A federal appeals court has upheld the constitutionality of the way the Federal Communications Commission hands out billions of dollars in subsidies for broadband and other advanced communications services.

At issue were the Universal Service Fund (USF) and the FCC’s use of a private company, the Universal Service Administrative Co. (USAC), to administer the distribution of those funds to subsidize broadband and phone service to high-cost areas and low-income households nationwide.

Suing the FCC were phone provider Consumers’ Research and a group of its subscribers.

In an opinion released Friday (March 24) rejecting a challenge to that authority, the 5th U.S. Circuit Court of Appeals concluded that the FCC did sufficient due diligence on USAC proposals, which the agency independently considers based on data it collects and other relevant information, and that the regulator was sufficiently in charge not to run afoul of the law.

The challenge was principally based on the assertion that USAC was not “sufficiently subordinate” to the FCC to pass constitutional muster.

The 5th Circuit pointed out that federal agencies are allowed to “reasonably condition” their actions on “determinations by outside parties.” In the case of the USF and USAC, the conditions were reasonable and thus USAC was properly subordinate to the FCC.

“To be clear,” the court said, “agencies may delegate to private entities so long as the entities function subordinately to the federal agency and the agency has authority and surveillance” over its activities.

The USAC makes recommendations to the FCC, which are not binding until the commission signs off on them, the court pointed out. The FCC also allows telecoms to challenge USAC proposals directly to the regulator and “often” grants relief, the court said. The FCC also dictates the amount of the contribution telecoms have to make to the fund. 

All of that shows the FCC has sufficient control of the process for the delegation not to run afoul of the private nondelegation doctrine (under Article I of the Constiution) that prevents the delegation of or regulatory oversight to private entities, the court said.

Andrew Schwartzman represented the Benton Institute for Broadband & Society, which filed a brief in the case in support of the FCC. 

“Coming from one of the more conservative courts in the country, this decision is a ringing ratification of the system Congress established to ensure that all Americans have affordable access to telecommunications service and advanced services like broadband,” he said after the decision was issued. “This should not come as a surprise but once the USF was subjected to a legal challenge, the Benton Institute for Broadband & Society joined with its allies to defend this critical mechanism for ensuring universal broadband service.” 

"NaLA is pleased with this decision [because] the USF and Lifeline in particular provides targeted support to low-income Americans who struggle to afford essential communications services necessary to participate in our digital society," said David Dorwart, chairman of the National Lifeline Association. "NaLA is proud to serve these consumers and ensure they can connect to family, community, jobs, education, telehealth and other service using our members’ mobile voice and broadband solutions."

"We are pleased to see the Fifth Circuit uphold the FCC's authority to administer the Universal Service Fund," said Angie Kronenberg, presdient of INCOMPAS, whose members include edge providers rooting for as universal service as possible. "This is a big win for the FCC and a big win for the millions of Americans who rely on this program. While we are delighted at today's result, we believe reforms to the USF are necessary to ensure this critical service can continue to exist."■

The Federal Communications Commission has taken no official position on whether California’s $0 co-pay policy for mobile carriers applying for its California LifeLine low-income subsidy is statutorily impermissible rate regulation, but its amicus brief in a challenge to that law in a federal appeals court does everything but that. 

Commercial broadband operators, fixed and mobile, are constantly on guard for what they see as government rate regulation by proxy and the FCC’s brief did nothing to allay those concerns.

One section of the Communications Act says states can adopt regulations “not inconsistent with the FCC’s rules” to advance the government's interest in universal service. Another says states can’t regulate the rates charged for mobile services although they can regulate “terms and conditions” and take steps to ensure “universal service at affordable rates.”

The issue before the 9th U.S. Circuit Court of Appeals is whether the $0 co-pay is allowed by the first section or pre-empted by the second, the FCC points out.

The FCC first throws up its hands, saying: “(The FCC) has never addressed whether states may advance universal service by requiring wireless providers to offer minimum service standard plans with a $0 copayment as a condition of receiving state subsidies through a voluntary program like California LifeLine. For that reason, the FCC writes in support of neither party.”

The FCC then puts both thumbs on the scale for a reading that supports the $0 pay policy. That’s no big surprise, since the Biden administration has made it clear it sees price as a factor in universal availability.

The FCC keeps its official hands off the decision by using words like “might” and “may.”

It says, for example, given “statutory text, context and common sense,” the state’s policy ”might not ‘regulate’ rates” in the sense used in the statute. It said many FCC orders have held that state regulations that indirectly affect rates are not pre-empted and “may’ be analogous to the California rule.

The FCC also holds that certain state regulations, including rate regulations, are exempted “once wireless service has ‘has become vital to universal service.‘ “ 

”Because the parties have not litigated this case under that universal service exception, the FCC asks the Court to take care not to cast doubt on California’s ability to avail itself of [that holding] in a future proceeding should California choose to re-enact a $0 co-payment requirement,” the regulator said. ■

American Broadband & Telecommunications has agreed to pay more than $16 million to settle a Federal Communications Commission complaint that the company had violated its Lifeline program rules, including by applying for broadband subsidy money for ineligible participants.

American Broadband is a competitive local exchange carrier (CLEC) providing consumer and broadband services in the Midwest.

The company has already paid back $15,063,935.45 to the Universal Service Fund for USF subsidies the FCC said were either for “ineligible and duplicate Lifeline accounts,” or for people who had died.

There is an additional payment of $1,487,249.99. The FCC said the company had also failed to de-enroll ineligible subs, filed to have proper procedures for complying with FCC rules and failed to adequately screen, train or supervise third-party sales agents.

In addition to the company payments, company owner Jeffrey Ansted agreed to pay $67,050 to the U.S. Treasury. ■

The Federal Communications Commission‘s Lifeline low-income advanced communications subsidy program gets a shout-out, sort of, in the new Netflix series, Maid.

The limited series (created by screenwriter Molly Smith Metzler) from Stephanie Land‘s memoir, Maid: Hard Work, Low Pay, and a Mother‘s Will to Survive, has drawn critical praise since its Oct. 1 premiere for its gritty portrayal of life on the margins for an abused single mother and her daughter.

In a later episode, during a stay at a domestic violence shelter, single mom Alex Russell (Margaret Qualley) is given a new refurbished phone. The head of the shelter, Denise (BJ Harrison) advises Alex: “The FCC has a a lifeline program for discounted phone service for people in emergency shelters.”

The “sort of” aspect of the plug is because one of the show's central themes is how tough it is to navigate the government programs meant to help victims of domestic abuse get back on their feet and keep away from their abusers. Denise also advises Alex, “Like all things run by the government, there is a lot of red tape.”

The scene cuts to Alex‘s laptop with an FCC Lifeline program home screen, followed by a cut-away and the sound of typing, signaling she has, once again, begun the process of navigating that red tape, as she has had to do with housing and food assistance and other programs.

The show‘s promotion of the program, the emphasis on red tape notwithstanding, dovetails with the FCC's effort to get the word out about the assistance.

Back in September, during ”Lifeline Awareness Week,“ Rosenworcel talked in a brief YouTube video about the use of the Lifeline program for, among other things, helping victims of domestic abuse.

Phones are actually more often a malevolent character in the stories of domestic violence since abusers have been known to track their victims using cell phone location information. In the show, the shelter's policy is not to let anyone use the phone on the premises, only outside on the street so the location of the shelter cannot be pinpointed.

The potential for domestic abusers to get phone information was one of the reasons Rosenworcel pushed for more information back in 2019 about carriers' sale of real-time geographic location data to third parties, including bounty hunters.

And the same month Maid premiered, the Federal Trade Commission released a report concluding that ISPs are collecting and sharing more data about their customers than those customers are aware of, including internet traffic and real-time location data. ■

Democrats are urging the FCC to take a hard look at Verizon's proposed $6.9 billion purchase of TracFone, but there concern is not so much concentration as Verizon's commitment to the Lifeline low-income internet broadband subsidy program.

That came in a letter to acting FTC chair Jessica Rosenworcel from Sens. Richard Blumenthal (D-Conn.), Sheldon Whitehouse (D-R.I.), Dianne Feinstein (D-Calif.), Ron Wyden (D-Ore.), and Ed Markey (D-Mass.), who pointed out that TracFone was one of the largest operators in the Lifeline program.

Also Read: Verizon to Buy TracFone

Verizon has pledged to continue TracFone's support of Lifeline, but the senators want the FCC to take a not quite trust and definitely verify approach to that pledge, saying that Verizon "would have significant incentives and opportunities to push subscribers from Lifeline and inexpensive prepaid services to higher revenue plans.”

That is why they said the FCC should turn Verizon's pledge into binding deal commitments. In addition to making participation in Lifeline a condition of the deal, they argue the FCC should also require to make 5G available to Lifeline and prepaid subs at the same rate as other Verizon customers.

In addition to making participation in Lifeline a condition of the deal, they argue the FCC should also require to make 5G available to Lifeline and prepaid subs at the same rate as other Verizon customers.

The Federal Communications Commission on Wednesday (May 12) will launch its $3.2 billion Emergency Broadband Benefit (EBB) program, saying it expected the money to last a number of months, and signaling that the quicker the money runs out, the more successful it will have been.

Congress provided the funds and some of the mandatory framework, including that participating broadband providers — there are more than 825, according to the FCC — cannot exclude eligible households even if they have past or current delinquent payments.

Households already getting discounted broadband through various broadband operator programs will be automatically eligible for the EBB subsidy, but cannot be automatically enrolled by the broadband provider.

