranking Member Schatz, and
members of the Subcommittee, good morning. I am pleased to be
here today to discuss our March 2015 report on FCC's Lifeline
program.
My statement today will highlight three key findings from
our report: first, FCC's progress with program reforms; second,
the need for program evaluation; and, third, the challenges
with the broadband pilot program.
Our work highlights that FCC needs sufficient and reliable
information to make important policy choices for the Lifeline
program, both for support of voice service and also the
possible support of broadband service.
Our first key finding: FCC has made progress implementing
Lifeline reforms, but some reform efforts remain incomplete.
As has been mentioned, in 2012, FCC adopted a reform order
that sought to improve internal controls, addressing problems
we identified in 2010, and also to evaluate the inclusion of
broadband into the program. The order included 11 key reforms,
and FCC has fully implemented eight of those reforms, including
the National Lifeline Accountability Data base, which companies
query to verify an applicant's identity and check whether the
applicant already receives Lifeline service.
FCC has ongoing work to implement the three remaining
reform efforts.
Our second key finding: FCC has not evaluated the
efficiency or effectiveness of the Lifeline program.
FCC officials have told us that the structure of the
program has made it difficult to determine a causal connection
between the program itself and whether low-income households
subscribe to telephone service. However, FCC officials noted
that two academic studies have assessed the program.
These studies suggest that many low-income households would
choose to subscribe to telephone service in the absence of a
Lifeline subsidy. Thus, the Lifeline program as it is currently
structured may be an inefficient and costly mechanism to
increase telephone subscribership among low-income households.
Our work on program evaluation has shown that it can allow
agencies to understand whether the program is addressing the
problem it is intended to and also assess the effectiveness of
the program. Therefore, we recommended that FCC conduct a
program evaluation to determine the extent to which the program
is efficiently and effectively reaching its performance goals.
The results of such an evaluation could assist the FCC in
making changes to improve both the design and management of the
program. FCC agreed and said staff would address our
recommendation.
Our third key finding: The lack of an evaluation plan and
other challenges may limit the usefulness of the broadband
pilot program.
FCC's broadband pilot program included 14 projects that
tested an array of options. For example, one project we
reviewed offered consumers three different discount levels and
four different broadband speeds, thereby testing 12 different
program options.
We identified several challenges with the broadband pilot
program. First, FCC did not conduct a needs assessment or
implementation and evaluation plans for the broadband pilot, as
we recommended in 2010. Second, FCC officials noted that there
was a lack of third-party or FCC oversight of the program,
meaning that the pilot projects themselves were largely
responsible for administration of the program. Third, the pilot
projects experienced lower than anticipated enrollment, and a
preliminary finding from the pilot was that service offered at
deeply discounted or free monthly rates had high participation
rates.
To conclude, FCC needs sufficient and reliable information
to make important policy choices for the Lifeline program. To
help accomplish this, we recommended that FCC conduct a program
evaluation, and FCC agreed with that recommendation. This
information will allow FCC to make sure that low-income
households have access to the valuable services they need while
minimizing the burden on households and businesses that support
the program.
Chairman Wicker, Ranking Member Schatz, and members of the
Subcommittee, this completes my prepared statement. I would be
pleased to respond to any questions you may have at this time.
Thank you.
[The prepared statement of Mr. Clements follows:]
Prepared Statement of Michael Clements, Acting Director, Physical
Infrastructure Issues, U.S. Government Accountability Office
Telecommunications
FCC Should Evaluate the Efficiency and Effectiveness of the Lifeline
Program
Chairman Wicker, Ranking Member Schatz, and Members of the
Subcommittee:
I am pleased to be here today as you discuss the Federal
Communications Commission's (FCC) efforts to promote telephone
subscribership among low-income households. Through the Lifeline
program, companies provide discounts to eligible low-income households
for telephone service. The Lifeline program supports these companies
through the Universal Service Fund, which is funded through mandatory
fees that are usually passed along to consumers through a charge
applied to their monthly telephone bills. The Lifeline program was
created in the mid-1980s and has traditionally centered on wireline
residential telephone service. However, FCC actions in 2005 and 2008
paved the way for prepaid wireless companies to begin offering Lifeline
service in 2008; at the time, FCC did not quantify or estimate the
potential increases in participation from its decision. Subsequently,
Lifeline experienced rapid growth in participation and disbursements.
In particular, from mid-2008 to mid-2012, Lifeline enrollment increased
from 6.8 million households to 18.1 million households and annual
disbursements increased from $820 million in 2008 to $2.2 billion in
2012, a 167 percent increase. In 2010, we found that the Lifeline
program lacked some features of internal controls, such as the ability
to detect duplicate benefits across companies.\1\ We recommended that
FCC take actions to improve management and oversight, including
conducting a robust risk assessment and implementing a systematic
process for considering the results of company audits; FCC agreed with
our recommendations.
---------------------------------------------------------------------------
\1\ Telecommunications: Improved Management Can Enhance FCC
Decision Making for the Universal Service Fund Low-Income Program, GAO-
11-11 (Washington, D.C.: Oct. 28, 2010).
---------------------------------------------------------------------------
To comprehensively reform and modernize the program, among other
things, FCC adopted a Reform Order in January 2012 that sought to
improve the program's internal controls and included a pilot program to
evaluate the inclusion of broadband into the program (see Table 1 for
the Order's key reforms).\2\ For example, to reduce the number of
ineligible consumers in the program, the Order adopted measures to
check consumers' initial and ongoing eligibility for Lifeline. After
FCC began implementing the Order in mid-2012, Lifeline participation
declined to 12.4 million households by the end of 2014, while
disbursements declined to approximately $1.7 billion in 2014.
---------------------------------------------------------------------------
\2\ See Lifeline and Link Up Reform and Modernization, Report and
Order and Further Notice of Proposed Rulemaking, 27 FCC Rcd. 6656
(2012). See also 47 C.F.R. Sec. Sec. 54.400-54.422.
------------------------------------------------------------------------
Table 1.--Key Reforms Contained in the Federal Communications Commission
(FCC) Lifeline Reform Order (2012)
------------------------------------------------------------------------
Lifeline reform Description
------------------------------------------------------------------------
One-per-household rule The Order limits Lifeline to a single
subscription per household.
------------------------------------------------------------------------
Elimination of Link-Up The Link Up program was originally designed to
support on non-Tribal offset the activation charges wireline
lands and phase out providers charged to install telephone
support for toll service; the Order eliminated Link Up on non-
limitation service Tribal lands. In addition, subsidies for toll
limitation service, which allowed consumers to
block or restrict long-distance telephone
service, were phased out and eliminated
beginning January 2014.
------------------------------------------------------------------------
Uniform eligibility Requires all states to use, at a minimum,
criteria eligibility criteria including (1) household
income at or below 135 percent of the Federal
poverty guidelines or (2) participation in at
least one of the following: Supplemental
Nutrition Assistance Program, Medicaid,
Supplemental Security Income, Temporary
Assistance for Needy Families, National School
Lunch Program's free lunch program, Low-Income
Home Energy Assistance Program, and Federal
Public Housing Assistance or Section 8.
Households residing on Tribal lands may be
eligible through additional programs.
------------------------------------------------------------------------
Non usage requirements Lifeline providers delivering service without a
monthly bill must notify and de-enroll
subscribers that do not use the service after
a specified period of time--60 consecutive
days of nonuse and a 30-day notice period.
------------------------------------------------------------------------
Payments based upon Lifeline providers receive payment based on
actual support claims actual support claims. Before this, payments
were based on projections that were ``trued
up'' against actual claims.
------------------------------------------------------------------------
Independent and first In addition to audits that were previously
year audit ongoing, Lifeline providers that receive more
requirements than $5 million in annual support are required
to hire independent auditors to conduct an
audit of their compliance with the Lifeline
rules on a biennial basis. In addition, all
new Lifeline providers are audited by the
program administrator--the Universal Service
Administrative Company (USAC)--within their
first year of service.
------------------------------------------------------------------------
National Lifeline Lifeline providers are required to query NLAD
Accountability at enrollment to verify an applicant's
Database (NLAD) identity and to verify the individual is not
already receiving Lifeline services. NLAD also
checks applicants' addresses against U.S.
Postal Service software in part to ensure
compliance with the one-per-household
requirement.
------------------------------------------------------------------------
Broadband pilot program The Order called for a pilot program to gather
data on whether and how Lifeline could be
structured to promote broadband and called on
FCC to select, fund, and gather data from
pilot projects offering broadband to Lifeline-
eligible consumers. FCC selected 14 pilot
projects that completed offering subsidized
service at the end of October 2014. In May
2015, FCC published the results of these
projects.
------------------------------------------------------------------------
Flat-rate reimbursement The Order implemented an interim $9.25 flat
rate reimbursement on non-Tribal lands.
Previously, Lifeline had a tiered structure of
support, with average monthly non-Tribal
support ranging from $4.25 to $10.00 per
subscriber in September 2011.
------------------------------------------------------------------------
Initial eligibility Effective June 2012, Lifeline providers must
verification and verify an applicant's eligibility at
annual recertification enrollment and annually through
procedures recertification. In addition, to reduce the
burden on consumers and providers, the Order
directed FCC and USAC to establish an
automated means for determining eligibility.
------------------------------------------------------------------------
Performance goals and The Order specified three performance goals:
measures (1) to ensure the availability of voice
service for low-income Americans, (2) to
ensure the availability of broadband for low-
income Americans, and (3) to minimize the
Universal Service Fund contribution burden on
consumers and businesses. The Order directed
FCC to define performance measures to evaluate
progress made towards these goals.
------------------------------------------------------------------------
Source: GAO summary of FCC Order.
My remarks today highlight key findings from our recently issued
report, Telecommunications: FCC Should Evaluate the Efficiency and
Effectiveness of the Lifeline Program.\3\ I will discuss: (1) the
status of FCC's Lifeline reform efforts, (2) the extent to which FCC
has evaluated the effectiveness of the program, and (3) how FCC plans
to evaluate the broadband pilot program and the extent to which the
pilot program will enable FCC to decide whether and how to include
broadband in the Lifeline program. For our report, we reviewed FCC
orders and other relevant information; analyzed 2008-2012 Census Bureau
data to estimate trends in the number of households that would satisfy
the Federal Lifeline criteria; and interviewed FCC officials, officials
at four broadband pilot projects selected based on features such as
technology, and officials from 12 Lifeline providers and four states
that were selected based on factors such as disbursements and
participation. We also reviewed two academic studies that examined the
effect of the Lifeline program. More detailed information on our
objectives, scope, and methodology can be found in the issued report.
We conducted the work on which this statement is based in accordance
with generally accepted government auditing standards. Those standards
require that we plan and perform the audit to obtain sufficient,
appropriate evidence to provide a reasonable basis for our findings and
conclusions based on our audit objectives.
---------------------------------------------------------------------------
\3\ GAO-15-335 (Washington, D.C.: Mar. 24, 2015).
---------------------------------------------------------------------------
FCC Has Made Progress Implementing Lifeline Reforms, but Some Reform
Efforts Remain Incomplete
Our March 2015 report found that FCC has made progress implementing
reform efforts contained in the Order.\4\ In particular, FCC has
implemented eight reforms, including the one-subscription-per-household
rule, uniform eligibility criteria, non-usage requirements, payments
based on actual claims, and the audit requirements. Furthermore, FCC
eliminated Link-up on non-Tribal lands and support for toll limitation
service, and the National Lifeline Accountability Database (NLAD) is
operational in 46 states and the District of Columbia. In May 2015, FCC
reported the results of the broadband pilot program.\5\ However, FCC
has not fully implemented three reform efforts:
---------------------------------------------------------------------------
\4\ We did not evaluate the effectiveness of these reform efforts.
GAO has ongoing work assessing the internal controls of the Lifeline
program. Results from this work will be available in fall 2015.
\5\ Federal Communications Commission, Wireline Competition Bureau,
Low-Income Broadband Pilot Program Staff Report, WC Docket No. 11-42
(May 22, 2015).
Flat-rate reimbursement: To simplify administration of the
Lifeline program, FCC established a uniform, interim flat rate
of $9.25 per month for non-Tribal subscribers. FCC sought
comment on the interim rate, but has not issued a final rule
---------------------------------------------------------------------------
with a permanent reimbursement rate.
Initial eligibility verification and annual recertification
procedures: To reduce the number of ineligible consumers
receiving program benefits, the Order required that Lifeline
providers verify an applicant's eligibility at enrollment and
annually through recertification; these requirements have gone
into effect. In addition, to reduce the burden on consumers and
Lifeline providers, the Order called for an automated means for
determining Lifeline eligibility by the end of 2013. FCC has
not met this time-frame or revised any timeframes for how or
when this automated means would be available.
Performance goals and measures: FCC established three
outcome-based goals: (1) to ensure the availability of voice
service for low-income Americans, (2) to ensure the
availability of broadband for low-income Americans, and (3) to
minimize the Universal Service Fund contribution burden on
consumers and businesses. FCC identified performance measures
it will use to evaluate progress towards these goals, but it
has not yet fully defined these measures. FCC officials noted
they are working on defining them using the Census Bureau's
American Community Survey data, which were made available in
late 2014.
FCC Has not Evaluated the Extent to which Lifeline is Efficiently and
Effectively Reaching its Performance Goals
In our March 2015 report, we found that FCC has not evaluated the
effectiveness of the Lifeline program, which could hinder its ability
to efficiently achieve program goals. Once adopted, performance
measures can help FCC track the Lifeline Program's progress toward its
goals. However, performance measures alone will not fully explain the
contribution of the Lifeline program toward reaching program goals,
because performance measurement does not assess what would have
occurred in the absence of the program. According to FCC, Lifeline has
been instrumental in narrowing the penetration gap (the percentage of
households with telephone service) between low-income and non-low-
income households. In particular, FCC noted that since the inception of
Lifeline, the gap between telephone penetration rates for low-income
and non-low-income households has narrowed from about 12 percent in
1984 to 4 percent in 2011. Although FCC attributes the penetration rate
improvement to Lifeline, several factors could play a role. For
example, changes to income levels and prices have increased the
affordability of telephone service, and technological improvements,
such as mobility of service, have increased the value of telephone
service to households.
FCC officials stated that the structure of the program has made it
difficult for the commission to determine causal connections between
the program and the penetration rate. However, FCC officials noted that
two academic studies have assessed the program.\6\ These studies
suggest that household demand for telephone service--even among low-
income households--is relatively insensitive to changes in the price of
the service and household income. This suggests that many low-income
households would choose to subscribe to telephone service in the
absence of the Lifeline subsidy. For example, one study found that many
households would choose to subscribe to telephone service in the
absence of the subsidy.\7\ As a result, we concluded that the Lifeline
program, as currently structured, may be a rather inefficient and
costly mechanism to increase telephone subscribership among low-income
households, because several households receive the subsidy for every
additional household that subscribes to telephone service due to the
subsidy. FCC officials said that this view does not take into account
the Lifeline program's purpose of making telephone service affordable
for low-income households. However, in the Order, the commission did
not adopt affordability as one of the program's performance goals;
rather, it adopted availability of voice service for low-income
Americans, measured by the penetration rate.\8\
---------------------------------------------------------------------------
\6\ Olga Ukhaneva, ``Universal Service in a Wireless World'' (Paper
presented at The 42nd Research Conference on Communication, Information
and Internet Policy, Washington, D.C., September 2014). Daniel A.
Ackerberg, David R. DeRemer, Michael H. Riordan, Gregory L. Rosston,
and Bradley S. Wimmer, Estimating the Impact of Low-Income Universal
Service Programs, Center for Economic Studies, CES-13-33 (2013).
\7\ Olga Ukhaneva, ``Universal Service in a Wireless World''
(2013).
\8\ FCC officials noted that voice service is only available to
low-income consumers to the extent it is affordable. In the Order, FCC
found that affordability is a component of the goal of ensuring the
availability of voice service. See para. 28 of Order.
---------------------------------------------------------------------------
These research findings raise questions about the design of
Lifeline and FCC's actions to expand the pool of eligible households.
We estimated approximately 40 million households were eligible for
Lifeline in 2012.\9\ The Order established minimum Lifeline
eligibility, including households with incomes at or below 135 percent
of the Federal poverty guidelines, which expanded eligibility in some
states that had more limited eligibility criteria. Further, FCC
proposed adding qualifying programs, such as the Special Supplemental
Nutrition Program of Women, Infants, and Children (WIC) program, and
increasing income eligibility to 150 percent of the Federal poverty
guidelines. We estimated that over 2 million additional households
would have been eligible for Lifeline in 2012 if WIC were included in
the list of qualifying programs. These proposed changes would add
households with higher income levels than current Lifeline-eligible
households. Given that the telephone penetration rate increases with
income, making additional households with higher incomes eligible for
Lifeline may increase telephone penetration somewhat, but at a high
cost, since a majority of these households likely already purchase
telephone service. This raises questions about expanding eligibility
and the balance between Lifeline's goals of increasing penetration
rates while minimizing the burden on consumers and businesses that fund
the program.
---------------------------------------------------------------------------
\9\ We estimated the number of Lifeline-eligible households using
Census Bureau data. The Census data approximate, but do not completely
align with, Lifeline eligibility. For example, the Census data do not
reflect state Lifeline eligibility that extends beyond the FCC minimum
requirements or qualifying programs specific to Tribal areas.
---------------------------------------------------------------------------
In our March 2015 report, we recommended that FCC conduct a program
evaluation to determine the extent to which the Lifeline program is
efficiently and effectively reaching its performance goals of ensuring
the availability of voice service for low-income Americans while
minimizing program costs. Our prior work on Federal agencies that have
used program evaluation for decision making has shown that it can allow
agencies to understand whether a program is addressing the problem it
is intended to and assess the value or effectiveness of the program.
The results of an evaluation could be used to clarify FCC's and others'
understanding of how the Lifeline program does or does not address the
problem of interest--subscription to telephone service among low-income
households--and to assist FCC in making changes to improve program
design or management. We believe that without such an evaluation, it
will be difficult for FCC to determine whether the Lifeline program is
increasing the telephone penetration rate among low-income customers,
while minimizing the burden on those that contribute to the Universal
Service Fund. FCC agreed that it should evaluate the extent to which
the Lifeline program is efficiently and effectively reaching its
performance goals and said that it would address our recommendation.
Usefulness of Broadband Pilot Program May Be Limited by FCC's Lack of
Evaluation Plan and Other Challenges
In our March 2015 report we also found that FCC's broadband pilot
program includes 14 projects that test an array of options and will
generate information that FCC intends to use to decide whether and how
to incorporate broadband into Lifeline. According to FCC, the pilot
projects are expected to provide high-quality data on how the Lifeline
program could be structured to promote broadband adoption by low-income
households. FCC noted the diversity of the 14 projects, which differed
by geography (e.g., urban, rural, Tribal), types of technologies (e.g.,
fixed and mobile), and discount amounts. FCC selected projects that
were designed as field experiments and offered randomized variation to
consumers. For example, one project we reviewed offered customers three
different discount levels and a choice of four different broadband
speeds, thereby testing 12 different program options. FCC officials
said they aimed to test and reveal ``causal effects'' of variables. FCC
officials said this approach would, for example, test how effective a
$20 monthly subsidy was relative to a $10 subsidy, which would help FCC
evaluate the relative costs and benefits of different subsidy amounts.
However, FCC officials noted that there was a lack of FCC or third
party oversight of the program, meaning that pilot projects themselves
were largely responsible for administration of the program.
We found that FCC did not conduct a needs assessment or develop
implementation and evaluation plans for the broadband pilot program, as
we had previously recommended in October 2010. At that time, we
recommended that if FCC conducted a broadband pilot program, it should
conduct a needs assessment and develop implementation and evaluation
plans, which we noted are critical elements for the proper development
of pilot programs.\10\ We noted that a needs assessment could provide
information on the telecommunications needs of low-income households
and the most cost-effective means to meet those needs. Although FCC did
not publish a needs assessment, FCC officials said they consulted with
stakeholders and reviewed research on low-income broadband adoption
when designing the program. Well-developed plans for implementing and
evaluating pilot programs include key features such as clear and
measurable objectives, clearly articulated methodology, benchmarks to
assess success, and detailed evaluation time frames. FCC officials said
they did not set out with an evaluation plan because they did not want
to prejudge the results by setting benchmark targets ahead of time. FCC
officials said they are optimistic that the information gathered from
the pilot projects will enable FCC to make recommendations regarding
how broadband could be incorporated into Lifeline.\11\ FCC officials
noted that the pilot program is one of many factors it will consider
when deciding whether and how to incorporate broadband into Lifeline,
and to the extent the pilot program had flaws, those flaws will be
taken into consideration. Since our report was issued, FCC released a
report on the broadband pilot program, which discusses data collected
from the 14 projects.
---------------------------------------------------------------------------
\10\ GAO-11-11.
\11\ Under the Administrative Procedure Act, the law that governs
agency rulemakings, FCC must give notice and seek public comment on any
proposed regulations prior to their enactment through a Notice of
Proposed Rulemaking. See 5 U.S.C. Sec. 553. FCC officials noted that
the commission may draw on many sources of information in crafting its
final rule, such as outside studies.
---------------------------------------------------------------------------
We also found that the broadband pilot projects experienced
challenges, such as lower-than-anticipated enrollment. The pilot
projects enrolled approximately 12 percent of the 74,000 low-income
consumers that FCC indicated would receive broadband through the pilot
projects. According to FCC's May 2015 report, 8,634 consumers received
service for any period of time during the pilot. FCC officials said
that the 74,000 consumers was an estimate and was not a reliable number
and should not be interpreted as a program goal. FCC officials said
they calculated this figure by adding together the enrollment estimates
provided by projects, which varied in their methodologies. For example,
some projects estimated serving all eligible consumers, while others
predicted that only a fraction of those eligible would enroll. FCC
officials told us they do not view the pilot's low enrollment as a
problem, as the program sought variation. Due to the low enrollment in
the pilot program, a small fraction of the total money FCC authorized
for the program was spent. Specifically, FCC officials reported that
about $1.7 million of the $13.8 million authorized was disbursed to
projects.
FCC and pilot project officials we spoke to noted that a
preliminary finding from the pilot was that service offered at deeply
discounted or free monthly rates had high participation.\12\ FCC
officials and representatives from the four pilot projects we
interviewed noted that broadband offered at no or the lowest cost per
month resulted in the highest participation. For example, we found one
project that offered service at no monthly cost to the consumer
reported 100 percent of its 709 enrollees were enrolled in plans with
no monthly cost as of October 2013, with no customers enrolled in its
plans with a $20 monthly fee. This information raises questions about
the feasibility of including broadband service in the Lifeline program,
since on a nationwide scale, offering broadband service at no monthly
cost would require significant resources and may conflict with FCC's
goal to minimize the contribution burden.
---------------------------------------------------------------------------
\12\ In its May 2015 report, FCC noted that the cost to consumers
affects their adoption choice.
---------------------------------------------------------------------------
Chairman Wicker, Ranking Member Schatz, and Members of the
Subcommittee, this completes my prepared statement. I would be pleased
to respond to any questions that you may have at this time.
Senator Wicker. Thank you, sir. We appreciate your
testimony.
Mr. Bergman?
STATEMENT OF SCOTT BERGMANN, VICE PRESIDENT, REGULATORY
AFFAIRS, CTIA--THE WIRELESS ASSOCIATION
Mr. Bergmann. Chairman Wicker, Ranking Member Schatz, and
members of the Subcommittee, on behalf of CTIA, thank you for
the opportunity to speak about the important role of mobile
wireless services in the Federal Lifeline program.
Thirty years after its creation, Lifeline continues to
advance the goal of ensuring that every American has access to
telecommunication services that enable public safety, health
care, educational, occupational, and other important
communications.
CTIA appreciates the opportunity to work with the
Subcommittee, the FCC, and interested parties to ensure that
Lifeline is efficient and fiscally responsible while
continually evolving to connect all Americans to essential
communication services.
Increasingly, consumers and particularly low-income
consumers view wireless as their primary means of
communications, and Lifeline has evolved to reflect that
reality. The CDC's most recent data show that 44 percent of all
households are now wireless-only. Low-income households are
significantly more likely to have cut the cord.
Recognizing this trend, the FCC established a framework to
enable wireless participation in Lifeline in 2005, and today
the majority of Lifeline subscribers have chosen mobile
wireless. They use wireless Lifeline services to communicate
with 911 and medical professionals, seek job and learning
opportunities, and access critical government services.
Robust competition from the wireless industry has increased
the effectiveness of the program, enabling greater
participation by eligible consumers and offering more services
without increasing the subsidy amount.
The wireless industry is also the largest funder of Federal
universal service programs. Wireless carriers and their
consumers currently pay 44 percent of the USF contribution
burden. So CTIA's members have a significant interest in
ensuring that all universal service programs are fiscally
responsible and managed efficiently.
For this reason, CTIA advocated for Lifeline reforms that
deter waste, fraud, and abuse. We supported the FCC's efforts
to enact new and much needed Lifeline accountability measures
in 2012, and we supported the development of a duplicates
database to ensure that no one double dips from Lifeline. The
National Lifeline Accountability Data base has been an
important and successful tool in combating misuse of Lifeline.
The FCC announced last week that the database and a dozen
other reforms adopted in 2012 have reduced Lifeline spending by
nearly 24 percent. Yet more can be done.
The role of carriers today in determining Lifeline
eligibility is unique among Federal low-income programs. So, as
part of the 2012 reforms, the FCC committed to develop an
automated means of determining Lifeline eligibility. An
automated approach could reduce fraud and abuse, lower barriers
to carrier participation, and permit opportunities for
coordinated enrollment and automatic de-enrollment.
Last week, the FCC announced a proceeding to consider
changes to Lifeline, including whether Lifeline should be
expanded to support broadband access. CTIA and our member
companies are committed to this evolution, consistent with
Congress's directive in section 254 of the Communications Act
to provide an evolving level of service.
As the FCC and this subcommittee examine opportunities for
expanding Lifeline to broadband, there are a number of
important considerations that must be weighed, and let me
highlight three.
First, we urge the FCC to ensure that any Lifeline reforms
reflect consumers' clear preference for mobile services to meet
their voice and broadband communications needs.
In addition, the FCC must also carefully balance
appropriate subsidy levels so that it can meet its objectives
while minimizing burdens on consumers who fund the Federal
Universal Service Fund.
And, finally, we are encouraged that the FCC will also
evaluate transitioning decisions about consumer eligibility
into the hands of appropriate government agencies.
Over the nearly three decades since its creation, Lifeline
has served an important purpose. It should evolve to meet the
communications needs of the 21st century. CTIA believes this
objective can be achieved in a way that both recognizes low-
income Americans' reliance on mobile wireless services and
ensures the fiscal integrity of the program.
Thank you for the opportunity to testify today, and I look
forward to your questions.
[The prepared statement of Mr. Bergmann follows:]
Prepared Statement of Scott Bergmann, Vice President of Regulatory
Affairs, CTIA--The Wireless Association
Chairman Wicker, Ranking Member Schatz, and members of the
Subcommittee, on behalf of CTIA--The Wireless Association (``CTIA''),
thank you for the opportunity to speak with you today on the subject of
the Federal Universal Service Fund's (USF) Lifeline program.
Throughout its history, the Lifeline program has helped advance the
goal of ensuring that every American has access to telecommunications
services that enable public safety, health care, educational,
occupational, and other important communications for low-income
consumers. The wireless industry plays an increasingly important role
in furthering that objective. CTIA looks forward to working with the
Subcommittee, the Federal Communications Commission (``Commission'' or
``FCC''), and other industry stakeholders to ensure that the FCC's
Lifeline program is run in an efficient, responsible manner that
fulfills the mission of connecting all Americans to essential
communications services.
Today, my testimony will focus on three areas. First, I will
discuss how wireless has become the communications platform of choice
for consumers, including the low-income, people with disabilities,
older adult, and minority communities. Second, I will provide a brief
history of the Lifeline program and demonstrate that wireless has
brought competition and efficiency to the Lifeline program. Third and
finally, I will offer CTIA's views on additional steps the FCC should
consider to further improve administration of the Lifeline program and
meet the evolving needs of low-income consumers.
Wireless is the 21st Century Communications Platform of Choice
As the Subcommittee is aware, consumers increasingly view wireless
as their primary means of communications, particularly for low-income
and diverse, underserved communities. Year-over-year, the Center for
Disease Control reports indicate that the number of households relying
exclusively on a wireless connection for voice services is increasing,
up to 44 percent of U.S. households by July 2014. (CDC Wireless
Substitution: Early Release Estimates from the National Health
Interview Survey, January-June 2014, released December 2014). Indeed,
the CDC report demonstrates that low-income consumers are significantly
more likely to reside in wireless-only households than other consumers,
with over 59 percent of adults living in poverty relying exclusively on
wireless services.
The findings of the Pew Internet & American Life Project illustrate
the importance of mobile wireless services to low income consumers. Pew
found that approximately 60 percent of Americans with incomes less than
$30,000 per year use wireless for occupational or health reasons
compared to 30 percent of Americans earning more than $75,000 per year.
That is, low-income consumers are roughly twice as likely to use mobile
wireless services for work and health reasons as their more affluent
counterparts.
A growing number of consumers are also using their wireless service
as their on-ramp to the Internet. According to the Pew Internet &
American Life Project, 13 percent of Americans with incomes of less
than $30,000 per year are ``totally smart-phone dependent,'' while
another 24 percent of low-income consumers report that they primarily
rely on the smartphone for Internet access and have limited options
other than their cell phones for getting online. An additional 19
percent of low income Americans report using smartphones to access the
Internet but have no Internet access at home.
In particular, wireless empowers people with disabilities, older
adults, and underserved communities. Specifically, some reports suggest
that more than 84 percent of people with disabilities own a wireless
device. (Wireless Technology Use and Disability: Results from a
National Survey, Wireless RERC, released 2013). In addition, 77 percent
of older adults have a cell phone, up from 69 percent in April 2012.
(Pew Internet Research Report, Older Adults and Technology Use, April
3, 2014). Importantly, African American and Latino/Hispanic consumers
are significantly more likely to rely exclusively on wireless
broadband, according to recent data from Pew.
Wireless and the Lifeline Program
The Evolution of the Lifeline Program
The Lifeline program was created by the FCC in 1985 to ensure that
any increase in local rates that occurred following the break-up of the
Bell System would not put phone service out of reach for low-income
households. The FCC was concerned that changes in the long distance
industry structure could force low-income consumers to drop voice
service, which, the FCC found, ``had become crucial to full
participation in our society and economy.''
That notion--that access to telecommunications service is essential
to full participation in our economy--led Congress to enact Section 254
of the Act as part of the Telecommunications Act of 1996, which
includes specific universal service principles to ensure that low-
income consumers have access to telecommunications service. The 1996
amendments also directed the FCC to consider ``such other principles as
the Joint Board and the Commission determine are necessary and
appropriate.'' Upon the recommendation of the Federal-State Joint
Board, the Commission adopted rules that universal service support
mechanisms should be ``competitively neutral'' and ``not unfairly
advantage one provider, nor favor one technology.'' The Commission also
endorsed the Joint Board's recommendation that ``all eligible
telecommunications carriers, not just ILECs, should be able to receive
support for serving qualifying low-income consumers.''
