GAO Advises FCC to Take a Step Back Before Implementing Further Lifeline Reforms

The Government Accountability Office (GAO) issued a candid report yesterday indicating that “[t]he FCC has not evaluated Lifeline’s effectiveness in achieving its goals—to ensure the availability of voice service for low-income Americans and minimize the burden on consumers and business that fund the program.” While this may not come as a surprise to the industry (we addressed many of these issues in the most recent JSI News and Commentary), the timing does not bode well for Commissioner Clyburn’s push to expand Lifeline to cover broadband. Indeed, the GAO report further put into doubt the possibility of Lifeline broadband by questioning the usefulness of the information gathered during the Lifeline Broadband Pilot, which is to be the basis for the new component.

In the report, the GAO indicates that although the 2012 Lifeline reforms have had some positive impacts on the program overall, especially in reducing the number of duplicative and ineligible subscribers and increasing accountability, the FCC has yet to implement all of the reforms. The GAO specifically pointed out that the FCC has failed to:

set a permanent monthly discount amount;
implement or provide a status of automating Lifeline enrollment;
provide any information on the Broadband Pilot results; or
set clear performance goals and measures.

Moreover, the report questions if Lifeline in its current form is an “inefficient and costly means to increase telephone subscribership” since studies suggest that low-income households would still subscribe to phone service without the subsidy. The GAO report addresses additional concerns including the security of consumer information and consumers’ difficulty retaining service. In light of valid security concerns, it is baffling that carriers are now required to obtain Social Security cards, birth certificates, and other highly sensitive documentation to enroll some Lifeline customers.

Although the GAO unfortunately failed to seek input from rural carriers, the report’s findings hopefully will serve to further incentivize the rural community to actively join the discussion on Lifeline reform, as proposed by Commissioner Clyburn. To further discuss Lifeline reform and share your company’s story with the FCC, please contact Tanea Foglia in JSI's Maryland office at tfoglia@jsitel.com or 301-459-7590.

Reminder: May 1 Deadline for ETCs to Decide on 2015 Recertification

Eligible telecommunications carriers (ETCs) that wish to change who will manage their 2015 annual Lifeline recertifications have until May 1, 2015, to notify the Universal Service Administrative Company (USAC) about their choice. This applies both to companies that did not elect to have USAC conduct their 2014 annual recertification but wish to do so now, and any that had USAC complete the 2014 recertification but want to do it themselves in 2015. ETCs that used USAC in 2014 and would like USAC to conduct the recertification in 2015 do not need to take action.

There are pros and cons to having USAC conduct the recertification. On the plus side, your staff is free to focus on other projects during this busy period. On the negative side, companies that had USAC conduct the recertification saw higher de-enroll numbers due to non-response (upwards of 75%), which can cause additional work for your company in the long run when those customers subsequently wish to be re-added. ETCs in states that manage Lifeline recertification (e.g., Texas) may not opt into USAC.

If you would like to weigh your options, please contact Tanea Foglia in JSI's Maryland office at tfoglia@jsitel.com or 301-459-7590 or Lisa McLaughlin in JSI’s Texas office at lmclaughlin@jsitel.com or 512-338-0473.