January 2012

FCC Reforms, Modernizes Lifeline Program for Low-Income Americans

Acting to reform and modernize a program vital to ensuring affordable communications for low-income consumers, the Federal Communications Commission approved a comprehensive overhaul of its Lifeline program.

As a universal service program that fulfills Congress’s mandate to ensure the availability of communications to all Americans, Lifeline for the past 25 years has helped tens of millions of low-income Americans afford basic phone service. Access to telephone service is essential for finding a job, connecting with family, or getting help in an emergency, and the percentage of low-income households with phone service has increased from 80% in 1985, when Lifeline began, to nearly 92% last year. But the program faces real challenges, including rules that have failed to keep pace as consumers increasingly choose wireless phone service, and that create perverse incentives for some carriers.
The FCC’s Lifeline reforms address these and other challenges:

Changes to eliminate waste, fraud, and abuse, saving up to $2 billion over 3 years
Setting a savings target of $200 million for 2012, and putting the Commission in a position to adopt an appropriate budget for the program in early 2013 after review of a six-month report and one-year report on the effects of the Order.
Creation of a National Lifeline Accountability Database to prevent multiple carriers from receiving support for the same subscriber. The database will build on FCC efforts in 2011 that eliminated nearly 270,000 duplicate subscriptions in 12 states following review of over 3.6 million subscriber records, saving $33 million.
Creation of eligibility databases from governmental data sources, enabling fully automated verification of consumers’ initial and ongoing Lifeline eligibility. This would reduce the potential for fraud while cutting red tape for consumers and providers. A database based on the three most common federal benefit programs through which consumers qualify for Lifeline will be created no later than the end of 2013.
Establishing a one-per-household rule applicable to all providers in the program, defining household as an “economic unit” so that separate low-income families living at the same address can get connected.
Establishing clear goals and metrics to measure program performance and effectiveness.
Phasing out support for services such as Toll Limitation – subsidies to carriers for blocking or restricting long-distance service—and ending Link Up – subsidies to carriers for initial connection charges. Link Up will continue in Tribal lands.
Reducing burdens on carriers by establishing a uniform, interim flat rate of reimbursement, allowing carriers to obtain a subscriber’s signature electronically, and streamlining enrollment through uniform, nationwide eligibility criteria.
Modernizing Lifeline
Adopting an express goal for the program of ensuring availability of broadband for all low-income Americans.
Establish a Broadband Adoption Pilot Program using up to $25 million in savings from other reforms to test and determine how Lifeline can best be used to increase broadband adoption among Lifeline-eligible consumers. Starting this year, the program will solicit applications from broadband providers and will select a number of projects to fund. Lifeline will help reduce the monthly cost of broadband service, but applicants will be expected to help address other challenges to broadband adoption, including the cost of devices and digital literacy.
Proposes increasing digital literacy training at libraries and schools. A Further Notice of Proposed Rulemaking seeks comment on using savings from other Universal Service Fund reforms to increase digital literacy training at libraries and schools, a key step in increasing broadband adoption.
Build on FCC efforts to close the broadband adoption gap and address digital literacy, including the Connect-to-Compete initiative, which enlists government, non-profit, and private sector leaders to address broadband adoption barriers through digital literacy training and low-cost broadband availability.
Allow Lifeline support for bundled services plans combining voice and broadband or packages including optional calling features.

Mixed Reaction to FCC's Lifeline/Linkup Reform

Response from industry and the Hill was swift, and mixed, to the Federal Communications Commission's vote to reform the Lifeline low-income phone subsidies program and migrate it to broadband.

AT&T senior VP Bob Quinn agreed with the FCC that reform was needed, but wasn't sure the FCC was the one that should be administering the fund. US Telecom called the changes the FCC did institute "sound" and gave the FCC a shout-out for overhauling the system.