In 2005, the Commission established a framework to enable wireless
participation in the Federal USF program. First, the FCC permitted
wireless providers serving rural areas to be designated as ``eligible
telecommunications carriers,'' or ``ETCs,'' making them eligible for
support from the high-cost fund and enabling consumers in rural areas
to access mobile wireless services. Designation of wireless providers
as ETCs was conditioned on the offering of Lifeline services to
qualified low-income consumers. Second, in response to the unique
challenges posed by Hurricane Katrina, the FCC further modernized the
Lifeline program by granting relief from the statutory requirement that
a carrier designated as an ETC for purposes of Federal universal
service support provide service over its own facilities. The Commission
concluded that the requirement that a Lifeline provider be facilities-
based would impede greater provision of Lifeline services and that
forbearance from the facilities requirement would promote competitive
market conditions.
In the decade since Hurricane Katrina, the FCC's reforms to the
Lifeline program have enabled wireless providers to bring competitive
telecommunications services to millions of low-income consumers. Nearly
three decades after its creation, and through an evolution shaped by
Congress and FCC leaders from both parties, Lifeline has been a
critical component in the effort to expand telephone subscribership
among low-income consumers. As the NAACP has explained to Congress,
without the wireless services made available through the Lifeline
program ``our most vulnerable populations would not have the ability to
call 911, contact prospective and current employers, connect with
health, social, and educational services, or keep in touch with family
and friends.'' (Letter from NAACP et al. to Chairman Walden and Ranking
Member Eshoo, Apr. 23, 2013)
The Lifeline Program Enables Opportunity
Today, Lifeline enables more than 12 million low-income consumers
to communicate with 9-1-1 and medical professionals, seek educational
and occupational opportunities, and access critical government
services. The impact of the Lifeline program has been especially
dramatic with respect to households with incomes of less than $10,000.
Telephone penetration for those lowest income households increased from
80 percent in 1984 to 93.1 percent in 2014. And the gap in telephone
subscribership between low-income households and all households shrank
from more than 11 percent to less than 4 percent.
In particular, since 2005, when the FCC first started permitting
wireless carriers to receive Lifeline funds, the gap has nearly halved,
from 6.3 percent to 3.2 percent. To put this in perspective, for every
1 percent increase in telephone penetration, approximately 1.2 million
households gain access. These low-income consumers realize the value
and opportunity to reach critical services and communicate with family
and care givers that wireless offers through Lifeline support.
Source: FCC Monitoring Reports
Wireless Brings Competition and Efficiency to the Lifeline Program
In the decade since wireless entered the Federal Lifeline program,
competition among wireless ETCs has more than quadrupled available
voice minutes from about 60 to 250 and more, including added text
messages and other services, such as roaming, while the subsidy amount
has remained steady at $9.25 since 2011. In other words, wireless
competition has greatly increased the efficiency of the Lifeline
program by offering more services to low-income consumers without
increasing the subsidy amount.
It may be helpful to clarify that the current Lifeline program only
supports voice services, not devices. Thus, the Lifeline program does
not fund ``free cell phones.'' Nor are smartphones and tablets
supported through the Lifeline program. The truth is that some wireless
providers offer a basic feature phone at low-or no-cost simply to
enable the low-income consumer to access Lifeline-eligible voice
services. Lifeline-eligible consumers can choose from a very limited
selection of provider-offered phones. For example, Sprint's Assurance
Wireless affiliate offers a single wireless handset--the Kyocera Jax--
for use by Lifeline customers and TracFone's Safelink Wireless
provides only two handset options with its Lifeline offering.
Commenters can argue whether the existing Lifeline subsidy offers too
little or too much, but wireless competition in the Lifeline program
has efficiently and effectively brought innovative products and
affordable services to low-income consumers.
The FCC's Reforms to Lifeline Are Successful, but Unfinished
CTIA's member companies have a significant interest in ensuring
that the full range of universal service programs are administered in a
responsible manner that prevents waste, fraud, and abuse. Contributions
from wireless carriers and their consumers currently make up 44 percent
of the overall Federal USF. CTIA has long advocated for reforms to the
USF that deter waste, fraud, and abuse to minimize the impact on
wireless consumers who support these contributions. CTIA and its
members share the view of the Government Accountability Office (GAO),
expressed in its recent report, that the FCC has made progress in
reforming the Lifeline program to improve its benefits and reduce
waste, fraud, and abuse, but also believe there is more work to be
done.
Specifically, we supported the FCC in its efforts to enact new
Lifeline accountability measures in 2011 and 2012. In particular, CTIA
called for and supported the adoption of a ``duplicates'' database, the
National Lifeline Accountability Database (``NLAD''), to address the
issue of consumers seeking more than one Lifeline benefit from multiple
providers. The NLAD launched for all states in March 2014 and has
already demonstrated great success, largely eliminating the problem of
consumers receiving multiple Lifeline benefits. The database is a
comprehensive list of all Lifeline customers against which a carrier
must run a check to make sure they are not signing up a customer who is
already receiving the Lifeline benefit. CTIA's position has and always
will be that no consumer should ``double dip'' from the Lifeline
program, and the NLAD has been a critical tool in combating misuse of
Lifeline funds by consumers.
The Commission also adopted additional reform measures--as
described by the GAO in its recent report--which included rules
eliminating Lifeline support for more than one connection per
household, standards for determining Lifeline eligibility, requirements
for ETCs to review Lifeline subscribers' eligibility (something
carriers previously were prohibited from doing), a monthly minimum
usage requirement that is intended to ensure that support is awarded
only in instances that will actually benefit low-income consumers, a
requirement that providers annually recertify the eligibility of their
Lifeline subscribers, and rigorous audit requirements. The FCC also
eliminated subsidies that had been questioned, including toll
limitation support and Link-Up support outside of tribal areas. The FCC
announced last week that these reforms have reduced Lifeline spending
by nearly 24 percent.
Yet, more work is necessary. In the 2012 Lifeline Reform Order, the
Commission directed ``the Bureau and USAC to take all necessary actions
so that, as soon as possible and no later than the end of 2013, there
will be an automated means to determine Lifeline eligibility for, at a
minimum, the three most common programs through which consumers qualify
for Lifeline.'' Unfortunately, these efforts have not moved as quickly
as with the NLAD. CTIA continues to strongly support the development of
an automated mechanism for determining eligibility, which we believe
will be the most effective way to improve administration of the
program. It is important that the Commission complete its work to
create and operationalize an automated eligibility mechanism as soon as
possible to continue to reduce fraud and abuse.
Lifeline for the 21st Century
Federal Universal Service Policy Must Recognize Consumer Preferences
for Mobile Wireless
The FCC has announced that it will open a proceeding to consider
whether Lifeline can effectively encourage providers to offer broadband
service to low-income consumers and CTIA and its member companies are
committed to this evolution, consistent with Congress's directive to
provide an ``evolving level'' of services through the USF. As the
Commission and this Subcommittee examines opportunities for expanding
broadband access for low-income consumers, there are a number of
important questions that must be addressed and we welcome the
opportunity to highlight some of the central considerations.
First, we urge the Commission to ensure any reforms reflect
consumers' clear preference for wireless services to meet their voice
and data communications needs. As the data on low-income adoption of
mobile services described above demonstrates, it is clear that mobile
wireless broadband will be integral to developing solutions targeted
for low-income consumers. The FCC's reforms must not exclude--
intentionally or unintentionally--wireless solutions and should
encourage greater wireless participation in the program to meet the
needs of low-income Americans.
At the same time, the Commission must carefully balance appropriate
subsidy levels and funding requirements to minimize burdens on
consumers who fund Federal universal service programs. Given that
wireless consumers contribute 44 percent of the overall Federal USF,
CTIA has a strong interest in ensuring that consumers are not subject
to an unreasonable contribution burden. As the Commission and the
Subcommittee consider potential increases to the size and scope of
programs supported by USF, Congress should continue to evaluate how all
of the universal service programs are funded and whether it may be more
appropriate to support programs of general benefit to the public out of
general revenue funds.
Similarly, the role of carriers in determining eligibility in the
Lifeline program is unique across Federal low-income support programs.
As the FCC considers reform, we are encouraged that the FCC will
evaluate transitioning eligibility decisions into the hands of
appropriate government agencies. Such an approach could reduce the
current significant regulatory burdens and risks for providers
interested in participating in the program, and permit opportunities
for coordinated enrollment and automatic de-enrollment when
participants are no longer eligible to participate in the program.
We look forward to working with this Subcommittee and the FCC as it
seeks to evolve this critical program in a manner that is fiscally
responsible as well as responsive to Americans' reliance on mobile
solutions.
Barriers to the Lifeline Program are Barriers to Communication
Notwithstanding the Commission's recent reforms, questions have
also been raised about additional proposals that may inadvertently act
as barriers to low income access to basic communications services. For
example, some have suggested that the FCC impose a mandatory minimum
charge on Lifeline subscribers. CTIA remains concerned that such
approach may have a significantly adverse impact on participation in
the Lifeline program. While a minimum charge of $5.00 per month may
seem modest to some, it may represent a significant financial burden
for those who fall within the income threshold for Lifeline
eligibility. For those subscribers who do not have a bank account or
credit of any sort, as is the case for a significant number of Lifeline
subscribers, the logistics of simply making a co-payment may be an even
more formidable challenge. For carriers to accept a co-payment,
arrangements will have to be made with retailers and others to accept
payment, increasing the cost of program administration, with the also
likely effect that consumers will receive fewer minutes of use.
Finally, the FCC's recent report on the Broadband Pilot Projects
demonstrates the price sensitivity of low-income consumers with respect
to broadband services. Unsurprisingly, increasing the cost of service
had an adverse impact on low-income participation.
While CTIA appreciates the interest some have expressed in limiting
the size of the Lifeline program through a cap or budget on the total
amounts that USAC may distribute, CTIA believes that capping the
Lifeline program may be counterproductive to encouraging low-income
consumers to adopt essential communications services. A cap or budget
on the Lifeline program will inherently exclude--or reduce the benefits
for--an undetermined number of the eligible low-income consumers.
Because the Lifeline program provides support only to means-tested
recipients and serves a purpose more akin to other low-income
government programs that aren't subject to caps or budgets, it is
reasonable for the Commission to distinguish this program from other
Federal USF programs that are appropriately subject to a cap. Moreover,
while there was significant growth in the Lifeline program between 2008
and 2011, that growth correlated to increased demand for other social
welfare programs during the economic downturn. As the economy has
improved and the 2012 reforms have been implemented, the level of
funding authorized for support of Lifeline has reduced from a high of
$2.18 billion in 2012 to $1.6 billion in 2014. We believe that a
properly administered fund can address fund growth while continuing to
meet the Lifeline program's core mission.
Over the nearly three decades since its creation, the Lifeline
program has served an important purpose by enabling low-income
consumers to access essential communications services, justifiably
earning bi-partisan support. CTIA appreciates the opportunity to work
with the Subcommittee, the Commission, and other interested parties to
ensure that low-income Americans continue to have affordable access to
increasingly essential communications services of the 21st Century.
CTIA believes this objective can be accomplished in a way that both
recognizes the important role of wireless for low-income Americans and
ensures the fiscal integrity of the program, and we look forward to
engaging with you to accomplish these objectives.
Thank you for the opportunity to testify today. If CTIA can provide
any additional information you would find helpful, please let us know.
Senator Wicker. And thank you very, very much.
Mr. May?
STATEMENT OF RANDOLPH J. MAY, PRESIDENT,
THE FREE STATE FOUNDATION
Mr. May. Chairman Wicker, Ranking Member Schatz, Ranking
Member Nelson, and members of the Committee, thank you for
inviting me to testify.
I am President of the Free State Foundation, a free market
think tank primarily devoted to focusing its research in the
communications law and policy area. I have served as Associate
General Counsel of the FCC, and I have been closely involved in
the communications policy area for over 35 years.
The principle of promoting universal service has been
central to communications policy for many decades, and this is
as it should be. The universal service principle supports
access to basic communications service for all Americans. And
Lifeline is an important means of effectuating the policy of
promoting universal service through a safety net mechanism.
Indeed, if Lifeline service is properly formulated and
implemented so that it aids low-income persons in an efficient
and effective manner, free from fraud and waste, then it should
be a cornerstone of the Nation's universal service policy. This
is because Lifeline is the most targeted means of providing
subsidies to those in need of assistance.
Before turning to my specific reviews, I want to make an
often-overlooked point. Many of the existing FCC regulations
are unnecessary, and they have the effect of raising the price
of access to communications services for all consumers,
including low-income persons.
Likewise, the USF surcharge that all consumers pay for all
interstate calls currently stands at 17.4 percent. Call it what
you will, but the reality is this is a tax that depresses usage
for all consumers, including low-income persons.
That said, I support a properly implemented Lifeline
program that is further reformed so the program remains viable.
Lifeline should be a safety net that operates within boundaries
to aid those truly in need, not another Federal entitlement
program that evolves in a way so that its subsidies inevitably
expand to subsidize those further up the income scale.
This boundary constraint becomes more important as the gap
in telephone penetration rates between low-income and non-low-
income persons has narrowed over time, because studies show
that many households receiving the subsidy would choose to
subscribe in the absence of the subsidy.
Regarding near-term reforms, the Commission should take
further steps to prevent waste and fraud. I won't take time to
address them here, but I do in my written testimony.
As for expanding Lifeline support to include broadband
service, the Commission and Congress should proceed with
caution. While there is considerable merit to the notion that
at some point and in some way broadband service should be
supported with Lifeline subsidies, any revamping of the
original concept of Lifeline as a safety net for access to
basic voice service should be undertaken in a way that doesn't
threaten the existing program's sustainability.
The results from the FCC's broadband pilot program
demonstrate the challenges inherent in attempting to expand the
program to include broadband without substantially increasing
the total amount of subsidies provided.
GAO reports that the FCC did not conduct a needs assessment
or develop implementation and evaluation plans prior to
establishing the broadband pilot. A proper needs assessment,
along with these plans, should be undertaken before committing
to a major revamp of the program that could involve substantial
cost.
The realization that expanding the program to include
broadband likely will be costly should prompt consideration of
significant reforms in the way the current program is
structured. For example, ultimately, it probably makes sense to
provide a nontransferable, portable voucher that an eligible
subsidy recipient can take to any participating service
provider. Any provider that accepts a voucher would agree to
provide a Commission-defined basic broadband service to voucher
recipients at no more than the Commission-defined subsidized
rate.
Obviously, it is far easier to describe the concept for a
voucher program than it is to formulate the parameters of an
efficient and effective program. But a portable voucher
structure gives purchasing power directly to low-income
individuals, allowing them to participate in the communications
marketplace like any other consumer. And it allows the fund to
benefit directly from competition among broadband providers.
Moreover, in order to provide more accountability to the
Lifeline program, indeed to each of the USF programs,
consideration should be given to funding them through the
appropriations process rather than through subscriber
surcharges.
To conclude, I support continuation of a Lifeline program
that provides subsidy support to those truly in need. But in
order for the program to remain viable and sustain public
support, meaningful reforms aimed at reducing waste, fraud, and
abuse should continue to be pursued. And any expansion to
include broadband should be pursued cautiously.
Thank you for giving me the opportunity to testify today,
and I will be pleased, of course, to answer any of your
questions.
[The prepared statement of Mr. May follows:]
Prepared Statement of Randolph J. May, President,
The Free State Foundation
Mr. Chairman, Ranking Member Schatz, and Members of the Committee,
thank you for inviting me to testify. I am President of The Free State
Foundation, a non-profit, nonpartisan research and educational
foundation located in Rockville, Maryland. The Free State Foundation is
a free market-oriented think tank that focuses its research primarily
in the communications law and policy and administrative law and
regulatory practice areas. I have served as Associate General Counsel
at the Federal Communications Commission and have been closely involved
with communications law and policy for over thirty-five years. I am a
past Chair of the American Bar Association's Section of Administrative
Law and Regulatory Practice. And I am currently a public member of the
Administrative Conference of the United States and a Fellow at the
National Academy of Public Administration.
The principle of promoting universal service has been central to
Federal and state communications policy for many decades, and this is
as it should be. The universal service principle supports access to
basic communications service for all Americans. And Lifeline service,
the focus of today's hearing, is an important means of effectuating the
policy of promoting universal service through a ``safety net''
mechanism. Indeed, if Lifeline service is properly formulated and
implemented, so that it aids low-income persons in an efficient and
effective manner, free from fraud and waste, then it should be a
cornerstone of the Nation's universal service policy. This is because
Lifeline is the most targeted means of providing subsidies to those
truly in need of assistance.
Importantly, keeping all members of society connected, regardless
of income, redounds to the benefit of those who can afford to pay as
well as those who cannot afford to pay for access to the network. This
result is attributable to the ``network effects'' principle: The larger
the number of people a network reaches, the more valuable the network
is to each user.
Now I will turn to some of my specific views, having in mind the
context of where matters stand today. But, first, from my free market-
oriented perspective, I want to make an important, too often
overlooked, point. Many of the FCC's existing regulations are unduly
burdensome, if not outright unnecessary, and these regulations have the
effect of raising the price of access to--and, therefore, decreasing
the availability of--communications services for all consumers,
including low-income persons. And, in the same vein, the USF surcharge
(from an economic perspective, in reality, a ``tax'') that all
consumers pay for all interstate and international calls currently
stands at 17.4 percent.\1\ This surcharge also has the effect of
depressing usage for all consumers, including those at the lower end of
the income scale.
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\1\ FCC Contribution Factor and Quarterly Filings, available at:
https://www.fcc.gov/encyclopedia/contribution-factor-quarterly-filings-
universal-service-fund-usf-management-support
---------------------------------------------------------------------------
That said, as a long-time supporter of a properly formulated and
implemented Lifeline subsidy program, I support measures to further
reform the program so it remains viable,\2\ and so it sustains public
support. In my view, 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.\3\ From the perspective of
sound policy, this ``program boundary'' constraint becomes more
important as the gap in telephone penetration rates between low-income
and non-low-income persons narrows. As the March 15, 2015, GAO Report
points out, as the penetration rate gap has narrowed over time, studies
show that, due to price insensitivity, ``many households receiving the
Lifeline subsidy would choose to subscribe to telephone service in the
absence of the subsidy.'' \4\ Thus, GAO cautions that the Lifeline
program, as currently structured, ``may be a rather inefficient and
costly mechanism to increase telephone subscribership among low-income
households. . . .'' \5\
---------------------------------------------------------------------------
\2\ Lifeline and Link Up Reform and Modernization, Report and Order
and Further Notice of Proposed Rulemaking (Lifeline Reform Order), 27
FCC Rcd 6656 (2012). I acknowledge that this order, championed by
Commissioner Mignon Clyburn, was a positive step in the direction of
reform.
\3\ For this reason, I do not favor Lifeline eligibility criteria
that provide subsidies to those persons whose income places them above
the federally-defined poverty level, or at least much above the poverty
level.
\4\ GAO Report, ``FCC Should Evaluate the Efficiency and
Effectiveness of the Lifeline Program,'' March 2015, at 14.
\5\ Id.
---------------------------------------------------------------------------
Regarding near-term reforms, the Commission should take steps to
prevent waste and fraud that go beyond those salutary steps it took in
the 2012 Lifeline Reform Order.\6\ For example, while the FCC's rules
require service providers to determine eligibility for Lifeline, they
prohibit the carrier from retaining any documentation provided by the
consumer to demonstrate eligibility after a determination has been
made. The Commission's concern that the privacy of Lifeline subscribers
be protected is not unwarranted, but as TracFone and other carriers
contend, there should be a means to do this without getting rid of
records that might help prevent fraud and abuse.\7\ Another reform
proposed by TracFone to inhibit fraud and abuse would prohibit in-
person distribution to prospective Lifeline customers. While this
proposal may not be necessary if the document retention proposal is
adopted as a means of discouraging fraud, in light of earlier reports
concerning questionable on-street distribution of handsets, it may
still warrant consideration if in-person distribution abuses
continue.\8\ While the 2012 order's requirement for annual
recertification was a step in the right direction as a means of weeding
out ineligible recipients, the use of some form of Electronic Benefit
Transfer card associated with an underlying Lifeline-qualifying program
could be considered as a further reform. Without waiting for the annual
recertification to come around, such an electronic payment vehicle has
the advantage of promptly de-enrolling from Lifeline a cardholder who
is de-enrolled from the associated benefits program to which the card
is tied.
---------------------------------------------------------------------------
\6\ After adoption of the Lifeline Reform Order, annual Lifeline
disbursements declined from $2.2 billion in 2012 to $1.7 billion in
2014. According to the GAO report, this was due, at least in part, to
the reduction in the number of ineligible households receiving support.
GAO Report, at 24. The establishment of the National Lifeline
Accountability Database (NLAD) played a positive role in achieving this
reduction.
\7\ See TracFone Supplement to Petition to Require Retention of
Program-Based Eligibility Documentation, May 30, 2012, available at:
http://apps.fcc.gov/ecfs/document/view?id=7021920913
\8\ I supported this TracFone proposal in June 2013 in comments
filed with the FCC, available at: http://www.freestatefoundation.org/
images/TracFone_Petition_for_Rulemaking_Comm
ents_061713.pdf. If such a in-person prohibition were adopted, there
would not appear to be a need to apply it to in-store distribution from
established outlets.
---------------------------------------------------------------------------
With regard to expanding Lifeline support to include broadband
service, the Commission--and Congress--should proceed with caution.
While there is considerable merit to the notion that, at some point and
in some way, broadband service should be supported with Lifeline
subsidies, any such revamping of the original concept of Lifeline--as a
``safety net'' for access to basic voice service--should be undertaken
in a way that does not threaten the sustainability of the existing
program. The results from the FCC's broadband pilot program demonstrate
the challenges inherent in attempting to expand the program to include
broadband without, at the same time, increasing substantially the total
amount of subsidies provided. As the GAO report points out, for one
pilot project, with no monthly cost to subscribe, there was 100 percent
enrollment. With a $20 monthly fee, there were no enrollees. The GAO
report concludes, in understated fashion: ``This raises questions about
the feasibility of including broadband service in the Lifeline program,
since on a nationwide scale, offering broadband service at no monthly
cost would require significant resources and may conflict with [the]
FCC's goal to minimize the contribution burden.'' \9\ The GAO Report
goes on to say: ``In addition, representatives from the projects we
interviewed noted other challenges, such as difficulties with marketing
the program and getting customers to pay their bills.'' \10\
---------------------------------------------------------------------------
\9\ GAO Report, at 34. As pointed out above, the ``contribution
burden'' surcharge is currently set at a hefty 17.4 percent.
\10\ Id. As the Pew Research Center reports consistently have
confirmed for years, lack of ``digital literacy'' and lack of interest
are substantial obstacles to expanding access to broadband, more
important for many people than the ability to pay or the price of
service. Digital literacy programs may be worthwhile, but they
certainly are not without costs either.
---------------------------------------------------------------------------
Another consideration, often overlooked in discussing expansion of
Lifeline subsidies to broadband, is that the devices used to access
broadband service, whether a laptop, tablet, or smartphone, are, on
average, considerably more expensive than the phone handsets typically
used to access Lifeline-supported voice services.\11\ Support for
``access'' without the means to acquire the associated devices is
meaningless. This is just another factor relating to cost that must be
considered in deciding whether Lifeline should be expanded to include
broadband.\12\
---------------------------------------------------------------------------
\11\ If Lifeline is expanded to include broadband, wireless
services should play a prominent role. Pew reports that those with
lower incomes and levels of educational attainment are much more
dependent on smartphones for online access than those with higher
incomes and levels of educational attainment. See ``U. S. Smartphone
Use in 2015,'' April 1, 2015, available at: http://www.pewinternet.org/
2015/04/01/us-smartphone-use-in-2015/
\12\ Another separate factor to consider is this: The FCC has just
ratcheted up the definition of what constitutes ``broadband'' to 25
Mbps from 10 Mbps, a standard which only recently had been adopted.
Obviously, providing ``broadband'' service at higher and higher speeds
is more costly. And it is unlikely that proponents of expansion of
Lifeline to include broadband will be receptive to providing a level of
service the Commission has deemed not to be ``broadband.''
---------------------------------------------------------------------------
It is worth noting that GAO reports that ``the FCC did not adopt
our previous recommendation to conduct a needs assessment or develop
implementation and evaluation plans prior to establishing the [pilot
broadband] program.'' \13\ While the efficacy of such measures may vary
depending on their execution, a proper needs assessment, along with
evaluation and implementation plans, is warranted when considering a
major revamp of the Lifeline program that could involve a substantial
increase in subsidies.
---------------------------------------------------------------------------
\13\ Id.
---------------------------------------------------------------------------
So, realistically, any expansion of the Lifeline program to include
broadband, if it is to meet the objectives of its proponents, is likely
to be costly. This realization should prompt consideration of
significant reforms in the way the current program is structured. I
have discussed many of these more fundamental restructuring reforms in
the past. For example, ultimately, it probably makes sense to
restructure Lifeline to provide a nontransferable portable voucher that
an eligible subsidy recipient can take to any participating service
provider. Any provider that accepts a voucher for broadband would agree
to provide a Commission-defined basic broadband service to voucher
recipients at no more than the Commission-defined subsidized rate.
Obviously, it is far easier to describe the concept for a voucher
program in broad outline than it is to formulate and implement the
parameters of such an efficient and effective program. But, as a group
of Free State Foundation-affiliated scholars said in a September 2014
Response responding to the House Commerce Committee's #CommActUpdate
Universal Service White Paper: ``[A] portable voucher structure gives
purchasing power directly to low-income individuals, allowing them to
participate in the telecommunications marketplace like any other
consumer. And it allows the fund to benefit directly from competition
among broadband providers. To attract recipients and avoid customer
defection, providers must compete on price and service as they do in
the marketplace generally.'' \14\
---------------------------------------------------------------------------
\14\ Response to Questions in the Fifth White Paper, ``Universal
Service Policy and the Role of the Federal Communications Commission,''
September 19, 2014, available at: http://freestatefoundation.org/
images/Response_to_Questions_in_the_Fifth_White_Paper_0919
14.pdf
---------------------------------------------------------------------------
Moreover, in order to provide more accountability to the Lifeline
program -indeed, to each of the USF programs--consideration should be
given to funding them through the Federal budget and appropriations
process rather than through subscriber surcharges. As the Free State
Foundation-affiliated scholars said in the September 2014
#CommActUpdate Response, this ``would improve the transparency of the
program by vesting oversight in Congress,'' rather than in the ``murky,
semi-private Universal Service Administrative Company.'' Funding
universal service programs through the appropriations process ``would
also apply a hard budgetary cap to expenditures established for a
definite period of time, requiring the Commission to wring
inefficiencies out of the system in order to serve the public within
congressional funding restraints.'' \15\
---------------------------------------------------------------------------
\15\ Id.
---------------------------------------------------------------------------
In summary, I support continuation of a Lifeline program that
provides subsidy support to those truly in need. But in order for the
program to remain viable and sustain public support, meaningful reforms
aimed at reducing waste, fraud, and abuse should continue to be
pursued. And, when considering proposals to expand Lifeline to include
broadband service, in light of the additional costs likely to be
involved, policymakers should proceed cautiously.
Thank you for giving me the opportunity to testify today. I will be
pleased to answer any questions.
Senator Wicker. Thank you, Mr. May.
Ms. Gonzalez?
STATEMENT OF JESSICA J. GONZALEZ, EXECUTIVE VICE
PRESIDENT AND GENERAL COUNSEL, NATIONAL HISPANIC MEDIA
COALITION
Ms. Gonzalez. Thank you, Chairman Wicker, Ranking Member
Schatz, Ranking Member Nelson, and members of the Committee.
Thank you for inviting me to testify.
As a former Lifeline recipient, I know firsthand how
effective and life-changing it can be. In 2004, when I was laid
off from my teaching job, I was on Lifeline for a short time.
With my subscription, I was able to list a reliable phone
number on my resume and use my phone to communicate with the
law school admissions and financial aid offices that ultimately
enabled me to become an attorney.
I can think of no better way of improving Lifeline than by
supporting the FCC's process to modernize it for the broadband
age. Home broadband access is critical to nearly every facet of
modern American life. More than 80 percent of Fortune 500
companies, including huge employers like Walmart and Target,
only accept job applications online. In the next decade, nearly
80 percent of jobs will require digital literacy skills.
Students with home broadband graduate at higher rates than
those without, and small businesses with broadband yield
$200,000 more in annual revenues.
Yet, despite the breakneck pace to embrace the benefits of
Internet through all sectors of our economy and society, we as
a country have not demonstrated a similar sense of urgency when
it comes to ensuring that all Americans can access the
Internet.
Thirty percent of Americans lack home broadband access. The
unconnected are more likely to be poor, African-American,
Latino, Native American, rural, and/or seniors. For people
under 65, the primary reason cited for non-adoption is cost.
The divide touches all parts of American life but is
particularly striking in education, rural life, and health
care. I have time to address just one now.
As a former public school teacher, I would be remiss not to
underscore how the digital divide is creating strikingly
unequal provision of public education across this great
country. FCC Commissioner Rosenworcel has raised concerns about
what she calls the homework gap--that is, that 7 in 10 teachers
assign homework that requires broadband, but 1 in 3 households
do not subscribe, including 5 million households with U.S.
schoolchildren.
Nearly 100 percent of high school students say that their
teachers assign homework that requires broadband. Fifty percent
have been able to complete it at certain times, and 42 percent
say they have received a lower grade because of lack of access.
A close friend of mine is still teaching the fourth grade
in Inglewood, California. Inglewood is a low-income
neighborhood; the majority of residents of African-American and
Latino. Some of her students have come to school with shoes
three sizes too big, jackets with holes in them, or, worse,
hungry, and they are expected to learn and succeed before their
basic needs are met.
And with new state standards, these children, half of whom
she estimates do not have broadband at home, will be taking
their standardized exams online. The standards direct teachers
to integrate tech into lesson plans and homework.
The textbooks, shared one to every two to three students,
are teeming with digital learning opportunities, yet she cannot
assign online homework or even integrate tech into lessons
because her students do not have the right tools.
Simple research projects that should take a couple of days
in classes where every student is connected drag on for weeks,
as her students wait for their precious 30 minutes per week in
the computer lab.
In the beginning of the school year, my friend invited me
to speak to her kids, and I was met with a roomful of bright,
ambitious, and enthusiastic kids. They have little in the way
of material possessions, but they have big dreams and unique
ideas about how to give back to this country. It is our job to
arm them with the tools to do so.
To balk at this task, to delay isn't just to throw aside
the core American value of educational equality; it is giving
up on our country's future. Tomorrow is too late. We must act
boldly, and we must act now.