Also Read: FCC Unveils First Round of Emergency Broadband Benefit Participants

In fact, the FCC's Enforcement Bureau put out an advisory Tuesday (May 11) to that effect, "reminding" broadband providers that existing Lifeline subsidy customers "give their informed affirmative consent to participate in the EBB Program and are able to choose not to apply their emergency broadband benefit with their Lifeline provider without jeopardizing their existing Lifeline service."

The Lifeline subsidy is the existing Universal Service Fund subsidy for advanced telecommunications services for low-income residents.

The advisory also warns against marketing practices that could confuse consumers about the EBB program, including suggesting that signing up for EBB is required for getting Lifeline service or tying enrollment to obtaining other customer information.

Asked why that advisory was issued, an FCC official said it was to clarify some of the obligations and responsibilities of providers to make sure they were operating on a level playing field in terms of disclosures they were making to households.

The EBB is as much as $50 per household — $75 on tribal lands — and a one-time device subsidy of up to $100 for laptops or desktops, as long as the household chips in at least $10 toward the device cost.

The FCC plans to make public information from the Universal Service Administrative Co., which is overseeing the process, on how many households are taking advantage of the program and how much money is going out the door, according to an agency official speaking on background. The official had no estimate on how long the program would last, given that it has yet to start. Its length will depend on how many people avail themselves of it, the official said, adding that a shorter program means essentially a more successful program.

In addition to the Lifeline subscribers who are automatically eligible for EBB, there are at least 30 million children receiving free or reduced lunches, which qualifies their household for the emergency benefit. Households getting Pell Grants — another 6.5 to 7 million homes — are also eligible. There is, of course, some overlap among those categories, but it provides some idea of how many households could be applying for the money.

The FCC is also handing out more than $7 billion in a remote learning connectivity fund, but there is language in the legislation that created the EBB to prevent double-dipping, said one official. There could, however, be a case in which a household receiving the broadband benefit has a child receiving a device subsidy for schoolwork through the connectivity fund.

The connectivity fund device subsidy can go to a laptop or tablet, but can't go to a desktop or smartphone.

The Federal Communications Commission is getting a lot of help in deciding how to spend the $3.2 billion — and potentially much more — set aside by Congress in a December COVID-19 relief bill for an Emergency Broadband Connectivity Fund (EBB), as well as new pandemic-driven investment being teed up.

The FCC has been seeking input from stakeholders, since it was only given 60 days from when the bill became law at year-end to come up with rules and regulations to implement the fund.

Congress is requiring the agency to make all that money available for an internet service available at a $50-per-household discount ($75 on tribal lands).

ALSO READ: Jessica Rosenworcel Takes FCC Gavel

Not surprisingly, internet service providers are focused on making sure they can access as much of that money as possible. That means leveling the playing field with current participants in the FCC’s Lifeline low-income subsidy, to which the new congressional money is tied. Ninety percent of Lifeline participants are wireless carriers, NCTA–The Internet & Television Association VP and general counsel Steve Morris told the FCC at a roundtable on the new subsidy.

In virtual meetings with FCC staffers, ACA Connects, the NCTA, internet and competitive networks trade group INCOMPAS and WISPA (the wireless internet-service providers association) presented a united front in calling for flexible rules regarding “the specific service offerings that are available for the EBB program, the categories of households that may participate, and the verification processes that providers will use to qualify households.”

For its part, NCTA said the money should be available to as wide a pool of consumers as possible. It urged the FCC to make sure all providers, including broadband cable operators that have not been Lifeline participants, have an equal shot at the money, rather than giving current Lifeline participants a head start, and by minimizing administrative and implementation “burdens.”

One way that can happen, NCTA said, is by essentially preapproving the vast majority of NCTA members who took the FCC’s Keep Americans Connected pledge via their own existing low-income programs or launching new ones.

NCTA argues that for the new EBB program, the FCC should grant “automatic approval of an application for participation by a broadband provider with a pre-existing program,” such as Comcast’s Internet Essentials, rather than participating in Lifeline. The presumption is the low-cost broadband program’s verification process “qualifies as sufficient to avoid waste,
fraud and abuse,” which the FCC can review under objective standards to make sure that is the case.

Another cable broadband ask is that the FCC make sure participants can access a full list of participating providers since the subsidy can only be used for one provider, Comcast Essentials administrator Trinity Thorpe-Lubneuski told the FCC at the roundtable.

Commenters should likely be readying some of the same arguments. 

Rep. James Clyburn (D-S.C.) has said he will reintroduce a bill that would spend $100 billion to extend internet service to everyone in the country, and has pushed the White House to make that bill a part of any infrastructure package. 

If the most recent COVID-19 relief bill passes as currently written, the commission will have billions more in broadband dollars to give out, targeted to schools and libraries.

One thing is clear: The broadband subsidy spigot appears to be opening wide. 

The National Lifeline Association and Assist Wireless have asked a federal court to stay the Dec. 1 trigger for the FCC's increase of the mobile broadband minimum service standard in the Lifeline subsidy program from 3 GB to 4.5 GB.

They first petitioned the FCC for a stay, but that was denied. 

The petitioners told the U.S. Court of Appeals for the D.C. Circuit that absent the emergency stay, they would suffer irreparable harm.

The petitioners argue that the stay is warranted because the FCC's decision was arbitrary and capricious, which is a violation of the Administrative Procedures Act.

They want the FCC to keep the current 3 GB standard, saying that any increase above that "would mandate unaffordable service offerings requiring co-pays and result in less Lifeline access by low-income consumers."

On Nov. 16, the FCC's Wireless Bureau said that rather than raising the standard to 11.75 MB on Dec. 1, it would only raise it to 4.5 MB, explaining that constituted a partial grant of the petition.

The FCC said that allowing the increase to 11.75 GB "would risk undue disruption for Lifeline subscribers and providers," but that keeping it at 3 GB "would risk leaving Lifeline consumers behind at a time when broadband access is more important than ever." 

Saying he was cleaning up a mess made by the previous commission, Pai last July circulated a draft order that would permanently have cut that new minimum mobile broadband data capacity provided to low income residents by the Lifeline subsidy from 11.75 GB to 4.5 GB, but it did not get voted.  

The National Lifeline Association said that because Pai could not get the vote, the Wireless Bureau was directed to do it on delegated authority "skirting the majority of commissioners who were in favor of pausing the mobile broadband MSS at 3 GB pending further study and resolution of [the] reconsideration petitions now pending for an egregiously long period of nearly four and a half years."

The FCC has extended its existing COVID-19-related waivers related to the Lifeline phone/broadband communications subsidy through Feb. 28, 2021.

The waivers deal with the program's "recertification, reverification, general de-enrollment, usage and income documentation requirements." 

Related: Dems Push FCC for Unlimited Lifeline Data

Without the extensions, those waivers would have expired Nov. 30.

In addition, the FCC has granted a partial waiver of the scheduled increase in what speed of mobile broadband plan qualifies for subsidies. Without that waiver, beginning Dec. 1, those plans would have to offer 11.75 GB per month of data compared to the current 3 GB.

It is partial because the National Lifeline Association (NLA) petition for waiver had sought a freeze of the 3 GB threshold. Instead, the FCC said it would allow it to increase to 4.5 GB. 

NLA had also sought to stop the FCC's planned decrease of Lifeline voice support from $7.25 to $5.25. The FCC declined to do so as it continues to migrate the program from voice to broadband.

The FCC said that allowing the increase to 11.75 GB "would risk undue disruption for Lifeline subscribers and providers," but that keeping it at 3 GB "would risk leaving Lifeline consumers behind at a time when broadband access is more important than ever."

The 4.5 GB figure has always been more to FCC Chairman Ajit Pai's liking--the bump-up to 11.75 was mandated by a previous FCC.

Saying he was cleaning up a mess made by the previous commission, Pai last July circulated a draft order that would permanently cut that new minimum mobile broadband data capacity provided to low income residents by the Lifeline subsidy from 11.75 GB to 4.5 GB.  

T-Mobile has agreed to pay $200 million to resolve an FCC investigation into Sprint's compliance, or lack of it, with FCC rules on waste, fraud and abuse in the Lifeline advanced communications--broadband and phone--subsidy for low-income residents.

The FCC said that figure is a record fixed-amount settlement of an investigation. Sprint has also agreed to a compliance program to insure it follows the Lifeline rules.

Related: FCC Launches Lifeline Investigation of Sprint

“Lifeline is key to our commitment to bringing digital opportunity to low-income Americans, and it is especially critical that we make the best use of taxpayer dollars for this vital program,” said chairman Ajit Pai of the settlement. “I’m pleased that we were able to resolve this investigation in a manner that sends a strong message about the importance of complying with rules designed to prevent waste, fraud, and abuse in the Lifeline program. In addition to the great work of our Enforcement Bureau team, I would like to thank the Oregon Public Utility Commission for its efforts in this case. States play an important role in helping low-income consumers get access to affordable communications through Lifeline and making sure the program is run efficiently.”

The Enforcement Bureau was investigating allegations--stemming from an Oregon Public Utility Commission, that Sprint, before the T-Mobile merger--"claimed monthly subsidies for serving approximately 885,000 Lifeline subscribers, even though those subscribers were not using the service," the FCC said at the time, which would violate its "non-usage" rule.

Related: Pennsylvania Joins T-Mobile-Sprint Suit

Pai launched the investigation back in September 2019, calling it an "outrageous" apparent violation of the FCC's rules on Lifeline broadband subsidies. Sprint had said it was a mistake it has fixed and would pay back the money.

The FCC did not call it an apparent violation, but instead treated it as an established problem the "full extent" of which now needs to be investigated and responded to.

