Should we provide a ‘Hand Up” to low-income Americans or “Hang Up” on them?
Last week’s Congressional oversight hearing on the Lifeline program vacillated between fact and fiction.
Thanks to efforts by Springwire and Consumer Action, more than 1,400 Americans who benefit from the program wrote to tell the committee how important Lifeline phone service is to low-income households.
Testimony from industry, consumer advocates and government confirmed that providing communications support to low-income households allows these Americans to call employers, schools, health care providers, family, veterans' help lines, and police. The bottom line is that access to communications helps people find their own pathways out of poverty.
However, despite a record overflowing with letters of support, individual stories and expert testimony, many members attending the hearing continued to perpetuate negative myths about the program.
Fiction: President Obama is responsible for the creation of the prepaid wireless Lifeline program.
Fact: Lifeline is a bi-partisan program started by the Reagan Administration and expanded in 2005 to include prepaid wireless under the Bush Administration. In 2012 the Obama administration focused on rooting out fraud, waste and abuse, reforming the program at both the user and the provider levels.
Some of the expert witnesses emphasized this basic fact by reiterating it in both their oral and written testimony. An excellent explanation of the history of the Lifeline program, the guiding concept of Universal Service and its roots in the Postal Act ushered in by the nation’s first president (yes, that would be President George Washington) can be found in the written testimony by expert witness Jessica Gonzales of the National Hispanic Media Coalition (NHMC.)
Fiction: Lifeline is a tax.
Fact: Lifeline is one of four programs of the Universal Service Fund utilized by industry for the extension of telecommunications services. These same industry groups pay into the fund. Of the four USF programs, Lifeline ranks third in cost.
Expert witness Chris Guttman-McCabe of CTIA the Wireless Association fielded this question before the panel:
“The Lifeline program, like all USF programs, is funded through levies imposed on providers of interstate telecommunications services. Wireless companies, wireline telephone companies, and VOIP providers contribute to the fund and generally recover those contributions from their end-user customers. Funds are remitted not to the U.S. Treasury, but rather go to the Universal Service Administrative Company, an independent, not-for-profit organization established by the FCC to administer the four universal service programs.
Universal service contributions collected and distributed by USAC do not impact the federal budget, the deficit, or the debt in any way. Congress appropriates no money for the fund and, because of that, increasing or decreasing the size of the Lifeline program, or any other component of the overall universal service program, will not impact the federal budget.”
Fiction: Lifeline users are not really in need.
Fact: According to data from one Lifeline provider the average Lifeline household makes $14,000 a year. That is well below the government’s definition of the “poverty line.”
Here are some additional facts carriers released about their Lifeline customers:
- Seniors depend on this service -- 60% of customers are over the age of 45, and nearly a third of customers are over 55 years old
- Our lowest-income households use this service – 79% of customers have an annual household income below $15,000
- Lifeline users are diverse – 53% are Caucasian, 30% are African American and 10% are Hispanic
However, if committee members at the hearing managed to miss all the written testimony, comments and letters of support, they could not miss the moving oral testimony by expert panel witness Jessica Gonzales of NHMC. Ms. Gonzales, during her five minutes of testimony, retold the stories of Lifeline users and recounted her own story of using Lifeline during a moment of need and struggle.
Fiction: The Federal Communications Commission (FCC) has not taken serious measures to reform the Lifeline program, illustrated by the “runaway growth” of the program.
Fact: The FCC's reform measures have met and exceeded the goals to curb growth and address fraud, and are on track to save 2 billion dollars by 2014.
On May 4, 2010 the FCC asked the Federal State Joint Board to provide input into reforms for Lifeline. On June 15, 2010 the Federal Joint Board began to examine Lifeline reforms to address issues of fraud, waste and abuse.
Following the required procedures for a rule change, the Commission received Federal State Joint Board input and initiated multiple rounds of public comment. By January of 2012 the FCC voted on rule changes to address fraud, waste and abuse.
Like any nationwide program with federal, state, industry and community components, the implementation of program changes takes time and close scrutiny to ensure that the rules are properly applied. Despite these challenges, the FCC reported that it not only met its 2012 target to reduce the program by 200 million dollars but it exceeded targets by reducing the program in 2012 by 214 million dollars. The program is on track to save 2 billion dollars by 2014.
If you are curious about changes made in the 2012 order, but don’t have the time to tackle the 500- page document, I strongly suggest you check out the Commission’s expert witness for the panel, Chief of the Wireline Competition Buearu, Julie Veach’s written testimony.
As the FCC continues to enforce and implement the program changes, I hope committee members take this time to get up to speed on the facts of this important, 30-year old program.
Communications tools provide a pathway out of poverty and help the nation ensure that all Americans can fully participate in the growth of the country. Informed and educated oversight by members of Congress will help guarantee the longevity and future relevance of this critical program.
Read more from the Author(s)
- GAO Report Bolsters Need for Lifeline Broadband Expansion
- Strengthening a Vital Lifeline or Snatching it Away?
- City Broadband Plans: One Vision, Four Markets, Four Issues
- FCC’s Low-Income Phone Reform Needs to Connect and Tie Eligibility to People, Not Housing
- "Obama-Phones" or "Gipper-Phones" -- What's in a Name?
- Should we provide a ‘Hand Up” to low-income Americans or “Hang Up” on them?
- Sen Pryor Calls on FCC to Reform Costly Lifeline Program
- FCC Proposes Comprehensively Reforming and Modernizing Lifeline/Link Up
- Broadband: A Lifeline for the 21st Century
- The Lifeline Program: Examining Recent Allegations of Waste, Fraud, and Abuse
- The Truth About Lifeline
- FCC's Lifeline Program Ripe for Fraud, Abuse
- FCC Reforms, Modernizes Lifeline Program for Low-Income Americans
- Strengthening a Vital Lifeline or Snatching it Away?
- Fact Sheet: Modernizing the Lifeline Program for Broadband
- Hearing Recap: Lifeline: Improving Accountability and Effectiveness
- Ranking Members Waxman, Eshoo, and DeGette Call For Hearing on Lifeline Program Reforms
- Status Report: An Update On the FCC's Ongoing Work To Reform And Improve Lifeline and Link Up
- FCC Contemplates Subsidized Broadband Services
- Consumer Action asks FCC not to narrow criteria for Lifeline phone service