Reps Anna Eshoo (D-CA) and Doris Matsui (D-CA) had nothing but encouraging words for the FCC. Matsui's support is no surprise. She introduced legislation that would provide low-income homes with broadband, saying that bill was the basis for the FCC's announced pilot program She also gave a shout out to plans to fund digital literacy outreach to schools and libraries, which will also tap into the planned savings from cutting back on waste, fraud and abuse, including duplicative subsidies.

Benton Foundation Policy Counsel Amina Fazlullah said, “At a time of nationwide economic stress, when a number of families are facing unemployment and homelessness, Lifeline ensures that these families are able to maintain a connection to potential employers, educational resources, government services and healthcare providers.”

Cost is a major barrier to many Latinos' ability to adopt broadband in their homes, noted the National Hispanic Media Coalition. As broadband continues to transform into a basic need, NHMC is pleased to see the FCC taking steps to ensure that all Americans have affordable access. Although some of the reforms announced today may come with their own challenges, NHMC is extremely heartened that the FCC did not set a cap on the Lifeline program, which would have stymied the program before its full potential is realized.

Stubborn disparities in internet access and economic opportunity can only be narrowed meaningfully by the FCC – and its announcement today shows that it sees and acknowledges this. The commissioners, Chairman Genachowski and Commissioner Clyburn in particular, recognize that Lifeline must be kept intact so that it can one day be modernized to include access to internet services and to narrow the digital divide. For that, we praise them, said Wade Henderson, president and CEO of The Leadership Conference on Civil and Human Rights.

Will AT&T Get Rid of the Yellow Pages?

AT&T has hinted that it may sell off parts of its business that are performing poorly. Perhaps the most obvious candidate is the good old-fashioned Yellow Pages.

Yes, the fat phone book that you probably toss into the recycling bin after it has been out on the porch for a few weeks. Randall L. Stephenson, AT&T’s chief executive, said during the company’s quarterly earnings call that the company would accelerate its growth by getting rid of or restructuring “low-performing and nonstrategic assets.” The Yellow Pages would fit that category. AT&T took a write-down of $2.9 billion for the fourth quarter of 2011 to reflect the declining value of its directories business, which includes the Yellow Pages in print and online.

Petition calls for “ethical” iPhone 5

With Apple’s labor practices in the spotlight, an online group has started a petition asking the company to make its next iPhone model “ethical.”

Nearly 40,000 people have signed the petition to Apple on the online petition site called SumofUs.org, asking Apple to “overhaul the way its suppliers treat their workers in time for the launch of the iPhone 5.” Taren Stinebrickner-Kauffman, executive director of SumOfUs, said that — as an Apple user herself — she would like to see Apple reform its labor practices, even if it means taking a hit to it profit margin or passing some of the costs onto consumers. “I think there are lots of people who love Apple products, but are unhappy about the labor conditions,” she said. “We believe there are many ethical consumers out there who identify with these brands and want that part of their life to be equally as ethical. If you wouldn’t have a slave in your home, you also wouldn’t want to have one making your iPhone.” Stinebrickner-Kauffman would also like to see Apple open its factories to independent audits.

Gingrich vs. Romney: Whose website got the most hits?

Does the number of people who click on a political candidate's website have any correlation to how many votes he or she receives? Experian Hitwise, an online measurement company, has released some data on how many people have visited Mitt Romney's website versus how many people have visited Newt Gingrich's website in the last four weeks.

In Florida, Romney is the clear winner (online). Over the last three weeks, his website got 39.5% of traffic to the four remaining Republican presidential candidates' websites from Florida users. Gingrich came in second with 26.53%. Rick Santorum's site got 19.20% of the traffic, and Ron Paul got 14.75%. But outside of Florida, the top two positions were reversed. Experian reports that last week in the U.S. overall, Gingrich's site got 35.74% of the hits, while Romney's site received just 29.31%. Then came Ron Paul, who got 20.48%, and finally Rick Santorum with 14.47%.