Lifeline, the only government initiative that addresses
affordability, is well suited for the task. It already provides
many with a pathway out of poverty. In fact, over 4.2 million
households represented by members of this subcommittee alone
currently rely on Lifeline telephone service. An estimated 90
percent of them are without home broadband.
I will be forever grateful for the investment that this
country made in my future, and I will fight to give other
Americans similar opportunity. Modernizing Lifeline is one
fight worth fighting.
Thank you.
[The prepared statement of Ms. Gonzalez follows:]
Prepared Statement of Jessica J. Gonzalez, Executive Vice President and
General Counsel, National Hispanic Media Coalition
Chairman Wicker, Ranking Member Schatz, esteemed members of the
Subcommittee, thank you for inviting me to testify.\1\ Lifeline has
tremendous potential to dramatically improve the lives of millions of
Americans. This is an exciting moment in history: we have the
opportunity to explore important improvements to the program and to
modernize it for the digital age. This will provide a pathway out of
poverty--a pathway to success--to some of our country's poorest people.
---------------------------------------------------------------------------
\1\ I would like to thank my colleagues, Michael Scurato and
Elizabeth Ruiz, for assisting me with the preparation of this
testimony.
---------------------------------------------------------------------------
As a former Lifeline recipient, I know firsthand how life-changing
it can be. In 2004, after being laid off from my teaching job, I was on
Lifeline for a short while. With my Lifeline telephone subscription, I
was able to list a reliable phone number on my resume as I searched for
jobs and use my phone to communicate with the law school admissions and
financial aid offices that ultimately made it possible for me to become
an attorney.
Today, Lifeline infrastructure can--and should--be modernized to
enable all Americans to participate in our society. As we look forward
to the release of the Federal Communications Commission's (``FCC'')
related notice of proposed rulemaking, and applaud yesterday's
introduction of the Lifeline-centric Broadband Adoption Act of 2015, it
appears we will have ample opportunity to do more than explore
improvements to the program, and hopefully adopt a number of
improvements at the FCC within the year.
One of the questions posed in this hearing is how to improve the
effectiveness of Lifeline. Lifeline is a program designed to help make
modern communications services affordable to low-income families by
providing a modest, $9.25 subsidy for households participating in a
number of other assistance programs or living below 135 percent
poverty. Yet, it has not been modernized to fully support broadband
connections. As members of this subcommittee are well aware, broadband
Internet access has become an essential service, and it has become
increasingly critical in promoting the economy, public health, public
safety, and education. I can think of no better way of improving the
effectiveness of Lifeline than by supporting the FCC's efforts to
modernize it for the broadband age and encouraging the agency to
complete the process by the end of this year.
I do not need to elaborate to this subcommittee how critical home
broadband access is to nearly every facet of modern American life. The
FCC's Broadband Adoption Taskforce has defined the digital divide that
exists between those that have broadband and those that do not as an
``opportunity divide'' that manifests itself in a number of ways.\2\
For instance, more than 80 percent of Fortune 500 companies, including
huge employers like Wal-Mart and Target, only accept job applications
online.\3\ In the next decade, nearly 80 percent of jobs will require
some digital literacy skills.\4\ And students with broadband at home
graduate at a higher rate than students who lack such access.\5\
Consumers with broadband at home can save up to $7,000 per year on
goods and services, and annual revenues of small businesses with
broadband access are, on average, $200,000 higher than those without
broadband.\6\
---------------------------------------------------------------------------
\2\ FCC Broadband Adoption Taskforce, Broadband Adoption
Presentation to FCC Open Meeting, at slide 4-5 (Nov. 30. 2011),
available at http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-
311281A1.pdf (``Broadband Adoption Taskforce Presentation'').
\3\ Id. at slide 10.
\4\ Id. at slide 11.
\5\ Id. at slide 14.
\6\ Id. at slide 19.
---------------------------------------------------------------------------
Yet, despite the breakneck pace to embrace the efficiencies and
benefits of the Internet through all sectors of our economy and
society, we, as a country, have not demonstrated a similar sense of
urgency when it comes to ensuring that all Americans are able to access
the Internet. Many of those that could benefit most from broadband
remain unconnected. According to a 2013 Pew Research Center study, 30
percent of Americans lack home broadband.\7\ These people are more
likely to be poor, African American, Latino, Native American, rural
and/or seniors.\8\ For people under 65, the primary reason cited for
non-adoption is cost.\9\
---------------------------------------------------------------------------
\7\ Aaron Smith and Kathryn Zickuhr, Home Broadband 2013: Trends
and demographic differences in home broadband adoption, Pew Research
Center (Aug. 26, 2013), available at http://www.pewinternet.org/2013/
08/26/home-broadband-2013/.
\8\ Id.
\9\ John B. Horrigan, PhD, Closing Online Access Gaps for Older
Adults, Time Warner Cable Research Program on Digital Communications at
11 (Fall 2014), available at http://www.twcresearchprogram.com/pdf/
TWC%20Horrigan%20Project%20GOAL%20Paper.pdf.
---------------------------------------------------------------------------
Furthermore, in recent years, broadband adoption has remained
stagnant.\10\ And, perhaps more troubling, the latest data indicates
that broadband adoption actually posted a slight decline among lower-
income communities.\11\ Those who are unsubscribing from broadband cite
cost as their number one reason for disconnecting.\12\ Fewer than half
of households earning less than $25,000 have broadband at home.\13\
---------------------------------------------------------------------------
\10\ Dep't of Commerce, Nat'l Telecomm. & Info. Admin., Exploring
the Digital Nation: Embracing the Mobile Internet at 15 (Oct. 2014),
available at http://www.ntia.doc.gov/files/ntia/publications/
exploring_the_digital_nation_embracing_the_mobile_internet_10162014.pdf.
(``In 2012, 75 percent of households reported having Internet at home,
representing a 3 percentage-point increase from 2011'') (``Digital
Nation 2014'').
\11\ Id. at 16 (reporting based on 2012 Census data that 48 percent
of households earning less than $25,000 use broadband at home);
Computer and Internet Use in the United States: 2013, American
Community Survey Reports at 3 (Nov. 2014), available at http://
www.census.gov/history/pdf/2013computeruse.pdf (reporting based on 2013
Census data that 47.2 percent of households earning less than $25,000
have high speed Internet access at home, down from 48 percent in 2012).
\12\ Digital Nation 2014 at 30.
\13\ Id. at 16.
---------------------------------------------------------------------------
Three instances where the broadband opportunity divide is
particularly striking are education, rural life and healthcare.
As a former public school teacher, I would be remiss not to
underscore how the digital divide is creating strikingly unequal
provision of public education across this great country. In recent
years, FCC Commissioner Jessica Rosenworcel has raised serious concerns
about what she calls the Homework Gap, which refers to the following
phenomenon. Seven in ten teachers assign homework that requires
broadband access yet, according FCC data, one in three households do
not subscribe to broadband services.\14\ Five million households with
school-aged children are falling into this gap.\15\ A recent survey by
the Hispanic Heritage Foundation and the Family Online Safety Institute
revealed that nearly 100 percent of high school students say they are
required to access the Internet to complete homework assignments
outside of school.\16\ Nearly 50 percent reported that they have been
unable to complete a homework assignment because they did not have
access to the Internet or a computer, and 42 percent say they received
a lower grade on an assignment because of lack of Internet access.\17\
Pew research shows that half of teachers in low-income communities say
their students' lack of home broadband access has been a barrier to
integrating technology into their lessons.\18\
---------------------------------------------------------------------------
\14\ Remarks of Commissioner Jessica Rosenworcel, Taking the Pulse
of the High School Student Experience in America, Hispanic Heritage
Foundation, Washington, DC (April 29, 2015), available at https://
apps.fcc.gov/edocs_public/attachmatch/DOC-333274A1.pdf (``Remarks of
Comr. Rosenworcel'').
\15\ Id.
\16\ Hispanic Heritage Foundation and Family Online Safety
Institute, Taking the Pulse of the High School Student Experience in
America (April 28, 2015), available at http://www.his
panicheritage.org/hispanic-heritage-foundation-mycollegeoptions-family-
online-safety-institute-and-other-partners-announce-findings-of-new-
study-titled-taking-the-pulse-of-the-high-school-student-experience/.
\17\ Id.
\18\ Remarks of Comr. Rosenworcel.
---------------------------------------------------------------------------
A very dear friend of mine teaches fourth grade in Inglewood,
California, a Los Angeles suburb. Inglewood is a low-income
neighborhood and the majority of residents are Latino or African
American. My friend tells me how some her students have come to school
with shoes three sizes too big, or jackets with holes in them, or
worse, hungry. And they are expected to learn and succeed without
having their basic needs met. With the new state Common Core standards,
these children--nearly half of whom, she estimates, do not have home
broadband access--will be taking standardized exams online. The state
standards direct teachers to integrate technology into lesson plans and
homework. The textbooks--often shared one to every two or three
students--are teeming with digital learning opportunities. Yet, she
cannot assign online homework or even integrate technology into her
lessons because she knows that many of her students do not have
adequate Internet access, and thus would be on unfair footing.
Her students have access to the school computer lab for 30 minutes
a week, and she has only two computer modules in her classroom, both of
which are old and in disrepair. She tells me that simple research
assignments that would take a day or two in classrooms where 100
percent of students have home broadband access, carry on for weeks and
sometimes months. But currently, she spends her time teaching basic
computing and Internet navigation skills so her students can be
minimally prepared for California's move to online exams.
In the beginning of the school year, my friend invited me to speak
with her students and tell them about my journey to becoming an
attorney. I was met with a room full of bright, ambitious and
enthusiastic kids. I asked them about their dreams, and they told me
that they wanted to be veterinarians, fashion designers, teachers and
police officers. These kids have so little in the way of material
possessions, but they have big ambitions and big desires to give back
to our society.
It is our job to arm them with the tools to do so. To balk at this
task is not just to throw aside the core American principle of
educational equality, it is giving up on our own future as a country--
overlooking aspiring talent just because their parents do not have the
resources to provide Internet access. Tomorrow is too late. We must act
boldly, and we must act now!
Simply put, it is past time that the Federal government took
serious steps to address the affordability of broadband for low-income
families. After all, affordability is the main barrier to broadband
adoption for many segments of the population and it is, by a wide
margin, the number one reason that families that have previously
adopted broadband cancel their service and fall offline.\19\ This is a
task for which Lifeline, the only government initiative that directly
addresses the affordability barrier to adoption of communications
services, is particularly well suited.
---------------------------------------------------------------------------
\19\ Digital Nation 2014 at 30.
---------------------------------------------------------------------------
For rural communities, the promise of broadband to lower geographic
barriers and provide access to an incredible world of new services and
resources cannot be overstated. We, as a country, continue to invest
significant sums through other Universal Service Fund programs to
ensure that every corner of our Nation has access to advanced
telecommunications networks. While this important work continues, we
would only be completing half the job if we deliver access to
communities while failing to address the significant number of rural
families who cannot afford to adopt the service once their home is
connected. In fact, extensive research has shown broadband adoption,
not access, is the primary driver of positive economic outcomes.\20\
Researchers analyzed county-level data to compare non-metro areas in
terms of broadband availability, adoption and economic growth between
2001 and 2010. They found that rural counties that reached or exceeded
a broadband adoption rate of 60 percent or higher experienced higher
income growth and less growth in unemployment.\21\ Those where
household broadband adoption was less than 40 percent exhibited lower
growth in number of businesses and total number of jobs. Broadband
adoption is the key to prosperity for rural Americans.
---------------------------------------------------------------------------
\20\ Econ. Research Serv./USDA, Broadband Internet's Value for
Rural America, ERR-78 at 15 (Aug. 2009), available at http://
www.ers.usda.gov/media/155154/err78_1_.pdf.
\21\ Rural economies benefit from broadband, Nat'l Agric. & Rural
Dev. Policy Ctr. (Aug. 5, 2014), available at http://www.nardep.info/
BenefitsBroadband8.html.
---------------------------------------------------------------------------
Data shows that, for lower-income rural households where broadband
is available, affordability is the main barrier to adoption.\22\
Lifeline, which exists to directly address affordability of
communications services, can help.
---------------------------------------------------------------------------
\22\ Rural Broadband At A Glance, USDA (2013 ed.), available at
http://www.ers.usda.gov/media/1133263/eb-23.pdf.
---------------------------------------------------------------------------
Finally, for low-income communities, particularly in rural areas,
broadband is becoming increasingly important to improving access to
healthcare and driving down costs. The FCC recently told the story of
the residents of Ruleville, Mississippi, a rural community with a
population of just over 3,000 in which 58 percent of children live in
poverty.\23\ The town, as the FCC recounted, has one doctor, one
hospital, and skyrocketing levels of diabetes, obesity, and
unemployment. Despite all of this, the town is at the forefront of the
broadband medicine revolution.\24\ One of its greatest success stories
is its ability to remotely monitor diabetes patients over broadband
connections. Not only has this improved the quality of lives of
patients, but hospital visits for diabetes-related issues have fallen
significantly.\25\
---------------------------------------------------------------------------
\23\ P. Michele Ellison, Just Around the Broadband Bend, Official
FCC Blog (Feb. 23, 2015), available at https://www.fcc.gov/blog/just-
around-broadband-bend.
\24\ Id.
\25\ Id.
---------------------------------------------------------------------------
This is just one example of how helping low-income people afford
broadband could positively impact health outcomes by allowing more
individuals to access quality healthcare while helping doctors be more
effective and efficient.
While I do not have time to elaborate on how important broadband
has become to accessing job opportunities and trainings, providing
independence and dignity to seniors living on fixed incomes, and
maximizing the efficiency of other government agencies and programs, I
will say that addressing the affordability barrier to broadband
adoption is a key component of ensuring a whole host of positive
outcomes for our country.
Lifeline is not a silver bullet answer to the digital divide, but
it has tremendous potential to dramatically change the landscape. We
already have Lifeline infrastructure throughout the country that is
helping families stay connected with telephone service. And according
to comments that TracFone, one of the Nation's largest Lifeline
providers, filed with the NTIA several years back, 90 percent of its
SafeLink subscribers did not have home broadband access.\26\ In other
words, we have mechanisms and agents in place to reach the unconnected.
The question is whether we will activate them.
---------------------------------------------------------------------------
\26\ Comments of TracFone Wireless, Inc., USDA, Rural Util. Serv.,
Broadband Initiatives Program, RIN: 0572-ZA01, Dep't of Commerce, Nat'l
Telecomm. & Info. Admin., Broadband Technology Opportunities Program,
RIN: 0660-ZA28, Dkt. No. 0907141137-05 at 5 (Nov. 30, 2009), available
at http://www.ntia.doc.gov/files/ntia/broadbandgrants/comments/rfi2/
TracFone%20
-%20Comments%20to%20NTIA%20and%20RUS%20sent%2011-30-09.2.pdf.
---------------------------------------------------------------------------
Lifeline already provides so many with a pathway out of poverty and
a means to contribute to our economy and society. In fact, more than
4.2 million households represented by members of this subcommittee
alone currently rely on Lifeline telephone service. Most of them surely
need home broadband as well.
I will be forever grateful for the investments that this country
made in my future, and I will fight for the rest of my life to give
back and make this a better country for everyone in it. Modernizing
Lifeline for the digital age is, I believe, one such fight. Thank you.
I look forward to your questions.
Senator Wicker. Thank you very much.
Because our schedules are more flexible this morning,
Senator Schatz and I will defer our questions. I will yield my
5 minutes at this point to Senator Ayotte, and then Senator
Schatz will yield his 5 minutes to Senator Nelson, and we will
proceed from there.
Let's stick to the 5-minute timeframe.
Senator Ayotte?
STATEMENT OF HON. KELLY AYOTTE,
U.S. SENATOR FROM NEW HAMPSHIRE
Senator Ayotte. I want to thank the Chairman and Ranking
Member and all of you for being here.
Mr. Clements, I wanted to follow up on an issue that I have
in my state that is a different issue, and that is that if you
look at New Hampshire and some of the challenges we face in
terms of universal access and even in more economically
challenged areas of my state, they are in rural areas. And, in
fact, New Hampshire citizens only receive 37 cents back on the
dollar of what they put in overall in the Universal Service
Fund.
And yet, as we look at some of the providers that are
trying to build out more broadband capacity, meaning on the
infrastructure piece of that portion of the Connect America
Fund, the Universal Service Fund, as I listen to this
challenge, I think to myself, if we are going to extend
Lifeline on broadband, what would help my constituents most is
if--with a lack of capacity on infrastructure in more rural
areas in my state, really the expansion of broadband isn't
going to give the access to a big number of constituents that I
have, who might be eligible for this program but otherwise the
just basic infrastructure isn't there because they live in
rural America.
So, as we look at potentially the FCC considers expanding
this into broadband, how do my constituents deal with that
challenge? Because you can expand it all you want, but if you
don't have the infrastructure in rural America, you are not
going to have an ability to expand broadband or access to
broadband whatsoever.
Mr. Clements. Sure. In our report, we focused on the
Lifeline program itself, and we do realize that the Connect
America Fund is designed to try to get those more advanced
services to the people that you are----
Senator Ayotte. Or any service, in some areas.
Mr. Clements. Any service, as you are mentioning.
In terms of the Lifeline program itself, one could argue
that, to the extent that the consumers now have additional
resources, creates additional demand for broadband service in
rural areas, because there is a higher probability that a
consumer would subscribe, therefore, that might also encourage
companies to provide the service.
It could be another avenue to encourage companies, because
the number of consumers that might subscribe will increase in
those areas.
Senator Ayotte. Mr. May, have you looked at this issue
separately also, thinking about--you proposed a whole new
formula. So for a state where I would argue my constituents
aren't getting the value on what they are contributing on this,
you know, what are your thoughts on areas like in rural New
Hampshire, where we can expand Lifeline all we want, but if you
don't have basic infrastructure of any broadband access, it is
not going to help them?
Mr. May. Senator Ayotte, you make an excellent point that
if you don't have the infrastructure Lifeline is maybe nice in
theory but meaningless in practice.
And it just so happens I was driving from Keene, New
Hampshire, to the Manchester airport this past weekend after
visiting my son in Keene, and I can testify that there may be
some places on that route that lack access----
Senator Ayotte. Yes.
Mr. May.--between those two points.
Senator Ayotte. Yes.
Mr. May. Look, the FCC has a program, Connect America Fund.
I am supportive of targeting funds to unserved areas, and, you
know, that is important. And, you know, beyond that, in terms
of exactly what changes need to be made and whatever, I can't,
I can't tell you. It is just important that the funds be
targeted, I think, to unserved areas.
I guess what I would say is, in the past, based on my
observations and studies in terms of the way the programs have
worked, as you know, subsidies have gone to areas, really, that
don't need them----
Senator Ayotte. Right.
Mr. May.--because there are duplicate providers, and that
is just a fact. So that really shouldn't happen.
And so one of the points I will make over and over is just
focus on the unserved areas. You should have some form of,
ideally, competitive bidding so that you have people that come
in and provide service on the least-cost basis. And that is
what you need to do.
Senator Ayotte. Thank you.
I also wanted to follow up, Mr. Clements, on this pilot
program. So, as the FCC considers the expansion of Lifeline
into the broadband area, you seem to be quite critical of the
basis upon which they are making this information on the pilot.
And so do we have sufficient information based on this pilot
to, you know, make this decision, in terms of expansion?
Mr. Clements. The pilot had some weaknesses that I had
mentioned, in terms of the needs assessment and implementation
and evaluation plans.
The pilot did provide some information, and FCC came out
with a staff report recently. The one, I think, critical
finding there was that the participation rate was relatively
low. Of consumers that were offered service, about 10 to 12
percent ultimately accepted service. Discount rates were in the
$20 range.
That raises questions in terms of the type of discount that
you are going to need to offer to get people to actually
subscribe to service.
Senator Ayotte. Thank you.
Senator Wicker. Thank you very much.
And next, Senator Booker.
STATEMENT OF HON. CORY BOOKER,
U.S. SENATOR FROM NEW JERSEY
Senator Booker. Thank you, Mr. Chairman.
Just jumping in real quick, I want to highlight, Ms.
Gonzalez, the urgency for the need of more penetration, more
access. You spoke simply about applying for jobs, but obviously
we have platforms now that provide access to life and
opportunity well beyond just simply a job application. You have
the sharing economy now, platforms, everything from--in fact,
there are thousands of people in New Jersey who make their
living or augment their income from things like eBay or other
shared-economy platforms. We have people that, even beyond
their homework, that use things like the Khan Academy to
supplement their education. This has become a world where
without the Internet you really do close off opportunities.
And so I just would love for you to expand for a moment for
me on, you know, your passion, which is obvious, about the
digital divide and how it affects low-income communities and
communities of--low-income communities in urban areas, as well
as rural areas, and some of the impact that you see with the
lack of broadband access that Lifeline could cover.
Could you elaborate on that for me?
Ms. Gonzalez. Sure. Thank you. Thank you, Senator Booker.
You know, we have always said this is a good investment,
not just in these individuals who are receiving the subsidy but
also in our digital economy. Having more consumers online is
good for everyone. There are more people to, you know, shop and
spend and develop economy, but there are also a lot of people,
as you mentioned, who have small businesses.
I was here a couple months ago testifying with Etsy. And
they were talking about this online marketplace where there are
moms who are stay-at-home moms and picking up an extra $30,000,
$40,000, $50,000 a year for their families, often making the
difference between making ends meet and not, during children's
naps.
And so, when you think about the opportunities that are
being missed out on right now by those who can't afford to
connect, it is harming our economy and the well-being of
individuals.
I think there are a lot of other instances, too, as health
care and telemedicine--I know this subcommittee has already
looked at this recently, but the opportunity for remote health-
care monitoring is critical and could change the way that
especially low-income people--as, you know, if you have to take
a couple buses to get to the doctor, it is really hard to get
there when you don't have reliable transportation.
And so there are just so many different opportunities for
civic participation, engaging in, you know, political processes
and debates. The list goes on and on. I think education is the
most glaring one, because as we wait to, you know, provide
affordable access, students are already, already this year, in
27 states, taking their exams online, and they don't have the
skills.
Senator Booker. Let me interrupt you because Senator Wicker
is tough on time, and--thank you for somebody getting that
joke.
Mr. May, in past writings, you have described the dismissal
of Lifeline programs as another social giveaway as
shortsighted. And you have also discussed the overall
importance of the Lifeline program to not just low-income users
themselves but to the communication networks as a whole.
In your testimony, you also note that universal service has
been a principle of the American communications policy for
decades, as it should be.
So the simple question is, can you just elaborate for the
Committee on what you see as the national benefits of having a
low-income program such as Lifeline?
Mr. May. Thank you, Senator Booker.
I don't recall those first quotes. There may be another Mr.
May.
But I have been a longtime supporter of Lifeline, and in
this sense: because, in my view, there is a role for a social
safety net program. I think everyone should have the
opportunity to have access to the network. Universal service--I
think this is the point--universal service actually not only
benefits those low-income people that are able then to have
access, but it benefits those who can pay because of what we
call ``network effects,'' that everyone benefits more, the more
people that are on in a network.
So I have been a supporter of Lifeline, but here is a part
that some people don't like to hear as much as the other. One
reason I support Lifeline is because if you implement it
properly, it should be, as I said, the most targeted means of
providing support to those in need.
I will just say that some of the other USF programs aren't,
even by design, as targeted. And, therefore, you know, we only
have a limited amount of money, and so Lifeline can give
subsidies to those that need them if it is implemented and if
it is free from waste, fraud, and abuse and so forth.
Senator Booker. And I will add in the 2 seconds I have left
that the network idea, the engagement, is also important, not
only for economic reasons, educational reasons, but also
citizen participation----
Mr. May. Sure.
Senator Booker.--and the well-being of our society.
Mr. May. Sure.
Senator Booker. Thank you.
Senator Wicker. Thank you, Senator Booker----
Senator Booker. Thank you, Mr. Chairman.
Senator Wicker.--for being so mindful of the time.
Senator Booker. Mr. Chairman, would I be able to enter for
the record just a list of many of the statements from industry,
civil rights, advocacy groups' strong support for the Broadband
Adoption Act of 2015, which is some legislation I introduced
yesterday, and a series of over 60 civil rights and advocacy
groups that are supporting this, including industry groups,
and, finally, a letter from Multicultural Media, Telecom, and
Internet Council, also expressing support for these goals? May
I enter that into the record?
Senator Wicker. Without objection----
Senator Booker. Thank you.
Senator Wicker.--that will be entered.
[The information referred to follows:]
May 11, 2015
Hon. Tom Wheeler
Chairman
Hon. Mignon Clyburn
Hon. Ajit Pai
Hon. Jessica Rosenworcel
Hon. Michael O'Rielly
Commissioners
Federal Communications Commission
Washington, DC.
Dear Chairman Wheeler and Commissioners:
RE: Lifeline Reform, WC Dockets 11-42 and 03-109
The 36 organizations set out below write on behalf of
telecommunications consumers across America to call for the rapid and
comprehensive reform of the Commission's critically important Lifeline
universal service program.
A bi-partisan effort is required to modernize this program so that
millions of Americans can realize the full potential of the digital
broadband age, and obtain this benefit in an efficient and effective
program. At Stanford University's Rebele Symposium on April 1, 2015,
Commissioner Clyburn called the Internet the ``great equalizer of our
time,'' accurately noting how society's increasing dependence on the
rapid exchange of information makes broadband connectivity essential
for the average American to access education, employment opportunities,
improved health care, civic engagement, family communications and a
host of other services.
According to the Pew Research Center, today 70 percent of American
adults have a broadband connection, and 90 percent with incomes of
$100,000 or more have broadband at home. Yet disparities in broadband
access by income still persist. Sixty-four percent of Americans with
incomes of less than $30,000, 54 percent of citizens with incomes under
$20,000, and 42 percent of those with incomes less than $10,000 have
broadband service at home. Pew also reports that senior citizens
typically have been the slowest adopters of home broadband; only 47
percent of U.S. adults age 65 and older have broadband at home.
A modernized Lifeline program aimed at making broadband more
affordable and available for the Nation's low-income, older and less
able consumers is a fundamental tool in the fight to break the cycle of
poverty and connect the under-connected.
In a February 2015 FCC blog article, Commissioner O'Rielly noted
that common sense principles that help to protect the universal service
fund and ratepayers against waste, fraud and abuse should also be part
of the Commission's reforms of its Lifeline universal service program.
We believe that a twenty-first century program with ``adequate controls
and deterrents'' can be run far more efficiently and with better
safeguards against fraud, waste and abuse than the existing program.
Success in upgrading this 30 year-old program will require policy
makers to embrace a new approach. Commissioner Clyburn outlined her
thoughts on the subject in a 2012 speech at the American Enterprise
Institute referencing immediate Lifeline reform where she stated that
reform must occur in a manner that, ``. . . increases the value of
other Federal investment, reduces administrative burdens, reduces
incentives for waste, fraud and abuse, addresses privacy concerns of
consumers, streamlines the program to encourage participation and
leverages efficiencies from other programs.''
On behalf of the constituents that entrust our organizations to
ensuring parity in telecommunications services and other public
benefits, we believe that the Commission has the tools necessary to
create a new twenty-first century model for the Lifeline program that
would serve the needs of low income consumers in an efficient, secure
and respectful fashion. To do so, any future modernization effort
should be guided by the following core principles:
Empowering consumer choice.
At bottom, the success of any new Lifeline program
will depend on its ability to treat Lifeline customers
similarly to other customers in the marketplace. The best
way to achieve this is to deliver benefits directly and,
when feasible, electronically to Lifeline consumers in a
way that allows them to choose the eligible voice and
broadband services available in the market that best meet
their needs. This will allow market forces to drive
increased value for Lifeline consumers as it does for all
other customers. It will also help preserve the dignity of
Lifeline consumers, putting them on equal footing with
other consumers on issues such as privacy.
Leveraging the efficiencies of coordinated enrollment
through existing assistance programs.
An intelligently designed program can achieve new
program efficiencies, improve Lifeline participation, and
reduce waste, fraud and abuse. We should further these
goals, simplify the consumer experience, and better protect
consumer privacy by allowing consumers to enroll in
Lifeline at the same time as they apply for other
government benefits. This process would also de-enroll
consumers from Lifeline only when they are no longer
covered by one of the qualifying low-income assistance
programs.
Eliminating a service providers' role in eligibility, enrollment
and de-enrollment will increase overall program efficiency
and bolster the integrity of the program by eliminating
harmful incentives and opportunities for waste, fraud, and
abuse.
Encouraging broader provider participation in Lifeline.
The current Lifeline program was built for a
marketplace that looks very different today. As such, the
existing structure and program requirements contain
unnecessary barriers that currently discourage
participation across the broad spectrum of service
providers. Increased participation and competition will
offer consumers a greater range of service options.
The program should also incentivize public private
partnerships and coordinated outreach. The challenge of
digital adoption is too large and too important to think
that it can be solved by an isolated effort of a few.
This letter represents diverse and strong support for rapidly
reforming and improving Lifeline. In light of this emerging consensus
and the millions whose lives can be improved by a reformed program, we
urge you to prioritize action on Lifeline reform in the days ahead, and
we encourage you to be creative and realistic in budget needs and
interagency coordination as you accommodate this program.
We appreciate your interest in improving this vital program and
look forward to working with the Commission as it moves forward to
bring Lifeline service into the twenty-first century.
Sincerely,
1. American Foundation for the Blind
2. Asian & Pacific Islander American Health Forum
3. Asian Americans Advancing Justice (AAJC)
4. Asian Pacific American Labor Alliance (APALA)
5. Asian Pacific Islander American Public Affairs Association
(APAPA)
6. Consumer Policy Solutions
7. Council for Native Hawaiian Advancement
8. Dialogue on Diversity
9. Filipina Women's Network
10. Hawaiian Community Assets
11. Hispanic Technology and Telecommunications Partnership (HTTP)
12. Hmong National Development
13. International Leadership Foundation
14. Japanese American Citizens League (JACL)
15. League of United Latin American Citizens (LULAC)
16. LGBT Technology Partnership & Institute
17. MANA--A National Latina Organization
18. Multicultural Media, Telecom and Internet Council (MMTC)
19. National Association of Neighborhoods
20. National Action Network
21. NAACP
22. National Black Caucus of State Legislators
23. National Coalition on Black Civic Participation and Black
Women's Roundtable
24. National Council of Asian Pacific Americans (NCAPA)
25. National Policy Alliance
26. National Puerto Rican Chamber of Commerce
27. National Urban League (NUL)
28. National Organization of Black County Officials (NOBCO)
29. NOBEL Women
30. OCA--Asian Pacific American Advocates
31. Rainbow PUSH Coalition
32. The Association of People with Disabilities (AAPD)
33. National Farmers Union
34. National Grange
35. Southeast Asia Resource Action Center (SEARAC)
36. U.S. Black Chambers, Inc.
The contact person for this letter is Kim M. Keenan, President,
Multicultural Media, Telecom and Internet Council, 3636 16th St. N.W.,
Suite B-366, Washington, DC 20010, [email protected].
