Lifeline/Low-Income Consumers

The American people rightfully expect that all federal programs operate as efficiently as humanly possible and are targeted to help those truly in need. As Commissioners at the Federal Communications Commission, we have an obligation – as stewards of federal programs funded by monthly fees on American’s communications bills – to improve the functionality and effectiveness of the programs we oversee, including the Federal universal service fund (USF). Failure to do so would waste consumers’ hard-earned income, diverting it from the intended purposes and undermining public confidence in the programs. We should end the practice of spending scarce USF high-cost support to illogically subsidize the cost of communications services for very rich people who happen to live in the more rural portions of our nation. Because of our budgetary constraints, each dollar spent subsidizing service unnecessarily is a dollar that is not being used to help bring broadband to unserved Americans, particularly those who cannot afford the full cost of service. We seek comment on whether, and if so how, to implement means-testing within the high-cost universal service program.

FreedomPop is hoping to cash in on the Federal Communications Commission’s overhaul of the Lifeline program, which subsidizes telecommunications services for low-income consumers.

FCC Chairman Ajit Pai directed the agency to eliminate the federal approval process for Lifeline service providers, effectively returning those processes to the state level. Critics say the move will require would-be service providers to undergo a lengthy and perhaps prohibitively burdensome course to extend offerings to Lifeline participants. But FreedomPop, an MVNO that provides wireless services in North America and Europe, is licensing its platform as a way for companies to bring offerings to market through Lifeline more simply and affordably. The company announced a deal with one Lifeline service provider, PWG Solutions, and said it will launch with a few more companies in the coming months.

“It’s pretty much impossible to get certified across 30 states, so you’ve got these (potential service providers) who are just stagnant,” FreedomPop CEO Stephen Stokols said. “Rather than just trying to come in and outdo them, we’re literally just going to empower them, basically extend our technology to these guys so they can modernize.” FreedomPop uses a freemium model to entice users, then upsells them into bigger packages or other value-added services such as additional local numbers for users in foreign lands or a “safety mode” that prevents overage charges. It sells handsets as well as SIM cards enabling customers to activate their own phones.

CoSN and the Alliance for Excellent Education issued two complementary resources for school leaders to advance digital equity and increase broadband connectivity to students nationwide. Advancing Digital Equity and Closing the Homework Gap details the current state of broadband access, its adoption, and its barriers in US communities. The second brief, Advancing Digital Equity: An Update on the FCC’s Lifeline Program, recaps efforts to modernize the Lifeline Program, explains how these changes are at risk, and puts forth ways school leaders can stand up for the program and its positive impact on learning.

In the briefs, the groups underscore current data that paint the picture of broadband access and its implications:

• The Pew Research Center found that 5 million households with school-age children do not have broadband access. Low-income families make up a heavy share of those households.
• According to the Bill & Melinda Gates Foundation, 42 percent of teachers reported that their students lack sufficient access to technology outside of the classroom.
• Results from CoSN’s 2016 Annual Infrastructure Survey show that 75 percent of district technology leaders ranked addressing the lack of broadband access outside of school as a “very important” or “important” issue for their district to address.
• In the same survey, 68 percent of respondents reported that affordability is the greatest barrier to out-of-school broadband access.

Over time, the Lifeline Program has provided critical support for underserved Americans to help improve these trends.