FCC's Lifeline Program Ripe for Fraud, Abuse

[Commentary] The Federal Communications Commission’s low-income program, known formally as Lifeline, has spent billions of ratepayer dollars to provide phone service for poorer Americans. Because of significant waste, fraud and abuse in the program, however, a good portion of that funding has not been used as intended. More than once, the Government Accountability Office has taken the FCC to task for failing to control the program, evaluate its flaws and improve accountability. In June, the FCC proposed to expand Lifeline to subsidize broadband services without adequate controls to prevent further misuse of funds. We have significant concerns about this new course of action. It is not too late to change direction, but doing so would require the FCC to confront the substantial issues plaguing the program and adopt strong solutions.

While many reforms are appropriate, two in particular are critical, and the FCC has shown little interest to date in fixing them. First, the FCC must set a spending cap for the program. If the FCC fails to control costs, hard-working taxpayers facing higher phone bills may drop service altogether. The FCC, therefore, has a responsibility to set a spending limit that balances the goals of the program against the burden on consumers nationwide. Second, the program must be better targeted to eligible low-income individuals who would not otherwise sign up for service. Given the significant problems with Lifeline, it is not surprising that many have lost confidence in the program. Rather than rush headlong down a path that will increase spending and multiply concerns about waste, fraud and abuse, the FCC needs to reevaluate the program and address its serious flaws. This means, at a minimum, an overall cap and better targeting. To do less would betray the FCC’s responsibility to Americans to ensure that their money is well spent.