______
May 28, 2015
Modernizing the Lifeline Program: Statements of Support
Below are statements from more than 50 national and regional civil
rights organizations, policymakers, media rights advocates and other
community groups in support of modernizing the Lifeline Program. These
groups that represent diverse constituencies include the National
Council of La Raza, American Civil Liberties Union, Center for Media
Justice, NAACP, Benton Foundation, National Hispanic Media Coalition,
Public Knowledge, the American Library Association and The Leadership
Conference on Civil and Human Rights.
National
Michael Copps, Former FCC Commissioner and Common Cause Special
Advisor, Common Cause
``It's high time we bring Lifeline into the 21st century. Our lives
are increasingly digital and communications for ALL Americans must be
digital, too. A Lifeline program without broadband underlying it means
second-class citizenship for millions of citizens. They can't afford
that; our Nation can't, either.''
Eric Rodriguez, VP Office of Policy and Research, The National Council
of La Raza
``The National Council of La Raza (NCLR) strongly supports the
prompt modernization of the Lifeline program to include broadband
services. Of all demographic groups, Latinos have the least access to
home Internet connections, with only 53 percent of Latino households
connected to broadband. Internet usage is critical, as it increases
employment and income, enhances educational opportunities, expands
health care access, and improves overall social well-being. The
expansion of Lifeline to support broadband services will give millions
of Latinos opportunities for social and economic advancement.''
Gabe Rottman, Legislative Counsel/Policy Advisor, American Civil
Liberties Union (ACLU)
``A key free speech challenge of the modern age is providing equal,
open, quality access to information services for all. A modernized
Lifeline is essential to closing the digital divide that prevents us
from meeting this challenge. Access to modern telecommunications
infrastructure is a question of both civil rights and civil
liberties.''
Jessica J. Gonzalez, Executive Vice President and General Counsel,
National
Hispanic Media Coalition
``I have long said, and I know from personal experience, that
Lifeline is a vital pathway out of poverty for millions of Americans.
It is the only Federal program that directly addresses the
affordability of communications services for low-income consumers. I
applaud the FCC for starting a process to modernize and refocus the
program--a necessary step to ensuring the program can become an
effective bridge across the digital divide. This is crucial to ensuring
that our neighbors can access broadband and fully participate in our
21st century society and economy.''
Hilary Shelton, Director, NAACP Washington Bureau and Sr. VP for Policy
and
Advocacy, NAACP
``The NAACP strongly supports the Lifeline program. Lifeline is a
much-needed program. It is in our society's best interest to empower
everyone, especially our most vulnerable citizens, with the ability to
connect with emergency services, prospective and current employers,
health, social, and educational services, civic engagement programs,
and keep in touch with family and friends. There are currently as many
as 16 million low-income households who, without the Lifeline benefits,
would have to choose between feeding their children and going without
the dial tone that could save their lives, connect with their
children's schools, or put them on a better economic path through
employment. It is because of Lifeline's essential role that the NAACP
supports the next step, adopting it for broadband Internet access. This
will further enhance the core mission of the program and ensure that
those Americans who are currently without are still engaged, and
provide them with the necessary communication tools to improve
themselves.''
Wade Henderson, President and CEO, The Leadership Conference on Civil
and Human Rights
``In today's information age, the Internet is as vital to the lives
of everyday Americans as electricity was in the last century, and can
play a critical role in moving people out of poverty and into the new
economy, by providing access to job opportunities, health care, social
services, and education.
And yet, there are still far too many disparities in Internet
adoption, particularly among communities of color, low-income
communities, people with limited English proficiency, and people with
disabilities. The FCC has the power to address this disparity by
modernizing the Lifeline program to include broadband.
Modernizing the program will give broadband access to millions of
low-income people. At a time when those most in need of the advantages
of broadband do not or cannot use it because of cost, reducing the high
cost of broadband service is a concrete step our Nation can take toward
an inclusive economic recovery.''
Kristine DeBry, V.P., Policy Strategy Center, Public Knowledge
``People increasingly depend on the Internet for access to jobs,
education, news, services, communications, and everything else under
the sun. Low-income communities are no different. Public Knowledge
supports modernization of America's low-income phone support program to
allow consumers to choose broadband support. Updating the program
recognizes the fundamental importance of connecting low-income
communities to the jobs, education, and services they need.''
Arabella Martinez, CEO, Latino Community Foundation
``In California, only 52 percent of all Latino families are
connected to the Internet at home. This means that almost half of all
Latino children don't have access to the vital tools necessary for
success. Latino families want to be connected, but the cost of service
is still out of reach for many families in our state. We can do better.
We can establish an affordable high-speed Internet service plan for all
low-income households.
We must join forces and fight to ensure that all families have
access to the same opportunities. The dreams of our children and the
resilience of our parents requires nothing less.''
Olivia Wein, Attorney, National Consumer Law Center
``The National Consumer Law Center, on behalf of its low-income
clients, strongly supports the modernization of Lifeline to include
broadband service. The lack of affordable broadband service hurts
children whose educational opportunities are limited and hampers
workers' ability to apply for jobs or establish entrepreneurial
businesses. Internet access affects every facet of modern life, from
access to healthcare to participation in commerce. In an information
age, access to modern communication services enhances the
competitiveness of individuals and communities. Three out of four
Federal Universal Service programs have already shifted from supporting
voice to supporting broadband. It is Lifeline's turn.''
Courtney Young, President, American Library Association
``Every day, America's libraries stand witness to the
transformative power of broadband access and use--as well as to the
gaps in broadband adoption that persist for many of our most vulnerable
residents, from the most remote rural communities to urban centers and
spanning families with school-age children to older adults. The
Universal Service Fund's Lifeline program has failed to keep pace with
this pressing reality and demands 21st Century updates. The American
Library Association urges the Federal Communications Commission to move
swiftly to modernize Lifeline and increase affordable broadband access
for millions of low-income Americans. Further, we urge policymakers at
all levels to support libraries and other community institutions in
building the digital literacy skills essential for sustainable
broadband adoption.''
Tracy Rosenberg, Executive Director, Media Alliance
``Lifeline telephone service has been crucially important in
maintaining family and community support networks for people struggling
with economic instability. In the 21st century, the Internet is the new
telephone. Isolation and disenfranchisement weakens the country's
fabric and creates more social divides. It's important for the FCC to
open a new Lifeline rule-making and determine the best use of
subsidized communication services to help increase connectivity and
support challenged populations in surviving economic stress.''
Hannah Sassaman, Policy Director, Media Mobilizing Project
``Access to the Internet is a human right. In today's challenging
economy, low-income community members can't apply for a family-
sustaining job, let alone for college, without reliable access to the
Internet. Here in Philadelphia, we have the third worst broadband
penetration of any big city in the country--because so many of us are
poor. It is the responsibility of our elected officials and appointed
leaders to protect and expand Lifeline service for the millions of us
who struggle on the wrong side of the digital divide.''
Larry Gross, Executive Director, Coalition for Economic Survival (CES)
``Lifeline phone service is crucial to our low-income members. For
many it is the only way they'd be able to access the Internet. This
digital divide has especially far-reaching consequences when it comes
to education. For children in low-income school districts, inadequate
access to technology can hinder them from learning the tech skills that
are crucial to success in today's economy. Smart phones have helped
bridge the divide, as they provide Internet access to populations
previously at a digital disadvantage. The Internet provides a diverse
array of online resources for low-income disabled and homebound older
adults to manage their health and mental health problems and maintain
social connections. We must ensure that Lifeline rates continue.''
Debbie Goldman, Telecommunications Policy Director, Communications
Workers of America
``It's long past time to update the Lifeline program to support
broadband. The Communications Workers of America applauds FCC action to
bring this important program into the 21st century.''
Mark Erpelding, Executive Director, Open Access Connections
``Open Access Connections has worked hard to promote and increase
usage of the Federal Lifeline program. We see first hand how access to
a Lifeline supported phone can help a homeless and low-income person
find housing, employment, and economic success.
The need for affordable Internet is greatly increasing for the
homeless and low-income communities we serve. Access to the Internet is
increasingly becoming a necessity in participating in today's society.
Because of the increased usage of the Internet in everyday life, it is
absolutely critical that the Lifeline program be expanded to increase
broadband access.''
Ana Montes, Organizing Director, The Utility Reform Network
``Communications and information services are essential tools for
everyday living and is as important as access to energy and water.
Without Universal Services Programs like Lifeline Telephone service,
people who are low income and come from the most vulnerable populations
would have lacked access to important services like public safety or
emergency services, health information, education, access to employers,
children's schools or the ability to communicate with families and
friends.
We now live in a world where the Internet has become increasingly
important, yet the digital divide has grown. We need to close the gap
by making broadband affordable, reliable and accessible to all so that
everyone can participate in today's society. We need to expand
Universal Services in order to promote digital inclusion and avoid
digital exclusion for those who cannot afford it.''
Orson Aguilar, Executive Director, The Greenlining Institute
``For decades, Lifeline has served as just that--a lifeline helping
low income families stay connected to family, friends, doctors,
employers, and schools. Today, more of these daily essentials are
moving online, yet too many of our families can't afford broadband, and
are once again left behind. This disproportionate disconnection creates
ripple effects in just about every aspect of life--but they can and
must be reversed. Connected communities have better rates of
employment, better rates of civic participation, and better
educational, health, and wealth outcomes. It's time to modernize
Lifeline and bring to all communities the wealth of opportunities
offered by fast, reliable, open broadband.''
Joshua Stager, Policy Counsel, New America's Open Technology Institute
``From homeless veterans trying to secure jobs and housing to
pediatricians providing care for low-income children, many of the most
vulnerable Americans rely on Lifeline for critical services. Extending
Lifeline benefits to broadband is a prudent step that reflects
Americans' increasing reliance on Internet-based services. OTI strongly
supports the Commission's efforts to modernize this vital program.''
Chuck Sherwood, Senior Associate, TeleDimensions, Inc.
``On behalf of Rita Stull and myself, we support the FCC's Lifeline
service as a key connectivity resource to make Digital Inclusion
available to all who live in the United States. Without Lifeline
service available to all they will not be able to fully participate in
the Community, Educational and Economic Development opportunities that
are so important in our 21st Century Information and Innovation
Economy.''
Thomas Kamber, Executive Director, Older Adults Technology Services
(OATS)
``Since 2004, Older Adults Technology Services (OATS) has been
harnessing the power of technology to change the way we age. The
modernization of the Lifeline Program would strengthen our programs
empowering older adults to live successful, independent, more connected
lives.''
Angela Siefer, Director, National Digital Inclusion Alliance
``To improve the daily lives of all community members, the National
Digital Inclusion Alliance calls for public policies for digital
inclusion that reflect what we've learned from experience. Broadband
adoption is most effectively promoted by community-driven efforts that
combine affordable home broadband service, public broadband access, and
locally trusted technology training and support. The modernization of
the Lifeline Program would provide a valuable resource, allowing local
resources to be stretched further.''
Danielle Chynoweth, Organizing Director, Media Action Grassroots
Network
(MAG-Net)
``Affordable broadband is key to democracy in that it addresses
deepening racial and economic disparities. Modernizing the Lifeline
program and extending it to include broadband ensures that our
communities--people of color, low-income families and rural
communities--can access jobs, education and other essential needs.''
Malkia Cyril, Executive Director, Center for Media Justice
``The potential of the Internet is in decentralizing who can drive
democratic governance in this country. The struggle for black lives is
evidence of the social and political power of owning and controlling
your own story. Yet there are still 100 million Americans who lack
affordable access to the Internet and critical to addressing this
growing divide and building a more participatory democracy is
modernizing the Lifeline program.''
James P. Steyer, Founder and CEO, Common Sense Kids Action
``At a time when access to high-speed Internet is critical for
education, healthcare, jobs, and civic engagement, we must bring high-
speed connectivity to the millions of low-income households with school
age children that do not have high-speed Internet today. This will help
to ensure all kids have equal opportunity to do their homework and that
parents have the opportunity to look for and apply for jobs and engage
in other important activities. We urge the FCC to act now to bridge the
digital divide, and reform and improve the Lifeline program to make
broadband more affordable and accessible for today's low-income
consumers and their children.''
Cecilia Zamora, Executive Director, Latino Council
``The Latino Council is writing this letter in support of the
Lifeline Telephone Program. We understand that the FCC will be
evaluating the program and making recommendation for its
``modernization''. According to the latest research by the Pew Research
Center, 44 percent of low-income smartphone owners have had to cancel
or suspend their service due to financial constraints. And for those
whose only access to the Internet is their smartphone, 48 percent have
had to cancel or shut off their cell phone for a period of time because
the cost of maintaining the service was a financial hardship.
The Latino Council is a community-based organization helping
nonprofits, government agencies, community organizations, and
businesses increase their capacity to create effective outcomes with
the Latino community. We accomplish this through research, cultural
assessment, strategic planning and leadership development. The Latino
Council also advocates and supports improved services for the Latino
community.
We believe that the Lifeline Telephone Program increases access for
phone service for the most vulnerable in our community, especially
Latino seniors. We hope that the evaluation by the FCC and discussion
by the Senate will recognize the significance of this program and make
recommendations that will continue Lifeline for our poorest
communities.''
David Jessup, Jr., Chief Executive Officer, Digi-Bridge
``Digi-Bridge aims to equip educational institutions and the
communities they serve with the necessary resources and support to
teach 21st century learners the fundamentals of technology and beyond.
The educational achievement gap in our country will only continue to
widen if we don't address the technological needs of the communities
being served by our learning institutions. Reform of the Lifeline
Program will support Digi-Bridge's efforts to eradicate the digital
divide, as costs associated with connectivity have continued to serve
as a real barrier to access.''
Alisson Walsh, Community Outreach Manager, Mobile Beacon
``Through our nationwide Education Broadband Service license Mobile
Beacon is able to offer low income families affordable broadband
service for $10. for unlimited data per month. However, our reach and
coverage area does not nearly meet the ever-growing digital gaps
throughout the Nation.
The modernization of the Lifeline Program would help establish
uniform broadband access and adoption--a much needed solution to the
patchwork of offerings that can often confuse eligible families and
individuals.''
Michael W. Kwan, National President, OCA--Asian Pacific American
Advocates
``OCA is ecstatic that the FCC is moving quickly in their attempts
to modernize the Lifeline program and include broadband as an option.
As our country further moves online, increased access to fast and
affordable broadband is more necessary than ever before. Although
studies have indicated that 81 percent of Asian Americans use
broadband, we know that income, educational achievement, and cost are
all indicators of how likely a household will adopt it.
Asian Pacific American communities encompass some of the highest
poverty and lowest educational attainment rates within our country.
Even though aggregated Asian Pacific American (APA) data show high
adoption rates, that 81 percent hides broadband adoption and access
disparities similar to those found in education, healthcare, and
employment. A modernized Lifeline program will allow low-income
families to ensure that there is a constant line of communication
between the parents and their children; allow children to supplement
their schooling; and provide these families with the opportunity to
better their livelihoods. Asian Pacific Americans need a modern
Lifeline program, and we are hopeful that the FCC will make that a
reality.''
Amina Fazlullah, Director of Policy, Benton Foundation
``The FCC's January 2012 reforms of its Lifeline program have saved
U.S. ratepayers billions, strengthening oversight and eliminating
waste, fraud and abuse. With these reforms now fully implemented, the
Benton Foundation welcomes the FCC taking the next step to modernize
Lifeline to reflect the reality of 2015: home broadband service is no
longer a luxury, but an essential service for education, public health,
public safety, jobs and the economy. In 1996, Congress decided that
``universal service'' should be an evolving level of telecommunications
services. Broadband services to the home are widely deployed and
subscribed to by households that can afford them. Now is the time for
the FCC to begin support for families that are not able to afford
broadband service.''
John Windhausen, Executive Director, SHLB Coalition
The SHLB Coalition welcomes the upcoming proceeding to reform the
Lifeline program so that it increases the opportunities for low-income
persons to benefit from broadband Internet service at home. Schools,
libraries and other anchor institutions often provide digital literacy
training and open, middle-mile connections that can help to foster
residential broadband deployment and adoption. The SHLB Coalition
Mission is to support open, affordable, high-speed broadband for anchor
institutions and their communities, and we look forward to playing an
active role in supporting this important initiative.''
Regional
Randall Chapman, Executive Director, Texas Legal Services Center
``TLSC is a statewide provider of Legal Aid and publishes legal
self-help information through the website, www.TexasLawHelp.org. In
2014 over 1 million unique visitors went to the site, but many seniors
and vulnerable persons have been stymied due to the high costs
associated with broadband access. We recommend much needed improvements
by the FCC in the Lifeline program to facilitate broadband access.''
Ellis Jacobs, Senior Attorney, Advocates for Basic Legal Equality
(ABLE)
``I'm an attorney who represents low income people in Dayton, Ohio.
Most of my clients have no access to the Internet at home or on their
phones. As a result, it is difficult for them to access employment,
training and other opportunities. Since they can't receive e-mail and
frequently have lifeline phones with inadequate minutes, it is also
difficult for me to stay in touch with them.''
Jim Jacob, President and CEO, New Jersey SHARES
``Communications Lifeline is a critically needed safety-net for
low-income households, seniors and persons with disabilities in New
Jersey. Affordable landline telephone service is needed to keep our
most vulnerable neighbors connected to medical providers, caregivers
and the community-at-large. Communication Lifeline helps to prevent
households from being isolated and allows neighbors to help neighbors.
Every year New Jersey SHARES assists thousands of applicants to receive
communications lifeline service and stay connected. These families and
individuals succeed because of access to this program.''
Arleen Novotney, Administrator, ACCES
``Our membership serves Low-income communities throughout CA
including the designated disadvantaged communities with energy
efficiency education and services. As with the lifeline cell service,
broadband is now a vital service needed by all. We are supporting this
proposed program.''
Peg Dierkers, Executive Director, Pennsylvania Coalition Against
Domestic Violence
``The importance of Lifeline programs cannot be understated.
Lifeline, quite literally, save lives. Lifeline ensures that those most
vulnerable in our communities, like victims of domestic violence, are
able to access emergency assistance, supportive services, and friends
and family within their supportive network.''
Julie Berlin, Manager of the Tenderloin Technology Lab, St. Anthony
Foundation
``St. Anthony's Tech Lab provides education and access to San
Francisco's lowest income community members. 20 percent of recent
survey respondents have no device and 50 percent have no Internet
access on the device they own; thus 70 percent have no Internet access,
unless they go to a computer center or the library. Without regular
Internet access, homeless and extremely low-income individuals in San
Francisco lack access to information, services and support in areas of
housing, employment, medical care, hygiene and technology. Modern life
requires Internet access for entire communities, especially for members
of the community with limited access to essential resources.''
Michael Liimatta, President and CEO, Connecting for Good
``Connecting for Good is a nonprofit organization that has been
bridging the Digital Divide since 2011 using wireless Internet,
community technology centers, low cost refurbished PCs and free digital
life skills classes.
In the past two years we have helped over 3,000 low income people
in Kansas City get online, the majority live in public housing. In the
Kansas City Public Schools, which has a high low income and minority
student population, 70 percent of children do not have Internet
connections at home. This puts them at a serious academic disadvantage.
Without the ability to get online these families also lack access to
valuable resources that lead to better quality of life that contribute
to better health, social services and upward mobility through increased
employment and training opportunities.
We believe that in our digital society, connectivity equals
opportunity. For this reason we support LifeLine reform that leads to
increasing broadband adoption for low income families.''
Roberta M. Rael, Executive Director, Generation Justice
Generation Justice understands access to Internet service as
foundational for building healthy and thriving communities of color in
New Mexico. That is why we strongly support the Lifeline Program and
urge the FCC to move forward with its modernization. Extending the
Lifeline Program will allow New Mexicans--people of color, immigrants,
youth and students, those living in rural areas of our state, and
Native communities--to connect with family, their children's schools,
civic information, and employment opportunities.
Cheryl Leanza, Policy Advisor, United Church of Christ, OC Inc.
``Broadband is essential for every aspect of modern life. Today,
even connections to our religious communities often takes place via
broadband. For all people to have equal opportunity, broadband must be
affordable and Lifeline is the only way to make it happen. Without
affordable access, digital literacy will not increase, broadband
adoption will not occur. Affordable access is the linchpin.''
Cheptoo Kositany-Buckner, Deputy Director, Strategic Initiatives,
Kansas City Public Library
``70 percent of the kids who attend the Kansas City School District
do not have Internet access at home. Children without Internet access
in the evening will be increasingly disadvantaged in the classroom.
Without home access to the Internet many pupils will struggle to
complete their homework and miss out on online resources to support
their learning. This digital divide will have a truly damaging impact
on children's prospects and causing the most disadvantaged to fall
further behind.''
Theodora Higginson, Co-Director, Tech Goes Home
``From our experience, two of the main reasons people lack home
access are the prohibitively high costs and a lack of understanding
about how the Internet can help them save money and improve their
access to opportunities. In order to address these barriers, Tech Goes
Home works with schools and community organizations to connect
underserved populations with free digital literacy training, as well as
low cost home Internet access and discounted computers. Digital
citizenship to us is a three-legged stool, consisting of skills,
Internet access, and hardware, and without any one of the legs, the
stool would fall. A modernized Lifeline program is critical to bridging
the opportunity gap.''
Lynda Goff, Executive Director, WinstonNet
``For the past 15 years WinstonNet's has been working with low
income and disconnected residents in Winston-Salem/Forsyth County, NC
by providing dozens of public computer centers, free WiFi hotspots,
digital literacy training and affordable home computers. Upgrading the
Lifeline Program into the 21st Century would strengthen and support our
programs and positively affect the lives of thousands of children,
adults and seniors in our community by providing an affordable solution
to access important and necessary online services in the areas of
education, healthcare, jobs, banking and much more.''
Dan McLaughlin, Program Officer, Seeds of Literacy
``Seeds of Literacy is an adult literacy program providing basic
education and GED preparation free of charge to people in greater
Cleveland. Because the GED examination is now offered only by computer,
our students must be comfortable with online operations to take it
successfully. Since the majority of our students are low-income--in a
city where more than half of low-income households have no home
Internet access--digital illiteracy and the cost of broadband are often
significant barriers to their success. An opportunity for truly
affordable high-speed Internet access through the Lifeline program
could go a long way toward removing those barriers.''
Brian J. Cummins, Councilman Ward 14, Cleveland City Council
``As an elected Member of Cleveland City Council, I represent some
25,000 residents in the City of Cleveland, the majority of whom live in
households with incomes well below the national median. Recent Census
and FCC data suggest that up to half of my constituents still lack home
Internet access. This is a serious barrier to our community's economic
and educational progress and it isolates many of our poorer citizens
from day-to-day civic and community activities, which increasingly
depend on online communication. For the last two years I've supported a
community technology training center and other digital inclusion
initiatives, but the cost of home broadband remains a major problem for
participants. A truly affordable broadband option added to the Lifeline
program could make a very big difference for the people I represent.''
Debbie Fisher, Director of HOPE Village Initiative, Focus: HOPE
``According to 2013 Census data, more than a third of all
households in Cleveland and Detroit still have no home Internet access
of any kind--not even mobile or dialup. Most are low-income; for
households with incomes below $20,000 the ``disconnected'' percentage
is above 50 percent. This is a huge obstacle not just for the
households themselves, but for our government, healthcare, education,
banking, human services and civic-sector institutions who need to
engage online with all our neighbors.
So we strongly support Lifeline and Lifeline reform to provide
meaningful broadband access for all low-income households. By
``meaningful'' we mean:
(a) truly affordable cost, e.g., no more than $10-15 a month
(b) mainstream home broadband data speeds and (for mobile users)
real smart devices
(c) the widest possible range of providers as well as support for
innovative community partnerships
(d) support for community-based marketing, including digital
literacy training.''
Bill Callahan, Director, Connect Your Community
``Connect Your Community is a collaborative of organizations in
Greater Cleveland and Detroit working to close the large, persistent
digital divide in our cities through grassroots training, affordable
access and support initiatives. (http://connect
yourcommunity.org)
According to 2013 Census data, more than a third of all households
in Cleveland and Detroit still have no home Internet access of any
kind--not even mobile or dialup. Most are low-income; for households
with incomes below $20,000 the ``disconnected'' percentage is above 50
percent. This is a huge obstacle not just for the households
themselves, but for our government, healthcare, education, banking,
human services and civic-sector institutions who need to engage online
with all our neighbors.
So we strongly support Lifeline reform to provide meaningful
broadband access for all low-income households. By ``meaningful'' we
mean:
(a) truly affordable cost, e.g., no more than $10-15 a month
(b) mainstream home broadband data speeds and (for mobile users)
real smart devices
(c) the widest possible range of providers as well as support for
innovative community partnerships
(d) support for community-based marketing, including digital
literacy training.''
Patrick J. Gossman, Ph.D., Executive Director, Community
Telecommunications
Network
``The Community Telecommunications Network is a non-profit
organization representing K-12, Higher Education and Public Television
in Southeast Michigan. Our mission is to improve the quality of life
and much of our focus is on education. Our largest project has worked
to get broadband into the homes of low-income households for which
numerous barricades exist. One of those hurdles is the cost of home
broadband access.
According to Pew Research, low-income homes with children are four
times more likely to be without broadband than their middle or upper-
income counterparts. This is the ``homework gap'' which needs to be
resolved to give these children a better chance to learn and compete in
the modern world. Reducing the cost of access is one important step
necessary to address this problem.''
Charlaine Mazzei, Executive Director, Del Norte Senior Center
``As a local non-profit agency providing CSBG and LIHEAP services,
the Del Norte Senior Center comes in contact with hundreds of low-
income individuals and families every year. Increasingly, we see these
families rely on cellular services as not only their only telephone
service, but their only access to Internet services as well. In a rural
community such as ours, broadband Internet access is both expensive and
limited. The Internet is no longer a luxury, and those without access
will be left behind. We must continue to view Lifeline services as
essential to poverty reduction and full participation in society.''
Arturo Trejo, Environmental Justice Organizer, Southwest Workers' Union
``As a multi-cutural, and multi-lingual social justice group,
Southwest Workers' Union recognizes the hardships of socio-economic
injustice for people of color, and workers. We continue to organize
with our community on towards a living wage, and other basic needs
capitalism imposes on folks of color in both urban, and rural parts in
the south. As an organization we know the purposes of communications,
and the importance of it to connect families, social media, and allies
in different communities. We stand in solidarity for justice for the
communities who are placed under the risk of losing access to Internet
services due to modernity, and other capitalistic politics.''
Tim Hawkins, Director of Operations, Community Action of Ventura
County, Inc.
``Support services for low-income families are not easy to access
in Ventura County if a family has transportation issues (which many do)
or no Internet access (which many don't). Having access to broadband
would make the already hectic lives of low-income families less so by
making program applications, bill paying and information gathering both
easier and cheaper. The high price of broadband is a huge obstacle for
low-income families. In this day and age, broadband access is a
prerequisite for social and economic inclusion and those who go without
fall farther behind the ever-widening gap of inequality.''
Elizabeth Marx, Staff Attorney, Pennsylvania Utility Law Project (PULP)
``Access to affordable and reliable telecommunication service
critical to the safety, welfare, and economic stability of all
households, as it enables individuals to contact emergency services,
seek employment, contact a place of work, school, or childcare center,
reach out to supportive government and social service agencies,
friends, and/or family, engage in civil or criminal court proceedings,
and attend to other sensitive matters. Today, with the ever-increasing
reliance on the web for communication and information needs, access to
the broadband Internet has become just as important to the health,
safety, and welfare of our citizenry, especially to our children whose
studies and coursework are increasingly dependent on having ready
access to the Internet. We therefore urge the continuation of Lifeline
telecommunication service, and encourage expansion of programming to
provide low or no-cost access to broadband Internet services.''
Patty Bailey, Director, Healthy Homes & Health Services, MAAC
``MAAC has previously contracted with Richard Health & Associates
in educating and enrolling low to moderate income households into the
Lifeline Program. Through these contracts we have enrolled over 10,000
households. MAAC supports Lifeline and the FCC moving forward to extend
it to broadband.
Henry Martin, Executive Director and Attorney, Watsonville Law Center
``Public services, employment information, financial services,
health care and wellness information, and consumer information is
increasing available primarily on mobile devices. Affordable access to
high-speed data on a mobile telephone improves quality of life,
improves access to essential information and services, and is a means
of accessing the digital world when access to a stand-alone device is
not an affordable option.
For information providers, mobile devices are often the most
convenient and cost-effective means of distributing information to
individuals and communities. Improving access to high-speed data on
mobile telephones is a means of ensuring low-income communities benefit
from rapidly increasing information technology. If low-income families
are not seen as part of the mobile digital information community, they
will be left behind by information producers. As a nonprofit service
provider serving low-income, limited-English proficient families in a
rural area, we urge you to ensure equal access to high-speed data on
mobile telephones for low-income and rural communities.''
Malcolm Yeung, Deputy Director, Chinatown Community Development Center
``Chinatown Community Development Center is committed to building
community and enhancing the quality of life for San Francisco's
residents. We support the modernization of the Lifeline Telephone
Program and making broadband access a reality for low income
communities we serve including the elderly, the disabled, and families
with children. The modernization of the program will bridge the
technological and affordability gap for our constituents as many cannot
afford a computer, face financial hardships with paying for broadband
services, yet they rely on their phones to connect for their medical
needs, social services, access to jobs, and school.''
Danna MacKenzie, Executive Director, Office of Broadband Development,
State of Minnesota
``In Minnesota, our survey results show that low income and senior
residents adopt broadband at a rate 20 percent below the state adoption
rate (59 percent v. 79 percent). The top two reasons provided for not
adopting are relevance and cost. Updating Lifeline rules will provide a
critical tool for shrinking this gap.''
Wanda Davis, Executive Director, Ashbury Senior Computer Community
Center
``Ashbury Senior Computer Community Center (ASC \3\), a 501c-3 non-
profit grassroots organization, established in October of 2002, is
proud to be an empowering technology resource center in greater
Cleveland. Our mission is to bridge the gap in the ``Digital Divide''
thus fostering a movement of ``Digital Inclusion'' in our inner-city
communities by providing high quality, accessible, and free technology
classes in a supportive, appropriately-paced, and nurturing
environment. The modernization of the Lifeline Program is essential to
our community's growth and will enhance the quality of life for all our
community members.''
Sean McLaughlin, Executive Director, Access Humboldt
``Access Humboldt seeks universal access to open networks for local
communities in Humboldt County on the Redwood Coast of California,
working to inform public policy deliberations, convening local
discussions of regulatory policies, and articulating principles for
Localism and Diversity.
We support timely reform of the Lifeline program to secure
connectivity for those who cannot afford service in a manner that
supports digital inclusion, training and community empowerment to meet
our human potentials, securing independence for all.''