That rule requires Lifeline providers to "de-enroll" subs who aren't using their phones. The FCC said Sprint's violation was uncovered by the Oregon Public Utility Commission, which Pai thanks for its efforts. “States are an important partner with the FCC in both helping low-income consumers get access to affordable communications through Lifeline and cracking down on waste, fraud, and abuse in the program," he said.  

Preventing that abuse has been behind Pai's efforts to make it more accountable and prevent just the sort of abuse he said Sprint is guilty of.

That 885,000 represents almost a third of Sprint's Lifeline sub base. The FCC-overseen Universal Service Fund provides $9.95-per-month subsidies to serve low-income consumers, but that service must be provided. 

A spokesperson for FCC chairman Ajit Pai said Senate Democrats slamming the FCC for its administration of the Lifeline low-income broadband subsidy programming during the pandemic are to blame for not coming up with more money for the program as they seek tax cuts for the rich rather than negotiating for more broadband funds for the poor.

Democratic Vice Presidential nominee Sen. Kamala Harris (Calif.) and two dozen other Democratic senators argue the FCC has failed to take "forceful action" to keep households connected during the pandemic and said they are profoundly frustrated.

Related: Groups Want Unlimited Talk, Text for Lifeline Subs

In a letter dated Aug. 27, they called on Pai to "reverse proposed changes to the Lifeline program, take immediate steps to open its assistance to more households, and ensure that its services meet the pressing needs of families during this crisis."

They said even given the vast "homework gap" as students prepare to return to school virtually, the FCC has no national plan to make sure there is access for those students, calling it a "looming disaster" and a "vast digital divide" the FCC should be doing more to bridge with Lifeline and other Universal Service Fund programs. 

Rather than ramping up Lifeline subsidies--those for low income residents--the FCC has "actively worked to undermine and destabilize the Lifeline program," they argued, adding: "The FCC has also failed to complete important reforms to ease burdens on consumers and reduce fraud, such as the full implementation of the National Verifier meant to automate registration and preserve the integrity of Lifeline. Lastly, carriers face continued uncertainty about the long-term stability of the program given the open FCC proposals to cut back participation and compensation for services. The consequences of this sustained assault on Lifeline are stark – less than 20% eligible households subscribe to services, as much as a 30% drop during your watch."

Related: FCC Won't Drop Suspect Lifeline Subs

But in a response to the letter, the spokesperson was not having any of it.

"With the universal service tax that consumers pay to fund broadband services already at record levels, chairman Pai for months has made clear that Congress needs to step up to the plate and make more funding available for connectivity during the COVID-19 pandemic," the spokesperson said. "It’s therefore disappointing that Senate Democrats have failed to do their job and are refusing to find common ground with the Administration and Senate Republicans on broadband funding and other core national priorities unless they get their demand for special-interest giveaways that have nothing to do with the pandemic, like tax cuts for the rich in states like Connecticut, New York, New Jersey, and California."

"The FCC under Pai has taken a number of steps to reduce the red tape in the current program during the pandemic and encouraged ISPs to find ways to keep economically challenged subs connected so that Lifeline subs would not be involuntarily removed, but he has also proposed to cut the new minimum mobile broadband data capacity provided to low income residents by the Lifeline subsidy from 11.75 GB to 4.5 GB. 

But the senators suggested broadband fortunes favor the bold and proposed their own national plan:

1.) "Take emergency measures to provide additional financial support to Lifeline providers during the pandemic to temporarily support unlimited mobile data and voice minutes, and notify Congress if additional funding is needed for such changes.

2.) "Extend all current FCC waivers on Lifeline usage and subscriber documentation requirements for at least a full year, until August 2021 or when we have recovered from the pandemic.

3.) "Close the currently outstanding Lifeline proposed rulemakings that would create new obstacles for eligible households and add unwarranted burden on carriers.

4.) "Pause the scheduled changes to Lifeline program’s minimum service standards until the Commission studies such impacts on the market in its upcoming 2021 State of Lifeline Marketplace Report, to avoid disruptions to customers’ services.

5.) "Restore the monthly subsidy to $9.25 for plans offering voice services for subscribers who value voice over data-heavy plans and pause the planned decrease in contributions for voice support.

6.) "Work with states to increase the automated verification of state databases with the National Verifier program by the end of this year."

Among those signing on to the letter were Sens. Richard Blumenthal (D-Conn.), Mark Warner (D-Va.), Ed Markey (D-Mass.), Amy Klobuchar (D-Minn.), Bernie Sanders (I-Vt.), and Tim Kaine (D-Va.). 

The FCC has extended its Lifeline-related waivers. 

Lifeline is the phone/broadband subsidy to low-income residents, service that has become even more important during the pandemic. 

The FCC's Wireline Competition Bureau has, on its own motion (which means its own initiative rather than in response to a petition) agreed to extend the deadlines to Nov. 30. 

Related: Groups Want Unlimited Talk, Text, for Lifeline Subs 

"In light of the ongoing pandemic, we find good cause to extend, on our own motion, our prior waivers of certain Lifeline program rules governing re-certification, re-verification, general de-enrollment, subscriber usage, income documentation, and documentation requirements for subscribers residing in rural areas on Tribal lands," the bureau said.  

The FCC has also agreed not to drop suspect subs 

"Telemedicine, telework, and online learning continue to be necessary social distancing measures, which has emphasized the importance of access to affordable communications services for low-income consumers," the bureau concluded.

Calling the FCC's COVID-19-related changes to its Lifeline broadband subsidy program "small steps" and "tweaks," Some House Democrats are calling for bolder action. 

In a letter Thursday (Aug. 13) to FCC Chairman Ajit Pai, 15 members of the House Energy & Commerce Committee, which has principal jurisdiction over the FCC, urged him to use Lifeline funds to subsidize unlimited voice minutes and mobile data for Lifeline users for the duration of the pandemic. 

Related: Groups Want Unlimited Talk, Text, for Lifeline Subs 

“A strong response is critical given the supreme importance of connectivity while the country continues its efforts to combat the unprecedented and devastating COVID-19 pandemic," they wrote.  

They also took issue with a recent draft rule proposal from Pai that would reduce the amount of mobile data subsidized by the program. 

Saying he was cleaning up a mess made by the previous commission, Pai last month circulated a draft order that would cut the new minimum mobile broadband data capacity provided to low income residents by the Lifeline subsidy from 11.75 GB to 4.5 GB.  

"Now more than ever, Americans need this Lifeline to support telework, telehealth, education, and other services offered online to keep individuals and our communities safe and healthy," they wrote. "Unfortunately, your proposed rules seem to ignore the fact that coronavirus cases continue to rise, and the country has experienced nineteen consecutive weeks of over one million unemployment claims.” 

The legislators pointed out that while the Lifeline program generally provides $9.25 per month in subsidies, after Hurricane Katrina, the FCC provided $130 to qualifying households for handsets and voice minutes "to help them get back on their feet." They said that, "given the importance of connectivity and remote learning, working, and healthcare during the pandemic," the FCC should similarly take "aggressive action" to help struggling Americans. 

Signing on to the letter were Energy and Commerce Chairman Frank Pallone, Jr. (D-NJ), Communications and Technology Subcommittee Chairman Mike Doyle (D-PA), and Reps Jerry McNerney (D-CA), Yvette Clarke (D-NY), Marc Veasey (D-TX), Donald McEachin (D-VA), Darren Soto (D-FL), Tom O’Halleran (D-AZ), Anna Eshoo (D-CA), Diana DeGette (D-CO), G.K. Butterfield (D-NC), Doris Matsui (D-CA), Peter Welch (D-VT), Ben Ray Luján (D-NM) and Tony Cárdenas (D-CA). 

They asked for a response from Pai by Sept. 3. 

Among the Lifeline "tweaks" the FCC has already made include extending Lifeline-related waivers on recertification, reverification, general de-enrollment, usage, and income documentation and agreeing not to drop suspect subs.

Saying he was cleaning up a mess made by the previous commission, FCC chairman Ajit Pai has circulated a draft order that would cut the new minimum mobile broadband data capacity provided to low income residents by the Lifeline subsidy from 11.75 GB to 4.5 GB. 

The current minimum is 3 GB and was scheduled to more than triple in Dec. 1 per a formula approved back in 2016 by the Tom Wheeler FCC. 

The order would revise the methodology, said Pai, to ensure "predictable, reasonable yearly updates" rather than the "drastic year-over-year increases that could impact the ability of Lifeline carriers to continue providing affordable service." 

Related: Pallone Stumps for Massive Broadband Investment

The FCC stepped in last year, the first time the 2016 formula kicked in, to reduce the increase from 2 to 3 GB, rather than the 2 to 8 GB the 2016 formula would have mandated. Pai wants to make the revision to the methodology permanent. 

Related: Bipartisan Bill Would Goose Broadband Buildouts 

Lifeline provides monthly discounts of about $10 dollar on broadband and phone service meeting certain minimum standards updated annually. But Pai said the current data capacity formula for updating the standards result in dramatic swings that risk pricing the service out of range of Lifeline-eligible residents. 

Pai said the methodology change would: "(1) ensure greater predictability in the standard from year-to-year for Lifeline subscribers and providers; (2) better account for the needs of smaller-than-average households; and (3) enable the Wireline Competition Bureau to rely on the latest data sources in making its calculations."

A number of groups including Common Cause and the Open Technology Institute are calling on the FCC to provide unlimited talk and text to Lifeline recipients. 

Lifeline is the Universal Service Fund program that provides basic telecommunications services to low-income residents. 

Related: Bill Expands Access to Broadband Subsidies 

They want the change immediately and say it is to protect civil rights, specifically by providing equal access to life-saving services during the pandemic.  

