Fighting Fraud in Lifeline Program Remains a Priority

By Wayne Rash  |  Posted 2012-01-09

FCC Extends 'Lifeline' Program to Include Broadband Services

Federal Communications Commission Chairman Julius Genachowski has announced a plan that would expand the Universal Service Fund's Lifeline program to include broadband communications. Currently, Lifeline provides funding for landline telephone service for people who can't afford it or who otherwise couldn't get phone service because the cost of extending phone service would be too expensive. Many poor and rural telephone customers depend on Lifeline for basic calling services.

The new plan would extend the Lifeline program to bring broadband Internet access to those same people. The new program would effectively bring Internet access to millions of consumers who can't get it now because it costs too much or because ISPs are reluctant to serve their communities.

The new extension to Lifeline would include significant changes to help control costs to eliminate waste, fraud and abuse. It would establish national criteria for measuring performance, budgeting, and establishing eligibility criteria and accountability.

Genachowski made the announcement at the offices of Third Way, a self-described moderate think tank. "Tomorrow, I will circulate to my fellow Commissioners an order to reform and modernize the Universal Service Fund's Lifeline program," Genachowski said. "This is an opportunity to take another major step forward in our efforts to modernize our programs for the digital age, and to make them efficient and fiscally responsible."

Genachowski said this move implements congressional directives that all consumers, including low-income consumers, should have access to telecommunications and information services. He said the FCC started reforming the Lifeline program with the release of the National Broadband Plan in 2010. "Broadband has gone from being a luxury to a necessity in the 21st century," Genachowski said.

Genachowski pointed out that between the time that the Lifeline program was initiated 20 years ago and now, broadband Internet access has become critical. "It's essential for finding a job, for example, as job postings have moved online, and for landing a job, as companies increasingly require basic digital skills. But one-third of Americans haven't adopted broadband at home and the majority of low-income Americans are non-adopters."

The new plan includes a pilot program that would be used to determine the best methods for increasing broadband adoption for low-income Americans. It would also determine how to improve digital literacy so that people could use their broadband connections when they become available.

The expansion of the Lifeline program is critical to reducing what's long been called the "Digital Divide." Where once the primary cause of the divide was the inability of poor people to buy computers, it's now the inability of rural and poor communities to acquire Internet access even if they can acquire computers.

Fighting Fraud in Lifeline Program Remains a Priority


There are programs nationwide that will refurbish donated computers and make them available to low-income households, often with some training. But the computer is only part of the problem. To be useful in the 21st century, that computer needs access to the Internet, and lack of access is perpetuating the divide because it limits the usefulness of that computer.

While it's true that many wireless devices can provide access to the Internet and some of those devices are reasonably affordable, being able to see a job listing on your cell phone is far different from being able to apply for the job-still something that can't be realistically accomplished on your cell phone.

The problem, unfortunately, is how to accomplish those Internet connections. Cable companies, DSL providers and other broadband services have historically bypassed poor communities and followed the money by connecting affluent users to their systems. The reasons are easy to guess: Those companies likely assume that people in poor communities can't afford Internet service, perhaps that they won't pay their bills and that even if they can afford the minimum, that's all they'll buy-skipping all of those expensive high-speed options. The expansion of Lifeline at least eliminates those excuses for not providing the Internet to the people who may need it the most.

As you might expect, in Washington no good act goes unpunished. The Civil and Human Rights Coalition released a statement complaining that the FCC proposal is moving ahead with the program, including its efforts to find fraud in the Lifeline program, without waiting for further studies. The group called fraud and abuse a limited problem and implied that the FCC shouldn't be putting forth the effort to fight it.

But the fact is that in this era of declining budgets, an aggressive stance against fraud is critical to getting the program funded at all and keeping it funded once it's under way. The FCC has already found millions of dollars of fraudulent activity in the Lifeline program, and the FCC chairman is taking the correct stance that fraud must be stopped if the program is to succeed in actually helping the people who need it the most.

The best way for people to help raise themselves out of poverty and become contributing members of society-and yes, taxpayers-is to have access to the modern tools necessary to do so. To accomplish this while also cutting the cost of the Lifeline program is a worthy goal. 

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