Started in 1985, the Lifeline Assistance Program has brought free telephones and service to millions of Americans over the years. Consumer participation rose dramatically when the program was expanded to include cell phones in 2008. To assist the public, the process of applying for a phone was made simple. In fact, no documentation is needed to prove eligibility on many applications.
Unfortunately, many people have taken advantage of the easy application process and have fraudulently ordered multiple phones for their households, when they are limited to one by law. In fact, an audit done last year showed that 269,000 users were getting service from at least two carriers. Some others continue to keep their phones after they no longer qualify under the guidelines set by their states.
Many people have received advertisements inviting them to apply for the phones whether they qualified or not. One of these people was US Senator Claire McCaskill. The Senator, concerned there could be many abuses under the program, called for reform. The program, which has a subscriber base of over 12 million users, cost over$1.6 billion in 2011.
At the senator’s urging, the Federal Communication Committee (FCC), which oversees the Lifeline program, is making significant changes to the way the program will be overseen.
These changes, in part, will include:
- The creation of a National Lifeline Accountability Database. This database will keep a record of all customers of the Lifeline Program, so that customers cannot apply under separate carriers to obtain additional phones.
- The creation of eligibility databases with data supplied from federal benefit programs. This database will allow the wireless companies operating under the Lifeline program to automatically determine initial and ongoing eligibility of their customers. Previously, customers in some states were told to certify annually whether they were still eligible for the program.
- Establishing and enforcing a one-per-household rule. This will not apply to separate families living at the same address. Customers with more than one account will be subject to civil and/or criminal penalties.
- Companies will also be required to close the accounts of Lifeline customers which have been inactive for 60 days.
The Lifeline Assistance program is funded by the telecom companies, who in turn charge their customers what is known as the Universal Service Fee. It is expected that the changes to these programs will save over $200 million in 2012 and up to $2 billion over the course of three years, by eliminating users who don’t qualify and those who have multiple phones.
With these savings gained from these reforms, the FCC plans to modernize the Lifeline program. There will be studies and tests done to see how the program can be extended to guarantee broadband internet for all low-income Americans. The FCC also hopes to extend the services available on the existing phone plans such as broadband or other optional features.