They also point out that the services can help those assembled in mass protests against police brutality and systemic racism. 

Related: Jobless Numbers Cited in Call for Major FCC Lifeline Expansion 

"The pandemic has once again shone a light on the critical importance of telecommunications in health and education. Let’s ensure that we all can afford the connections that many of us take for granted," the groups told the FCC.

"Benton urges the FCC to act to help our most vulnerable neighbors during this national emergency. The pandemic has once again shone a light on the critical importance of telecommunications in health and education. Let’s ensure that we all can afford the connections that many of us take for granted," said Andrew Jay Schwartzman, senior counselor at the Benton Institute for Broadband & Society, another of the groups seeking the change. 

The FCC has taken another step towards getting broadband access to rural areas, specifically Tribal Lands, as well as generally extending other recent Lifeline-related waivers on recertification, reverification, general de-enrollment, usage, and income documentation through Aug. 31. 

Related: FCC Adds Lifeline Waiver, Extends Deadlines

The FCC said Monday (June 1) that it has loosening the program application and enrollment processes for its Lifeline program for low-income Tribal lands consumers, a program whose name has never been more appropriate given the stay-at-home culture promoted by the COVID-19 pandemic. 

The FCC's Wireline Competition Bureau has issued a temporary waiver to allow carriers to provide service to Tribal residents even if they have not submitted what would ordinarily be the requisite documentation. 

Residents will get the service, then have 45 days to provide the requisite eligibility information. 

The program provides up to a $34.25 per-month subsidy for broadband/voice service for those living on Tribal lands. 

"Today’s waiver will give consumers easier, quicker access to the affordable broadband service they need for telehealth, online learning, telework, and communicating with loved ones during the pandemic, and it will give Lifeline carriers the flexibility needed to help these consumers safely complete the application process," said FCC chair Ajit Pai. 

Of the general waiver extensions, the FCC said: "This extension will help ensure that no existing Lifeline subscribers are involuntarily removed from the program during the waiver period." 

The FCC has been encouraging ISPs to get low-cost broadband to as many people as possible during the pandemic, and handing out money for telehealth, but a big group of Democratic legislators want it to put its mouth where its money is to inform those newly low income thanks to the pandemic that they can get cheaper broadband. 

Related: Pandemic Amplifies Call for Universal Broadband 

Led by potential vice presidential candidate Amy Klobuchar (D-Minn.), Dick Durbin (D-Ill.), Marcia Fudge (D-Ohio) and Anna Eshoo (D-Calif.), a gross of House and Senate Dems (144 in all) has asked FCC chairman Ajit Pai to get together with the USDA and HHS to make sure that folks newly eligible for Supplemental Nutritional Assistance Program (SNAP) or Medicaid are also newly eligible for the FCC's Lifeline broadband subsidy. 

“While we understand that the FCC has traditionally issued guidelines for states and telecommunications providers to advertise the Lifeline program, given the critical role of internet connectivity during the coronavirus pandemic, we urge the FCC to coordinate directly with USDA and HHS as well as states and stakeholders to help ensure people in need are informed about their eligibility for the Lifeline program.” 

Related: FCC Won't Drop Suspect Lifeline Subs 

Local media, including broadcasters and cable operators, could use some of that government advertising infusion given the fall-off in advertising during the pandemic. 

The legislators want answers to the following questions, though they did not give Pai a deadline: 

1. "What is the FCC currently doing to work with the USDA and HHS to help ensure that people in the U.S. who are newly eligible for the Lifeline program are aware that they can receive subsidized communications services?  

2. "What data has the FCC collected on the number of people in the U.S. who are newly eligible for the Lifeline program since the onset of the coronavirus pandemic and how many of those newly eligible have enrolled in the program?  

3. "Please detail the additional resources and authorities the FCC needs to ensure qualifying people in the U.S. know that they are eligible for the Lifeline program."  

Also backing the letter are Public Knowledge, the National Consumer Law Center, United Church of Christ and Third Way. 

FCC commissioner Geoffrey Starks added his imprimatur on the effort.  

“The COVID-19 pandemic has shown us that connectivity is more important than ever. I’ve called for the FCC to coordinate with agencies that administer services that determine eligibility for the Lifeline program to ensure low-income communities learn about the critical Lifeline program," Starks said. "Americans cannot afford for the government to work in silos, and I’m thankful for the leadership of Senator Klobuchar, Senator Durbin, Congresswoman Fudge, and Congresswoman Eshoo to make sure more Americans know about this essential program in our social safety net." 

Fans of expanding the FCC's Lifeline low-income broadband subsidy program are citing the new unemployment figures--which bring the total to nearly 10 million jobless claims since the pandemic wave first hit those figures hard--as reason enough to do expand Lifeline, including automatic enrollment in the subsidy. 

The new figures were 6,648,000 for the week ending March 28, added to the 3,341,000 from the previous week.  

Adrianne Furniss, executive director of the Benton Institute for Broadband & Society, pointed out Thursday (April 2) that means over 10 million people most of whom have been told to shelter in place, a place where they will need to get broadband so their kids can learn, so they can look for new jobs if necessary, and so they and their families can connect with healthcare providers and loved ones. 

Related: Groups Seeks Massive Lifeline Response from FCC

"Fortunately, the Federal Communications Commission has a tool that can keep these people connected, the Lifeline program," Furniss said. She wants everyone who files for unemployment to be automatically enrolled in the Lifeline program and automatically get the broadband price break, which she says should be $50 per month. The current Lifeline subsidy is $9.25. 

Democratic FCC commissioner Jessica Rosenworcel also tied immediate Lifeline expansion to the jobs figures. 

“Today’s announcement is a sad indication of the impact of the coronavirus pandemic on the country’s economy and on the livelihood of so many people that find themselves newly out of work," she said. "As the coronavirus places new strains on our economy and households across the country, we need to make sure that no one is left behind when it comes to communications. Now is the time to see how we can modernize our Lifeline program and extend its reach to so many in need. This includes the millions of recently unemployed, seniors, and others at risk at this difficult time. The FCC has done so before in the face of crisis and it’s time to do so again.” 

The FCC has already taken some steps to boost Lifeline availability, including not dropping suspect subs.

In an order released Tuesday (March 17) the FCC's Wireline Competition Bureau waived the program's re-certification and re-verification requirements for 60 days, which has become something of a standard for the suspension of regular processes.

It also suspended for those 60 days the requirement that participating carriers' representatives register with the Universal Service Fund, which implements the Lifeline subsidy. 

The FCC said it has taken steps to make sure no low-income residents currently receiving broadband via the Lifeline Universal Service Fund subsidy lose access to that vital link in the age of coronavirus. 

The FCC's Wireline Competition Bureau has waived various rules that would otherwise result in subs being dropped from the program, which provides broadband and voice subsidies for low-income residents. 

Related: Groups Seek Massive Lifeline Response from FCC 

The rules being waived are meant to get duplicate, unused or ineligible accounts off the books as a way to guard against waste, fraud and abuse. Carriers are directed by the rules to de-enroll any sub they reasonably believe no longer qualifies. 

But the FCC has concluded that in the current "unprecedented public health crisis," it is in the public interest to waive that mandate temporarily to make sure no sub loses service. 

The rules are waived until May 29. The FCC has also extended its recent waiver of the "recertification and reverification requirements. 

The FCC has initially waived those requirements for 60 days back on March 17.

The FCC has decided not to raise the minimum broadband usage standard for its Lifeline subsidized mobile broadband service from 2 GB to 8.75 GB per month starting Dec. 1, instead raising it by 1 GB to 3 GB per month. But it has declined to delay the phase-down of carrier support for service that does not meet that 2 GM minimum. 

Lifeline is the Universal Service Fund program to subsidize communications services to low income residents. 

Related: Pai Launches Investigation of Sprint for Lifeline Abuse

The vote was 3 to 2, with Democrats Jessica Rosenworcel and Geoffrey Starks dissenting. 

CTIA and others had sought a waiver of the four-fold increase in the minimum, and also wanted the FCC not to decrease the subsidy from $9.25/month to $7.25/month for those carriers not meeting the broadband minimum, which would include mobile voice-only service. 

The FCC is migrating the subsidy from voice to broadband.

"We believe a 3 GB per month minimum standard balances the core objectives of bringing the mobile broadband usage available to our nation’s most vulnerable consumers more in line with what other Americans expect and receive from their service, while maintaining a service that is affordable for low-income consumers," the FCC said in granting the petition in part and denying it in part. 

The commission said that the unexpectedly large growth in mobile broadband and the resulting four-fold increase in the standard due to the formula for that calculation adopted by the FCC under then chairman Tom Wheeler in 2016 was sufficient cause to grant the waiver to the extent that the commission will cap the minimum at 3 GB per month beginning Dec. 1. 

But the FCC said there was no good cause for waiving the phase-down of support for noncompliance with that minimum standard. 

"Though the record contains no clear evidence on the extent of additional costs, which makes it difficult to precisely quantify the likely effect of an increase in the minimum usage allowance," the FCC majority said. "[W]e find it reasonable to anticipate that a more than four-fold increase in the minimum usage allowance would require substantially greater network resources, and, in turn, the associated costs would be passed along to resellers and/or end-users. Absent a more substantial transition period, the large increase in the minimum standard for mobile broadband usage could unduly disrupt service to existing Lifeline subscribers."

