On March 31, 2016 the Lifeline Modernization Order was approved by the Federal Communications Commission, effectively modernizing the Reagan-era program for the 21st century. The new Order transforms the Lifeline program from a voice only subsidy to one that subsidizes high speed broadband, phases out voice only Lifeline service, imposes higher service standards, eases market entry for broadband providers, and transfers responsibility for verifying Lifeline eligibility of Lifeline applicants to a national database.
Why was this needed?
“This is a program that will meet the twenty-first century needs of those who are most worthy and could most benefit from connectivity and what the technological revolution has to offer,” said FCC Commissioner Mignon Clyburn, who led the Lifeline broadband expansion effort. The Lifeline program was originally created to subsidize phone service for low income people, but with the key role the internet plays in our economy, federal regulators have moved to extend the program to cover broadband access among other changes.
Indeed, of low income households (those earning less than $25,000) only 48% subscribe to broadband service per the 2013 US Census report. By comparison, 95% of those with incomes over $150,000 subscribe to broadband. Former FCC Commissioner Michael Copps, a special advisor to Washington D.C. based public interest group Common Cause, called the Lifeline expansion “a giant leap forward” that will help “extend the awesome power of the internet to those who need it most. School children, jobseekers, the elderly and infirm in particular will all benefit.”
Here are some of the changes the Lifeline Modernization Order introduces:
- A $9.25 monthly household subsidy for broadband access
- Establishes a fixed minimum standard of 10 Mbps for downloads and 1 Mbps for uploads with a usage allowance of at least 150 GB
- Phases in a minimum mobile standard of 500 MB per month of 3G data, increasing to 2 GB by the end of 2018
- Establishes an inflation-adjusted annual budget of $2.25 billion for the program
- Phases out the voice-only subsidy beginning in December 2019 and eliminates it by December 2021 except in areas where there is only one Lifeline provider
- Establishes a National Lifeline Eligibility Verifier database to determine the eligibility of low income applicants to participate in the program
- Streamlines and reduces the number of federal and state programs used to determine Lifeline eligibility
- Creates a streamlined nationwide “Lifeline Broadband Provider” designation to increase competitive entry by broadband providers (including cable operators and ISPs), bypassing traditional state-by-state designation requirements
- Introduces other changes and refinements, including to non-usage rules and the annual recertification process, establishing a 12-month window for transferring broadband benefits, publishing subscriber counts, and creating new forms
When will this take effect?
The Lifeline Modernization Order was published in the Federal Register on May 24, making the effective date of the Order June 23, 2016. The majority of the rule changes will not take effect until the Office of Management and Budget (OMB) certifies that the edits meet the requirements of the Paperwork Reduction Act. This includes changes to authorize Lifeline funding for broadband Internet access services and the minimum service requirements for Lifeline-supported voice and broadband services. The majority of the edits will not become effective until Dec. 1, 2016 at earliest, possibly later if the OMB approval comes after that date. A few of the changes will become effective immediately upon publication of the OMB approval, others 30 days after.