Last December the Federal Communication Commission (FCC), led by former Chairman Tom Wheeler, implemented its 2016 Lifeline Modernization Order. The order paved the way for qualifying low-income households to apply their subsidy towards phone or broadband service– a measure that 44 of our mayors wrote in support of to the FCC in December 2015.

More than 900 companies currently provider Lifeline phone service, and dozens of others have applied for Lifeline Broadband Provider (LBP) designation. The first nine were approved in January: Spot On Networks, Boomerang Wireless, KonaTel, STS Media (FreedomPop), Applied Research Designs, Kajeet, Liberty Cablevision of Puerto Rico, Northland Cable Television, and Wabash Independent Networks.

Under new Chairman Ajit Pai, who originally dissented from the 2016 Order, the FCC’s Wireline Competition Bureau (Bureau) has revoked LBP designation from the nine previously approved providers. Though these providers were only approved within the last month, one of them, Boomerang, had already begun providing service to low-income residents eligible for the Lifeline program. It now has 60 days to notify its customers and discontinue their service. The founder of Kajeet, another LBP, has said he is most concerned for the children the company was set to serve, as the company had agreed to partner with school districts in 41 states and the District of Columbia.

In the Bureau’s reversal, the new FCC leadership cites “shortcomings” and “procedural errors” as grounds for rolling back the Lifeline program. The Bureau also argues that this revocation of LBP status will give the Commission more time to consider measures that might prevent waste, fraud, and abuse in the program. It should be noted, however, that the 2016 Modernization Order had already introduced several new measures to ensure program integrity, including the creation of a National Verifier.

Public interest groups, members of Congress, and FCC Commissioner Mignon Clyburn have all spoken out against the Bureau’s action. Read some of their statements below:

• Commissioner Mignon Clyburn, who has been a vocal advocate of the Lifeline program, criticised these rollbacks saying, “Rather than working to close the digital divide, this action widens the gap…By eliminating the designations of nine entities to provide Lifeline broadband service, the Bureau has substantially undermined businesses who had begun relying on those designations.”

• Representative Ro Khanna (D-CA) said in a speech on the House floor, “[Chairman Pai] is writing the rules of modern day capitalism in a way that privileges these elite telecom companies, with concentrated economic power, at the expense of low income Americans.” Rep. Khanna has also written a “Dear Colleague” letter and asked other Representatives to sign.

• Representative Frank Pallone (D-NJ), Ranking Member of the House Energy and Commerce Committee, said in a statement “I’m deeply disappointed by the FCC’s aggressive actions against consumer protections…The FCC’s decision to seriously hamstring the Lifeline program — which helps millions of Americans stay connected through access to basic communications like mobile phones and internet service — needlessly punishes the most vulnerable consumers.”

• Public interest groups, including the NAACP, Benton Foundation, New America’s Open Technology Institute, Public Knowledge, Common Sense Kids Action, Communication Workers of America, Free Press, Greenlining Institute, Media Mobilizing Project, National Consumer Law Center, National Digital Inclusion Alliance, United Church of Christ’s media justice ministry, and others have all issued statements in opposition to the Lifeline program reversals.

Commissioner Pai has responded to criticism regarding the order in a blog post saying, “Putting the designations on hold gives the FCC the chance to make sure the process is legally defensible and to avoid potentially stranding customers if the courts ultimately deem the process unlawful.”

Pai continued, “My focus has been — and will continue to be so long as I have the privilege of serving as the Chairman of the FCC — doing everything within the FCC’s power to close the digital divide.”
Next Century Cities will continue to follow these developments to the Lifeline Modernization Order and keep our member communities up to date on how future actions may impact their low-income residents.