Related: Markey Leads Counter-Charge Over USF Cap

The FCC concluded that the potential benefits of a big increase standard were outweighed by what it said would be the hardship on Lifeline subs and that the increase was greater than the FCC had envisioned when establishing the calculation for increasing the minimum. "In practice, the primary methodology for updating the minimum standard for mobile broadband usage under the Lifeline program’s rules yields a far larger year-over-year change than we believe the Commission anticipated," the FCC said. 

Rosenworcel said she was dissenting because she thought the FCC should have granted the waiver of the support phase-down for voice service, citing the unintended consequences for those who still rely on Lifeline for voice services.  

Starks said that given that the FCC was currently reviewing the Lifeline market, it should not have made changes until that report was completed. He also agreed that the voice-only subsidy phase-down was problematic.  

Even as the FCC is expected to soon approve the merger of T-Mobile and Sprint, which FCC chair Ajit Pai has publicly supported, the chairman has now launched an Enforcement Bureau investigation into what he said is an "outrageous" apparent violation of the FCC's rules on Lifeline broadband subsidies. 

Sprint said it was a mistake it has fixed and would pay back the money.

"The Federal Communications Commission has learned that Sprint Corp. claimed monthly subsidies for serving approximately 885,000 Lifeline subscribers, even though those subscribers were not using the service," the FCC said, which would violate its "non-usage" rule meant to prevent waste, fraud and abuse.  

Related: Pennsylvania Joins T-Mobile-Sprint Suit

The FCC did not call it an apparent violation, but instead treated it as an established problem the "full extent" of which now needs to be investigated and responded to. 

That rule requires Lifeline providers to "de-enroll" subs who aren't using their phones. The FCC said Sprint's violation was uncovered by the Oregon Public Utility Commission, which Pai thanks for its efforts. “States are an important partner with the FCC in both helping low-income consumers get access to affordable communications through Lifeline and cracking down on waste, fraud, and abuse in the program," he said.  

Preventing that abuse has been behind Pai's efforts to make it more accountable and prevent just the sort of abuse he said Sprint is guilty of. 

That 885,000 represents almost a third of Sprint's Lifeline sub base. The FCC-overseen Universal Service Fund provides $9.95-per-month subsidies to serve low-income consumers, but that service must be provided.  

“Lifeline is an important component of our efforts to bring digital opportunity to low-income Americans, and stopping waste, fraud, and abuse in the program has been a top priority of mine since I’ve been at the Commission,” Pai said. “It’s outrageous that a company would claim millions of taxpayer dollars for doing nothing. This shows a careless disregard for program rules and American taxpayers. "I have asked our Enforcement Bureau to investigate this matter to determine the full extent of the problem and to propose an appropriate remedy.” 

It is unclear what, if any, impact the investigation could have on the merger, though the FCC usually likes to wrap up legal loose ends before signing off on deals.  The Justice Department has already agreed not to block the deal on various conditions. 

"It cuts both ways," said MoffettNathanson senior analyst Craig Moffett of the impact on the merger. "On the one hand, it is certainly a blow to Sprint’s credibility, and that’s an obvious negative for the merger. But it also highlights how precarious Sprint is as a fourth operator, so I suppose that could be spun as a positive for the deal, inasmuch as a merger would effectively take them out as an independent operator."

Sprint countered the FCC in a statement, saying that the problem was an error it had since fixed and would reimburse the federal  and state governments.

"In 2016, the FCC approved sweeping changes to the Lifeline program," the company said in a statement. "These changes required Sprint to update how it calculates usage and therefore eligibility of Lifeline customers. An error occurred when these new requirements were implemented in July of 2017.

"When the error was discovered, we immediately investigated and proactively raised this issue with the FCC and appropriate state regulators. We also engaged an independent third party to review the results of our review and the effectiveness of our operational changes.

"While immaterial to Sprint’s financial results, we are committed to reimbursing federal and state governments for any subsidy payments that were collected as a result of the error.

"We are proud of the benefits we provide to eligible low-income individuals through discounted wireless service. We believe this program is valuable for underserved populations."

In a further move in the FCC's effort to better target telecom and broadband funds and prevent waste, fraud and abuse, the Wireline Competition Bureau is "soft" launching its national Lifeline eligibility verifier in another 11 states on June 25: Arizona, Connecticut, Georgia, Iowa, Kansas, Nebraska, Nevada, New York, Vermont, Virginia, and West Virginia.

The first soft-launch states were Colorado, Mississippi, Montana, New Mexico, Utah and Wyoming.

Eligible telecommunications carriers (ETCs) in those states who are eligible for the Lifeline subsidies will not be able to begin any subscriber re-certifications after June 25 and should wrap up any current certifications under the existing rules by Aug. 30. Certification consists of verifying that the subs it is serving with subsidies ($9.25 per month) qualify for the program, which is targeted at low-income residents and tied to qualifying for various other government subsidy programs—Medicaid, Food Stamps, etc.).

ETCs will be able to test the new verifier before the FCC mandates its use so their employees can be ready on day one.

During the "soft" launch, the Universal Service Administrative Company (USAC) will start re-certifying subs using the national verifier. Anyone who can't be certified will be excluded from the program.

One of the things Pai did early on in his tenure was to revoke the most recent round of Lifeline until the FCC addressed the verification issue. Pai's stated goal is to prevent waste, fraud and abuse, something he has long targeted in the program, though critics have suggested it was a draconian hit on lower income residents being denied service.

WASHINGTON — Bipartisan frustration with the Lifeline communications subsidy program was vented Thursday (Sept. 14) at a Senate Homeland Security and Government Affairs Committee hearing.

Witnesses taking some of that heat were FCC chair Ajit Pai; Seto Bagdoyan, director of audit services, forensic audits and investigative service at the Government Accountability Office; and Vicki Robinson, acting CEO of the Universal Service Administration Co.

The hearing title telegraphed that frustration, “FCC’s Lifeline Program: A Case Study of Government Waste and Mismanagement.” But while that title is the responsibility of the majority, both Republicans and Democrats took aim at the program.

The Lifeline program is the Universal Service Fund subsidy that goes to low-income residents to support basic lifeline communications service, previously phone service and now, increasingly, broadband Internet service.

Sen. Ron Johnson (R-Wis.), the committee chairman, said he would recommend the USF undertake a forensic audit of the top 30 providers participating in the program.

Johnson pointed to evidence that many people getting subsidized wireless service had other means of communications, so it was not really a lifeline. He suggested that ending the program was on the table, with the money perhaps better spent on paying down the deficit.

But Sen. Heidi Heitkamp (D-N.D.) said she did not want the baby thrown out with the bathwater. Heitkamp argued that the USF program was crucial, and that while officials need to get a handle on waste, fraud and abuse, she did not want the fund raided for deficit reduction, including by moving it from private banks to the U.S. Treasury as some have suggested.

Pai said moving the USF to the Treasury would be a way to better protect the money.

Arguably the legislator most incensed by the program's waste, fraud and abuse was ranking member Sen. Claire McCaskill (D-Mo.). The GAO witness was in attendance because of a GAO report (the "case study" of the hearing's title) McCaskill had asked for showing widespread waste, fraud and abuse in the program.

For example, the GAO was unable to confirm whether 36% of the 3.5 million individuals it reviewed (or some 1.2 million) actually participated in any of the qualifying programs, like Medicaid, that they stated on their applications for the subsidy.

“I don’t know where to start,” she said, then picked one of many issues: The $90 million owed by participating companies who were still receiving Lifeline money. Over the past two years, McCaskill pointed out, the FCC had written checks totaling more than $2 billion to the 10 carriers that owed it money, asking how in the world that was possible.

Pai said it was a great question, and he was committed to stopping that.

But McCaskill shot back that he wasn't, that there was no enforcement, and that they continued to get away with it. She conceded three Lifeline related settlements the FCC had struck, but the former DA said nobody had gone to jail. "It is outrageous that they have gotten away with this level of fraud," she said.

Pai said that it was a top enforcement priority and they would not be "falling through the cracks" on his watch.

McCaskill was also nonplussed that companies were able to override the local verification process, essentially saying that folks who had been deemed ineligible for the subsidy were eligible anyway. GAO found that 63% of the time it applied for the subsidy under fake names, it got one.

Robinson pointed out that a new national verifier could not be overridden, but that the program always had to balance integrity with participation. McCaskill shot back that the integrity of the process had already been lost.

Related: Senate Leaders Want Lifeline Abuse Investigations

McCaskill said she would personally help put some of the fraudsters in jail and asked Pai why the FCC was not doing more to weed out the waste and fraud. 

Pai said he was trying to, but that he was addressing issues that had essentially festered under previous management due to an unwillingness to crack down on the program's abusers. Pai actually launched his own investigation into Lifeline abuses when he was a commissioner, and has long argued the FCC needed to do more to rein in those abuses. As chairman, he rescinded some Lifeline eligibilities while the FCC figures out how to better verify that eligibility. 

Pai said the key is that the subsidy — $9.25 per month — should only go to those who would otherwise not have basic communications and that insuring that was a top priority of his FCC.

Asked by McCaskill for three things he could talk about that would bring some "urgency" to the issue of waste fraud and abuse, Pai said that 1) verification needed to be upfront, rather than follow an after-the-fact "pay and chase" model; 2) there needs to be a "meaningful" budget mechanism; and 3) the FCC must clearly define the goal of the program, then measure how and if it is meeting that goal.

McCaskill suggested handing out phones when folks apply for unemployment or SNAP (the Supplemental Nutrition Assistance Program), so their eligibility would already be established. 

At a couple of points during the hearing, it was Johnson who eased the tension by pointing out that while they were clearly venting on the program, they considered the witnesses as wearing "white hats," and that they were all there to work with the committee to improve it.

