May 28, 2015 - 1:25 pm
By Tom Wheeler | FCC Chairman

The Lifeline program was established in 1985 to help low-income Americans afford access to vital communications. Our nation’s enduring promise is opportunity for all, and helping financially struggling Americans access basic communications empowers individuals to pursue new opportunities and build better lives. This principle has remained constant since Lifeline’s inception. In 1996, Congress ratified the goal of access to advanced communications for low-income consumers in the Communications Act. Over a span of three decades, the program has helped tens of millions of Americans afford basic phone service. But as communications technologies and markets evolve, the Lifeline program also has to evolve to remain relevant.  As I told Congress earlier this year, it is time to overhaul Lifeline to make sure it is still performing the critical function for which it was formed.

Today, we take the first step in that process.  I am circulating new proposals to “reboot” Lifeline for the Internet age.

First, we propose to make Lifeline more efficient and impactful by establishing minimum standards of service for voice and broadband, so both beneficiaries and those who pay into the fund can know that they are getting the best value.

Broadband is key to Lifeline’s future. In 2015, broadband access is essential to find a job: more than 80 percent of Fortune 500 job openings are online. Americans need broadband to keep a job, as companies increasing require basic digital literacy skills. We rely on broadband to manage and receive healthcare, and to help our children do their homework. A 2012 study estimated that broadband helps a typical U.S. consumer saves $8,800 a year by providing access to bargains on goods and services.

But nearly 30 percent of Americans still haven’t adopted broadband at home, and low-income consumers disproportionately lack access. While more than 95 percent of households with incomes over $150,000 have broadband, only 48 percent of those making less than $25,000 have service at home. A world of broadband “haves” and “have-nots” is a world where none of us will have the opportunity to enjoy the full fruits of what broadband has to offer.

But establishing minimum service levels is not enough to ensure that this program is serving its core mission.  We also propose an overhaul of the way we determine eligibility for Lifeline. Currently, Lifeline providers are responsible for ensuring eligibility, a situation that invites waste and fraud while burdening those providers who do want to comply. We also ask about ways to target the Lifeline subsidy to those low-income consumers most in need of the support, which is one of the reform principles advanced by my colleague Commissioner O’Rielly.

We also seek comment on how to encourage more providers to participate in the program, increasing competition and consumer choice on price and service offerings.

Getting Lifeline reform right won’t be easy. Fortunately, Lifeline reforms adopted in 2012 put the program on stable footing and laid the foundation for a comprehensive overhaul. I look forward to working with my colleagues to resolve the difficult questions before us. In particular, I want to commend Commissioner Clyburn for driving the important effort to further eliminate waste in the program and re-focus the program to better serve those who need it most.