Death by a Thousand Cuts—the Lifeline Edition

The Federal Communications Commission, under Chairman Ajit Pai, recently limited the number of providers that can offer Lifeline service in tribal areas (though that decision was struck down in court on Feb 1). And, in Nov 2017, the agency proposed a series of changes to the program that, together, would severely hobble the program and take Lifeline service away from millions of people. “Our statistics suggest the program has shrunk 30 percent under Chairman Pai’s watch,” said John Heitmann, a partner at Kelley Drye & Warren LLP who has represented Lifeline-participating companies. Heitmann elaborated on the 30-percent drop in the program over the past two years, attributing it to, “in large part, regulatory uncertainty created during Chairman Pai’s administration. [Pai] started by eliminating Lifeline Broadband Provider (LBP) designations within weeks of walking in the door,” Heitmann added, referring to Chairman Pai’s decision, at the very beginning of his administration in 2017, to revoke nine broadband companies’ official designations, which had allowed them to participate in the program. “That sent a signal to the marketplace that we have problems…The companies have been having difficulty attracting investment to grow in the Lifeline space.” What were the FCC’s specific 2017 proposals? They included a ban on standalone broadband from the program, strict limitations on subscribers’ lifetime use and the program’s budget, and a ban on wireless resellers, which make up around 70 percent of Lifeline-supported connections. The FCC’s proposal, on the whole, represents a wholesale attack on the Lifeline program.