“It’s worth noting that on the day a Senate committee is examining the FCC’s Lifeline program to try to ensure that waste, fraud, and abuse is curtailed, the FCC has just announced that the new USF fee, in effect a tax on their phone service paid by all consumers, will be 18.8%," said Randolph May, president of free market think tank, The Free State Foundation. "I am a long-time supporter of a properly-formulated and properly-run Lifeline program to provide a safety net for low income persons. But this tax of almost 19%— the highest ever —  on all phone bills shows why it is so important to curtail fraud and abuse if support for the program is to be sustained."

The Senate Communications Subcommittee Tuesday (June 20) took a deep dive into the FCC's Universal Service Fund, with a focus on rural broadband deployment and telehealth.

Sen. Roger Wicker (R-Miss.), chair of the subcommittee, signaled that he and ranking member Brian Schatz (D-Hawaii) were reintroducing the Reaching Underserved Rural Areas to Lead [RURAL] on Telehealth Act, which would qualify some rural healthcare providers for USF funds. He said robust broadband connections are vital to the adoption of "lifesaving technology."

Wicker, who previously has introduced a bill requiring the FCC to improve broadband data collection, said, "[E]nsuring broadband deployment to rural healthcare providers is a critical component of the USF program."

He also said the importance of delivering broadband to rural areas -- Mississippi has a lot of them -- cannot be understated, citing economic and digital innovation.

FCC chair Ajit Pai has promised that closing the digital divide, particularly the rural divide, is a priority.

Sen. Schatz said all Americans need the essential connection to broadband to fully participate in society, from applying for a job todoing homework to accessing government services. He said the FCC's yearly broadband report demonstrates that millions of Americans (north of 30 million) lack access to high-speed broadband. "We can't close that divide without USF," he said.

He said the FCC should remain "vigilant" against waste fraud and abuse.

That was one of the reasons Pai cited in suspending the designation of nine telecoms as eligible for Lifeline USF subsidies, which are the subsidies for basic connectivity for low-income residents.

Related: O'Rielly, Clyburn Seek Comments on Broadband Subsidies

Schatz said the FCC needs to take into account unique geographical and topographical challenges--like those in his home state of Hawaii, that make broadband deployment particularly difficult and costly.

Shirley Bloomfield, CEO of NTCA-The Rural Broadband Association, told the legislators that the USF program's "viability and effectiveness" were "in peril" due to a flat budget.

She said that lack of money is leading to cancelled buildouts and layoffs. She then brought it home for committee chair Wicker. "In Mississippi, instead of upgrades in Fulton, the only investments will be to remain operational."

She said the FCC should tap USF fund reserves if necessary, to meet the shortfall, or increase the contribution factor, by only the cost of a Starbucks coffee a year, she added. She said another option would be for Congress to direct some infrastructure money to the program.

FCC chairman Ajit Pai was already getting pushback from Capitol Hill, his fellow Democratic commissioner and others soon after he announced the plan to roll back the FCC's Lifeline eligibility program in favor of letting states decide who should get to provide the subsidized broadband service to low income residents.

“This is another effort by President Trump’s FCC to inflict death by a thousand cuts on the Lifeline program," said Energy and Commerce Committee ranking member Frank Pallone (D-N.J.), Communications and Technology Subcommittee ranking member Mike Doyle (D-Pa.), and subcommittee member Rep. Doris Matsui (D-Calif.) in a joint statement. "Through lawyerly maneuvering, the FCC is trying to disguise its efforts to eliminate a system designed to make it easier for anyone who needs access to broadband to get it—no matter where they live. We will continue to fight for this important program that keeps struggling families across the country connected.”

Pallone and the others had called for Pai to un-rescind nine federal eligibility authorizations issued under his predecessor, but since he is eliminating the program, he signaled Wednesday that wasn't happening.

Among the reasons Pai cited for rescinding those was that the FCC first needed to get a better handle on claims of waste fraud and abuse in the program, but Pallone cited a Democratic staff report saying such claims were exaggerated.

“Chairman Pai's statement confirms that under this Administration low-income Americans will have less choice for Lifeline broadband, and potential providers who want to serve low-income Americans will face greater barriers to entry and regulatory uncertainty," said Democratic FCC commissioner Mignon Clyburn. "While today's announcement is not surprising, it is nonetheless deeply disappointing.”

Lifeline fans The Benton Foundation also took a dim view of the move.

"Here’s what today’s announcement means: less competition in the Lifeline marketplace and less choice for Lifeline consumers," said Kevin Taglang of the Foundation in a statement. "The FCC is short two commissioners, so it seems the chairman is trying to occupy two chairs or, at the least, talk out of both sides of his mouth. But if you’re really listening, the message is clear: Ajit Pai is anti-competition and anti-consumer."

“Chairman Pai ignores the facts, the record, and the law," said Carmen Scurato, director of policy and legal affairs for the National Hispanic Media Coalition. "His misguided approach on how to improve the Lifeline program is simply a ruse that will lead to the ultimate demise of the program. His plan, which includes eliminating the new federal designation process for Lifeline Broadband Providers, will ultimately deny America’s poorest families and their children the opportunity to connect to affordable broadband."

But not all Lifeline fans were hanging crepe over the move.

“I am a proponent of free market-oriented communications policies, but I also have been a long-time supporter of the FCC’s Lifeline program as a safety net as long as the program is properly structured and run as efficiently as possible," said Free State Foundation President Randolph May. "I think Chairman Pai will also be shown to be a supporter of a properly structured, efficient Lifeline program. He made clear last year that he believed the Commission erred as a matter of law in creating a federal Lifeline broadband provider designation process. I certainly don’t fault him for acting on his belief that extension of Lifeline to broadband services must rest on a sound legal foundation, not just on policy predilections. I think those, like me, who favor Lifeline as an effective means of closing the digital divide, understand Chairman Pai’s action and don’t take it as inconsistent with support for Lifeline." 

Pai said that while he was moving eligibility decisions back to the states, he remained committed to the subsidy and including broadband--it used to go to phone when that was the "basic telecommunications" lifeline that broadband is fast becoming.

“Giving states authority over designating Lifeline providers is what Congress has always intended. States play a crucial role in ensuring that Lifeline is run honestly and efficiently," said Sen. John Thune (R-S.D.), chair of the Senate Commerce Committee. "Chairman Pai is correcting FCC overreach that threatened accountability and, therefore, the success of the Lifeline program. I thank Commerce Committee Senators Fischer and Udall for their leadership in supporting the role of states to prevent waste and abuse in the effort to connect Americans to the internet through broadband.”

Over a dozen Democratic members of the House Energy & Commerce Committee have asked FCC Chairman Ajit Pai to reverse his reversal of nine Lifeline broadband subsidy authorizations granted in the waning weeks of his predecessor, Chairman Tom Wheeler.

In a letter to Pai Wednesday (Feb. 15), they said his halting of the expansion of the program, which provides subsides for basic communications services to lower income residents, unnecessarily pulls the tools to connect out of the hands of the poor in the case of one provider, which is already providing service, and the potential for the other eight--which are not yet providing service--to supply those tools.

Related: Democratic Sens. Push Pai to Reverse Lifeline Decision

Pai has pointed out that the authorizations were not denied, but just returned to "pending" status while the FCC gets a better handle on weeding out potential waste, fraud and abuse, but the Dems weren't convinced.

"The order does not explain how its actions will accomplish those goals," he said. "Furthermore, since the Order raised many novel policy questions regarding the Commission’s current efforts to safeguard the integrity of the Lifeline program, we find it troubling that the Chairman would insist on pursuing the same course he has so often criticized his predecessors for: an improper exercise of the FCC’s delegated authority and a refusal to permit the full Commission from voting on an item that poses new questions of law and policy."

They said they were all for making the program more efficient and accountable, but said that need not come at the expense of the consumers who benefit from the Lifeline subsidies.

They urged him to immediately reinstate the designations and allow more companies to qualify. 

Among those signing onto the letter were E&C ranking member Frank Pallone (D-N.J.), Communications Subcommittee ranking member Michael Doyle (D-Pa.), and former Communications Subcommittee chair Anna Eshoo (D-Calif.).

Rep. Ro Khanna (D-Calif.), who last week criticized FCC chairman Ajit Pai on the House floor, is heading a letter from 40 Democratic colleagues calling on Pai to expand Lifeline broadband subsidies.

That follows a similar push last week by Senate Democrats.

After Pai rescinded nine (out of some 900) Lifeline authorizations, which were approved in the last few weeks of his predecessor in the post, Khanna, who represents Silicon Valley, decried the move in a floor speech and signaled a letter from him and his colleagues would be on the way.

“[Chairman Pai] is writing the rules of modern day capitalism in a way that privileges these elite telecom companies, with concentrated economic power, at the expense of low income Americans," Khanna said. "This Congress must stand united to make sure an unelected bureaucrat doesn’t get to write the rules of our economy in favor of wealthy interests at the expense of ordinary Americans.”

Pai said he made the move to get a better system of vetting waste, fraud and abuse in place before expanding the program. The applications were not dismissed, but returned to "pending" status.

In the letter, the legislators said Pai was hurting "those in our country that need the most help," calling the decision an arbitrary one that will "hurt poor children and widen the digital divide." They asked him to reconsider the decision to remove the companies.

Pai came into the job pledging that closing the digital divide was a priority for him.

Among those signing on to the letter was Anna Eshoo (D-Calif.), former ranking member of the Communications Subcommittee.

Some of those legislators will have a chance to grill Pai on the issue early next month. He is scheduled to testify before House and Senate committees March 8.