Juanita Budd, Executive Director, Austin Free--Net
``Austin Free-Net (AFN) focuses on digital literacy and broadband
adoption through partnering with 3 types of organizations: 1. An
equipment provider; 2. An Internet provider; and 3. A training
provider. AFN provides the training component; we offer a customized
training program for each client. This methodology has generated much
success and amazing outcomes. A national broadband subsidy through the
Lifeline Program would support local efforts working toward broadband
adoption for all Americans.''
Sunne McPeak, President and CEO, California Emerging Technology Fund
``The CETF Board of Directors supports an Internet Lifeline Program
that addresses the 3 primary barriers to broadband adoption: (1) Cost;
(2) Relevance; and (3) Digital Literacy. This includes the:
Establishment of an affordable high-speed Internet service
plan for all low-income households offered by and through all
broadband providers in the $10/month range.
Capitalization of an independent fund to support community-
based organizations (CBOs), schools and libraries (as ``trusted
messengers'') to assist in enrolling eligible low-income
households and participate in true public-private partnerships.
Establishment of an oversight advisory body to ensure
transparency and accountability with a broad base of
stakeholders and community leaders knowledgeable about
broadband adoption.''
Olga Talamante, Executive Director, Chicana Latina Foundation
``Chicana Latina Foundation and CETF support an Internet Lifeline
Inclusion Program that addresses the 3 primary barriers to broadband
adoption: (1) Cost; (2) Relevance; and (3) Digital Literacy. This
includes the:
Establishment of an affordable high-speed Internet service
plan for all low-income households offered by and through all
broadband providers in the $10/month range.
Capitalization of an independent fund to support community-
based organizations (CBOs), schools and libraries (as ``trusted
messengers'') to assist in enrolling eligible low-income
households and participate in true public-private partnerships.
Establishment of an oversight advisory body to ensure
transparency and accountability with a broad base of
stakeholders and community leaders knowledgeable about
broadband adoption.
We are very concerned about the large number of Americans that are
not able to enjoy the benefits of Internet connectivity. This affects
their ability to do well in school, find jobs, enhance their education
and skill set, get better prices that are available only on the
Internet and be part of the growing civic engagement via the Internet.
We are particularly concerned about the impact on people who live in
rural areas.''
Barrie Hathaway, Executive Director, The Stride Center
``The Stride Center and CETF support an Internet Lifeline Inclusion
Program that addresses the 3 primary barriers to broadband adoption:
(1) Cost; (2) Relevance; and (3) Digital Literacy. This includes the:
Establishment of an affordable high-speed Internet service
plan for all low-income households offered by and through all
broadband providers in the $10/month range.
Capitalization of an independent fund to support community-
based organizations (CBOs), schools and libraries (as ``trusted
messengers'') to assist in enrolling eligible low-income
households and participate in true public-private partnerships.
Establishment of an oversight advisory body to ensure
transparency and accountability with a broad base of
stakeholders and community leaders knowledgeable about
broadband adoption.''
Teresa Favuzzi, Executive Director, California Foundation for
Independent Living Centers
``The California Foundation for Independent Living Centers (CFILC)
respectfully urges the Federal Communication Commission (FCC) to
support the establishment of a Lifeline for Broadband Program to meet
the Internet service plan needs of people with disabilities. The
following comments are submitted as part of a coordinated effort to
demonstrate broad-based support by various communities of interest
throughout the Nation for the creation of a new ``Lifeline'' program
that would ensure that advanced communication services are affordable,
provide genuine consumer choice, and offer competitive options to meet
today's communications needs.
CFILC is a statewide non-profit membership organization of 21
Independent Living Centers located throughout the State of California.
Our centers provide programs and services to over 100,000 people with
disabilities annually. We also advocate on Federal and California state
legislation, regulations, and budget issues to support and promote
independent living and the community integration of people with
disabilities.
In addition, CFILC is a member organization that has partnered with
the California Emerging Technology Fund (CETF) on a number of issues
that have been considered by the FCC. Our most recent collaboration
with CETF strongly supports the establishment of an Internet Lifeline
Inclusion Program that addresses the three major barriers affecting
broadband adoption by people with disabilities. They include: (1) Cost;
(2) Relevance, (3) Digital Literacy, and (4) Access.
Accordingly, we urge the FCC to establish an Internet Lifeline
Inclusion Program that offers affordable high-speed Internet Service
Plans for all low-income households offered by and through all
broadband providers within a $10 per month range that is also available
to the Deaf and Hard of Hearing Communities that require video rely
services in order to communicate with the hearing world. Concurrently,
there is also a need to ensure the capitalization of an independent
fund to support community-based organizations (CBOs), schools, and
libraries as trusted messengers to assist in the enrollment of eligible
low-income households and to participate in genuine public/private
partnerships. Finally, CFILC supports the creation of an oversight
advisory body to ensure transparency and accountability among a broad
base of stakeholders and community leaders knowledgeable about
broadband adoption.
The creation of such an Internet Lifeline Inclusion Program is
critical because closing the existing Digital Divide is one of the most
important issues affecting people with disabilities as a community that
is disproportionately affected by the divide. According to the American
Association of People with Disabilities (AAPD), 54 percent of adults
with disabilities use the Internet, compared to 81 percent of non-
disabled adults. In addition, only 41 percent of disabled adults have
access to broadband services at home, while 69 percent of those without
a disability have such access.
The failure to close this divide for people with disabilities would
result in significant, negative consequences. More so than ever before,
people with disabilities are increasingly dependent upon having access
to affordable Internet service plans and broadband technology.
Improvements in Assistive Technology have enabled people with
disabilities to live independently in their homes and communities as a
viable alternative to more costly and dehumanizing institutionalization
in nursing homes and other institutions. Access to affordable Internet
services is a vital part of acquiring the advanced technology that
supports in Assistive Technology devices, software, and hardware
because they require sufficient, minimum, broadband capacity to operate
and maintain those applications.
Enabling people to live independently is an issue that warrants bi-
partisan support. Advanced technology and adequate broadband services
allow people with disabilities to pursue and compete for educational
and job training opportunities and avoid institutionalization that is
often up to eight times more expensive than living at home with
appropriate supportive services.
For all of these reasons, CFILC urges the commission to adopt
initiatives that will bridge the affordability gap and create links to
technology that connects, empowers, and supports independent living for
people with disabilities.
Today, advanced technology has the promise of becoming the greatest
equalizer for genuine independence and educational and job
opportunities. The Lifeline Program that was originally established
over 30 years is outdated and no longer meets the growing demand for
access to advanced technology. If the FCC takes decisive action in this
regard it can help lead our Nation in new directions that will reshape
access to affordable Internet services that will reap dividends for all
Americans.''
Press Contacts
----------------------------------------------------------------------------------------------------------------
Organization Press Contact E-mail Address Phone Number
----------------------------------------------------------------------------------------------------------------
ACCES ACCES [email protected] 310-480-3922
----------------------------------------------------------------------------------------------------------------
Access Humboldt Sean McLaughlin [email protected] 707-616-2381
----------------------------------------------------------------------------------------------------------------
ACLU Nathaniel Turner [email protected] 202-715-0831
----------------------------------------------------------------------------------------------------------------
Advocates for Basic Legal Ellis Jacobs [email protected] 937-305-6735
Equality
----------------------------------------------------------------------------------------------------------------
American Library Association Jazzy Wright [email protected] 202-628-8410
----------------------------------------------------------------------------------------------------------------
Ashbury Senior Computer James Wade [email protected]
Community Center
----------------------------------------------------------------------------------------------------------------
Austin Free--Net Juanita Budd [email protected] 512-236-8225
----------------------------------------------------------------------------------------------------------------
Benton Foundation Kevin Taglang [email protected] 8478949977
----------------------------------------------------------------------------------------------------------------
California Emerging Susan Walters [email protected] 415 730 1718
Technology Fund
----------------------------------------------------------------------------------------------------------------
California Foundation for Teresa Favuzzi [email protected] (916) 325-1690
Independent Living Centers
----------------------------------------------------------------------------------------------------------------
Center for Media Justice Chinyere Tutashinda chinyere
----------------------------------------------------------------------------------------------------------------
Chicana Latina Foundation Olga Talamante [email protected] 650-373-1083
----------------------------------------------------------------------------------------------------------------
Chinatown Community Tina Cheung [email protected] 415-984-2730
Development Center
----------------------------------------------------------------------------------------------------------------
Cleveland City Council Joan Mazzolini [email protected] (216) 664-4466
----------------------------------------------------------------------------------------------------------------
Coalition for Economic Larry Gross [email protected] 213-252-4411
Survival (CES)
----------------------------------------------------------------------------------------------------------------
Common Cause Todd O'Boyle [email protected] 302-709-1781
----------------------------------------------------------------------------------------------------------------
Common Sense Kids Action Lisa Cohen [email protected]
----------------------------------------------------------------------------------------------------------------
Communications Workers of Debbie Goldman [email protected] 202-434-1194
America
----------------------------------------------------------------------------------------------------------------
Community Action of Ventura Tim Hockett [email protected] 805-436-4028
County, Inc.
----------------------------------------------------------------------------------------------------------------
Community Telecommunications same as above [email protected] 313 577-2085
Network
----------------------------------------------------------------------------------------------------------------
Connect Your Community Bill Callahan [email protected] 216-870-4736
----------------------------------------------------------------------------------------------------------------
Connecting for Good Michael Liimatta [email protected] 816-217-9637
----------------------------------------------------------------------------------------------------------------
Del Norte Senior Center Charlaine Mazzei [email protected] (707) 464-3812
----------------------------------------------------------------------------------------------------------------
Digi-Bridge David Jessup, Jr. [email protected] 7049109086
----------------------------------------------------------------------------------------------------------------
Focus: HOPE Carrie Budzinski [email protected] 3134944367
----------------------------------------------------------------------------------------------------------------
Generation Justice George Luna-Pena [email protected] 505-277-1831
----------------------------------------------------------------------------------------------------------------
Kansas City Public Library Steve Woolfolk [email protected] 816-701-3400
----------------------------------------------------------------------------------------------------------------
Latino Community Foundation Masha Chernyak [email protected] 415-533-9697
----------------------------------------------------------------------------------------------------------------
Latino Council Cecilia Zamora [email protected]
----------------------------------------------------------------------------------------------------------------
Lighthouse Learning Resource Lighthouse Learning [email protected] 951-536-1794
Center Resource Center
----------------------------------------------------------------------------------------------------------------
MAAC Lisette Islas [email protected] (619) 426-3595
----------------------------------------------------------------------------------------------------------------
Media Action Grassroots Chinyere Tutashinda [email protected] 510-698-3800
Network (MAG-Net)
----------------------------------------------------------------------------------------------------------------
Media Alliance Tracy Rosenberg [email protected] 510-684-6853
----------------------------------------------------------------------------------------------------------------
Media Mobilizing Project Hannah Sassaman [email protected] 267-970-4007
----------------------------------------------------------------------------------------------------------------
Minnesota Office of Broadband Madeline Koch [email protected] 651-259-7236
Development
----------------------------------------------------------------------------------------------------------------
Mobile Beacon Alisson Walsh [email protected]
----------------------------------------------------------------------------------------------------------------
NAACP Hilary Shelton [email protected] (202) 463-2940
----------------------------------------------------------------------------------------------------------------
National Consumer Law Center, Jan Kruse [email protected] 617-542-8010
on behalf of its low-income
clients
----------------------------------------------------------------------------------------------------------------
National Digital Inclusion Angela Siefer [email protected] 6145373057
Alliance
----------------------------------------------------------------------------------------------------------------
National Hispanic Media Jessica Gonzalez [email protected] (626) 792-6462
Coalition
----------------------------------------------------------------------------------------------------------------
New America's Open Technology Alison Yost [email protected] 202-596-3345
Institute
----------------------------------------------------------------------------------------------------------------
New Jersey SHARES Jim Jacob [email protected] 609-883-1478
----------------------------------------------------------------------------------------------------------------
OCA--Asian Pacific American Kham S. Moua [email protected] 2028308952
Advocates
----------------------------------------------------------------------------------------------------------------
Office of Broadband Danna MacKenzie [email protected] 651.259.7611
Development, State of
Minnesota
----------------------------------------------------------------------------------------------------------------
Older Adults Technology Thomas Kamber [email protected] 718 360 1707
Services (OATS)
----------------------------------------------------------------------------------------------------------------
Open Access Connections Mark Erpelding [email protected] 612-432-0900
----------------------------------------------------------------------------------------------------------------
Pennsylvania Coalition Steve Halvonik [email protected] 717-545-6400
Against Domestic Violence
----------------------------------------------------------------------------------------------------------------
Pennsylvania Utility Law n/a [email protected] 7172369486
Project (PULP)
----------------------------------------------------------------------------------------------------------------
Public Knowledge Shiva Stella [email protected] 202-861-0020
----------------------------------------------------------------------------------------------------------------
Seeds of Literacy Jo Steigerwald [email protected] 216-661-7950
----------------------------------------------------------------------------------------------------------------
SHLB Coalition John Windhausen [email protected] 202-256-9616
----------------------------------------------------------------------------------------------------------------
Southwest Workers' Union Southwest Workers' Union [email protected] 210-299-2666
----------------------------------------------------------------------------------------------------------------
St. Anthony Foundation Tech Karl Robillard [email protected] 415-592-2736
Lab
----------------------------------------------------------------------------------------------------------------
TeleDimensions, Inc. Chuck Sherwood [email protected] 508-385-3808
----------------------------------------------------------------------------------------------------------------
Texas Legal Services Center Randall Chapman [email protected] 512-637-5416
----------------------------------------------------------------------------------------------------------------
The Greenlining Institute Bruce Mirken [email protected] 510-926-4022
----------------------------------------------------------------------------------------------------------------
The Leadership Conference on Scott Simpson [email protected] 202.466.2061
Civil and Human Rights
----------------------------------------------------------------------------------------------------------------
The National Council of La Julian Teixeira [email protected]
Raza
----------------------------------------------------------------------------------------------------------------
The Stride Center Barrie Hathaway [email protected] 510-629-6966
----------------------------------------------------------------------------------------------------------------
The Utility Reform Network Mindy Spatt [email protected] 415-929-8876
----------------------------------------------------------------------------------------------------------------
United Church of Christ, OC Cheryl Leanza [email protected] 202-904-2168
Inc.
----------------------------------------------------------------------------------------------------------------
Watsonville Law Center Henry Martin [email protected] (831) 722-2845
----------------------------------------------------------------------------------------------------------------
WinstonNet Lynda Goff [email protected] 336-757-2800
----------------------------------------------------------------------------------------------------------------
______
The Broadband Adoption Act of 2015
Catalog of Public Endorsements
National Hispanic Media Coalition (NHMC)
National Cable & Telecommunications Association (NCTA)
Verizon
United Church of Christ (UCC)
The Leadership Conference on Civil and Human Rights
Common Sense Media
Lifeline Connects--members include: Blue Jay Wireless, Global
Connection Inc. of America, i-wireless, LLC and Telrite Corporation
CTIA--The Wireless Association: represents U.S. wireless communications
industry
National Consumer Law Center
The Common Cause
Public Knowledge
______
National Hispanic Media Coalition
http://www.nhmc.org/?utm_source=NHMC+Supports+Introduction+of+the+Broad
band+Adoption+Act&utm_campaign=NHMC+Supports+Introduction+of+the+Broad
band+Adoption+Act&utm_medium=e-mail
NHMC Supports Introduction of the Broadband Adoption Act
Commends Representative Matsui, Senator Murphy, Senator Booker, and
others
WASHINGTON--Today, a pair of bills were introduced in the U.S.
House of Representatives and the U.S. Senate, which instruct the
Federal Communications Commission (FCC) to modernize Lifeline to fully
support broadband services and take additional steps to ensure the
health of the program. The legislation aligns closely with proposals
circulated by FCC Chairman Tom Wheeler last week and the bills' authors
applauded the FCC's initiative and recognized the agency's existing
authority to modernize Lifeline.
Currently, Lifeline defrays the high cost of telephone service and,
in some instances, bundled voice telephone and broadband service, for
poor families. Lifeline has evolved since its inception during
President Ronald Reagan's Administration. It was updated to include
access to wireless phone services during President George W. Bush's
Administration in 2005, and it was also significantly reformed to
eliminate waste, fraud, and abuse in 2012.
For nearly a decade, NHMC has advocated for Lifeline to further
evolve to include access to meaningful broadband services to help close
the digital divide. Currently, 30 percent of Americans lack home
broadband. Those without home broadband are disproportionately poor,
Latino, African American, Native Americans, rural, and/or seniors. Cost
is the main barrier to adoption for people under sixty five years of
age. At the same time, broadband is critical to nearly every facet of
modern American life, including education, jobs, healthcare, civic
participation, and more.
The following statement can be attributed to Jessica J. Gonzalez,
NHMC's Executive Vice President and General Counsel:
``I applaud our champions in Congress--Representative Matsui,
Senator Murphy, Senator Booker, and all of their co-sponsors--
who understand the tremendous, untapped potential of Lifeline.
Lifeline could offer a bridge across the digital divide and
represents a crucial investment in the people of this country.
This legislation and current FCC efforts to modernize Lifeline
are about the core American values of creating access to
opportunity and a pathway out of poverty for millions of
Americans.''
The bills, referred to as the Broadband Adoption Act of 2015, were
introduced by Congresswoman Doris Matsui (D-CA) in the House and
Senator Chris Murphy (D-CT) and Senator Cory Booker (D-NJ) in the
Senate. The bills were supported by an impressive list of co-sponsors
including: Congressman Frank Pallone (D-NJ), Congresswoman Anna Eshoo
(D-CA), Congressman Michael Doyle (D-PA), Congressman Ben Ray Lujan (D-
NM), Congressman Peter Welch (D-VT), Senator Edward Markey (D-MA),
Senator Ron Wyden (D-OR), and Senator Richard Blumenthal (D-CT).
More than 70 national and regional civil rights organizations,
policymakers, media rights advocates and other community groups have
recently gone on the record in support of modernizing the Lifeline.
Gonzalez will testify in support of Lifeline modernization before
the U.S. Senate Commerce Subcommittee on Communications, Technology,
Innovation, and the Internet on Tuesday, June 2 at 9:30 a.m. A live
stream of the hearing will be available at this link. You can follow
the conversation on Twitter by following @NHMC, @JGonzalezNHMC, and
@michaelscurato. To access the written testimony, click here.
About NHMC
The National Hispanic Media Coalition (NHMC) is a media advocacy
and civil rights organization for the advancement of Latinos, working
towards a media that is fair and inclusive of Latinos, and towards
universal, affordable, and open access to communications. Learn more at
www.nhmc.org. Receive real-time updates on Facebook and Twitter @NHMC.
______
National Cable & Telecommunications Association
https://www.ncta.com/news-and-events/media-room/content/statement-ncta-
regar
ding-reintroduction-broadband-adoption-act
FOR IMMEDIATE RELEASE CONTACT: Brian Dietz/Joy Sims
June 1, 2015 202-222-2350
Statement of NCTA Regarding the Reintroduction of the Broadband
Adoption Act
``We welcome the reintroduction of the Broadband Adoption Act by
Rep. Doris Matsui and Senators Chris Murphy and Cory Booker, and the
renewed focus it shines on the important issue of broadband adoption.
While broadband is the fastest growing consumer technology in history,
a small but significant percentage of U.S. consumers do not yet
subscribe or see the relevance of the Internet in their daily lives.
The cable industry has invested hundreds of billions of dollars to
build networks that reach 93 percent of homes and we have worked
closely with local, state and Federal government agencies and non-
profits to educate consumers about the benefits of broadband. We look
forward to working with all interested stakeholders in developing new,
cost-effective strategies that will encourage all Americans to realize
the benefits of fast broadband networks.''
NCTA is the principal trade association for the U.S. cable
industry, representing cable operators serving more than 80 percent of
the Nation's cable television households and more than 200 cable
program networks. The cable industry is the Nation's largest broadband
provider of high-speed Internet access, serving more than 54 million
customers, after investing $230 billion since 1996 to build two-way
interactive networks with fiber optic technology. Cable companies also
provide state-of-the-art digital telephone service to more than 28
million American consumers.
______
Verizon
http://publicpolicy.verizon.com/blog/entry/statement-verizon-supports-
efforts-to-modernize-lifeline
Verizon Supports Efforts to Modernize Lifeline
Today, Representative Doris Matsui (D-CA), Senator Chris Murphy (D-
CT) and Senator Cory Booker (D-NJ) introduced the Broadband Adoption
Act of 2015. The followong statement should be attributed to Peter
Davidson, Verizon senior vice president, Federal Government relations:
``Verizon supports efforts to reform, modernize and add
accountability to the Lifeline program, and the bill introduced
by Representative Matsui and Senators Murphy and Booker is an
important contribution to those efforts. Among other things,
the bill includes several accountability provisions that will
help protect consumers who pay for the fund. We look forward to
working with the sponsors and other interested stakeholders on
ways to modernize the program.''
______
United Church of Christ
http://uccmediajustice.org/p/salsa/web/blog/public/?blog_entry_KEY=7551
In response to the introduction of the Broadband Adoption Act
today, the following can be attributed to Cheryl Leanza, policy advisor
to UCC OC Inc.:
I welcome today's introduction of the Broadband Adoption Act.
Congresswoman Matsui, Senator Murphy and Senator Booker, along
with all the Act's co-sponsors, deserve praise. This proposed
legislation is timely in light of the Federal Communications
Commission's upcoming proceeding considering modernization of
the Lifeline program.
Universalizing broadband adoption is critical--broadband is
essential for every aspect of modern life. As I said last week,
affordable access is the linchpin to digital literacy and relevance and
hence it is the key to adoption. Universal Adoption is the key to
individual and national economic security.
______
The Leadership Conference on Civil and Human Rights
http://www.civilrights.org/press/2015/lifeline-modernization-bill.html
Nancy Zirkin, executive vice president and director of policy of
The Leadership Conference on Civil and Human Rights, issued the
following statement after the bicameral introduction of the Broadband
Adoption Act, which would incorporate broadband within the Lifeline
program:
``For Americans trying to move out of poverty and succeed in
our modern economy, broadband access is absolutely crucial.
This bill will help put modern communication services within
reach for some of our Nation's most vulnerable communities,
helping low-income households afford the broadband access they
need to thrive in today's information age.
High-speed Internet today is vital to accessing job
opportunities, health care, social services, and education. But
for millions of low-income and minority Americans--the people
who are in most need of the advantages of broadband--such
service is simply out of reach. By helping reduce the high cost
of broadband services, this bill will help narrow the digital
divide and move our Nation toward an inclusive economic
recovery.
We thank Representative Matsui and Senators Murphy and Booker
for introducing this important legislation, and urge their
colleagues to support its passage.''
Nancy Zirkin is executive vice president and director of policy of
The Leadership Conference on Civil and Human Rights, a coalition
charged by its diverse membership of more than 200 national
organizations to promote and protect the rights of all persons in the
United States. The Leadership Conference works toward an America as
good as its ideals. For more information on The Leadership Conference,
visit www.civilrights.org.
______
Common Sense Media
``Common Sense applauds Sens. Booker and Murphy and Rep. Matsui for
their important bicameral efforts to bring high-speed Internet access
to all American homes. High-speed broadband at home is considered
essential for the vast majority of Americans, and for good reason.
Unfortunately, millions of low-income Americans--including millions of
low-income kids--do not have broadband at home, and are being left
behind. The Broadband Adoption Act of 2015 will make broadband more
affordable and accessible for low-income Americans, enabling more
children and their families to connect to 21st century education, jobs,
and other critical opportunities that benefit our overall economy.''
--Jim Steyer, Common Sense Media CEO and Founder
______
Lifeline Connects
LIFELINE CONNECTS COALITION LAUDS INTRODUCTION OF BROADBAND ADOPTION
ACT OF 2015
Broadband Affordability is Key to Alleviating Poverty and Promoting
Opportunity
Washington, D.C.--Lifeline Connects, a coalition of Lifeline
providers committed to advancing the Federal Communication Commission's
goal of protecting and preserving the integrity of the Lifeline Low-
Income communications program, today released the following statement
in support of the Broadband Adoption Act of 2015, introduced by
Representative Doris Matsui (D-CA) in the House and by Senators Chris
Murphy (D-CT) and Cory Booker (D-NJ) in the Senate. The legislation
seeks to modernize the Lifeline program to include broadband access for
qualifying low-income Americans for whom the cost of service remains a
barrier to adoption.
According to John Heitmann on behalf of Lifeline Connects,
``Broadband access has become a fundamental requirement of social and
economic inclusion and ensures that every segment of our population can
fully participate in the information age. Access to the Internet and
the availability of information drive economic development and job
growth, as well as advancements in healthcare and education.''
``The nation needs a new paradigm for alleviating poverty and
promoting opportunity for poor families and communities across America.
We strongly commend the bill sponsors' efforts to make broadband
affordable for the most vulnerable members of our society. This
legislation is an important step in ensuring access for low-income
households that in many cases have been excluded from the digital
revolution.''
About Lifeline Connects
Lifeline Connects is a coalition of telecommunications service
providers who believe that all Americans deserve access to affordable
telephone and broadband service.
Its members are Blue Jay Wireless, Global Connection Inc. of
America, i-wireless, LLC and Telrite Corporation. Lifeline Connects is
committed to educating and separating myths from facts about the
Lifeline program, sharing best practices on compliance and industry
self-regulation and proposing additional reforms to preserve the
integrity of the program.
______
CTIA--The Wireless Association
http://www.ctia.org/resource-library/press-releases/archive/ctia-the-
wireless-association-statement-on-the-matsui-booker-lifeline-
legislation
CTIA--The Wireless Association Statement on the Matsui-Booker Lifeline
Legislation
WASHINGTON, June 1, 2015--The following statement should be
attributed to CTIA--The Wireless Association Vice President of
Government Affairs Jot Carpenter:
``We appreciate Congresswoman Matsui and Senator Booker for
releasing their Lifeline modernization legislation. As we will
say in our testimony [PDF] tomorrow at the Senate Subcommittee
on Communications' hearing, we support efforts to expand mobile
broadband use while carefully and efficiently administering the
Lifeline program to prevent waste, fraud and abuse and
safeguarding the interests of the consumers who support all
universal service programs.''
CTIA--The Wireless Association (www.ctia.org) represents the U.S.
wireless communications industry. With members from wireless carriers
and their suppliers to providers and manufacturers of wireless data
services and products, the association brings together a dynamic group
of companies that enable consumers to lead a 21st century connected
life. CTIA members benefit from its vigorous advocacy at all levels of
government for policies that foster the continued innovation,
investment and economic impact of America's competitive and world-
leading mobile ecosystem. The association also coordinates the
industry's voluntary best practices and initiatives and convenes the
industry's leading wireless tradeshow. CTIA was founded in 1984 and is
based in Washington, D.C.
Twitter: @ctia Blog: http://ctia.it/Na6erv Facebook: http://ctia.it/
LCm4Nn
LinkedIn Group: http://ctia.it/Na6cA2 Google+: http://ctia.it/12PfCrO
Press Contact: Amy Storey, [email protected], 202-736-3207
______
National Consumer Law Center
http://www.nclc.org/images/pdf/energy_utility_telecom/
telecommunications/pr_broadband_adoption_act6115.pdf
Olivia Wein--contact
NCLC Advocates Support Broadband Adoption Act of 2015
Today, U.S. Congresswoman Doris Matsui (D-CA), U.S. Senator Chris
Murphy (D-CT), and U.S. Senator Cory Booker (D-NJ) introduced
legislation to modernize the Federal Lifeline Assistance Program to
include broadband service to eligible low-income households.
National Consumer Law Center Attorney Olivia Wein praised today's
action on behalf of NCLC's low income clients:
``The Broadband Adoption Act of 2015 addresses a critical need
in our nation--closing the digital divide by bringing
affordable broadband within the reach of struggling households.
The lack of affordable broadband service hurts children whose
educational opportunities are limited and hampers workers'
ability to apply for jobs or establish entrepreneurial
businesses. Internet access affects every facet of modern life,
from access to healthcare to participation in commerce. In an
information age, access to modern communication services
enhances the competitiveness of individuals and communities.
Representative Matsui and Senators Murphy and Booker have
demonstrated great leadership on this issue by introducing this
legislation.''
Since 1969, the nonprofit National Consumer Law Center (NCLC) has
used its expertise in consumer law and energy policy to work for
consumer justice and economic security for low-income and other
disadvantaged people, including older adults, in the United States.
NCLC's expertise includes policy analysis and advocacy; consumer law
and energy publications; litigation; expert witness services, and
training and advice for advocates. NCLC works with nonprofit and legal
services organizations, private attorneys, policymakers, and Federal
and state government and courts across the Nation to stop exploitative
practices, help financially stressed families build and retain wealth,
and advance economic fairness. www.nclc.org
______
Common Cause
http://www.commoncause.org/democracy-wire/closing-the-digital-
divide.html
Closing the Digital Divide
By Todd O'Boyle
The fight to close the digital divide just got a major boost.
Rep. Doris Matsui, D-CA, and Sens. Cory Booker, D-NJ, and Chris
Murphy, D-CT, introduced the Broadband Adoption Act of 2015 today to
modernize Lifeline, a program which helps connect low-income households
to telecommunications.
For decades, qualifying households have received a federally-
subsidized discount on their monthly bills for a wired or wireless
telephone connection. The original program helped build out the
American telephone network, and make it a global model of universal
service. This bill would give beneficiaries a third choice: a basic
broadband connection.
Broadband is key to citizenship and opportunity in the 21st
century; yet America trails other nations in terms of quality,
affordable, and ubiquitous broadband service--we rank 30th by some
measures! Affordability is among the largest barriers to broadband
adoption.
With news breaking that the Federal Communications Commission (FCC)
is moving forward with Lifeline reforms, this bill couldn't come at a
better time.
This is great news--and brings us one step closer to the goal of
universal broadband service.
``This strong public interest leadership shows the way forward for
the FCC. It's time to modernize Lifeline so more American families can
benefit from the democracy and opportunity engine of the 21st century.
It's everyone's need and everyone's right,'' said former FCC
Commissioner and Common Cause Special Adviser Michael Copps.
Office: Common Cause National
Issues: Media and Democracy
______
Public Knowledge
https://www.publicknowledge.org/press-release/public-knowledge-
applauds-introduction-of-broadband-adoption-act
Public Knowledge Applauds Introduction of Broadband Adoption Act
By Shiva Stella
Today, Congresswoman Doris Matsui (D-Calif.), Senator Chris Murphy
(D-Conn.), and Senator Cory Booker (D-N.J.) introduced the Broadband
Adoption Act to modernize the Lifeline Assistance Program. The bill
would instruct the Federal Communications Commission to establish a
Lifeline broadband assistance program, allowing broadband Internet
services to be available as an option for eligible Lifeline households
for the first time. Public Knowledge supports the bill and applauds
Congresswoman Matsui for her continued efforts in championing Lifeline.
