Will Lifeline Modernization Be CURB-ed?

Submitted on April 22, 2016

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Robbie’s Round-Up for the Week of April 18-22, 2016

On April 19, the House Subcommittee on Communications and Technology marked up several telecommunications bills including the Controlling the Unchecked and Reckless Ballooning of Lifeline Act (or the Lifeline CURB Act (H.R.4884), if you’re scoring at home). The subcommittee approved the bill by a final vote of 17-11 along party lines, with Republican members of the subcommittee supporting the measure.

The Lifeline CURB Act, authored by Rep. Austin Scott (R-GA), would prohibit the total amount of annual support that may be provided through the Federal Communications Commission’s Lifeline program from exceeding $1.5 billion. The bill would also ban use of Lifeline support for: (1) any amount charged to a consumer for the sale, lease, or other provision of a mobile telephone or similar device; or (2) mobile service if the service offering is limited to voice communications service.

Lifeline, you’ll recall, is the FCC's program to help make communications services more affordable for low-income consumers. Currently, Lifeline provides subscribers a discount on monthly telephone service purchased from participating providers in the marketplace. On March 31, 2016, the FCC approved rules to modernize Lifeline so that subscribers can also purchase discounted broadband from participating providers. Discounts will apply to stand-alone broadband, bundled voice-broadband packages - either fixed or mobile - and stand-alone voice service. These modernizations will help ensure that low-income consumers can afford 21st-century broadband and the access it provides to jobs, education and opportunities.

During the mark up session, the subcommittee approved an amendment, offered by Rep. John Yarmuth (D-KY), that delays the annual cap on Lifeline from going into effect until: 1) the Federal Communications Commission reports to Congress that imposing the cap will not limit the ability of low-income families with school-age children from receiving Lifeline benefits and 2) within 180 days of receipt of the FCC report, Congress adopts a joint resolution approving the $1.5 billion cap.

When the FCC adopted its new Lifeline rules, a press release indicated that a $2.25 billion budget was set, but, moving forward, it would be indexed to inflation to allow for increased participation generated by the support for broadband. In addition, when Lifeline spending reaches 90 percent of the budget, the FCC’s Wireline Competition Bureau will notify the full commission and prepare an analysis of the causes of spending growth and provide recommendations for the commission to consider.

The Debate
The bill passed after lengthy debate as it has become a showdown between Republican Representatives seeking to prevent fraud, waste, and abuse in the Lifeline program and Democratic Representatives who want the means-tested program to have sufficient funding to assist vulnerable populations including seniors, veterans, and low-income families.

The CURB Act got supportive letters and statements from numerous organizations, including the 60 Plus Association, Americans for Prosperity, Americans for Tax Reform, Frontiers of Freedom, and the Taxpayers Protection Alliance.

But the subcommittee also received a letter from numerous public interest groups opposed to the legislation, with signatories including Public Knowledge, Free Press, and the Leadership Conference on Civil Rights.

“All we’re asking for is a dose of fiscal discipline,” said Subcommittee Chairman Greg Walden (R-OR). “If there’s a budget in place, the FCC will be forced to undergo a more serious examination of the problems plaguing this system.”

Several Democratic amendments were voted down.

Rep. Doris Matsui (D-CA), for example, proposed a new version of the bill that called for the FCC to consider any appropriate measures to prevent any waste, fraud, or abuse in the program. But Republicans rejected the change, saying it would lead to more Lifeline spending.

Rep. Frank Pallone (D-NJ), the Ranking Member for the full House Commerce Committee, argued that Matsui's bill was a preferable alternative to the Republican bill, which he said would eliminate the Lifeline service for the people who need it most. Subcommittee Ranking Member Anna Eshoo (D-CA) asked, “Why are we hurting these people? What did they ever do to you that you wanted to do this for them? Come on. We really are better than this."

Rep. Pallone said he did not see why the Matsui alternative could not be the basis of bipartisan agreement, rather than taking an axe to the program. Chairman Walden (R-OR) said he did not think the bill was taking an axe to what he called a very important service. But he pointed to waste, fraud and abuse in the program as the need for a hard cap on Lifeline spending.

Rep. Pallone countered saying he did not see any way a cap would target waste, fraud and abuse or reform the system. He agreed with Rep. Eshoo that it would unnecessarily penalize fund recipients. Chairman Walden said he did not appreciate being tabbed as not wanting to help the poor. "I've done plenty for the poor," he said.

Chairman Walden noted that most Federal programs have caps, which called prudent -- especially as policymakers begin considering who pay into the Universal Service Fund which collects and disburses Lifeline and other subsidies.

Rep. Steve Scalise (R-LA) said struggling single moms are among those paying into the USF. He said a cap is needed because each time the fee is raised, it is coming out of the pockets of people just struggling to get by. He said added that USF charges are harder and harder to pay for those struggling folks. He called the USF an FCC slush fund going to new, partisan, "whimsical" proposals.

Next Step
April 19’s vote is just a step in what could be a long partisan path. A full House Commerce Committee vote has not yet been scheduled. If the bill makes it through the House, Senate consideration could take some time. But there appears to be willingness among Republicans to consider putting some pressure on the FCC. “We don’t like where the FCC is headed,” Senate Commerce Committee Chairman John Thune (R-SD) said. “It seems to me at least that [a cap] was something they should have had when they considered and moved that rule through — that they ought to at least have put a budget in place so they knew what they were going to spend on this new program. Because it is something, I think, that is going to be a consideration for a lot of members of Congress, and hopefully members of Congress on both sides.”

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