(Washington, D.C.) – While taxpayers were hoping that the two misguided rulings by the Federal Communications Commission (FCC) on March 31, 2016 were an early April Fools’ joke, they are unfortunately quite real and particularly pernicious.  Chairman Tom “Wheeler Dealer” pushed through an expansion of the Lifeline program from $1.75 billion to $2.25 billion without a cap on spending and also began the process of imposing unfair, duplicative, and burdensome privacy regulations on Internet Service Providers (ISPs).

The Lifeline and Linkup Reform and Modernization Order expanded Lifeline to cover broadband Internet services for the first time.  Originally intended to provide subsidies for low-income consumers to obtain telephone services at little or no cost, Lifeline was expanded to wireless services in 2008.  Following a series of reports that this new subsidy was subject to rampant waste, fraud, and abuse, the FCC voted in 2011 voted to reform and strengthen the program to help reduce these deficiencies.  Numerous sources reported that the two Republican FCC commissioners had obtained the agreement of Democratic Commissioner Mignon Clyburn for a $2 billion spending cap on the Lifeline program and full commission approval for any additional expenditures.  When she changed her mind during the meeting, the Republicans accused her of reneging on the deal, even holding up the email from Thursday morning indicating her assent.  Now, Lifeline will remain the only Universal Service Fund program that does not have a spending cap, and the chairman himself can approve any amount above $2.25 billion.

The Lifeline expansion was not the only problematic FCC decision yesterday.  In another partisan 3-2 vote, the agency approved a notice of proposed rulemaking on “privacy” that would require consumers to opt-in to receive services and allow data tracking by ISPs, such as Comcast, AT&T, and Verizon.  These rules do not apply to content providers, such as Google, that would be able to continue to collect, use, and sell data irrespective of the consumers’ wishes.  The FCC’s proposal is completely unnecessary.  It creates a two-tiered privacy scheme that affects solely ISPs, and attempts to supersede the Federal Trade Commission’s stringent consumer privacy protections, which apply equally to all industries.

CAGW President Tom Schatz said, “FCC Chairman Wheeler was certainly ‘wheeling and dealing’ just in time for April Fools’ Day.  These two actions simultaneously expand a wasteful program and lead the way to imposing arduous rules on a critical consumer industry.  Given the hyper-partisan nature of the FCC and the last-minute pressure on Commissioner Clyburn to drop her assent to a reasonable compromise on Lifeline, a proposed rulemaking is now tantamount to a final rulemaking, and shady schemes seem to be the new norm.  Whether it is Lifeline, privacy, set-top boxes, or the imposition of archaic Title II regulations on the Internet, the FCC remains woefully out of step with twenty-first century policies that would bolster technology development and consumer choice.”

Citizens Against Government Waste is a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government. 

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