The following can be attributed to Kristine DeBry, Vice President
of the Policy Strategy Center at Public Knowledge:
``This legislation acknowledges the critical role broadband
plays in providing access to jobs, education, news, services,
healthcare, and essential communication to low-income
individuals. When the Lifeline program was created in the
1980s, voice calls were the critical connection people needed,
and now that connection should include broadband.
``Low-income Americans face multiple challenges to accessing
broadband service. Without confronting these challenges, the
digital divide persists--separating Americans from their own
jobs, schools, libraries and healthcare facilities. Lifeline
helps address the cost obstacle that too many Americans face in
connecting to opportunity. It is a critical program in the
FCC's commitment to making broadband service available for
everyone.
``We commend Congresswoman Matsui for her long history of
leadership in this issue. We're also pleased to see Sen. Murphy and
Sen. Booker supporting Lifeline modernization in the Senate. Americans
need broadband Internet to connect with and provide for their families,
and we believe this bill is a great step forward for struggling
communities.''
If you would like more information about broadband as an essential
service, please view our latest white paper, Universal Service in an
All-IP World.
Senator Wicker. Thank you.
Senator Fischer?
STATEMENT OF HON. DEB FISCHER,
U.S. SENATOR FROM NEBRASKA
Senator Fischer. Thank you, Mr. Chairman.
Given the waste, fraud, and abuse that has already been
identified and the rest that I believe still exists, I think we
need to take a look at considering a cap and a co-pay for this
program. After all, the other three USF programs are capped,
but this one is not.
There is a range of issues that deserve attention. They are
reconsidering whether the ETC should be mandated to
participate, requiring a budget and improved enforcement,
clarifying the states' role, better defining what kind of
Lifeline marketing is permissible, determining eligibility and
benefits, and ultimately evaluating the FCC's proposal to
transition to a broadband subsidy.
My first question is about transparency for rate payers and
the families who subsidize the Lifeline services.
What I hear in Nebraska from rate payers is they are
already appalled by the charges that they have on their phone
bills. This is a regressive tax; let's not forget that. And
everyone pays the same rate no matter their income.
The USF fees on our bills, I think, are either going to
increase or potentially we are going to see a crowding out of
the other programs that Universal Service Fund already has, and
that is, like, the High Cost fund for rural communications or
the E-Rate or telehealth.
I would ask Mr. Clements, do you think that Chairman
Wheeler, his latest Lifeline proposal should be made public
before the Commission votes on it on June 18th so that the
public, the rate payers, can know whether their phone bills are
going to go up in order to have other people have their
Internet service subsidized?
Mr. Clements. That is not an issue that we looked at. I
think what he is proposing is a notice of proposed rulemaking,
so I don't believe the final order, in terms of any changes in
the rates, would take place until after that process is
complete.
Senator Fischer. Mr. May, would you like to address that?
Do you think that we should be seeing the proposal be made
public before there is a vote on it?
Mr. May. Thank you, Senator.
You know, I just testified over in the House; they had a
hearing on reforming the process of the FCC. And I testified
that draft orders should be made public before the Commission
votes. You know, because they have Sunshine meetings; that is
what they are called. So it seems to me, consistent with that,
the public could have the item in front of them and know more--
they could actually have the item in front of them. I think
that could be a good thing. It is more important, I think, on
the final orders, as Mr. Brise said.
The one thing I would say is, you know, Chairman Wheeler
now is beginning to release a lot of details--and this is
different from past practice--about what is in these proposed
orders.
And one thing that I believe, really going to the substance
of your point, is that it is pretty clear that if the program
is expanded to broadband, I think we have to be pretty clear-
eyed about it and understand that it is probably going to
increase the cost of Lifeline, and then people have to figure
out how you want to pay for that, if you do.
Because, you know, let's be frank, the cost of broadband
service is much more expensive than providing ordinary basic
service. And that is not even taking into account the equipment
that you need, which is more expensive. You know, a laptop or a
smartphone is more expensive than a dumb-phone.
And you have the literacy programs. You know, someone
mentioned the Comcast Internet Essentials program. I think that
type of thing is a good thing because that is helpful for
adoption and providing equipment. But there is a cost.
Senator Fischer. But I think, sir, exactly, there is a
cost, and we need to make sure that our citizens in our states
and across this country realize that. The Universal Service
Fund right now has revenue that is limited, and it is divided
up between programs. And when we are looking at a huge increase
in cost on this one program, either rate payers are going to
pay for it or other programs will be cut back. That is a
reality that we need to make clear here.
Mr. May. Well, you said, I think, that many of your
constituents know that they are paying the 17 percent tax----
Senator Fischer. In Nebraska, we are very open about
listing it.
Mr. May.--in Nebraska, but, you know, in a lot of places,
unfortunately, a lot of consumers aren't as aware of it. I
think if more were aware of it, there would actually be more
pressure on the----
Senator Fischer. Or if other states followed the 1996 law
and set up their program----
Mr. May. Yes. You know, then there would be pressure to
really grapple with, you know, the waste, fraud, and abuse and
inefficiency.
Senator Fischer. Correct.
Thank you, Mr. Chairman.
Senator Wicker. And thank you very much.
Senator Markey, followed by Senator Daines.
STATEMENT OF HON. EDWARD MARKEY,
U.S. SENATOR FROM MASSACHUSETTS
Senator Markey. Thank you, Mr. Chairman, very much.
The Federal Communications Commission Act of 1934, it has
at its core this principle of universal service. It was kind of
a brilliant insight that that society had in our country. Here
is what it said; it said capitalism can't work if we don't have
everybody as part of this new, modern telecommunications system
with a black rotary-dial phone, so we are going to have to find
a way of ensuring that everyone has access to it.
And so, yes, there was a system set up that said that, kind
of, my father and mother in urban America who were doing OK
would be subsidizing people in rural America or subsidizing
poor people so they would have a phone too.
And how did capitalism work? Well, of course, now that
everyone had a phone, everyone could plug into this incredible
capitalist system that we had in America, and we got the return
on investment 2, 3, 4, 5, 10 times over because everyone was
now part of this capitalist system with a telephone.
So that is what we are talking about here today, the same
system. Now, there is no question that my mother and father
subsidized rural America for probably 50 years, making sure
they had phones, making sure poor people had phones, no
question about it. But it was part of a capitalistic plan.
And so now we are talking about modernizing that system,
because broadband is to the 21st century what a black rotary-
dial phone was to the 20th century, no question about it.
So, Ms. Gonzalez, do you think that in the 21st century
that the system should be technology-neutral and it should
remain open to ongoing reinterpretation so that we are ensuring
that the lowest income people in our country or the most rural
societies in our country should have access to the most modern
technology?
Ms. Gonzalez. Yes, sir, Senator Markey. I do think it needs
to evolve and needs to build in choice.
Senator Markey. And why is that?
Ms. Gonzalez. Because, I mean, I think just every facet of
modern American life can be--we can better people's lives with
broadband. We can advance the economy, we can give people
access to health care. You know, back 50 years ago, you could
start a small business without the Internet; today you cannot.
And it is just as simple as that. There are economic reasons,
there are moral reasons. It just makes good sense.
Senator Markey. I agree with you. I think that in the same
way that a black, rotary-dial phone played that huge role in
the 20th century, for better or worse, broadband, the Internet,
is now economic oxygen for every family in America. You have to
be connected to it, you have to be able to fully participate in
it, or else you are going to get left behind economically in
our country. And we need the same kind of modern plan for this
century as was brilliantly put together in the 20th century. We
became the model for the rest of the world.
How would you go about determining, Ms. Gonzalez, what the
standard should be for the 21st century with regard to access
to broadband?
Ms. Gonzalez. I think we need to look at how we provide
sufficient capacity to perform the basic functions that we
expect one can perform with broadband. So, for instance, one
should be able to access digital education, should access
health care, social services, job opportunities, closing the
homework gap, emergency communications, civic discourse and
participation.
We need to develop some sort of mechanism to ensure
outreach is sufficient and that the service is available
throughout the month, it doesn't cutoff halfway through the
month. And the standards need to evolve over time as the way we
communicate evolves.
Senator Markey. Yes. So, obviously, we don't want to have a
digital divide in the country. We don't want digital haves and
digital have-nots. Because that is the key word, ``digital.''
Who has it, and who doesn't? And if you don't have it, you are
out of the system, you are out of capitalism. You can't pretend
that that family is going to be able to fully participate in
what the modern America, the modern world has become.
And so I praise the FCC for their beginning this process,
and I praise Senator Booker and Senator Murphy, Senator
Blumenthal. I have joined with them in introducing a Lifeline
piece of legislation into this committee. I think it is a very
important discussion for us. Without modern telecommunications
technologies, we are going to leave behind too many people in
our country.
Thank you, Mr. Chairman.
Senator Wicker. Thank you, Senator Markey.
Senator Daines?
STATEMENT OF HON. STEVE DAINES,
U.S. SENATOR FROM MONTANA
Senator Daines. Thank you, Mr. Chairman.
I am going to pick up where Senator Fischer left off about
the Lifeline program. I am curious--and this is probably a
question for Mr. Clements--I am curious to understand why the
Lifeline program is the only Universal Service Fund program
that has been funded without a cap. The other three USF
programs--the High Cost, which serves rural areas; schools and
libraries; the rural health care--all have program caps.
In fact, the GAO has specifically noted, and I quote, ``The
Low-Income Program has no funding cap, and the addition of
broadband and other future telecommunications technology
without key management information and evaluation tools has the
potential to further increase the cost to consumers, who pay
for the program through their telecommunication bills.''
So my question, Mr. Clements: What are the reasons the FCC
has not put a cap on the Lifeline program?
Mr. Clements. I can't speak for why FCC has not done that.
Senator Daines. What are your thoughts?
Mr. Clements. We haven't done enough work to say whether a
cap would be effective or not.
Senator Daines. Do you think they should consider
implementing a cap? And why would the other three programs have
a cap and this one doesn't?
Mr. Clements. They have recently added caps, for example,
to the High Cost program. Before, that was not capped, as well.
So, in part of the reform of the High Cost program, they have
implemented that.
To the extent that a cap would help control program growth
and control waste, fraud, and abuse, we would generally be in
support of that.
Senator Daines. And, I guess, I mean, it is the GAO, after
all. Are you concerned the Lifeline fund could continue to
increase without sufficient oversight, thus increasing all
consumer phone bills?
Mr. Clements. I think this is why we recommended the
program evaluation, to get a better sense of--you have two
moving parts. You have the subsidy amount, and so if we are
talking about moving to broadband, that subsidy amount may need
to go up. And then you have the eligible base, the population
that could benefit from the program. You can move the two parts
and still keep the total disbursements about the same if you
wanted to.
Senator Daines. But it is just back to what--there is the
old Sesame Street saying, ``One of these things is not like the
other.'' Why is this one program singled out without a cap and
every other program has a cap?
Mr. Clements. Again, I can't speak for why.
Senator Daines. I am going to ask Mr. Bergmann, perhaps, a
similar question. Why shouldn't the Lifeline program be subject
to a cap in the way that other portions of the USF program are?
Mr. Bergmann. Thank you, Senator.
And, you know, just to share a little bit about the
perspective of the wireless industry, we share your concerns in
making sure that the burdens on consumers are kept to a
minimum, because 44 percent of the universal service
contribution fund comes from wireless carriers and their
customers. And the way technology is evolving, that is going to
be 50 percent soon. So we certainly share that interest.
I think part of the reason that the Commission and the
wireless industry has been concerned about a hard cap is that
the low-income Lifeline program is structured a little bit
differently than those other USF programs. So, first, it is
directed to individuals, as opposed to carriers. And the second
is that it is means-tested, so directly looking at the
eligibility of those customers, as opposed to the other
programs, which are based on, sort of, other proxies.
So, you know, as we look at the typical customer profile,
you know, we see that the average Lifeline customer has an
income of $12,000. About half of them are middle-aged. About a
third of them have disabilities. So the challenge for us is how
would you implement it so that you get that fiscal discipline
without forcing the next eligible customer to miss out on that
opportunity.
Senator Daines. But would a cap perhaps be an important
step forward to help drive this desire to eliminate the waste,
fraud, and abuse in the system?
Mr. Bergmann. So I think, from our perspective, the best
thing that the Commission could do to address those issues is
by addressing this issue of determining eligibility.
They have taken important steps with the development of the
duplicates database, but the Commission said in 2012 that it
would adopt an automated way to determine who is eligible. It
hasn't moved forward with that yet. So we are hopeful that that
will be part of the FCC's proceeding coming up.
Senator Daines. Mr. Bergmann, let me shift gears here and
move to tribal access for a moment. As of the first quarter of
2015, there were 6,546 Lifeline subscribers in Montana; 3,800-
plus were listed as tribal, and about 2,700 were listed as non-
tribal.
Mr. Bergmann, since almost 60 percent of Montanans
receiving Lifeline services are from tribal lands in my state,
what are some of the challenges the wireless industry faces in
bringing service to our tribal lands?
Mr. Bergmann. So thank you, Senator.
Tribal areas present some of the most difficult challenges
to serve in the country. They tend to be in rural areas; those
tend to be high-cost areas. And, you know, for anyone who has
had a chance to visit tribal areas, there can often be, sort
of, eye-popping economic challenges.
So, you know, one element of that, I think, is that the FCC
has set up special rules for Lifeline for tribal areas so that
there are higher support amounts. Link Up continues.
But looking outside of Lifeline, I would also say that
there is probably more that could be done to facilitate the
build-out of networks, to Senator Ayotte's question, trying to
make sure that we have the networks there to support those
services. So tower siting on tribal lands has traditionally
been a challenging issue, and it is something that we would
love to work on to try to promote.
Senator Daines. Thank you.
Senator Wicker. Thank you, Senator Daines.
Senator Blumenthal?
STATEMENT OF HON. RICHARD BLUMENTHAL,
U.S. SENATOR FROM CONNECTICUT
Senator Blumenthal. Thanks, Mr. Chairman. And appreciate
your having this hearing on a really important topic and the
testimony that we have heard. Excellent testimony from the
panel so far.
The so-called digital divide really threatens to become a
digital chasm or canyon, as access to this really critical
service diminishes as people become faced with the inability to
pay for it. And access to broadband is every bit as important
today as the availability of phone service was 30 years ago. So
defending this vital lifeline--it really is a lifeline--I think
ought to attract unanimity from this panel and from the U.S.
Senate.
But there still are the myths and the bogeymen about waste,
fraud, and abuse. There is no question that some of it exists,
and the FCC is focusing on it, and it should, with even greater
vigor and vigilance. But it has taken some steps.
And I would like to ask members of the panel, for example,
Mr. Clements and Ms. Gonzalez, about the steps that have been
taken already--for example, the cross-checks on databases, so
that double or triple subsidies for the same household can be
eliminated. The number of households has diminished, from 18
million to 12 million, I believe, as a result.
And what are the steps that you think are most important
remaining to be taken to eliminate waste, fraud, and abuse? And
I assume a cap is not one of them.
Ms. Gonzalez. Thank you, Senator Blumenthal. I will begin.
When I looked through the GAO report, on page 9 there is a
table of all the reforms that the FCC proposed in 2012, and
seven of them have been fully implemented.
They have adopted a one-per-household rule. They have
eliminated Link Up on non-tribal lands. Develop uniform
eligibility criteria. Establish non-usage requirements, so if
someone isn't using their service, it is terminated. The
payments to the eligible telecommunications carriers are based
on actual support claims. They have conducted independent and
first-year audits. And they have developed the National
Accountability Data base in 46 states and the District of
Columbia. That has eliminated 1.28 million duplicates.
The GAO--I am stealing your thunder, I am afraid.
[Laughter.]
Ms. Gonzalez.--also identified four that were in progress.
The FCC has developed a $9.25 flat rate, and they are still
evaluating what a permanent reimbursement rate is. I am not
sure if it is appropriate to develop a permanent rate. I think
it is something that might need to be reviewed periodically.
Senator Blumenthal. So these steps really represent
profoundly significant progress toward eliminating waste,
fraud, and abuse; would you agree?
Ms. Gonzalez. I agree. I think it demonstrates serious
efforts to curb those problems.
Senator Blumenthal. Does anyone on the panel disagree? I
mean, these steps strike me as a serious, sustained effort to
combat waste and fraud in this program, and we should credit
the FCC and suggest additional steps, if there are any, that
would go in that direction.
But it should not be an impediment to broadband access
under this program. The fact that there are defects in what has
been done before shouldn't prevent the FCC from extending
Lifeline to broadband. And we will do it by legislation, if
necessary.
Do you have a comment, Mr. Clements?
And does anyone on the panel disagree?
Mr. May?
Mr. May. I mean, I don't disagree in a broad sense, but I
will just say they have taken steps and they have had a
positive impact, but GAO and others have identified some other
steps that they could take. It is not clear to me why they
haven't taken some of these steps.
One example is--and the proposals were made several years
ago--just to require document retention when you sign up
someone so you can later check. I think you identified that.
They haven't done that.
So, in the way that I would think about some of these
things is, why not have them take the remaining steps and
implement them before you then move on to think about expanding
the program?
Senator Blumenthal. Well, you know, even government
agencies can do two things at once.
Mr. May. But they haven't.
Senator Blumenthal. They are capable of doing two things at
once, and they have, by the way, Mr. May. They have done many,
many things at once. The FCC is moving forward on some very
visionary and courageous steps even as we speak in other areas.
So maybe they haven't to your satisfaction, but may I just
suggest--and I welcome your comment; I think it is a very
constructive and important comment--that they should do steps
to eliminate waste, fraud, and abuse even as they expand
broadband.
Thank you, Mr. Chairman.
Senator Wicker. Thank you, Senator Blumenthal.
Senator Manchin?
STATEMENT OF HON. JOE MANCHIN,
U.S. SENATOR FROM WEST VIRGINIA
Senator Manchin. First of all, thank you all, and I
appreciate very much your being here.
You know, when you look at the program in my little state
of West Virginia, you know, there are a lot of people that
depend on it. But I have to be honest. And, Ms. Gonzalez, your
testimony was so compelling, but unfortunately we don't hear
that in West Virginia.
I hear more people complaining about people using these
funds for illicit purposes versus legitimate purposes. And they
are upset about it. And that is the state's, really, challenge.
My little state, and they see all the money being thrown at it.
And if you look at it, 2005 was an $800 million program. It has
gone to over $2.2 billion.
And they are just sick and tired of it, and there is no
confidence. So I don't know how you restore confidence back
into the system to where people think that their tax--and,
really, they think it is their tax dollars, first of all. If
they knew it was their long-distance, they would be more
outraged than what they are now. They just think it is overall
tax dollars going to the program.
So there is no support. I hear no support. In a state that
is really challenged and needs it. I have probably half a
million people who don't have broadband high-speed available.
And yet you are expanding your program to people who don't have
the basic infrastructure in a lot of rural states. I think
Kelly spoke about--I know that Senator Sullivan will have the
same in Alaska. And there is going to be a lot of abuse in
that.
So what we didn't understand is when Senator Daines was
asking you, just cap it. You will be more--if it is capped and
you only have a certain amount of money to work with, you are
going to be much more efficient and effective with it.
You know, people have just lost confidence that we have any
common sense here, any common sense to really control the out-
of-control spending. And that is coming from a Democrat in a
state that depends on an awful lot of government programs that
help them.
So, sooner or later, we are going to have to get real about
this. You know, I can't go back and look at them with all
good--just with good intentions. But, you know, I am
compassionate about helping people, and they need help. But
when a majority of the people that are receiving it use it for
illicit purposes and not for legitimate purposes----
You know, they still believe that Lifeline is when your
grandmother falls down and she pushes a button and someone
comes and helps her. That is what we are dealing with. I mean,
people just don't know. So we have done a very poor job of
doing it. And there is an old saying, they have told their
story before we have told our story.
So, Ms. Gonzalez, how do we have more people like yourself
that has really been benefited by this program? And then how
all of you can control the program, it would be good to hear
any of your inputs on that.
So anybody here that would want to speak, we can just go
right down the line.
Mr. Brise. Sure. I will go ahead and start, Senator.
The first thing, I will say that coming from a state that
is a donor state and having a state that has about 47 percent
of the people who would today be eligible actually participate,
there is an issue that exists in terms of people actually
knowing that the program exists and how it operates.
Now, there are a couple things that I think that the FCC
has done that has worked to assure that there is less waste,
fraud, and abuse, but there is a lot more that can be done.
Senator Manchin. Sure.
Mr. Brise. One is the national eligibility database. That
needs to continually be worked on, or that needs to be worked
on, so it can be implemented. Now, that is a challenge because
that is going to require the state input so that there is input
into the state databases for some of those services that are
provided.
The other thing that I believe is also important in this
space is recognizing the overall goal, as NARUC has supported,
that we have to be firm and express what the values of the
program are and identifying the bad actors. States have played
a very important role in identifying many of the bad actors.
Senator Manchin. Is there any quid pro quo on a state that
doesn't monitor, oversee, and basically run a program more
efficiently? Do you have any ability to pull back from the
Federal Government, pull back the services, the amount of
people they can help?
I mean, I am advocate of the program. I think it does,
hearing Ms. Gonzalez--and I am sure there are many more like
you that have really benefited from legitimate uses. But with
that being said, sometimes we throw the baby out with the
bathwater.
But if a state doesn't get its act together and turn in
this information, is there any quid pro quo back on that state?
Mr. Brise. Not that I am aware of.
Senator Manchin. Does anybody know that?
So nothing. So, basically, as we usually do in America, we
reward you for bad behavior. That is an awful question, isn't
it? You know, because it is just so true. I mean, we hold
nobody accountable or responsible for their actions.
How do we----
Senator Wicker. Well, perhaps, Senator Manchin, the other
four panelists could supplement their testimony with an answer,
because----
Senator Manchin. If anybody----
Senator Wicker.--you asked the question to all of them, and
we do have a vote on.
Senator Manchin. Yes, I know.
Senator Wicker. So if panelists could submit written
answers to Senator Manchin.
Senator Manchin. If you could tell us this: Basically, do
you believe that the reforms that are going into place are
tough enough? Do you believe we should put caps and we should
put benchmarks to make sure they are meeting them before we
just continue on with a program that a lot of people don't have
confidence in? I think that would be my question.
Senator Wicker. Thank you. And we will proceed in that
fashion.
Senator Sullivan?
STATEMENT OF HON. DAN SULLIVAN,
U.S. SENATOR FROM ALASKA
Senator Sullivan. Thank you, Mr. Chairman.
And I do want to mention that I think Senator Manchin is
raising a lot of important points, and I would agree with a lot
of those. I think it is important that you are able to kind of
address some of the issues he has raised in a lot of detail,
because there are issues of confidence with regard to the
program.
You know, like a lot of rural states, big rural states in
particular, the issue of expanding broadband, certainly in my
state of Alaska, is a really important goal. And many of our
carriers in the state are using the USF as a way to expand
broadband infrastructure.
Maybe, Mr. May, you can answer this question, but I will
open it up to all the panelists.
There is a concern that if the Lifeline support is expanded
to include broadband service that it would diminish the overall
funding, USF program funding, to build out broadband
infrastructure.
Can you address that, and is that a concern? Is there a
zero-sum element to the funding in what we are trying to do? I
know that it was asked earlier, but I would just be very
interested because this is a critical question for my state.
Mr. May. Thank you, Senator.
You know, in theory, the USF fund and the Lifeline fund are
two separate programs, and the money----
Senator Sullivan. When you say that, ``in theory,'' what
about in practice?
Mr. May. Well, no, in practice they are, as well. I just--
what I started to say is that, to the extent that public
confidence has eroded along the lines that Senator Manchin was
inferring in the Lifeline program because of some of the
problems that he has had, I think ultimately if that public
confidence erodes it might affect how people view potentially
all of these programs. And that is what I meant.
But the USF fund is different. I don't think you were here,
but when I was responding to Senator Ayotte I said I support
the USF High Cost fund program as long as those funds are
really targeted to unserved areas. Sometimes in the past they
have been targeted in a way that duplicative carriers are
supported.
So, you know, one thing that I would say about----
Senator Sullivan. So, I mean, just to be clear, so you are
saying that you look at the High Cost, the E-Rate, the Rural
Health programs, Lifeline program, there is not a--if you are
expanding one, you are not necessarily diminishing from----
Mr. May. No.
Senator Sullivan.--others?
Mr. May. No. Because they are not--I mean, you have caps on
the High Cost fund, for example, but there isn't a cap on the
Lifeline fund. If the Lifeline fund expands, it is not because,
you know, more eligibles are receiving funds. It is per se
diminishing the High Cost fund. At least that is my
understanding of the way it works.
Senator Sullivan. I would be interested in other panelists'
views on that.
Mr. Clements. I think what would happen in that case is the
contribution factor simply increases. So the other three
programs are fixed. If Lifeline were to double in
disbursements, then the contribution burden would go up.
Senator Sullivan. OK.
Let me ask another question relating to the program. You
know, I think that there have been some concerns about how
carriers are being asked to determine and verify individual
eligibility within the Lifeline program.
Can you comment on that, how that works, Mr. Clements, just
to give us a sense of how that operates? And does it impact
some of the issues that Senator Manchin was talking about?
Mr. Clements. Sure.
The current process requires at enrollment the carrier to
verify an applicant's eligibility. We found the most common
approach to doing that is the carrier will look at some type of
documentation. For example, an applicant will arrive at the
location and show a SNAP card. And it is at that point that the
applicant, if the document is valid, would be enrolled. The
carrier is doing that.
FCC had considered an approach where there would be a
database that the carrier could simply query, but it has not
implemented that database yet.
Senator Sullivan. And do you think that is an effective way
to look at eligibility? Are the carriers concerned about
liability or just the burden of that, particularly given some
of the concerns Senator Manchin mentioned?
Mr. Clements. Some carriers have expressed concerns to us
about the burden. I think it depends upon which carrier it is.
Some of the wireline carriers are more hesitant, where they
view that as a burden, that--it would be better to have the
government do it. Some of the wireless carriers would prefer
that the carrier themselves would do that.
Senator Wicker. Thank you, Senator Sullivan.
Senator Sullivan. Thank you, Mr. Chairman.
Senator Wicker. Senator Schatz and I are going to try to
wrap this hearing up before voting. We appreciate the members'
and witnesses' being mindful of the time.
Let me just ask you, Mr. Clements, the FCC has not
implemented a Lifeline eligibility database, and you report
this. We were told that it would be done by the end of 2013.
The FCC is now planning to move forward with the Lifeline
program to fund broadband before it has implemented the
database to verify that all consumers who sign up are actually
eligible.
I think there has been broad support in this hearing, as we
have all heard, for the concept of the program. We want
eligible people to participate, and we want to be able to
prevent ineligible people.
So how many folks are out there that are participating? Can
you enlighten us? How big is this problem? And does it concern
you that we would be moving forward as a government without
having the eligibility database?
Mr. Clements. I believe the total number of participants is
around 12 million households.
The problem the FCC has encountered with the database----
Senator Wicker. No, but of that number, how many are
ineligible?
Mr. Clements. We don't know how many are ineligible. We do
have additional work for Senator McCaskill looking at sort of
specifically looking at the Internet controls.
Senator Wicker. So that is part of the problem that Senator
Manchin was talking about, as I understand it. There are 12
participants, and we have no idea how many are ineligible? Is
that right?
Mr. Clements. We don't know that, no.
Senator Wicker. Does anyone on the panel care to take a
stab at that?
Mr. May?
Mr. May. Well, you know, I think the answer is, until you
implement some of the further reforms like the national
database, that might lead to a reduction in the number of
persons receiving the benefit by virtue of doing that. Then you
would have an idea at that point how many--some idea, order of
magnitude, how many people might have been ineligible or were,
after you have implemented the reforms. But you don't know
until you do that, I don't think.
Senator Wicker. So, as a free market advocate, you have no
idea, and you don't even have a hunch.
Mr. May. I don't have a hunch, no, sir.
Senator Wicker. OK. Well, I think that is helpful
information to the Subcommittee, Senator Schatz.
Mr. Bergmann, tell us about how automatic disenrollment
would work and be helpful.
Mr. Bergmann. So thank you, Senator. And I think that
really sort of tees off your last question, which is having an
automated means of determining eligibility. That is something
that the Commission talked about doing in 2012 and we certainly
hope will be part of the reforms going forward.
But one of the benefits, I think, of an automated means of
determining eligibility is that you will have more real-time
information about when subscribers are actually eligible and
when they are not eligible, right? So, right now, a carrier
makes an initial determination, and then you wait a year. There
is an annual recertification process.
But an automated system would allow you to figure out when
someone is no longer eligible--right? I think we all view
Lifeline as a hand up, not a handout. So when they are no
longer eligible for Lifeline, then you would be able to
automatically de-enroll a subscriber, saving the program money.
Senator Wicker. Thank you very much.
Senator Schatz?
Senator Schatz. How long is it going to take to develop the
national eligibility database, Mr. Clements?
Mr. Clements. We don't know that. And I think FCC has
encountered a number of problems in developing a database. One
of the problems is there----
Senator Schatz. Is it possible?
I mean, I understand the principle here, that you have the
eligibility determination made by the carriers, and so there is
a conflict and there is a sort of disincentive to find people
to be ineligible, and so the rational solution becomes, well,
let's develop a national database. But that sounds enormously
difficult and time-consuming and maybe not possible at all.
Would you care to comment on that?
Mr. Clements. There are challenges with it. And one of the
challenges is that you have seven programs that an eligible
household could apply for and qualify for the program. In
addition to the income, a lot of those data are housed at the
state level. And so that has been a problem of creating the
nationwide database, because data are housed at the state
level.
There are also privacy concerns----
Senator Schatz. You have the responsibility for the data
housed at the state level. In some instances, you actually
don't have the data at the state level at all. It is not just a
matter of integrating systems and matching up statutory
requirements. In some instances, the states just actually don't
have the information. Isn't that correct?
Mr. Clements. I would have to get back with you. I am not
sure.
Senator Schatz. Commissioner Brise?
Mr. Brise. Thank you very much. Thank you for the
opportunity to address that particular issue.
There are 15 states that have these eligibility databases
currently. And so my state is one of them. So what happens in
that case, someone who wants to participate in the Lifeline
program, they interact with the Department of Children and
Families. That sort of creates information that the carrier can
have access to, and they know that that individual is eligible
to receive the program.
Now, part of the challenge, as you have correctly
identified, is ensuring that these databases talk to a national
database for that to happen. We believe at NARUC that this
issue is ripe for a joint board referral, because that way you
can have the states around the table or at the table to discuss
ways for us to do this effectively in a way that all of the
states can get around and have a process that makes sense and
get it moving much quicker than the FCC moving at it alone.
Senator Schatz. I will just finish with this. It just seems
to me that, as we grapple with the eligibility determination
question and the mechanics of that, which are enormously
difficult, there is just no way that any of that is going to
get settled, as a practical matter, before the FCC moves
forward on broadband.
And my concern is no objection to moving forward on
broadband, but that at a minimum we take the lessons we have
learned from Lifeline for voice and we encourage the FCC to use
those lessons and not repeat those mistakes and find ourselves
8 years from now trying to clean up another mess that I think
we this time could have seen coming.