Senators, witnesses slam amendment to video privacy law

The Senate Judiciary subcommittee on Privacy, Technology and the Law held a hearing to examine proposed changes to the Video Privacy Protection Act (VPPA), which requires firms to obtain customers' consent before sharing any information about their video rental history.

Changing a crucial video privacy law to allow companies to obtain blanket consent to share customers' viewing choices would gut one of the government's most effective privacy laws, according to witnesses and lawmakers. Several lawmakers and witnesses used their opening remarks to criticize H.R. 2471, which passed the House in December and was referred to the Senate Judiciary Committee. Electronic Privacy Information Center executive director Marc Rotenberg said the bill could gut what is in many respects a model privacy law. The bill would amend the VPPA to allow video providers to obtain consent to share customers' viewing histories up front rather than every time the information is shared. Netflix has strongly backed the bill to enable easier sharing of customer viewing habits on sites like Facebook.

Reed Hundt rips House spectrum bill

Former Federal Communications Commission (FCC) Chairman Reed Hundt called the House GOP spectrum legislation "the single worst telecom bill" he has ever seen at a briefing on Capitol Hill.

"It should be rejected, not compromised with," Hundt said. The bill would restrict the FCC's ability to impose conditions on the companies that buy the spectrum and would prohibit the FCC from designating the spectrum it reclaims from broadcasters for unlicensed use. Unlicensed spectrum, which can be used by any company for free, powers technologies such as Wi-Fi, garage-door openers and remote controls. Hundt was the most outspoken in his blunt criticism of the House bill, saying the legislation focuses on one topic and "gets everything about that topic wrong." He worried that the bill would allow the largest wireless carriers to buy up all of the spectrum at auction, expanding their dominance of the airwaves. He said the carriers might not even plan to use some of the spectrum but could buy it just to kill off competition. He argued that Congress should rely on the FCC to use its technical expertise to set the conditions of the auction. "It's not a good idea to have Congress act like an agency and pass legislation that's ten times longer than it needs to be," Hundt said. "This is a microcosm of why the American people are so unhappy with government in Washington."

FCC apologizes to Sen. Grassley for 'McCarthyism' remark

Zachary Katz, the new chief of staff for the Federal Communications Commission (FCC), apologized to Sen. Chuck Grassley (R-Iowa) on Jan 31 after an agency official compared the senator to anti-communist former-Sen Joseph McCarthy. “The spirit of Joseph McCarthy has returned to Washington in the form of Senator Grassley,” an unnamed FCC official told TR Daily. “This is a witch hunt with no basis, driven by well-funded lobbyists in the Senator’s state, and everyone knows it.” In a phone call, Katz apologized to Sen Grassley and said the comment was unauthorized.

Comcast connects 41,000 families to Internet through low-cost program

Comcast announced that 41,000 families, an estimated 160,000 Americans, took advantage of the company's low-cost Internet program last year.

Comcast's Internet Essentials plan offers broadband Internet service for $9.95 per month to low-income families. The company agreed to offer the plan to gain approval from the Federal Communications Commission (FCC) for its $13.8 billion merger with NBC-Universal last year. The plan also offers a laptop computer for less than $150 to eligible families. Comcast said it sold 5,500 computers during 2011. Comcast said it advertised the program in 4,000 school districts and more than 30,000 schools.

Sen. Rockefeller presses Congress to pass cybersecurity legislation

Senate Commerce Committee Chairman Jay Rockefeller (D-WV) pressed his colleagues to pass comprehensive cybersecurity legislation immediately.

Chairman Rockefeller has worked with Senate Homeland Security Chairman Joe Lieberman (I-CT) and ranking member Susan Collins (R-Maine) to craft a bipartisan compromise that would task the Department of Homeland Security with ensuring critical infrastructure firms take measures to safeguard their networks. The Senate is expected to begin debate on the Rockefeller-Lieberman-Collins proposal in the coming days after spending years raising awareness and forging bipartisan agreement on the issue. But late resistance from federal IT contractors and some Republicans has jeopardized the success of the effort.

Benton

Search