Released: January 07, 2016

Consumer Action asks FCC not to narrow criteria for Lifeline phone service

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More than 2,580 signers oppose recommendations to amend Lifeline eligibility requirements so that far fewer who need subsidy would qualify; overly complicated voucher-style system also opposed as likely to further shrink Lifeline participation.

The nonprofit Consumer Action has filed a petition with 2,585 signatures to the Federal Communications Commission (FCC) in opposition to proposals to sharply reduce the ranks of low-income Americans who would be eligible for the Lifeline telephone subsidy. The petition text is available online (bit.ly/protect_Lifeline).

The Federal Lifeline program helps people in low-income households move out of poverty, by giving them access to job opportunities, health care, and public safety. The FCC voted in June to consider expanding the Lifeline program to also pay for broadband Internet service. Consumer Action applauds the FCC for recognizing that to be truly effective in connecting low-income Americans with crucial services and opportunities, low-income households must have Internet access.

Unfortunately, fears of program abuse have led to recommendations from some to limit Lifeline eligibility to households on the federal Supplement Nutrition Assistance Program (SNAP), and to rely on a voucher or other Electronic Benefits Transfer (EBT)-based payment system to provide benefits. Consumer Action opposes such a move for several reasons given outlined in a fact sheet and created a petition to the FCC to counter the recommendations. The petition filed today shows that consumers share Consumer Action’s concerns about steps that could seriously narrow or otherwise damage the Lifeline program.

Consumer Action Executive Director Ken McEldowney, a member of the FCC consumer advisory committee, says, “Roughly one million of the nation’s poorest people will be cut off SNAP over the course of 2016, due to the return in many areas of a three-month limit on SNAP benefits for unemployed adults aged 18-50 who aren’t disabled or raising minor children.  When you add to that that the elderly and other key groups are seriously underrepresented on SNAP, you have a prescription for several million people who are eligible today for Lifeline being forced out of the program in a needless and entirely unfair way.”

As to the idea that Lifeline subscribers would have to obtain vouchers  (or some equivalent arrangement) each month to remain in the program, and then submit these vouchers individually to subsidize their phone and Internet service bills, McEldowney says: “We fear that a voucher system would be so complicated, and possibly require consumers to incur ATM or other charges, that it would result in a further sharp reduction in the number of Lifeline subscribers.”

Created in 1985 under the Reagan Administration, the program offered a partial subsidy for landline phone connections in eligible low-income households. In 2005, Lifeline discounts were extended to eligible low-income consumers for prepaid wireless service plans in addition to landline service. Fees paid by service providers fund the program although most carriers require all phone customers to pay for the fees as a pass-through on phone bills.

In June, the FCC voted 3-2 along party lines to move forward with expanding the Lifeline program. Mayors and elected officials from 44 communities spoke out in support of the FCC proposal to improve Internet access for low-income families.

Two Republicans on the commission, Ajit Pai and Michael O’Rielly, objected, citing fraud in the Lifeline program that FCC Chair Tom Wheeler says has significantly decreased under the commission’s efforts to tackle Lifeline program waste, fraud and abuse.

About Consumer Action

Through multilingual consumer education materials, community outreach and issue-focused advocacy, Consumer Action empowers underrepresented consumers nationwide to assert their rights in the marketplace and financially prosper. Visit Consumer action online at www.consumer-action.org.