Thank you, Mr. Chairman.
Senator Wicker. And thank you, Senator Schatz.
We are going to make a dash to the floor to make this
cloture vote.
The hearing record will remain open for 2 weeks. During
this time, Senators are asked to submit any questions for the
record. Upon receipt, the witnesses are requested to submit
their written answers to the Committee as soon as possible.
Thank you very much.
And this concludes the hearing.
[Whereupon, at 10:59 a.m., the hearing was adjourned.]
A P P E N D I X
Response to Written Questions Submitted by Hon. Hon. John Thune to
Commissioner Ronald A. Brise
Question 1. Based on studies submitted by the FCC, the GAO Report
concluded that many low-income households would choose to subscribe to
telephone service even without the subsidy. To reduce waste, fraud, and
abuse in the program and ensure it is working efficiently, would you be
in favor of a rule that limits Lifeline benefits only to consumers who
do not already subscribe to phone service, broadband service, or a pay
TV service?
Answer. NARUC has not taken a position on this issue. Lifeline was
established to help those in need connect to and stay connected to the
phone network. Limiting Lifeline to those who do not already have phone
service or broadband will reduce the number of enrollments but it could
also have other impacts. This issue has both empirical and policy
dimensions. In the end, Federal policy makers, either in Congress or at
the FCC, must balance the anticipated costs and benefits of this
approach and set specific program goals. In Florida, we do collect
information on whether a Lifeline applicant currently has phone
service. On the Florida application for consumers applying for
Medicaid, SNAP, or TANF through Department of Children and Families
(DCF), we ask whether the applicant wants to receive a $9.25 per month
discount on their phone service from the Lifeline Assistance Program if
approved by DCF to receive one of its Lifeline-qualifying programs. If
the applicants answer yes, they are asked if they presently have phone
service and if so, what their phone number is and whose name is on the
bill. They are then asked to choose the name of their telephone
provider from a drop-down menu which appears with the names of all the
Florida ETCs. If an applicant checks that they do not presently have
phone service but want to receive Lifeline Assistance, they are advised
to contact their local provider and sign up for service.
Question 2. Several carriers that entered the Lifeline market in
recent years have chosen to offer free monthly service and handsets to
low-income consumers. This practice raises questions about whether the
program should fully subsidize Lifeline services, particularly when the
size of the Universal Service Fund continues to grow. Should Lifeline
subscribers be required to pay some amount of money in order to be
eligible for the program?
Answer. Historically the Lifeline program was a discount over
residential retail service. Until recently, there was never an
opportunity for free service--only an opportunity for discounted
services.
NARUC has not taken a position on the issue of imposing a minimum
monthly charge and, personally, I have not formed an opinion either. I
was not a member of the Joint Board when the Lifeline Recommended
Decision was released on November 4, 2010. However, in paragraph 79 of
that Recommended Decision, that Federal State Joint Board on Universal
Service noted, in a discussion of prepaid wireless lifeline services,
the following:
In particular, the Joint Board supports the further examination
of those Lifeline offerings that are offered at no cost to the
subscriber. The relevant decisions to expand USF Lifeline
funding to include prepaid wireless Lifeline-only carriers were
made largely by the FCC in the context of various forbearance
and waiver petitions and without advice or consultation from
the Joint Board . . . Our concerns include the implications of
demand for a service or product that is essentially free. When
the Commission last considered the issue of free service for
Lifeline customers, it was determined that the local
residential rate charged to Lifeline-eligible Tribal members
should not fall below a monthly minimum of $1.00, even if the
Lifeline credit exceeded the amount of their bill for local
service. The Commission should develop a record, and determine
whether this requirement for a minimum monthly rate should be
made applicable to all Lifeline subscribers and not just to
eligible Tribal members.'' \1\
---------------------------------------------------------------------------
\1\ In the Matter of Federal State Joint Board on Universal
Service, CC Docket No. 96-45, Lifeline and Linkup, WC Docket No. 03-
109, Recommended Decision (FCC10J-3), rel. November 4, 2010, at
paragraph 79, available online at http://hraunfoss.fcc.gov/
edocs_public/attachmatch/FCC-10J-3A1.doc.
For wireline service, customers also pay what is effectively a
minimum fee--their regular phone bill less the Lifeline discount.
Georgia considered a minimum $5 monthly lifeline charge but ultimately
decided against it. Oklahoma is the only state, to my knowledge, that
requires a monthly minimum charge. Oklahoma established a $1 monthly
minimum charge for Lifeline subscribers as a method to deter duplicate
service. However, now that the national duplicates database is up and
running the monthly minimum charge will be eliminated later this year.
______
Response to Written Questions Submitted by Hon. Joe Manchin to
Commissioner Ronald A. Brise
Question 1. The Lifeline Program, originally created in 1985, can
and should be a targeted means of providing subsidies to those who are
truly in need of assistance, but, first, we must address the rampant
waste, fraud and abuse that made the program a household name.
Question 1a: Do you believe that the enacted reforms to the
Lifeline program are tough enough?
Answer. The reforms instituted by the FCC have reduced waste, fraud
and abuse. Most of those reforms were specifically recommended by the
Federal State USF Joint Board.\1\ In particular, the National Lifeline
Accountability Database (NLAD) has unquestionably had an impact.
However, as both Congress and the FCC consider whether to expand the
program to include broadband service, it certainly would be prudent to
conduct an in-depth evaluation of the impact of the existing safeguards
and consider possible improvements.
---------------------------------------------------------------------------
\1\ In the Matter of Federal State Joint Board on Universal
Service, CC Docket No. 96-45, Lifeline and Linkup, WC Docket No. 03-
109, Recommended Decision (FCC10J-3), rel. November 4, 2010, available
online at: http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-10J-
3A1.doc.
---------------------------------------------------------------------------
In July 2013, after the first round of Lifeline recertifications
following the FCC's reforms, NARUC passed a resolution commending the
FCC for the reforms. However, that resolution also urged the FCC to:
(1) closely examine the recertification process, (2) ``promptly
initiate a collaborative process with the States to develop and
implement a mechanism for States and/or the Universal Service
Administrative Company to efficiently administer determination of
eligibility and recertification for consumers to participate in the
Lifeline program . . . to minimize waste, fraud and abuse, and to learn
from State Lifeline enrollment and recertification processes, databases
and systems,'' \2\ and (3) ensure the NLAD and eligibility databases
are operational by December 2013. While the NLAD is operational, the
national eligibility database is not. The FCC should continue to
utilize the Congressionally-mandated federal-state partnership to
promote efficiency in Federal universal service programs.
---------------------------------------------------------------------------
\2\ NARUC Resolution to Improve Lifeline Annual Recertification
Process, adopted July 24, 2013, online at: http://www.naruc.org/
Resolutions/Resolution%20to%20Improve%20Lifeline%20Ann
ual%20Recertification%20Process.pdf.
---------------------------------------------------------------------------
As pointed out in my testimony, States play a crucial role in
policing the Lifeline program. Several states have indicated that they
use State social service databases to confirm consumer eligibility for
participation in the Lifeline program. Indeed, coordinated action
between NARUC and the States have removed more than 2 million duplicate
subsidies. I commend FCC Commissioner Clyburn for her role in tackling
this issue and seeking vital State input throughout the process. While
it is hard to quantify program savings that are a direct result of
State action, it is safe to say it is in the millions of dollars.
While, other than in our 2013 resolution, NARUC has not taken a
specific position on whether other reforms are needed, Appendix A to my
testimony includes a list of ideas offered by individual NARUC members
and staff that work on Lifeline on a regular basis. The suggestions
have not been considered or endorsed by NARUC or any specific State
commission.\3\ Furthermore, the FCC could refer to the Federal State
Joint Board questions on further reforms to address waste, fraud and
abuse.
---------------------------------------------------------------------------
\3\ In gathering information for this hearing, NARUC asked for
suggestions on reforming the program. NARUC specified that we would not
attribute particular responses to any State or individual. This
anonymity encouraged a broader range of recommendations.
Question 1b. Do you believe that we should cap the program and
establish specific benchmarks to measure programmatic success before we
expand this program that, quite frankly, a lot of people do not have
confidence in?
Answer. NARUC and the States are sensitive to growth in the fund
and the associated contribution factor, but we have not taken a
specific position on whether the program should be capped or be given a
budget. Neither have I personally. On the question of whether specific
benchmarks to measure programmatic success should be established prior
to the program being expanded, NARUC, once again, doesn't have a
specific position. NARUC supports expanding the program to cover
broadband services and we have called for improved oversight and
eligibility verification procedures for the program overall. Measuring
programmatic success seems prudent for any publicly funded program.
______
Response to Written Questions Submitted by Hon. Amy Klobuchar to
Commissioner Ronald A. Brise
Question 1. Commissioner Brise, you mentioned that Florida has a
real-time verification procedure for Lifeline eligibility. Can you
explain how this system works and if this is something that can be
scaled on a national level?
Answer. The Florida Public Service Commission (FPSC) has worked
diligently to streamline the Lifeline enrollment process and to
eliminate the possibility of fraud, waste, and abuse. The Florida
Lifeline Coordinated Enrollment Process is a streamlined, efficient,
and verifiable process consistent with the vision of the FCC. The FCC
has used the Florida Coordinated Enrollment Process as an example in
both the 2012 Lifeline Reform Order (FCC 12-11, Sec. 175), and 2015
Lifeline Second Further Notice of Proposed Rulemaking, Order on
Reconsideration, Second Report and Order, and Memorandum Opinion and
Order (FCC 15-71, Footnote 215). It is the type of process which could
be adapted for national use provided confidentiality requirements are
adhered to. Florida Statutes provide that personal identifying
information of a Lifeline participant must be kept confidential.
Applicants in Florida can enroll in Lifeline by using the FPSC/
Florida Department of Children and Families (DCF) Lifeline Coordinated
Enrollment Process, or the FPSC On-Line Lifeline Coordinated Enrollment
Process for Applicants already Participating in Medicaid, Supplemental
Nutrition Assistance Program (SNAP), or Temporary Assistance to Needy
Families (TANF). Eligible Telecommunications Carriers (ETCs) can
receive real-time verification of applicants participating in the
Medicaid, SNAP, or TANF programs by logging in to the DCF computer
portal.
Florida Public Service Commission (FPSC)/Florida Department of Children
and Families (DCF) Lifeline Coordinated Enrollment Process
A Florida consumer applying for Medicaid, SNAP, or TANF must apply
for the assistance through DCF which is the administrator of those
programs in Florida. Included within DCF's application is a question
asking whether the applicant wants to receive a $9.25 per month
discount on their phone service from the Lifeline Assistance program if
approved by DCF to receive one of its Lifeline-qualifying programs.
If the applicants answer in the affirmative, they are asked if they
presently have phone service and if so, what their phone number is and
whose name is on the bill. They are then asked to choose the name of
their telephone provider from a drop-down menu which appears with the
names of all the Florida ETCs. If an applicant checks that they do not
presently have phone service but want to receive Lifeline Assistance,
they are advised to contact their local provider and sign up for
service.
The application then lists all the attestations and certifications
required in the Lifeline Reform Order, and asks if the residential
address listed on the application is permanent or temporary. The
applicants have to check whether they have read and understand each of
the certifications.
The DCF holds this information until a determination is made as to
whether the applicant gets approved for Medicaid, SNAP, or TANF. Once
an applicant has been approved for one of these programs, and has
indicated they want to participate in the Lifeline program, the DCF
computer automatically sends a message to the FPSC computer indicating
this person has been approved for a Lifeline qualifying program and has
requested Lifeline Assistance.
The FPSC computer automatically queries the DCF message to retrieve
the name of the applicant's ETC provider. The FPSC computer then
generates an automatic message to the appropriate ETC advising them
that it has a Lifeline applicant's information available for retrieval
on the FPSC's confidential website. The only time an ETC receives the
message from the FPSC is when an applicant has been certified that they
participate in Medicaid, SNAP, or TANF. The ETC can only view the
Lifeline applications of applicants who have applied to that specific
ETC through the coordinated enrollment process.
The ETC retrieves the Lifeline applicant's information by logging
in to the confidential FPSC website to download the spreadsheet with
the names, addresses and other information of the applicants. The
spreadsheet indicates whether the application was originated on the DCF
website or the FPSC (see below) website.
By Florida Statute, ETCs have 60 days to place the applicant on
Lifeline. By FPSC rule, the ETC has to apply the Lifeline credit back
to the date of the FPSC e-mail message sent to them advising that an
applicant has been approved for Lifeline.
Florida PSC On-Line Lifeline Coordinated Enrollment Process for
Applicants
Already Participating in Medicaid, SNAP, or TANF
Consumers already participating in Medicaid, SNAP, or TANF can
apply for Lifeline at: https://secure.floridapsc.com/
(S(ui5byg45jksr2efy0c0x0k45))/public/lifeline
/lifelineapplication2.aspx
Lifeline applications on the FPSC website are available in English,
Spanish, and Creole. The applicants provide their name, address,
telephone number, date of birth, and last four digits of their social
security number. They indicate whether their address is permanent or
temporary, and whether they have a different billing address. They
select the name of their provider from a drop-down box listing all
Florida ETCs, and then indicate whether they are participating in
Medicaid, SNAP, or TANF. The application includes all the attestations
and certifications required in the Lifeline Reform Order.
Once the applicant agrees to the terms and conditions at the bottom
of the application and hits the submit button, the FPSC computer
automatically conducts a query in the DCF computer to verify the
applicant is actually participating in the program(s) checked by the
applicant. If the DCF computer response message confirms participation
in a qualifying Lifeline program, the FPSC computer automatically
generates an e-mail to the appropriate ETC that it has a Lifeline
applicant's information available for retrieval on the FPSC
confidential website.
If the DCF computer cannot verify participation in the Lifeline
qualifying program, FPSC staff generates a letter to the applicant
notifying them we could not confirm participation in the Lifeline
qualifying program they checked. We include a hard-copy Lifeline
application with the letter along with a listing of all Florida ETCs
and FPSC staff telephone numbers if assistance is needed.
If the applicant desires to qualify using a Lifeline qualifying
program other than Medicaid, SNAP, or TANF, they are directed to use a
hard-copy Lifeline application which can be downloaded from the FPSC
website. Applicants wishing to qualify using Supplemental Security
Income, Federal Public Housing Assistance, Low-Income Home Energy
Assistance Program, National School Lunch Free Lunch Program, or Bureau
of Indian Affairs Programs can complete this form, and submit it to
their telephone provider along with verification that they are
currently participating in one of these programs. A list of acceptable
documentation is included on the application and can be viewed at:
http://www.floridapsc.com/utilities/telecomm/lifeline/LifelinePDFs/
ApplicationEnglish.pdf.
Real-Time Computer Portal Verification
In 2008, the FPSC and the Florida DCF began working on the concept
of a computer portal which would allow ETCs to verify in real-time
whether Lifeline applicants are enrolled in a DCF qualifying eligible
program (SNAP, TANF, or Medicaid). The ETC enters the first and last
names of the person, the last four digits of their social security
number, and their date of birth.
DCF's computer automatically replies in real-time with information
as to whether that person is or is not participating in a DCF
qualifying Lifeline program (without identifying the program).
Certification and verification can be accomplished using this process
if the applicant, in the case of certification, or an existing Lifeline
customer in the case of verification, participates in the SNAP, TANF,
or Medicaid programs which are administered by the DCF. If a program
other than Food Stamps, TANF, or Medicaid is used for certification,
the provider would have to turn to the agency administering that
program, which could be the Department of Education (free school lunch
program), the Social Security Administration (Supplemental Security
Income), or a county-level agency (Low-Income Home Energy Assistance
Plan). However, FPSC data shows that over ninety percent of applicants
apply using the Lifeline automatic enrollment process since they
qualify for Lifeline via participation in SNAP, TANF, or Medicaid.
As the GAO witness, Michael Clements, stated at the hearing the
data needed to confirm eligibility resides at the State level. About
seventeen States currently utilize their social service databases to
confirm eligibility and about another seven are considering making the
jump. The FCC has realized the difficulty in creating a national
eligibility verification database. Congress and the FCC should be
collaborating with the States to incentivize the use of State
databases. The Federal government can learn much from the States that
utilize their databases, such as Florida. Working with States to
utilize their social service databases to verify eligibility is most
likely the quickest, easiest and least costly way to reach a nearly
universal eligibility verification system. This would be a perfect
issue to refer to the Federal State Joint Board on Universal Service.
Question 2. Commissioner Brise, Mr. Bergman and Ms. Gonzalez, how
would you propose verification for Lifeline eligibility if the program
was expanded to broadband?
Answer. NARUC supports expanding the program to cover broadband
services and we have called for improved eligibility verification
procedures for the program overall. We have not taken a position on
whether the eligibility criteria should be modified when the program is
expanded to include broadband. On eligibility, NARUC adopted a
resolution in 2013 that specifically urged the FCC to ``promptly
initiate a collaborative process with the States to develop and
implement a mechanism for States and/or the Universal Service
Administrative Company to efficiently administer determination of
eligibility and recertification for consumers to participate in the
Lifeline program in an effort to minimize waste, fraud and abuse, and
to learn from State Lifeline enrollment and recertification processes,
databases and systems.'' \4\ The resolution also encouraged the FCC to
ensure the national lifeline accountability database (NLAD or
duplicates data base) and eligibility databases are up and running by
the end of 2013. While the NLAD is up and running the national
eligibility database is still a work in progress. As previously stated,
Congress and the FCC should be incentivizing States to use their
databases to confirm eligibility. NARUC will be considering a policy
resolution at our upcoming Summer Meeting in New York City on ``ETC
Designation for Lifeline Broadband Services.'' The draft resolution
notes that the FCC's Second FNPRM on Lifeline seeks comment on whether
the national designation of ETCs for Broadband Lifeline Service would
be preferable to the state-by-state ETC designation process currently
used for Lifeline Service (see para. 140, pg. 51). Specifically, the
draft resolution would urge the FCC to refrain from disrupting the
existing Federal-State partnership in the provision of Lifeline
Services by preempting the authority of States to designate ETCs for
the provision of advanced telecommunications services. Rather or not
the resolution is adopted, as noted in my testimony at the hearing,
States play an integral role in combating waste, fraud and abuse in the
program. While it is difficult to measure the amount of savings as a
result of collective State policing of the program it is fair to say it
is in the millions. Therefore, it makes little sense to remove States
from their role in administering and policing the program.
---------------------------------------------------------------------------
\4\ NARUC Resolution to Improve Lifeline Annual Recertification
Process, adopted July 24, 2013, online at: http://www.naruc.org/
Resolutions/Resolution%20to%20Improve%20Lifeline%20Ann
ual%20Recertification%20Process.pdf.
---------------------------------------------------------------------------
______
Response to Written Question Submitted by Hon. John Thune to
Michael Clements
Question. Based on studies submitted by the FCC, the GAO Report
concluded that many low-income households would choose to subscribe to
telephone service even without the subsidy. To reduce waste, fraud, and
abuse in the program and ensure it is working efficiently, would you be
in favor of a rule that limits Lifeline benefits only to consumers who
do not already subscribe to phone service, broadband service, or a pay
TV service?
Answer. We did not examine alternative approaches to determine
eligibility, and therefore we have not conducted the work necessary to
recommend a particular approach. The studies we reviewed suggest that
many low-income households would choose to subscribe to telephone
service in the absence of the Lifeline subsidy; this is because
household demand for telephone service--even among low-income
households--is relatively insensitive to changes in the price of the
service and household income. Therefore, we recommended that FCC
conduct a program evaluation to determine the extent to which the
Lifeline program is efficiently and effectively reaching its
performance goals (GAO-15-335). Such an evaluation might reveal that
FCC could reduce the eligible population, while better meeting its dual
goals to increase subscribership and reducing the contribution burden.
Reducing the eligible population might allow FCC to reduce the
contribution burden, increase the reimbursement rate to facilitate
inclusion of broadband, or both, while ensuring that the Lifeline
program meets its performance goals. In June 2015, FCC sought comment
on modifying the way low-income households qualify for Lifeline to, as
it noted, target the program to low-income consumers most in need of
the support.
______
Response to Written Questions Submitted by Hon. Joe Manchin to
Michael Clements
Question 1. The Lifeline Program, originally created in 1985, can
and should be a targeted means of providing subsidies to those who are
truly in need of assistance, but, first, we must address the rampant
waste, fraud and abuse that made the program a household name.
Question 1a. Do you believe that the enacted reforms to the
Lifeline program are tough enough?
Answer. In 2012, FCC adopted a Reform Order that sought to improve
the Lifeline program's internal controls, addressing problems we
identified in 2010 (GAO-11-11). Among the key reforms, FCC implemented
the National Lifeline Accountability Database, which companies query to
verify the applicant is not already receiving Lifeline services, and
initial eligibility verification and annual recertification procedures,
which require companies to verify eligibility at enrollment and
annually through recertification. As we noted, these reform efforts
contributed to declines in enrollment and disbursements (GAO-15-335).
In particular, enrollment declined from 18.1 million in 2012 to 12.4
million in 2014. Thus, FCC's reform efforts appear to have resolved
some problems with duplicate and ineligible enrollment. However, at
this time, we cannot say whether the reforms have eliminated all waste,
fraud, and abuse. We have ongoing work, which we anticipate completing
in fall 2015, assessing the internal controls of the Lifeline program
that could better address this question.
Question 1b. Do you believe that we should cap the program and
establish specific benchmarks to measure programmatic success before we
expand this program that, quite frankly, a lot of people do not have
confidence in?
Answer. We did not examine a program cap, and therefore we have not
conducted the work necessary to answer this question. However, in our
March 2015 report, we noted that many low-income households would
choose to subscribe to telephone service in the absence of the Lifeline
subsidy (GAO-15-335). Thus, we reported that FCC might reduce the
eligible population, while better meeting its dual goals to increase
subscribership and reduce the contribution burden. Regarding benchmarks
for success, on two occasions we have recommended that FCC take action
in this direction. In 2010, we recommended that FCC define performance
goals and develop quantifiable measures for the Lifeline program (GAO-
11-11). FCC subsequently established three outcome-based performance
goals; FCC is working on defining performance measures that it will use
to evaluate progress towards the performance goals. In our March 2015
report, we recommended that FCC conduct a program evaluation to
determine the extent to which the Lifeline program is efficiently and
effectively reaching its performance goals. Such an evaluation could
assist FCC in making changes to improve the design or management of the
program.
______
Response to Written Questions Submitted by Hon. John Thune to
Scott Bergmann
Question 1. Based on studies submitted by the FCC, the GAO Report
concluded that many low-income households would choose to subscribe to
telephone service even without the subsidy. To reduce waste, fraud, and
abuse in the program and ensure it is working efficiently, would you be
in favor of a rule that limits Lifeline benefits only to consumers who
do not already subscribe to phone service, broadband service, or a pay
TV service?
Answer. CTIA supports an efficient and effective Lifeline program
that recognizes all Americans' preference for wireless, including low-
income consumers. For this reason, the FCC's reforms and modifications
to the Lifeline program should ensure wireless remains a choice for low
income consumers.
The wireless industry has a strong incentive to ensure an efficient
Lifeline program because wireless consumers and providers bear 44
percent of the total Federal universal service contribution burden to
support high-cost, E-Rate, rural health and Lifeline programs. Thus,
CTIA continues to encourage the FCC to adopt tools to evaluate the
effectiveness of Lifeline and other Federal USF programs.
CTIA agrees with GAO that better tools to monitor the effectiveness
of the program, including the efficacy of the current eligibility
requirements, would assist in improving program administration. Data
available today show that, in the time since wireless carriers began
providing Lifeline, the gap in telephone penetration between low-income
households and other households has been cut nearly in half, from about
6 percent to about 3 percent. Thus, we believe that the program has
helped consumers without service to obtain much-needed connections.
Consideration of eligibility proposals should also take into
account the challenging economic situation faced by typical Lifeline
consumers. For example, data from a representative wireless ETC found
that the average Lifeline consumer has an annual income of $14,000 and
is about 50 years old, while about a third have some form of
disability. CTIA looks forward to working with Congress and the FCC to
adopt meaningful tools to evaluate the effectiveness of Lifeline,
modify the program as appropriate to maximize its ability to achieve
its goals, and recognize low-income consumer preference for wireless.
Question 2. The FCC recently changed its definition of
``broadband'' to increase it from 10 Mbps to 25 Mbps. I am concerned
about the unintended consequences that the new definition may have for
low-income citizens who benefit from Lifeline. If the FCC moves to
expand Lifeline to broadband, what challenges could the new definition
of broadband pose to Lifeline providers and consumers who participate
in the program?
Answer. CTIA shares your concerns about the unintended consequences
of defining broadband services in ways that may not reflect the
preferences of all Americans, including low-income consumers. For this
reason, the FCC's reforms and modifications to the Lifeline program
should ensure low income consumers can choose wireless to meet their
evolving communications needs.
In its recent Section 706 report, the FCC concluded that it would
treat ``advanced communications capability'' as service providing at
least 25 Mbps down and 3 Mbps up. CTIA believes that this definition
fails to fully capture the significant consumer adoption of mobile
broadband services. Indeed, considering low income consumers alone,
recent data from the Pew Research Center show that low-income
households are twice-as likely to rely on wireless for occupational or
medical communications as higher-income households.
In the universal service context, the FCC defines and support
broadband services at other thresholds. In its recent Lifeline Further
Notice of Proposed Rulemaking, the FCC has asked a number of questions
about how Lifeline broadband services should be defined, including by
looking at the services that are typically offered and subscribed to in
urban areas. CTIA will continue to support universal service broadband
standards that correspond to the offerings that consumers are
purchasing in the marketplace, and are set based on competitively and
technologically neutral standards consistent with the direction
established by Congress in Sec. 254(b).
Question 3. Several carriers that entered the Lifeline market in
recent years have chosen to offer free monthly service and handsets to
low-income consumers. This practice raises questions about whether the
program should fully subsidize Lifeline services, particularly when the
size of the Universal Service Fund continues to grow. Should Lifeline
subscribers be required to pay some amount of money in order to be
eligible for the program?
Answer. CTIA supports an efficient and effective Lifeline program
that recognizes low-income consumer preferences for wireless. Wireless
participation in the Lifeline program has brought competition and
innovative service offerings to low income consumers. Wireless has
continuously added services, including increasing voice and text, while
operating under a consistent subsidy level. For this reason, the FCC's
reforms and modifications to the Lifeline program should ensure
wireless remains a choice for low income consumers.
CTIA also supports an efficient and effective Lifeline program that
deters waste, fraud and abuse. The wireless industry has a strong
incentive to ensure an efficient Lifeline program because wireless
consumers and providers bear 44 percent of the total Federal universal
service contribution burden to support high-cost, E-Rate, rural health
and Lifeline programs. CTIA believes that the best way to ensure that
only eligible consumers participate in the program is for the
Commission to act on its 2012 commitment to provide an automated
mechanism for determining customer eligibility. CTIA is pleased that
the Commission has sought comment on this issue in its June 2015
Lifeline Notice of Proposed Rulemaking.
With respect to a minimum charge or co-payment, we remain concerned
about the consequences of limiting eligibility in Lifeline to low-
income consumers who can pay a minimum charge. Minimum payments present
unique logistical issues for low-income consumers who are less likely
to have credit cards or even bank accounts to facilitate a payment.
CTIA will continue to work with the Commission and other stakeholders
to adopt meaningful tools to evaluate the effectiveness of Lifeline,
modify the program as appropriate to maximize its ability to achieve
its goals, and recognize low-income consumer preference for wireless.
______
Response to Written Questions Submitted by Hon. Roger F. Wicker to
Scott Bergmann
Question 1. Mr. Bergmann, would expanding the Lifeline program to
include broadband be likely to increase the size of the funding
requirements associated with Lifeline? Commissioner O'Rielly has
suggested that it is time to consider a cap on the size of the Lifeline
program. Why shouldn't the Lifeline program be subject to a cap in the
way that other portions of the USF program are?
Answer. To evaluate the impact of the FCC's proposed changes to the
program, it will be important to consider the services supported, the
scope of eligible consumers, and the subsidy amount proposed. We
appreciate your question because the wireless industry has a strong
incentive to ensure an efficient and effective Lifeline program that
minimizes the contribution burden on consumers. Wireless consumers and
providers bear 44 percent of the total Federal universal service
contribution burden to support high-cost, E-Rate, rural health and
Lifeline program. CTIA looks forward to working with Congress and the
FCC to carefully evaluate the impact of the proposed expansion of the
program, and to continue recognize low-income consumer preference for
mobile wireless services.
While CTIA supports an efficient and effective Lifeline program, we
remain concerned about establishing a cap on Lifeline that may
inadvertently limit low-income consumer participation. Lifeline is
different from other universal service programs that the FCC
administers, such as high-cost, because it is means-tested and directed
to the individual consumer. In the recent Further Notice of Proposed
Rulemaking on Lifeline reform, the FCC seeks comment on issues that
could arise if the program were to be capped. For example, the FCC asks
how it would determine which consumers would be kept out of the program
if a cap was reached or whether the FCC should reduce the support
amount if more eligible consumers entered the program, and if so, how
low-income consumers could budget from month to month. Particularly
given the profile of the typical Lifeline consumer--data from a
representative wireless ETC found that the average Lifeline consumer
has an annual income of $14,000 and is about 50 years old, while about
a third have some form of disability--implementation of a cap presents
a difficult challenge.
CTIA looks forward to working with Congress and the FCC to adopt
meaningful tools to evaluate the effectiveness of Lifeline, modify the
program as appropriate to maximize its ability to achieve its goals,
and recognize low-income consumer preference for wireless.
Question 2. Mr. Bergmann, What impact does the FCC's recent move to
classify mobile broadband as Title II have on wireless ability to meet
consumer demand?
Answer. CTIA is concerned that the FCC's Open Internet Order will
add regulatory burdens and uncertainty that will harm low income
consumers and create barriers to low income adoption. The FCC's Open
Internet decision was unnecessary because mobile consumers already have
access to an open mobile Internet and a world-leading mobile broadband
ecosystem. The Commission's decision to apply burdensome rules and
monopoly-era Title II common carrier regulation to mobile broadband
will only chill investment and innovation and increase costs for
consumers.
As an example, consumers today can choose from over 700 different
service offerings with varying levels of usage and price which is why
no one is surprised that more than 44 percent of households are
``cutting the cord'' for wireless, including an even greater percentage
of low-income households. However, the FCC's unwillingness to recognize
the benefits of pro-consumer offerings based on a set allowance of data
or new innovative offerings like zero rating may inhibit the
development of services that would enable more consumers, including
low-income Americans, to adopt mobile broadband services. Mobile
wireless data allowances appropriately distribute the cost of service
among consumers by limiting subsidies to heavy mobile data users. Zero
rating enables service providers and application developers to incubate
competitive services by offering innovative content (e.g., music,
games, or video) at little or no charge to consumers. Experimentation
and differentiation with service offerings to reach low-income
consumers is what we need to address the Lifeline challenge.
