Imminent FCC Order to Modernize Lifeline Causes USF Reform Flashbacks

Though the ink is barely dry on the landmark 2011 Universal Service Fund and Intercarrier Compensation Transformation Order to modernize these programs for a broadband world, FCC Chairman Julius Genachowski announced on Monday, January 9, 2012 that a new order to renovate the Lifeline program will be circulated to commissioners this week. Genachowski’s speech at the Third Way think tank brought an overwhelming sensation of déjà vu—it was quite similar to a speech he made on February 7, 2011, at the Information Technology and Innovation Foundation when he announced the infamous USF/ICC Reform NPRM (and another in October when he announced the inevitable release of the Order). Both speeches emphasized the rampant waste, fraud and abuse in the respective USF programs; and both speeches insisted the programs be modernized for the broadband age, made more efficient and accountable.

Genachowski commented today that the FCC “inherited a series of programs that needed to be updated for the Internet age, and most also needed careful scrubbing to ensure that they were carrying out their missions effectively and efficiently.” Genachowski identified common problems with the Lifeline program, like duplicative support, the lack of a database, and “unscrupulous carriers… obtaining support for customers who did not sign up for Lifeline… or signing people up for Lifeline who aren’t eligible for the program.” Genachowski calls these abuses “flat-out wrong and simply unacceptable.”

The reforms in the order include standardizing eligibility requirements, constraining growth, increasing flexibility, establishing a budget, and ensuring broadband availability and digital literacy for low-income Americans. A statement that could easily be interchanged with comments by commissioners about ICC reform explained: “In some cases, old rules may have invited end-runs and created loophols some carriers are exploiting. This order would close those loopholes.”

At least the FCC has a solid template for reforming wide-reaching USF programs… Reforming Lifeline could be a cakewalk compared to ICC and the high-cost fund. Once the Lifeline Reform Order is released for public inspection, Cassandra Heyne will analyze the details and discuss the impacts on RLECs.

FCC Urges States to Eliminate Fraud and Abuse of Lifeline Programs

Source: FCC Letter

In a letter to state commissioners, the FCC said that it urges them to increase efforts to eliminate waste, fraud, and abuse from Lifeline programs. The letter said that the FCC has launched a proceeding to comprehensively reform and modernize Lifeline, including to significantly strengthen protections against waste, fraud, and abuse, and to prepare the program for the broadband era. The FCC is expected to vote soon to adopt reforms.

The FCC pointed out that together with the Department of Justice, it has reached a first-of-its-kind $1.5 million settlement agreement with a Lifeline provider to settle fraud allegations related to improperly signing up Lifeline subscribers.

The FCC said it has received reports that some carriers may be distributing Lifeline-subsidized cell phone subscriptions without verifying whether the consumers are eligible, or whether they already have a Lifeline subscription.

Click here for the full text of the FCC's letter.

The FCC’s Egalitarian Cable Broadband Initiative: What does it Mean for RLECs?

Source: The ILEC Advisor

Big Cable has been making headlines recently for its seemingly very generous decision to provide $9.95 per month broadband, $150 computers and digital literacy training to low income Americans. However, one of these programs--Comcast's Internet Essentials--is actually a voluntary merger commitment. Additionally, other NCTA cable companies have joined Microsoft, Best Buy, and a plethora of grassroots organizations under the FCC-spearheaded Connect 2 Compete program, which will also focus on low-income broadband adoption. Is this trend a threat to small telcos or will it catch on in the RLEC industry too? Cassandra Heyne explains the FCC and cable industry low-income broadband initiatives.

Read the full story here.

Cincinnati Bell Launches i-wireless Lifeline Service

Source: Cincinnati Bell Press Release

Cincinnati Bell, Inc. (NYSE:CBB) announced that it now participates in the government-funded Lifeline program through its i-wireless prepaid cell phone service. The i-wireless Lifeline program provides qualifying customers assistance with their wireless telephone service needs.