Commissioner Clyburn Sets the Record Straight on Lifeline

On March 15, 2013, FCC Commission Mignon Clyburn spoke to the Consumer Federation of America’s 2013 Consumer Assembly.  In her remarks, she addressed the FCC’s recent reforms of its universal service rules, including the Lifeline program.  The goal of universal service is to bring voice and advanced services to all Americans, a long-standing policy whose benefits have resulted in bringing telephone service to remote rural areas and narrowing (but not eliminating) the gap between low income and non-low income households, among other benefits.

In 2012, the FCC implemented far reaching reforms of the Lifeline program.  Commissioner Clyburn addressed head-on multiple misconceptions about the program and the reforms.  Among the items she clarified:

• The Lifeline program originated during the Reagan administration, contrary to the “Obama phone” criticisms.
• The recently-released results of the annual “re-certification” efforts have been mischaracterized.  Non-response by consumers in this process has been misconstrued as demonstrating that the consumer was never eligible, and this is typically not the case.  Commissioner Clyburn noted that utility companies report that "upwards of 66%" of their customers fail to read bill inserts, which is an even higher rate of non-response experienced in the re-certification process.
• Lifeline funding does not pay for wireless handsets.  These cells phones are usually subsidized by the providers themselves.  In fact, Lifeline funds are prohibited from being used for cell phones, and only subsidize the costs related to communications service.  Commissioner Clyburn specifically aimed this clarification at misleading press reports “even from those who identify themselves as journalists.”
• FCC reforms saved more than $200 million last year, and another $400 million in savings are anticipated in 2013.
• Limiting the Lifeline program to wireline services would be contrary to the FCC’s commitment to technology neutrality.

Most importantly, Commissioner Clyburn underscored the importance of having effective communications technology for low income persons looking for a job or in need of health or emergency services. She noted that “[w]ithout this program, 15 million low-income families would literally be choosing between feeding their children or going without a dial tone that potentially could save their lives and put them on a better economic path.