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FCC to overhaul Lifeline phone service for low-income homes

Consumer Reports News: February 01, 2012 11:53 AM

The Federal Communication Commission voted yesterday to overhaul the national Lifeline program, a means of providing low-cost home land-line telephone service to low-income families in the U.S. The pending changes are intended to cut $2 billion in federal costs over the next three years, as well as modernize the federal program—adding low-cost home broadband Internet access to the mix, for one thing.

The FCC's unanimous vote (3-0) for Lifeline program changes are intended to help check the rising amount of fraud and abuse.

Under the current setup, for example, families who qualify under federal definitions of "low-income" can receive a $10 monthly discount for phone service. (The Lifeline program funds comes from the "Universal Service Fund Fee" that companies tack on every customer's phone bill.) But in some cases, phone companies and wireless service providers have been able to bill the Lifeline program for multiple services to the same household.

Under the revised Lifeline service, the FCC will create a National Lifeline Accountability Database to ensure that service providers do not receive multiple program funds for the same household. The program will also link to other federal databases that govern low-income benefits—say, Medicaid—to cut down on the potential of fraud and red tape among Lifeline applicants. Independent audits of phone-service providers participating in the program will occur every two years, says the FCC.

Bloomberg reports that the FCC has alreay saved about $33 million after removing 270,000 duplicate Lifeline subscriptions in just 12 states. And such savings—as well as increases to the Universal Service Fund Fees that feed Lifeline—will help expand the program to include low-cost home Internet access.

At yesterday's meeting, FCC Chairman Julius Genachowski said, "Broadband has gone from being a luxury to a necessity in the 21st century." The FCC will solicit applications from broadband-service providers to join a pilot program for home Net access this year.

FCC Reforms, Modernizes Lifeline Program for Low-Income Americans [FCC]
FCC Votes to Reform Lifeline Fund, Launch Broadband Pilot ProgramFCC Overhauls Telephone Subsidy for the Poor, Adding Broadband [PC World]

Paul Eng

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