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FCC Launches Lifeline/Linkup Reform

The FCC voted unanimously Thursday to reform the
lifeline/link up program that subsidizes phone service in low-income

The FCC's thrust is two-fold: to reduce waste, fraud and abuse
and to migrate the fund to broadband support. The FCC proposes to do that

1) Taking immediate steps to create a uniform national
framework for validating ongoing eligibility; 
2) Ensuring Lifeline only supports services consumers are actually using;
3) Allowing discounts to be used for bundled voice-broadband service plans; 
4) Launching pilot programs to test strategies for supporting broadband
service; and 
5) Evaluating a cap on the program, either temporary or permanent, in light of
recent, rapid growth.

The moves are part of a general overhaul of
the Universal Service Fund, which primarily subsidizes phone service
to rural, low income and other areas where the cost of buildout in the
private sector is not justified by the return on investment.

The proposal also asks whether the FCC should cap the fund,
which FCC Commission Michael Copps raised a yellow flag about. "I am
concerned that this item contemplates capping low-income support," he
said. "As we tee up proposals about how to provide support for broadband,
capping today's program would be at best imprecise.  How can we
intelligently cap a program when we don't know how much meeting the challenge
is going to cost?  At worst, we risk compromising the future of low-income
Americans who may never be connected without Lifeline."

FCC Chairman Julius Genachowski said the FCC would not
wait for the rules to be in place to fight possible abuse. "while we're
seeking comment on these reforms," he warned. "we will work to ensure
that consumers are not misusing the program and that the companies that receive
Lifeline/Link-Up support are living up to their responsibilities to combat
waste, fraud, and abuse, including taking adequate precautions to prevent
duplicate support."

He also said the the FCC was open to creative ideas and
pilot programs for using the fund to support broadband. Earlier in the day
Native American leaders attending the FCC's open meeting for a vote to improve
communications for tribes and tribal lands, asked the FCC to grandfather
support for traditional phone to insure that the broadband migration does not
widen the digital divide for their people.