Sens. Richard Blumenthal (D-Conn.) and Corey Booker (D-N.J.) are leading more than a dozen senators (all Dems except independent Bernie Sanders of Vermont) calling on FCC Chairman Ajit Pai to reverse his decision to withdraw Lifeline broadband subsidy authorizations from nine companies.

Pai said the decision was due to 1) procedural errors, 2) because they were issued in the waning hours of the previous Administration, something Republicans warned against, 3) and because he suggested the FCC needed to hit the pause button on expanding the low-income subsidy program until it got a better process for monitoring for waste, fraud and abuse.

The senators, who also included Al Franken of Minnesota, Ed Markey and Elizabeth Warren of Massachusetts and Ron Wyden of Oregon, said they were deeply troubled by the action.

Related: Ex-Wheeler Aide Sohn Slams Pai for Lifeline Decision

They said the chairman was undermining the program, making it more difficult for low income residents to afford critical communications services, and appearing to run counter to his pledge in the first days of his chairmanship to make closing the digital divide a priority under his watch.

The senators said that to "abruptly revoke" the authorizations only weeks after they had been granted was "unfairly punishing" low-income consumers.

Pai had pointed out in a blog post that eight of the nine customers had no customers so far, so the impact should not be great, and that there were still some 900 companies authorized and providing the subsidies.

The senators pointed out that the customers of at least one of the nine would have to be disconnected.

Evoking Sec. 706 of the Communications Act, they said that the FCC has an obligation to ensure “consumers in all regions of the country, including low-income consumers” have access to “advanced telecommunications services,” and asked him to reconsider the decision.

”Chairman Pai shares the Senators’ commitment to closing the digital divide and believes that the Lifeline program can play an important role in helping to achieve that objective," said a Pai spokesman. "The Wireline Competition Bureau’s decision last week did not have any impact on over 99% of the companies in the program, and eight of the nine companies affected did not have any Lifeline customers.

"These nine companies’ applications were rushed out the door in the final days of the last Administration through an improper process. Some of these companies did not follow Commission rules requiring consultation with Tribes. The Bureau granted some applications without waiting for the 30-day public comment period set forth in our rules to close. And there was inadequate attention paid to whether necessary safeguards were in place to prevent the waste, fraud, and abuse that has plagued the program. For all these reasons, it was important for these nine companies’ applications to receive additional review.”

The Republican leadership of the House Energy & Commerce Committee is challenging the independence of the FCC Inspector General's (IG) office following its finding that FCC chairman Tom Wheeler did not leak information about the existence of a compromise on Lifeline subsidy reforms in order to blow up the deal.

E&C Chairman Fred Upton (R-Mich.) and Communications Subcommittee Chairman Greg Walden (R-Ore.) want the FCC to supply some specific information about the "interdependence" of the FCC and IG, they said in a letter to IG David Hunt.

“In order to address our committee’s concerns regarding the independence of the FCC’s Office of Inspector General and the impact on accountability in the FCC’s decision-making and management, we request… information necessary to understand the practical and working relationship between the Office of the Chairman and the Inspector General.”

The IG report found that Wheeler did leak the information, but that he had the authority to make nonpublic information public, and that there was no evidence of a motive beyond what FCC spokesperson Shannon Gilson, who said she had recommended the chairman release the info, said was "providing the press with information about the compromise Lifeline proposal to address the confusion that was already surrounding the item in the media."

The IG's office said it "found no evidence that the information was provided to the press in an attempt to unduly influence the outcome of the vote."

The Letter from Upton and Walden addresses their concerns more generally, citing a number of issues including what they said was the possible sharing of IG drafts and audits with the chairman's office before they were finalized, the FCC Office of Human Resources, a  "direct report" to the chairman's office, participating in IG hiring decisions, the apparent absence of IG reports from the FCC Web site.

The Republican legislators said that there is "growing concern that because the FCC Inspector General is appointed by, reports to, and is under the general supervision of the chairman of the commission that the IG is not free to provide the honest and independent criticism that is critical to the performance of the IG's oversight."

They want to know, among other things, what mechanisms are in place to ensure IG independence, what role the chairman plays in budgeting, drafting releases, and copies of all communications between the FCC and IG's office since 2012.

Senate Commerce Committee Chairman John Thune (R-S.D.), who requested the IG investigation, was also not happy, particularly with the finding that the chairman was free to leak the information.

“The findings by the inspector general reveal significant dysfunction and a lack of transparency at the FCC,” he said after the committee circulated the report publicly. “Under the agency’s current interpretation, the FCC chairman is free to leak cherry-picked details about proceedings and deliberations while other commissioners are gagged and even kept in the dark about decisions by the chairman to approve such leaks. Worse yet, the FCC is not keeping a record of decisions by the chairman to disclose non-public information. This report is yet another indication of increased partisanship and dysfunction at the FCC that underscores the need for Congress to reform how the agency does business.”

Wheeler's office declined to comment on the Upton/Walden letter.

A divided House Communications Subcommittee approved by a vote of 17 to 11 the CURB Lifeline Act (HR 4884) along with a handful of other communications-related bills.

Lifeline is the subsidy to low-income residents for advanced telecom, which the FCC is migrating from voice to broadband.

The Lifeline CURB Act caps the Lifeline fund at its current $1.5 billion annually--the FCC voted to increase the subsidy to $2.25 billion and even a Republican-backed compromise would have raised it to $2 billion.

It would also prevent the subsidy--which is $9.25 per month--from being used for a cell phone or other device, and would also end voice-only mobile service subsidies--the FCC proposals phases out voice-only mobile over several years and even then allows for extending that if necessary.

The bill passed after lengthy debate along party lines and after a series of Democratic amendments were voted down. Democrats do not want the program cut or capped, saying it could adversely impact broadband adoption for seniors, vets, and low-income families. One Democratic amendment was adopted. It required the FCC Comptroller General to study whether a cap on the fund discourages waste, fraud and abuse.

Rep. Doris Matsui (D-Calif.), for example, proposed a new version of the bill that Republicans said would lead to more Lifeline spending.

Rep. Frank Pallone (D-N.J.) said 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. He said, "for the life of him," he did not see why her bill could not be the basis of bipartisan agreement, rather than taking an axe to the program, as he said the Republicans were doing.

Other amendments would require an FCC study before any cap was imposed and identify categories of people who would be adversely impacted.

Rep. Greg Walden (R-Ore.) chairman of the subcommittee, 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, which is why he thinks there needs to be a cap. He cited a recent FCC action against a Lifeline abuser as specific evidence,

saying the FCC also allowed the fraudulent activity to continue, some of it beyond the statute of limitations.

Rep. Anna Eshoo (D-Calif.) said the Republicans were trying to rip away the lifeline for the subsidy recipients, and said she did not think that was part of Chairman Walden's DNA. "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." She called it a "sad" and "hurtful" effort.

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

As to the cap targeting waste, fraud and abuse, Walden said most programs have caps, which are one way to tighten up such programs. He said it is prudent to cap the program as the government works through how to tighten the program, including for those who pay into the subsidy.

Rep. Steve Scalise (R-La.) said struggling single moms are among those paying into the subsidy. 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 Universal Service Fund 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.

The bill was introduced March 23--in advance of the FCC's Lifeline vote--by Rep. Austin Scott (R-Ga.), and was fast-tracked after a politically divided FCC voted not to cap the fund.

Among the other bills approved, mostly without opposition or debate, was The Spectrum Challenge Prize Act of 2015, a competition to promote greater spectrum efficiency, and the Security Access to Networks in Disasters (SANDy) Act.

“NCTA applauds Ranking Member Pallone and the Members of the Communications and Technology Subcommittee for approval of The Security Access to Networks in Disasters, or SANDy Act," the National Cable & Telecommunications Association said in response. "The legislation recognizes the role the cable industry plays in keeping Americans informed, safe and connected.  We especially commend Congressman Pallone for taking lessons learned from Superstorm Sandy’s devastation and updating the law so that the country may better respond to future natural disasters.”

Senator John Thune (R-S.D.) is investigating how the FCC's compromise Lifeline proposal fell apart and what role the possible disclosure by the FCC of nonpublic information played in that process.

In a letter to FCC chairman Tom Wheeler, Thune, chairman of the Senate Commerce Committee, said events surrounding the FCC's March 31 meeting, at which the Lifeline proposal was voted, "raise new questions about the Commission's policies for the disclosure of nonpublic information."

The March 31 meeting was delayed for over three hours after the Republican-backed compromise was struck, and then fell apart after commissioner Mignon Clyburn concluded she could not support a cap on the Lifeline fund, which subsidizes advanced telecom to low-income residents. The FCC is migrating the fund to broadband, but ultimately voted not to cap the fund, though approaching the $2.25 billion allocation would trigger a review of the fund.

Thune said the delays were "highly unusual -- they certainly were for the generally punctual Wheeler commission -- and cited media reports, including Multichannel News/Broadcasting & Cable stories, about the compromise and the delay.

Thune said the proper functioning of the FCC depends on the confidentiality of deliberations and asked Wheeler to explain the disclosures of nonpublic information in those news reports, whether he or any other employee authorized disclosure and, if so, any legal justification for doing so.

Thune said the leaks of info appeared "designed to engage outside interest groups to disrupt the deal struck between the Republican Commissioners and Commissioner Clyburn.

He asked whether the FCC was planning to investigate who leaked the information about deliberations, and if not, why not.

Wheeler has said there was no such strategy to kneecap the compromise, and the suggestion that there was "balderdash."

House Energy & Commerce Committee Democrats got wind of the Lifeline compromise that would have created a hard cap on the fund's spending Thursday (March 31) and fired off a letter to FCC Chairman Tom Wheeler urging him to reject a cap, according to a copy of the letter obtained by B&C/Multichannel News.

