Reform of the federal Lifeline program took an important and much-needed step forward earlier this month as Congress heard testimony about how to create a more effective system to help low-income consumers.
In one sense, the hearing was a deserved victory for recent efforts to improve the program. Four years ago, Congress and the FCC took action to stop the program's spiraling problems of waste and fraud. Lifeline had become stereotyped more for its inefficiency than for its successes. As everyone recognized, those likely to be affected most by a continued lack of confidence in the program would be the low-income beneficiaries Lifeline was designed to help.
As Congress heard, the 2012 reform has produced tangible results. Annual program payments have dropped by more than 30% since 2012 as fraudulent and undeserving participants were dropped from the program.
But the hearing also put a necessary spotlight on the next logical part of Lifeline's reform: establishing an efficient verification system to keep out those who don't qualify.
Last month, the FCC began moving in the right direction with a new National Eligibility Verifier (NEV) to further control Lifeline's waste and abuse. The NEV is an independent third party that uses Medicaid and the Supplemental Nutrition Assistance Program (SNAP) to determine eligibility.
Until now, Lifeline relied on wireless carriers to establish program verification and the problems with that have become increasingly clear. Earlier this month, the FCC announced a $51 million fine against California-based Total Call Mobile for defrauding its Lifeline. The FCC claimed that the company enrolled tens of thousands of ineligible consumers, allegedly receiving nearly $10 million from the Lifeline program in improper payments.
Even beyond this, virtually no other carrier supported the system because it often put them in an unwinnable position of mediating qualification disputes between consumers and the Federal government.
Finally, no discussion of Lifeline can be complete without acknowledging the larger context around changing consumer demands and areas of greatest need. Clearly, Lifeline's expanded focus on mobile broadband is proving correct. Last December, the Center for Disease Control reported that almost half of all U.S. households were wireless-only and that the shift to mobile services has been even more prevalent among low-income Americans.
Millions of low-income Americans depend on the Lifeline program and Congress and the FCC deserve credit for improving it. The challenge now is to build on this success.