The California Lifeline Reform Case Study - Overview

by Access Humboldt’s Broadband Policy Project with support from Benton Foundation

Summary

The Federal Communications Commission is seeking public input on a proposal to reform and modernize its Lifeline program. For 30 years, the Lifeline program has made basic telecommunications services more affordable for people with low incomes. Now, the FCC is considering updating the program to make access to broadband networks more affordable, too. Public comments in this proceeding are due on Monday, August 17; reply comments are due Tuesday, September 15.

To help inform the FCC’s Lifeline proceeding, Benton Foundation is conducting a case study with Access Humboldt’s Broadband Policy Project that will highlight the California Lifeline reform experience - exploring issues raised, capturing lessons learned, and addressing important questions for the future of the Lifeline program.

California is the only state that has a Lifeline program with greater support provided to low income households than the federal program. Why is California’s Lifeline program the most substantial state program? How did that happen? What has the California Public Utilities Commission (CPUC) learned? We’ll review the history and explore the issues in hopes that the FCC and other states can take some lessons from the California experience to help inform the “modernization” of Lifeline going forward.

The California Lifeline Reform Case Study will review recent reforms in California through the lens of five guiding Lifeline reform principles proposed by FCC Commissioner Mignon Clyburn in her fall 2014 speech at the American Enterprise Institute.

Lifeline Reform Principles and Lessons from California’s Lifeline Experience

1. Get the most bang for our universal service buck

In her AEI speech, Commissioner Clyburn proposed that the FCC should establish minimum service standards for any provider that receives the Lifeline subsidy to ensure maximum benefit for these public investments. And back in 2006, CPUC adopted a new methodology assuming overall administration from the telephone carriers and contracting with an independent verification agent, ensuring that CPUC could monitor impacts on ratepayers. Program changes to improve the program included: added opportunities for customer response; eliminated customer back-billing; clarified program eligibility; enhanced marketing and outreach to increase program visibility; expanded call center role to assist with program enrollment; and consideration for additional improvements. (1)

Using these program improvements, and with input from industry and consumer advocates, CPUC developed minimum standards in wired and wireless voice service to provide consumers with a valuable service and to encourage robust competition and choice among Lifeline providers. (We will discuss minimum standards and related issues in detail in a future article.)

2. Providers should no longer be responsible for determining customer eligibility

Lifeline is the only federal benefits program in which the provider determines the consumer’s eligibility. Commissioner Clyburn believes these carriers should be removed from this process entirely. California’s Lifeline program has already moved to a third party verification and management system and the process offers insights for federal policymakers to consider. Reduced fraud and abuse is one outcome, as well as prospects for more diverse provider participation.

3. Encourage broader participation through a streamlined approval process

Consistent with the previous principle, Commissioner Clyburn says Lifeline reform should eliminate any unnecessary barriers that discourage provider participation in Lifeline. Following the most recent reforms adopted in January 2014, California’s Lifeline program does not require social security numbers to enroll. Experience with the program since this change will offer insights to consider as the FCC explores the principle of broadening participation to include people without social security numbers or those who might choose to avoid using that form of identification for privacy reasons.

4. Leverage efficiencies from existing programs and institute a coordinated enrollment

Other federal benefit programs, serving the same constituency, are using technology to improve service, reduce fraud and gain efficiencies. Commissioner Clyburn sees an opportunity to leverage these efforts to help streamline Lifeline and reduce administrative burdens. The California program review included wide participation and considered cross-agency partnerships to coordinate outreach and enrollment of the Lifeline program. Challenges and opportunities will be identified offering insights to consider as the FCC explores this principle.

5. Public-private partnerships and coordinated outreach efforts

Currently, there’s no central, federal government outreach to address the broadband adoption challenge. Commissioner Clyburn proposes more coordinated efforts. The California program has dedicated funds for marketing and outreach efforts which have resulted in a robust “take rate” of Lifeline and which also helps to prevent unscrupulous provider marketing efforts that may result in fraud or abuse of the program.

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In future installments of this series, we’ll explore how California’s current Lifeline program looks from the perspective of regulators, policymakers, advocates and stakeholders - especially the target population that the Lifeline program is intended to serve. We’ll explore the mechanics of third party management and verification of eligibility in California’s Lifeline program. Then, we’ll discover how California addresses minimum standards for voice service to meet baseline human needs. And finally, we’ll consider the prospects for California’s Lifeline reforms to incentivize competition among providers of basic minimum services for resilient communities.

1. For more on the CPUC's Lifeline reform see Efforts to Improve California LifeLine Program Accessibility (January 2009)