Unfortunately, the FCC's approach to net neutrality runs directly
counter to this principle and may lead to a one-size-fits-all Internet
that will fail to meet the needs of low-income consumers.
Instead of promoting greater industry investment and innovation,
the FCC opted to resuscitate a command-and-control regulatory regime,
including a process where innovators may be forced to first seek
permission from the FCC before rolling out new services. The FCC's
decision ignores substantial evidence demonstrating that the
competitive, constantly innovating mobile broadband industry provides
Americans with faster networks, a wide variety of devices, and an array
of service plans designed to meet the needs of high and low income
consumers. CTIA is hopeful that the courts will recognize the error in
the Commission's order. In the meantime, CTIA looks forward to working
with Congress to preserve an open Internet, end the substantial
uncertainty around the FCC's order, and ensure America's wireless
industry has the flexibility to develop and offer innovative service
offerings that will incent low income consumers to adopt broadband.
Question 3. Mr. Bergmann, are wireless companies concerned about
the overall Universal Service Fund burden on your consumers? Do you
favor shifting funds from other USF programs to fund Lifeline?
Answer. As noted in our response to Question 1, wireless consumers
and providers bear 44 percent of the total Federal universal service
contribution burden to support high-cost, E-Rate, rural health and
Lifeline program. To reduce the overall universal service burden, CTIA
has advocated for tools to evaluate the effectiveness and efficiency of
all of the universal service programs.
CTIA recognizes that Congress established multiple universal
service programs to meet specific objectives. As each of these programs
evolves to meet new communications needs, we encourage Congress to take
an active role in making sure that these programs work efficiently,
individually and collectively, to achieve the broad goals of increasing
connectivity. For example, the FCC currently provides the largest
single share of universal service support, which is nearly four times
the amount of support for Lifeline, to wireline companies serving rural
areas. As the FCC and Congress evaluate the overlap and relationship
between these programs, CTIA urges policymakers to continue to
recognize consumer preference for mobile wireless services.
______
Response to Written Questions Submitted by Hon. Joe Manchin to
Scott Bergmann
Question 1. The Lifeline Program, originally created in 1985, can
and should be a targeted means of providing subsidies to those who are
truly in need of assistance, but, first, we must address the rampant
waste, fraud and abuse that made the program a household name.
Question 1a. Do you believe that the enacted reforms to the
Lifeline program are tough enough?
Answer. CTIA supports an efficient and effective Lifeline program
that recognizes low-income consumer preferences for wireless. The
wireless industry has a strong incentive to ensure an efficient
Lifeline program because wireless consumers and providers bear 44
percent of the total Federal universal service contribution burden to
support high-cost, E-Rate, rural health and Lifeline programs. The
contribution burden on wireless consumers and providers has increased
as almost half of all U.S. households have ``cut the cord'' for
wireless which will continue to grow as consumers take advantage of the
value that competitive wireless services offer.
The Commission made significant strides in reducing waste, fraud,
and abuse through its 2012 Lifeline Reform Order and subsequent
implementation efforts. CTIA supports those efforts, though there is
more to be done. CTIA continues to support the Commission's 2012
commitment to provide an automated mechanism for determining customer
eligibility. This key reform, which would better align eligibility
decisions with the government agencies that administer underlying
benefit programs, is particularly important as the Commission
contemplates expanding the Lifeline program. CTIA is pleased that the
Commission has sought comment on this issue in its June 2015 Lifeline
Notice of Proposed Rulemaking, and CTIA will continue to work with the
Commission and other stakeholders towards a solution that ensures that
only eligible consumers receive Lifeline benefits. In addition, CTIA
continues to encourage the FCC to adopt tools to evaluate the
effectiveness of Lifeline and other Federal USF programs.
Question 1b. Do you believe that we should cap the program and
establish specific benchmarks to measure programmatic success before we
expand this program that, quite frankly, a lot of people do not have
confidence in?
Answer. CTIA and our member companies support an efficient and
effective Lifeline program. We agree that specific benchmarks to
measure programmatic success should be developed. CTIA looks forward to
working with Congress and the FCC to adopt meaningful tools to evaluate
the effectiveness of Lifeline, strengthen program administration, and
recognize low-income consumer preference for mobile wireless services.
In the recent Further Notice of Proposed Rulemaking on Lifeline
reform, the FCC seeks comment on issues that could arise if the program
were to be capped. We should carefully consider whether a cap is
appropriate for the Lifeline program. Lifeline is different from other
universal service programs that the FCC administers, such as high-cost,
because it is means-tested and the benefits flow directly to individual
consumers. In addition, The FCC asks how it would determine which
consumers would be kept out of the program if a cap was reached or
whether the FCC should reduce the support amount if more eligible
consumers entered the program, and if so, how low-income consumers
could budget from month to month. Particularly given the profile of the
typical Lifeline consumer--data from a representative wireless ETC show
that the average Lifeline consumer has an annual income of $14,000 and
is about 50 years old, while about a third have some form of
disability--implementation of a cap presents a difficult challenge. For
these reasons, CTIA is concerned that establishing a cap on Lifeline
may limit low-income consumer participation and we believe that other
reforms can ensure an efficient and effective Lifeline program.
______
Response to Written Question Submitted by Hon. Amy Klobuchar to
Scott Bergmann
Question. Commissioner Brise, Mr. Bergmann and Ms. Gonzalez, how
would you propose verification for Lifeline eligibility if the program
was expanded to broadband?
Answer. CTIA continues to support the Commission's 2012 commitment
to provide an automated mechanism for determining customer eligibility.
This key reform, which would better align eligibility decisions with
the government agencies that administer underlying benefit programs, is
particularly important as the Commission contemplates expanding the
Lifeline program. CTIA is pleased that the Commission has sought
comment on this issue in its June 2015 Lifeline Notice of Proposed
Rulemaking, and CTIA will continue to work with the Commission and
other stakeholders towards a solution that ensures that only eligible
consumers receive Lifeline benefits.
______
Response to Written Questions Submitted by Hon. John Thune to
Randolph J. May
Question 1. Based on studies submitted by the FCC, the GAO Report
concluded that many low-income households would choose to subscribe to
telephone service even without the subsidy. To reduce waste, fraud, and
abuse in the program and ensure it is working efficiently, would you be
in favor of a rule that limits Lifeline benefits only to consumers who
do not already subscribe to phone service, broadband service, or a pay
TV service?
Answer. While such a restriction has some appeal as a matter of
policy, consistent with the idea that Lifeline service should be a
``safety net,'' implementation of such a rule may be problematical in
certain respects. For example, although it may be easy to require a
subscriber certification to the effect that phone, broadband, or pay TV
subscriptions do not already exist, in today's environment, with
multiple providers for each of these services, and variations on the
level and quality of the services, actual verification would not
necessarily be easy absent a specific delineation of the services. It
would be necessary for this purpose to define with some specificity the
level of service already subscribed to that would be disqualifying for
subsidy eligibility.
Question 2. The FCC recently changed its definition of
``broadband'' to increase it from 10 Mbps to 25 Mbps. I am concerned
about the unintended consequences that the new definition may have for
low-income citizens who benefit from Lifeline. If the FCC moves to
expand Lifeline to broadband, what challenges could the new definition
of broadband pose to Lifeline providers and consumers who participate
in the program?
Answer. In my prepared written testimony at footnote 12, I noted
the FCC's recent ratcheting up of the definition of broadband to 25
Mbps from 10 Mbps. I stated that, ``[o]bviously, providing `broadband'
service at higher speeds is more costly.'' And, I said: ``[I]t is
unlikely the proponents of expansion of Lifeline to include broadband
will be receptive to providing a level of service the Commission has
deemed not to be `broadband.' '' Indeed, Gigi Sohn, counselor to FCC
Chairman TomWheeler, recently stated at a fiber-to-the-home conference
that 25 Mbps represented a ``snail's pace'' for broadband. So, if the
Commission were to expand the program to include broadband, the
challenge posed by the FCC's recent definitional change is that the
Lifeline program necessarily would become even more costly than it
otherwise would be absent such definitional change. Many broadband
providers offer tiered levels of service so that the price increases as
bandwidth availability increases, demonstrating that the cost of
providing service increases with bandwidth speed. It is almost certain
there will be ongoing efforts, at least with the current composition of
the FCC, to continue to ratchet up the definition of broadband service
so that it encompasses speeds far beyond 25 Mbps, thereby increasing
the amount of the subsidy.
Question 3. Several carriers that entered the Lifeline market in
recent years have chosen to offer free monthly service and handsets to
low-income consumers. This practice raises questions about whether the
program should fully subsidize Lifeline services, particularly when the
size of the Universal Service Fund continues to grow. Should Lifeline
subscribers be required to pay some amount of money in order to be
eligible for the program?
Answer. In light of the expansion of the Lifeline fund in recent
years, I understand why some call for initiation of some form of ``co-
pay'' requirement on the theory that recipients should have ``some skin
in the game.'' But I would prefer avoiding imposition of such
requirement, at least for now, as long as other reforms aimed at
curbing fraud or abuse are implemented and given a chance to work.
While, as GAO has reported, there undoubtedly are many (perhaps even
most) recipients of Lifeline subsidies who would subscribe to phone
service absent receiving ``free'' service, there surely are other
eligible low-income persons who may decide not to do so after taking
into account various other needs, such as for food, transportation,
clothing, or the like. For those low-income persons who are truly in
need of a ``safety net,'' and who prove their eligibility, it is
preferable that they not be forced to choose among basic needs. This
assumes that the benefit remains at a level consistent with the notion
of a ``safety net.''
______
Response to Written Question Submitted by Hon. Roger F. Wicker to
Randolph J. May
Question. Mr. May, you state in your testimony that you do not
``favor Lifeline eligibility criteria that provide subsidies to those
persons whose income places them above the federally-defined poverty
level, or at least much above the poverty level.'' Do you favor
tightening the eligibility criteria for Lifeline in some way to ensure
that the program serves those people who need it the most? For example,
eliminating categorical eligibility based on enrollment in programs
such as Food Stamps or SSI, or changing the income eligibility criteria
to make Lifeline available to only those persons who are at the
federally-defined poverty level?
Answer. Yes, I do have a concern about tying eligibility for the
Lifeline program to other Federal programs whose eligibility
requirements are above the federally-defined poverty level. The reason
is that if the eligibility level increases much above the defined
poverty level, the program becomes more than a ``safety net'' program.
While I would not object per se to tying the Lifeline benefit to some
other benefit program, I would prefer that such program to be
administered to benefit those at, or at least close to, the federally-
defined poverty level. That way Lifeline remains a true ``safety net,''
not a program that benefits those further up the income scale.
______
Response to Written Questions Submitted by Hon. Hon. Joe Manchin to
Randolph J. May
Question 1. The Lifeline Program, originally created in 1985, can
and should be a targeted means of providing subsidies to those who are
truly in need of assistance, but, first, we must address the rampant
waste, fraud and abuse that made the program a household name.
Question 1a. Do you believe that the enacted reforms to the
Lifeline program are tough enough?
Answer. No, the reforms adopted thus far are not sufficient. In my
prepared testimony, I suggested additional reforms that should be
considered and implemented, such as a record retention requirement
applicable to the service providers and a possible prohibition on in-
person distribution of ``free'' phones at other than established retail
outlets.
Question 1b. Do you believe that we should cap the program and
establish specific benchmarks to measure programmatic success before we
expand this program that, quite frankly, a lot of people do not have
confidence in?
Answer. I am concerned about expansion of the Lifeline program to
include broadband before additional reforms to curb fraud and abuse are
implemented and shown to be effective. If the reforms are adopted and
prove to be effective, in considering whether to expand the program to
include broadband subscription subsidies, I would favor adoption of a
projected budget for the program, as distinct from a inviolable hard
cap with an automatic shut-off. The budget will be dependent on
variables, such as defining the level of broadband services that
qualify for support, defining the level of support per eligible
recipient, projecting demand based on eligibility, and so forth. So,
while a budget could be adopted for a specified period to aid in
formulating the parameters of the program so it that remains fiscally
responsible, I would prefer avoiding imposition of a hard cap that, per
se, would require cutting off subsidies to those that otherwise meet
eligibility requirements. For example, in the event of a severe
economic downturn, which is not necessarily predictable, there may be
more persons who qualify to receive subsidies than projected when
formulating the budget. In my view, these persons should not be denied
Lifeline service because a hard ``cap'' has been reached. This does not
mean, of course, that the parameters of the program should not be
constantly evaluated and adjusted to ensure that it is operated in a
fiscally responsible manner. After all, all USF subsidies, whether for
Lifeline or otherwise, are paid for by consumers--presently all users
of interstate telecommunications services.
______
Response to Written Question Submitted by Hon. John Thune to
Jessica J. Gonzalez
Question. Based on studies submitted by the FCC, the GAO Report
concluded that many low-income households would choose to subscribe to
telephone service even without the subsidy. To reduce waste, fraud, and
abuse in the program and ensure it is working efficiently, would you be
in favor of a rule that limits Lifeline benefits only to consumers who
do not already subscribe to phone service, broadband service, or a pay
TV service?
Answer. I would not be in favor of the contemplated rule because I
do not believe that such a rigid economic analysis fully captures the
impact of the subsidy on low-income families. Many feel that access to
communications services is a necessity and acquiring such services
should be highly prioritized. For families that would otherwise qualify
for Lifeline, taking on a bill for a communications services
necessarily comes at the expense of other important needs, such as
food, healthcare costs, clothing, school supplies, and any number of
other things that so many take for granted. It does not suggest that
providing these households with a modest subsidy is a poor use of
funds.
To demonstrate the plight of many low-income families, the Economic
Policy Institute (EPI) provides a useful tool to calculate estimated
family budgets in a variety of geographic regions.\1\ EPI's estimated
budgets measure community-specific costs to determine how much income a
family needs to attain ``a secure yet modest'' standard of living.
---------------------------------------------------------------------------
\1\ Family Budget Calculator, Economic Policy Institute, http://
www.epi.org/resources/budget/.
---------------------------------------------------------------------------
In Rapid City, South Dakota, just 2 hours west of the Chairman's
hometown of Murdo, EPI estimates that a family of 3 (2 parents, 1
child) needs to earn nearly $54,000 per year in order to cover housing,
food, child care, transportation, healthcare, taxes, and other
necessities. However, a family of 3 living at 135 percent of the
Federal poverty guideline, and therefore eligible to receive Lifeline
support, would earn slightly more than $27,000 per year--about half of
what it actually needs to cover expenses.\2\ While a family living in
these circumstances may prioritize access to communications in its
budget, perhaps due to a desire to be able to contact 911 in an
emergency, remain in touch with a child's school, or communicate with
healthcare professionals, it is clear that such prioritization would
have to come at the expense of other needs.
---------------------------------------------------------------------------
\2\ 2015 Federal Poverty Guidelines--135 percent, Universal Service
Administrative Company, http://www.usac.org/_res/documents/li/pdf/
handouts/Income_Requirements.pdf.
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For some families, this difficult balancing act can ultimately
prove unsustainable, particularly when it comes to being able to afford
a high-speed Internet access connection. Households that have had to
cancel Internet access service overwhelmingly cite cost as the main
reason why (43 percent cite cost vs. 21 percent citing loss of need or
relevance).\3\ Smartphone users tell a similar story, with 44 percent
of people making less than $30,000 per year reporting that they have
had to cancel or suspend service due to the financial burden.\4\ It is
important to note that these are precisely the people that the
contemplated rule would exclude from Lifeline, even though they are
ultimately unable to afford service. Perhaps it should not be a
surprise that the adoption rate for people making less than $25,000
dropped slightly between 2012 and 2013, from 48 percent to 47.2
percent.\5\
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\3\ Dep't of Commerce, Nat'l Telecomm. & Info. Admin., Exploring
the Digital Nation: Embracing the Mobile Internet (Oct. 2014),
available at http://www.ntia.doc.gov/files/ntia/publications/
exploring_the_digital_nation_embracing_the_mobile_internet_10162014.pdf.
\4\ Aaron Smith, ``U.S. Smartphone Use in 2015,'' Pew Research
Center (April 1, 2015), available at http://www.pewinternet.org/2015/
04/01/us-smartphone-use-in-2015/.
\5\ Computer and Internet Use in the United States: 2013, American
Community Survey Reports at 3 (Nov. 2014), available at http://
www.census.gov/history/pdf/2013computeruse.pdf (reporting based on 2013
Census data that 47.2 percent of households earning less than $25,000
have high speed Internet access at home, down from 48 percent in 2012).
---------------------------------------------------------------------------
In light of the information shared above, it is my contention that
Lifeline is helping to meet our statutory Universal Service goals
regardless of whether or not a struggling family would choose to
subscribe to a communications service without the subsidy.
______
Response to Written Questions Submitted by Hon. Joe Manchin to
Jessica J. Gonzalez
Question 1. The Lifeline Program, originally created in 1985, can
and should be a targeted means of providing subsidies to those who are
truly in need of assistance, but, first, we must address the rampant
waste, fraud and abuse that made the program a household name.
Question 1a. Do you believe that the enacted reforms to the
Lifeline program are tough enough?
Answer. I believe that the FCC's enacted reforms, along with
aggressive enforcement actions, have gone a long way towards ridding
Lifeline of instances of waste, fraud, and abuse. In fact, there is
some evidence to suggest that the FCC's recent reforms may have placed
too great a burden on some subscribers who would otherwise be eligible
to receive the benefit.
According to the testimony offered by Michael Clements of the
Government Accountability Office at this hearing, of the eleven reforms
contained in the FCC's 2012 reform order, eight have already been
implemented.\1\ These tough reforms included a clarification of the
one-per-household rule, audit requirements for a number of providers,
ensuring that payments are based on actual support, establishing a
uniform floor of eligibility criteria, automatic de-enrollment for
subscribers not using the service, elimination of Link-Up support on
non-tribal lands, an annual recertification procedure for all
subscribers, and the creation of the National Lifeline Accountability
Database. Of the three reforms that the FCC is still considering, only
one directly addresses program integrity--the creation of an automatic
eligibility verification procedure.
---------------------------------------------------------------------------
\1\ Testimony of Michael Clements, Acting Director, Physical
Infrastructure Issues, Government Accountability Office (June 2, 2015),
available at http://www.gao.gov/assets/680/670687.pdf.
---------------------------------------------------------------------------
The FCC's reforms, along with our improving economy, have greatly
reduced the size of Lifeline in recent years. According to Commissioner
Clyburn, the reforms ``have saved the fund over $2.75 billion, put the
program on a sounder footing, eliminated duplicates and, according to
reports since our reform, Lifeline has better efficiency indices when
it comes to waste and fraud prevention, than most of our other
universal service or Telecommunications Relay Service programs.'' \2\
Indeed, the overall size of the program has declined by about 25
percent since 2012, and continues to shrink.\3\
---------------------------------------------------------------------------
\2\ Statement of Commissioner Mignon Clyburn, Federal
Communications Commission, Lifeline Modernization Notice of Proposed
Rulemaking (rel. June 22, 2015), available at http://
transition.fcc.gov/Daily_Releases/Daily_Business/2015/db0622/FCC-15-
71A3.pdf.
\3\ 2014 Annual Report, Universal Service Administrative Company,
http://www.usac.org/_res/documents/about/pdf/annual-reports/usac-
annual-report-2014.pdf.
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However, I must point out that not all of these savings are
indicative of waste, fraud, and abuse. Evidence suggests that a number
of subscribers who no longer utilize Lifeline may have simply failed to
comply with new and unfamiliar annual requirements to submit
eligibility paperwork. As Commissioner Clyburn noted in a response to
an inquiry from Senator Jeff Sessions shortly after many of the 2012
reforms were implemented:
``Based on the results of the 2012 Lifeline recertification
process, approximately one-third of all subscribers that were
enrolled in the program in June 2012 were de-enrolled for
failure to recertify their eligibility. Approximately 0.5
percent of all subscribers subject to recertification responded
that they were no longer eligible. Just under 4 percent of the
total subscribers subject to recertification were determined to
be ineligible via a state administrator or an ETC accessing a
state eligibility database. The remaining consumers were de-
enrolled for failure to respond to the recertification
attempts. Subscribers in this last group are not necessarily
ineligible for service; some may have simply failed to
recertify or decided they no longer wanted the benefit.'' \4\
(emphasis added)
---------------------------------------------------------------------------
\4\ Letter from Acting Chairwoman Mignon Clyburn to Senator Jeff
Sessions (Sept. 27, 2013), available at http://www.budget.senate.gov/
republican/public/index.cfm/files/serve?File_id=10
178adb-99c4-4866-9265-a05870eff559.
Moreover, since the 2012 reforms, FCC Chairman Wheeler has
developed a USF strike force to stop fraud and abuse. The FCC, through
enforcement actions, has proposed more than $90 million in fines
against companies for violating rules. Additionally, FCC consent
decrees have recovered $600,000 in payments to the U.S. Treasury and
more than $400,000 in repayments to the Universal Service Fund (USF).
Further, the FCC has issued citations to more than 300 Lifeline
customers with duplicative subscriptions.\5\
---------------------------------------------------------------------------
\5\ See Press Release, Federal Communications Commission, ``FCC
Proposes Nearly $44 Million In Fines Against 3 Lifeline Providers,
Brings Total Proposed Lifeline Fines to $90 Million in Past Three
Months'' (Dec. 11, 2013), available at https://apps.fcc.gov/
edocs_public/attach
match/DOC-9324620A1.pdf.
---------------------------------------------------------------------------
While I believe that a many government initiatives, including
Lifeline, can be continually improved, and NHMC intends to fully
participate in upcoming efforts to modernize Lifeline, the reforms that
have been enacted have gone a very long way towards making sure that
Lifeline is free of excessive waste, fraud, and abuse and ready to meet
the needs of the 21st century.
Question 1b. Do you believe that we should cap the program and
establish specific benchmarks to measure programmatic success before we
expand this program that, quite frankly, a lot of people do not have
confidence in?
Answer. I do not believe that it would be appropriate to cap
Lifeline at a level that would require service to be denied to
households that would otherwise be eligible.
Lifeline was developed in furtherance of the FCC's statutorily
defined goals to achieve ``universal'' service in this country and
ensure that all Americans, including the poor, have access to
affordable communications services. I believe that any cap on Lifeline
that prevents an eligible household that requests the benefit from
receiving it would frustrate our country's universal service goals.
At the FCC, proponents of a cap on Lifeline have suggested capping
it its current size--$1.6 billion.\6\ I think that would be a
disastrous mistake. By all accounts, Lifeline is a severely
underutilized program. Some estimates indicate that only a quarter to a
third of eligible households currently subscribe to Lifeline. Capping
the program at a level that would exclude so many potentially eligible
households would be unwise.
---------------------------------------------------------------------------
\6\ See Statement of Commissioner Michael O'Rielly, Federal
Communications Commission, Lifeline Modernization Notice of Proposed
Rulemaking (rel. June 22, 2015), available at http://
transition.fcc.gov/Daily_Releases/Daily_Business/2015/db0622/FCC-15-
71A6.pdf.
---------------------------------------------------------------------------
I continue to believe that the best way to constrain the size of
this program is to redouble our efforts at reducing the number of
families living in poverty in this country. Given that the program's
eligibility is tied to income or participation in other government
benefit programs, the program will naturally decrease in size as people
get back on their feet. If we are able to help families get out of
poverty, they will no longer be eligible for Lifeline.
______
Response to Written Questions Submitted by Hon. Amy Klobuchar to
Jessica J. Gonzalez
Question 1. Access to the Internet through reliable broadband
connections is critical for our students to achieve success. FCC
Commissioner Rosenworcel has talked about the need to address the
``homework gap,'' which occurs when kids are not able to complete
homework assignments because they do not have Internet access.
Question 1a. Ms. Gonzalez, do you think that expanding the Lifeline
program to broadband will help bridge this gap?
Answer. I agree with Commissioner Rosenworcel that the ``homework
gap'' is one of the cruelest parts of the digital divide. Simply put,
students who find themselves on the wrong side of the ``homework gap''
are being denied access to an education. Completing basic tasks that we
expect from our students, like completing a homework assignment or
researching a term paper, are rendered extraordinarily difficult, if
not impossible, for students who lack access to the Internet at home.
Taking advantage of next-generation educational tools like online
tutoring or accessing any number of supplemental learning materials is
often out of reach for these students. Lifeline has the potential to
help alleviate this problem.
The data that reveals the ``homework gap'' is truly startling.
Seven in ten teachers assign homework that requires broadband access
yet one in three households do not subscribe to broadband services.\1\
Five million households with school-aged children are falling into this
gap.\2\ A recent survey by the Hispanic Heritage Foundation and the
Family Online Safety Institute revealed that nearly 100 percent of high
school students report being required to access the Internet to
complete homework assignments outside of school.\3\ Nearly 50 percent
reported that they have been unable to complete a homework assignment
because they did not have access to the Internet or a computer, and 42
percent say they received a lower grade on an assignment because of
lack of Internet access.\4\ Pew research shows that half of teachers in
low-income communities say their students' lack of home broadband
access has been a barrier to integrating technology into their
lessons.\5\
---------------------------------------------------------------------------
\1\ Remarks of Commissioner Jessica Rosenworcel, Taking the Pulse
of the High School Student Experience in America, Hispanic Heritage
Foundation, Washington, DC (April 29, 2015), available at https://
apps.fcc.gov/edocs_public/attachmatch/DOC-333274A1.pdf (``Remarks of
Comr. Rosenworcel'').
\2\ Id.
\3\ Hispanic Heritage Foundation and Family Online Safety
Institute, Taking the Pulse of the High School Student Experience in
America (April 28, 2015), available at http://www.hispa
nicheritage.org/hispanic-heritage-foundation-mycollegeoptions-family-
online-safety-institute-and-other-partners-announce-findings-of-new-
study-titled-taking-the-pulse-of-the-high-school-student-experience/.
\4\ Id.
\5\ Remarks of Comr. Rosenworcel.
---------------------------------------------------------------------------
According to Pew, ``Low-income households--and especially black and
Hispanic ones--make up a disproportionate share'' of the five million
households that find themselves on the wrong side of the ``homework
gap.'' \6\ Indeed, nearly 40 percent of households with school-aged
children that earn less than $25,000 per year lack broadband at
home.\7\ For these families, being unable to afford a broadband
connection is a major barrier to adoption.
---------------------------------------------------------------------------
\6\ John B. Horrigan, ``The numbers behind the broadband `homework
gap,' '' Pew Research Center Fact Tank (April 20, 2015) available at
http://www.pewresearch.org/fact-tank/2015/04/20/the-numbers-behind-the-
broadband-homework-gap/.
\7\ Id.
---------------------------------------------------------------------------
Based on conversations that I have had with a friend who teaches
fourth grade in a very poor Los Angeles suburb, in many classrooms
across this country, far more than 40 percent of the students may lack
broadband at home. A family of three (two parents, one child) earning
less than $25,000 per year would be eligible to receive Lifeline
support based on income as it would fall below 135 percent of the
Federal poverty guidelines.\8\ While we clearly have a long way to go
towards making sure that all of our students have the opportunity to
succeed, helping make essential educational tools, like Internet
access, more affordable is certainly the least that we can do. Lifeline
is ready to help and is targeted to the families that need it the most.
---------------------------------------------------------------------------
\8\ 2015 Federal Poverty Guidelines--135 percent, Universal Service
Administrative Company, http://www.usac.org/_res/documents/li/pdf/
handouts/Income_Requirements.pdf.
Question 1b. Do you think that the lack of affordable broadband
access impacts our national shortage of workers educated in STEM
fields?
Answer. Yes, I do. Beyond STEM fields, if not remedied, lack of
affordable broadband access may weaken our national workforce as a
whole and make it difficult to fill even positions that we do not
typically consider needing technical knowledge.
To demonstrate our national challenge with boosting our STEM
workforce, and the potential role that low broadband adoption rates
could play, one needs to look no further than the Latino community.
Latinos are among the fastest growing segments of our population and
workforce and are expected to comprise 29 percent of the population by
2060.\9\ However, Latinos are currently among the least likely to have
home broadband, with nearly half of Latinos lacking a home
connection,\10\ and the most likely to cite cost as the primary barrier
to adoption.\11\ As a practical matter, it is exceedingly difficult for
a student with and interest in pursuing a STEM career to act on that
interest without access to a computer connected to broadband at home.
---------------------------------------------------------------------------
\9\ Sandra L. Colby and Jennifer M. Ortman, ``Projections of the
Size and Composition of the U.S. Population: 2014 to 2060,'' U.S.
Census Bureau (Mar. 2015), available at http://www.census.gov/content/
dam/Census/library/publications/2015/demo/p25-1143.pdf.
\10\ Aaron Smith and Kathryn Zickuhr, Home Broadband 2013: Trends
and demographic differences in home broadband adoption, Pew Research
Center (Aug. 26, 2013), available at http://www.pewinternet.org/2013/
08/26/home-broadband-2013/.
\11\ Dep't of Commerce, Nat'l Telecomm. & Info. Admin., Exploring
the Digital Nation: Embracing the Mobile Internet at 15 (Oct. 2014),
available at http://www.ntia.doc.gov/files/ntia/publications/
exploring_the_digital_nation_embracing_the_mobile_internet_10162014.pdf.
---------------------------------------------------------------------------
Given this reality, it is not surprising that Latinos are vastly
underrepresented in the STEM workforce. Latinos held only 7 percent of
the STEM jobs in 2011.\12\ Without action to ensure that more Latinos,
and other underrepresented groups, are able to engage in this important
field, our ability to compete globally as a country could be severely
diminished.
---------------------------------------------------------------------------
\12\ Liana Christin Landivar, ``Disparities in STEM Employment by
Sex, Race, and Hispanic Origin,'' U.S. Census Bureau (Sept. 2013),
available at https://www.census.gov/prod/2013pubs/acs-24.pdf.
---------------------------------------------------------------------------
However, we risk jeopardizing more than STEM jobs if we are unable
to help more Americans connect to broadband. By the end of the decade,
nearly 77 percent of jobs will require some level of digital
skills.\13\ We must ensure that everyone in this country can access the
Internet and prepare themselves for the digital age.
---------------------------------------------------------------------------
\13\ Remarks of Comr. Rosenworcel.
Question 2. Commissioner Brise, Mr. Bergman and Ms. Gonzalez, how
would you propose verification for Lifeline eligibility if the program
was expanded to broadband?
Answer. On June 18, 2015, the FCC voted to open a proceeding with
the goal of further reforming and modernizing Lifeline. In the item
released by the FCC, the question of whether or not the current methods
of verifying eligibility should be altered is on the table and
addressed through a number of questions that NHMC is in the process of
reviewing. While the FCC's 2012 reforms went a long way towards
ensuring that only eligible individuals are able to receive the benefit
and eliminating waste, fraud, and abuse from Lifeline, we are happy to
engage in the FCC's process to explore further improvements. I will
gladly share our forthcoming comments with your office, once they are
completed, if they explore this issue with greater depth.