Restoring State Authority for Lifeline
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In another sign of better times for taxpayers and consumers at the Federal Communications Commission, Chairman Ajit Pai is taking steps to address jurisdictional problems created by his predecessor, Tom Wheeler, regarding the Lifeline program. Citizens Against Government Waste has long reported on problems with the program, which is supposed to provide low-income households with subsidized telephone services and wireless services.
Following Congress’s expansion of Lifeline in 2008, which gave low-income individuals a choice between a land-line phone or a mobile phone, the program’s cost increased from $821 million in 2008 to $2.2 billion in 2012, due in large part to increased fraud and abuse. To address these issues, the FCC ordered a reform of the Lifeline and Link-up programs on March 31, 2015, to which then-Commissioner Pai dissented because it did not do enough to cut back on wasteful spending.
One year later, on March 31, 2016, the FCC adopted an expansion of the Lifeline program to include broadband services. The decision also stripped the ability of states to designate Eligible Telecommunications Carriers to administer the Universal Service Fund, which includes the Lifeline program, and gave it to the FCC. This provision runs contrary to Section 214 of the Communications Act of 1934, which specifically gives states such authority.
On March 29, 2017, Chairman Pai announced that the FCC will soon begin a proceeding to eliminate the federal designation process and return it to the states. According to Chairman Pai, 12 states have challenged the legality of the FCC’s March 31, 2016, order in the U.S. Court of Appeals for the District of Columbia Circuit, asking that the court send the case back to the FCC for further consideration. In addition, Chairman Pai halted further consideration of applications by companies who wish to participate in the Lifeline program, which he suggests would more properly be addressed under the provisions of Section 214 by the states.
Chairman Pai has a long list of examples of regulatory overreach promulgated by his predecessor, Tom Wheeler. His efforts to undo these damaging decisions should be applauded by taxpayers and consumers, who will benefit from the greater competition and innovation that will result from the new policies underway at the FCC.