In 2014, the Universal Service Fund (USF) collected approximately $8.5 billion to support telecommunications programs that include the Low Income support services, Lifeline and Link-Up programs; the High-Cost program; the Library and Schools program; and the Rural Health program. The funding for the USF is found in the charges on consumer’s communications bills as a hidden tax, known as the USF fee.

In 2008, the Lifeline program was expanded to include discounted wireless service, including wireless phones, to eligible individuals as an option to land line telephone services. What ensued was a drastic increase in demand for the program that the Government Accountability Office (GAO) detailed in an October 2010 report. The report attributed the increase in part to the availability of discounted wireless service for these individuals. The GAO report also detailed multiple instances of fraud and abuse in the program.

On June 29, 2011, the FCC issued the Lifeline and Link Up Reform Modernization Order (Reform Order), which sought to reduce programmatic waste, fraud and abuse, as well as provide for the development of a broadband pilot program. On March 24, 2015, GAO issued a report on the FCC’s reform progress. This report found that not all of the FCC’s reforms were working, and the agency still needs to do more to address deficiencies within the Lifeline program. In addition, GAO determined that the FCC lacked an evaluation plan for the data it gathered from the broadband pilot program.

In spite of these findings, the FCC is now discussing plans to expand the program by adding broadband services as another option for eligible subscribers. It is unknown how the FCC plans to implement these changes to the Lifeline program, particularly with the lack of proper evaluation of the data from the broadband pilot program. However, the FCC will be voting on the proposal during its June 18, 2015 meeting. One thing is certain, expanding the eligible services to include broadband will increase the cost of the program once again.

Rather than expanding an already broken program, the FCC should continue its ongoing work to reduce waste, fraud and abuse in the existing program.