Testimony Posted in Advance of Congressional Lifeline Hearing

As discussed in our earlier blog post, the sub-committee of the U.S. House of Representatives charged with overseeing the telecommunications industry (the Subcommittee on Communications and Technology, Committee on Energy and Commerce), will hold a hearing today to discuss the federal Lifeline program.  In advance of the hearing, the witnesses who will testify have submitted copies of their written testimony.  This testimony is now posted on the committee’s website.  The six witnesses will be representatives of the following organizations:  the FCC, CTIA—the Wireless Association (“CTIA”), the National Association of Regulatory Utility Commissioners (“NARUC”), the National Hispanic Media Coalition, the Montana Telecommunications Association and Billy Jack Gregg Universal Consulting.

They key points of the witnesses’ testimony are:

•  FCC: Julie A Veach, Chief of the Wireline Competition Bureau and testifying on behalf of the FCC, provides a history of the Lifeline program as well as the FCC's recent reform efforts, while emphasizing that the program has helped recipients to find jobs, access health care, connect with family, and call for help in emergencies.  She explains how the increase in adoption and use of mobile communications precipitated the need to overhaul the program.  She explains that these reforms are expected to lead to $2 billion in savings through the end of 2014 and how with these reforms, the Lifeline program will have a “firm footing” for the future so it can more effectively serve low-income consumers, including helping low-income consumers afford broadband.
• CTIA—the Wireless Association: Christopher Guttman-McCabe, VP of Regulatory Affairs, testifying on behalf of CTIA, addresses, among other things, misconceptions about the Lifeline program and provides data on how the Lifeline program has helped to close the penetration gap for voice services for the poorest households.  He also addresses proposals to impose minimum fees on Lifeline consumers, pointing out that requiring what may seem like a modest payment can in fact pose a significant hurdle to poor people, especially the unbanked.  Mr. Guttman-McCabe also takes on suggestions made by some that resellers should be precluded from participating in the program, and argues that such a ban would be contrary to competitive and technology neutrality.
• NARUC: Washington Utilities & Transportation Commission (WUTC) Commissioner Philip Jones, testifying as President of NARUC, reiterated NARUC’s “support for the Lifeline program with proper verification and accountability measures in place,” and commended the FCC’s recent initiatives to reform the program and to expand it to support broadband service.  But he also urged the FCC to implement its planned National Lifeline Accountability Database (designed to prevent duplicate Lifeline subscriptions) and National Eligibility Database by the end of this year, noted (without necessarily endorsing) a number of state-level initiatives and proposals to combat abuses in the program, such as minimum rate requirements and restrictions on mobile marketing of Lifeline service, and stated that Lifeline would be a major topic of discussion at NARUC’s summer meeting in July.
• National Hispanic Media Coalition: Jessica Gonzales, Vice President of Policy & Legal Affairs, testifying on behalf of the National Hispanic Media Coalition, explains that the answer to whether Lifeline is “money well spent” is a resounding “yes!”  She further notes that the Lifeline program continues to achieve one of the oldest and most enduring goals of this country: to ensure that all Americans have access to affordable communications services.  Specifically, Ms. Gonzales discusses the benefits of the Lifeline program with respect the economy, employment, and public safety.  In regards to the Lifeline program reforms, she explains that both Lifeline participants and providers face a number of new obligations and that the outcome is a set of effective steps to curb waste, fraud, and abuse the program.
• Montana Telecommunications Association: Geoffrey A. Feiss, testifying as the General Manager of the Montana Telecommunications Association (“MTA”), discusses the Lifeline program from the perspective of a rural telecommunications provider.  He explains that despite the savings achieved by the FCC’s reforms, he believes that there is reason to believe that the savings may bottom out in the near future.  To counter this effect, the MTA suggests certain changes, including putting the program on a budget and making Lifeline support for prepaid wireless cost-based or setting a benchmark support level at $3 for these providers.
• Billy Jack Gregg Universal Consulting: Mr. Gregg, testifying on behalf of his consulting firm, provides raw data as well as his own analysis of the overall financial status of the universal service program and the reasons for growth in Lifeline in recent years, as well as differences in distribution of funding among various states.

Update: The opening statement of Communications and Technology Subcommittee Chairman Greg Walden is now posted.  The statement of Rep. Henry Waxman has also been posted to the Democratic website for the committee.  The Republican and Democratic staff memos briefing the issues considered at today's hearing as well as a webcast of the hearing itself are also posted at these links.