A draft order circulated Tuesday by FCC Chairman Tom Wheeler and slated for a vote at the FCC’s March 31 open meeting would expand Universal Service Fund (USF) “Lifeline” support to fixed and mobile broadband services while boosting the yearly Lifeline program budget from $1.5 billion to $2.25 billion.  The draft order mirrors provisions of a further rulemaking notice that the FCC issued last June with the goal of updating Lifeline for the broadband age.  Thirty years ago, the FCC established the Lifeline program to provide eligible low income households with a monthly subsidy to offset the cost of fixed phone service.  Wireless voice services were added to Lifeline seven years ago, and in 2012 the agency enacted various reforms to reduce spending and combat abuses that included, among others, the award of multiple subsidies to the same household. 

While maintaining the Lifeline subsidy at its current level of $9.95 per month, the draft order would extend that subsidy to fixed and mobile broadband data and to bundled voice and data services as well as to stand-alone voice services.  Lifeline providers would be required to offer broadband service at a minimum speed benchmark of 10 Mbps downstream/1 Mbps upstream and provide a minimum monthly usage allowance of 150 GB for fixed broadband service or 500 MB per month of 3G-quality mobile service.  (The mobile data allowance would increase to 2 GB per month by the end of 2018.)  Although the draft order preserves Lifeline subsidies for stand-alone wireline voice services “in light of ongoing affordability challenges,” the per-line subsidy for stand-alone mobile voice services would fall to $7.25 as of December 1, 2017 and would be eliminated altogether in December 2019.  Mobile voice service, however, would still qualify for full Lifeline support when offered as part of a bundle that includes wireless broadband.  Carriers will have the option of seeking eligible telecommunications carrier status from the states or being certified as “Lifeline Broadband Providers” under a new, streamlined process to be administered by the FCC.  The order would also transfer responsibility for verifying subscriber eligibility from the industry to a new “National Eligibility Verifier” to be operated by the Universal Service Administrative Company.

Reaction to the draft order was generally positive.  As Senator Cory Booker (D-JN) applauded the FCC’s goal of “[improving] broadband access and affordability for the people who need it most,” a spokesman for Public Knowledge remarked that the draft order “takes significant steps to protect the integrity of the [USF] and ensure Lifeline remains sustainable into the future.”  Scott Bergmann, the vice president of regulatory affairs for wireless association CTIA, sounded a cautious tone, affirming that, while “we generally support the FCC’s efforts to expand the Lifeline program to broadband . . . we are, however, concerned that, by dictating service offerings, the FCC will increase costs for consumers.”