The compromise, brokered by FCC Commissioner Mignon Clyburn fell apart when she concluded she could not support it, and the hard cap was not adopted.

They said they strongly supported the commission's effort to modernize and expand the program.

"While we have long supported the Lifeline program and the essential assistance that it provides to low-income Americans, we cannot support any action that would severely limit the program."

They said any cap would threaten the program.

Signing on to the letter were G.K. Butterfield, Doris Matsui, Mike Doyle, Yvette Clarke, Bobby Rush, Jerry McNerney, Ben Ray Lujann, Anna Eshoo and Frank Pallone.

House Energy & Commerce Committee Republican leadership was not pleased with the collapse of a compromise Lifeline proposal that would have capped the subsidy.

That compromise was supported by FCC Republican commissioners.

According to a source familiar with their thinking, those leaders plan to consider a bill in April to impose a legislative cap on the spending, as well as what they said was protect ratepayers and eliminate waste fraud and abuse.

Those Republicans are the same ones who have been critical of FCC process, and signaled the compromise's failure was yet another example of that.

A bitterly divided FCC has voted 3-2 along party lines to reform the Lifeline subsidy by applying it to stand-alone broadband and other changes. In the process, a compromise with Republicans brokered by a Democrat at the last minute fell apart — more like blew up — at the last second, and the perceived comity turned into divisive language and angry accusations.

The proposal that was voted on was essentially the same one proposed initially by the chairman.

The key to the compromise, said a source familiar with the compromise, had been a new budget — essentially a cap absent further commission action — on spending.

FCC chairman Tom Wheeler had proposed a soft cap of $2.25 billion on the low-income Lifeline advanced telecommunications subsidy, which the FCC is migrating to broadband. That would have been an extra $750 million in spending, and even that could be exceeded if necessary.

The compromise was $2 billion, and no going over it unless the FCC commissioners vote to raise it. Lifeline is currently the only subsidy without such a cap.

The need for a hard budget for the fund was a key sticking point with the Republican members of the commission, with both Ajit Pai and Michael O'Rielly saying such a budget was necessary. The compromise would have meant a 5-0 vote and reflected many of the proposals made by Pai in a compromise offering earlier this week.

But commissioner Mignon Clyburn, who had brokered the deal, ultimately concluded she could not support it.

"I negotiated in good faith to have a budget mechanism in place that ensures millions of new households will have the opportunity to afford advanced telecommunications services," Clyburn said Thursday. "Upon further deliberation, I concluded that such a mechanism could not fully achieve my vision of a 21st century Lifeline program, but I applaud the deliberative process and want to thank Commissioners Pai and O’Rielly and their staff for engaging well into the night and morning."

Pai was not pleased, but pointed the finger at Wheeler. "Chairman Wheeler and his staff have been actively working to unwind that bipartisan compromise," he said. "Those efforts started with leaking nonpublic information to the press. The Chairman’s Office then encouraged lawmakers and stakeholders, from left-wing special interests to former FCC Commissioners, to blast the deal before the votes could be cast—indeed, before they even knew what the deal was."

And Pai was not done: "And so it gives me no pleasure to state the obvious: This agency in this proceeding represented the worst of government. Bipartisan agreements that would deliver digital opportunity to millions of Americans are thrown away and even Democratic commissioners are bulldozed simply because the Chairman can get away with it."

Commissioner Michael O'Rielly said it was like some cruel, premature April Fools joke, particularly given that he still had issues with the compromise but found he could have supported it.

Wheeler called the proposal an important action, and a simple one, providing low-income Americans access to the advanced telecommunications of the day. Wheeler said that given the item's national verifier for an individual subsidy recipient's eligibility, which takes the eligible carriers out of that process, the FCC is taking "the fox out of the henhouse."

Wheeler said that there is a budget "mechanism" for the program.

Wheeler praised the efforts to find consensus—without addressing the accusations he had worked against the compromise—but said sometimes that process does not yield consensus. He said there was no greater champion of Lifeline than Clyburn.

Clyburn said the chairman had not pressured her into a decision. Asked by reporters if he had bullied Clyburn, Wheeler said: "Balderdash."

To the suggestion Wheeler's staff was trying to gin up opposition to the compromise, Wheeler said: "Balderdash."

As the FCC prepares to vote on Chairman Tom Wheeler's proposal to reform the Lifeline advanced telecom subsidy, principally by migrating it to broadband, Senior Republican Commissioner Ajit Pai has gone public with what he bills as a fiscally responsible compromise proposal.

The Lifeline program is the Universal Service Fund subsidy for advanced telecommunications service to low-income Americans. The subsidy to eligible carriers is $9.25 per month. The FCC is planning to vote Friday on a plan to migrate that away from stand-alone voice to broadband or bundled voice and broadband and to increase the subsidy.

For starters, Pai says the fund should be capped at $1.75 billion--the chairman's proposal would increase it to $2.25 billion.

Pai is all for modernizing the program, but says that "failing to clean up the waste, fraud, and abuse in the program puts the entire enterprise in jeopardy."

The chairman's proposal does target waste, fraud and abuse, including getting eligible telecoms out of the business verifying participants. But Pai clearly wants more.

Pai says the $1.75 billion should be enough to offer Lifeline supported Internet "to every single Lifeline-qualifying household that isn’t online today, as well as to maintain landline voice service as proposed by Chairman Wheeler."

Pai also wants to automatically reduce payment to carriers when the estimated costs of the program exceed that budget.

Wheeler has a mechanism to raise red flags when the money is running short, but not an automatic reduction in payments.

Pai also wants to eliminate the enhanced subsidy of $25 per sub for counties with more than 50 people per square mile. He says that while the subsidy was intended to help build out facilities in Indian Country, it has encouraged abuse of the program in big cities including Tulsa, Reno and the Oklahoma City suburbs.

Finally, Pai says the minimum standard for fixed broadband should be 25 Mbps downstream--the chairman's proposal is 10 Mbps—for fixed and 4G LTE or wireless.  "As Chairman Wheeler has put it, these speeds are “table stakes” for digital consumers in the 21st century. I believe low-income families and students deserve a seat at the table," he said in announcing his proposal.

Wheeler’s proposal said it was basing the 10 Mbps on what “a substantial majority of consumers receive” and data at 3G speeds.

Pai has been spotlighting what he says was the FCC and Obama administration’s failure to get advanced telecom to the nation in a reasonable and timely fashion. That is the conclusion the FCC has been drawing in recent reports, and Pai want to make sure the Administration does not try to take credit for broadband buildouts and adoption at the same time it is saying to the commercial sector that the buildout has not been reasonable and timely, in part based on that “aspirational” high-speed definition of 25 Mbps..

FCC Chairman Tom Wheeler has circulated a number of proposals--primarily a Further Notice of Proposed Rulemaking--to restructure the Universal Service Fund's lifeline subsidy as it is migrated from traditional phone to broadband service. The plan is to vote on those proposals at the June public meeting.

Lifeline provides subsidies, paid by telecoms and, ultimately, their subs, for essential communications services for low-income Americans. The proposals do not deal with the contribution side--whether broadband operators will have to pay into the subsidy, too. That is the subject of a separate proceeding, with the FCC awaiting input from the USF Joint Board.

The Lifeline "reboot" includes adding broadband service to the subsidy, establishing minimum services standards for both phone voice and broadband that are sufficiently robust for modern demands--the FCC is seeking input on what those should be, but has not offered any tentative conclusions.

FCc Chairman Tom Wheeler has signaled that 25 Mbps on the broadband side should be table stakes for speeds in the digital age, although in the USF Connect America Fund, part of the migration of USF subsidies to rural, hard-to-reach areas, the FCC in April set 10 Mbps as a baseline (http://www.broadcastingcable.com/news/washington/fcc-makes-17b-available...).

The FCC is expecting to keep the subsidy at $9.25 per month, for either phone or broadband, but seeks comment on whether that is the right price.

The chairman is also proposing not to allow lifeline providers to verify the eligibility of their customers, which the FCC says invites waste and is both a potential conflict and a burden on providers. Instead, the FCC is looking for an independent third party to do the verification.

The FCC began Lifeline modernization and teed up the broadband migration in 2012, with reforms addressing waste, fraud and abuse, including an accountability database that FCC officials say helped reverse runaway spending and virtually eliminate duplicative payments.

In those reforms, the FCC considered establishing a budget for the program. The new proposals seek input on whether this would be the right time to establish that budget--it concluded back in 2012 that that was not the time.

The proposals also seek comment on whether nontraditional providers can compete in the program.

FCC officials also say the proposals would build on waste, fraud and abuse reforms from 2012 by:

1, "Requiring providers to retain documentation regarding the eligibility of their Lifeline customers to facilitate oversight and audits."

2. "Extending all record retention requirements from three to ten years."

3. "Increasing program transparency by making key performance data easily available to the public."

All the proposals are still just that. The commissioners will have to approve--the chairman almost certainly has the votes, then the public will get to comment and the FCC would have to vote again on a final order.

"The FCC’s January 2012 reforms of its Lifeline program have saved U.S. ratepayers billions, strengthening oversight and eliminating waste, fraud and abuse," said Amina Fazlullah, Benton Foundation director of policy in response to the FCC proposals. "With these reforms now implemented, the Benton Foundation welcomes today’s action by FCC Chairman Tom Wheeler to take the next step and modernize Lifeline to reflect the reality of 2015: home broadband service is no longer a luxury, but an essential service for education, public health, public safety, jobs and the economy."