Home - , , , - Customers of Wireless Resellers Might Lose Their Subsidy Under the Lifeline Program

Customers of Wireless Resellers Might Lose Their Subsidy Under the Lifeline Program

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Uh-oh... it looks like the Federal Communications Commission (FCC) is under fire again. This time, Mobile Virtual Network Operators (MVNO) and other wireless resellers are spearheading the outcry against the independent government agency.

The issue stems from the new changes the FCC made to its Lifeline program limiting its availability only to "facilities-based providers." This means that if this gets approved, wireless resellers will be banned from gaining access to the Lifeline program. Many have reacted against this change and have called this as an "anti-poor" solution.

What is the Lifeline program anyway and how does it benefit individuals?

The Lifeline program was created during the administration of Reagan but was expanded throughout George W. Bush's duration. Back then, the program applied to landline service before it was expanded to mobile and phone. In 2016, the Lifeline program was modernized to establish a more efficient administration as well as to give low-income Americans a $9.25 monthly subsidy for communications services. This later evolved to include broadband internet access, which is what many are enjoying in today's time and age.

How does the FCC intend to change the program?

Back in November 2017, the FCC filed a proposal to make changes to the program. In its filing, the agency argued:

"the vast majority of Commission actions revealing waste, fraud, and abuse in the Lifeline program over the past five years have been against resellers, not facilities-based providers. And the proliferation of Lifeline resellers in 2009 corresponded with a tremendous increase in households receiving multiple subsidies under the Lifeline program."

Sprint has responded to this filing by recommending that the FCC be "cautious about proposals that threaten affordable access to vital voice and broadband services by low income Americans." The wireless network suggests that the action should be done carefully so that existing Lifeline customers won't be affected.

If approved, the changes to the Lifeline program will affect wireless resellers the most; especially since these play a vital role in supply reasonable broadband and voice service to consumers with a low income. Eliminating resellers could lead to a significant impact in the program.

As a matter of fact, the top five wireless resellers namely TracFone, Access Wireless, Q-link Wireless, Boomerang, and Telrite have around 5.5 million consumers in total. This accounts for half the number of subscribers under the Lifeline program.

TracFone has argued against the proposal of the FCC by pointing out that this "departs greatly from the light-touch regulatory approach favored by the current administration, and represents a sweeping, unprecedented, and possibly illegal governmental intrusion into an otherwise healthy and competitive marketplace that lacks signs of widespread market failure. The Commission must reject its proposal that singles out resellers for their collective status, not for their individual behaviors, and that, if implemented, will forever undermine the utility of the Lifeline program for more than two out of every three existing Lifeline subscribers and render it inaccessible or impractical for still millions more."

A coalition composed of 200 advocacy and grassroots organizing groups are currently calling for the FCC to protect the program. The coalition, called The Leadership Conference on Civil and Human Rights, penned the letter that can be read here.

The National Lifeline Association estimates about 10.5 million Americans are using the Lifeline program. Out of this number, 7 million rely on wireless resellers to use important communications sservices that the Lifeline program has made more affordable.



Source: Fierce Wireless

26 comments:

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  1. Sadly, this is the way America is headed. The party in power is against helping those in need and insisting that those in need are in this situation because of their own faults.

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    1. I agree, but at the same time, "whole households" in need? At some point, those taking advantage of the program need to be eliminated.

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    2. Need to be eliminated? Really? Who gets to decide when that should happen? Those who are nowhere near the poverty line and haven't a clue (or a care, really) what those people go through just to survive (let alone have any hope left of a better life), that's who. What could *possibly* be wrong with that picture?

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    3. Ah...this is getting political right away. Clearly you missed the part about "taking advantage of the program". I agree those who need it should have it, just not those who abuse it. It's like parking in a handicap spot and literally running into the store - handicapped indeed!

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    4. The Republicans have been paining that being poor is a "crime" for years. They claim without evidence that the poor is taking advantage of the government programs, and the solution is to eliminate the programs. Sen. Rubio said, "People buy into my agenda." The Republicans describe being poor as crime and people are buying that.

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    5. And Democrats have been keeping them poor...

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    6. "The Republicans have been paining that being poor is a "crime" for years."

      More like, never. This is a fabrication.

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  2. Good. Get rid of lifeline all together we don't need these socialist policies in place.

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    1. Disagree. I know people for whom this is a great help and subsidizing cell service was created by Reagan admin, and expanded by Bush #1.

      We have a long history of subsidizing wired phone service prior to recent history and it has been good policy.

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    2. The real "socialism" is creating dozens of bureaucracies to administer all of these earmarked micro-welfare programs that primarily benefit corporations (wonder why resellers are up in arms and not the beneficiaries or their advocates?). $2.3 Billion / Year for 10.5 million beneficiaries? If household income is below poverty level, tack on a $220 refundable tax credit w/ 1040 return and be done with the whole business.

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  3. how exactly would someone take advantage of this program? when you apply you must provide proof that you are at or below poverty level... also why would someone who could afford a smart phone and plan want a flip phone with 250 minutes that are used up in two days? obviously the poor people on this program are desperate and this is all they can afford... any other argument doesn't make sense

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  4. The FCC is correct. Safelink floods minority neighborhoods with solicitations for Lifeline phone service. Most of my Section 8 tenants have Lifeline phones for every member of their family including young children.
    It is common for a household to have more phones than people.

    Safelink sends salesmen door to door, sets up booths at community events and send home flyers to parents from schools but mass mailing seems to be the primary marketing mwthod.

    I am not defending fraud. Those violating the law should be prosecuted. However, if customers received more minutes they would have less incentive to scam additional lines.

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    1. See. They claim without any evidence.

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    2. Those households with multiply lifeline phones have them because they stole, borrowed, or are using the ID of someone else. As an example: grandma's phone service is paid for via her son's family plan. The grandson uses grandma's info to get a phone for great-grand son. Grandma may/may not know this is happening.

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    3. Then crack down on abusers instead of eliminating all resellers.

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  5. "departs greatly from the light-touch regulatory approach favored by the current administration"
    When will people learn that when conservatives talk about light-touch regulation it only applies to their corporate puppet masters, otherwise conservatives are often heavy-handed with regulations and laws for everyone else. With that said, the current administration and congress are only in power because of all the "low-income Americans" who voted for them. This policy only affects low-income Americans, so there you have it.

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    1. So are you saying that republicans are the party of rich corporations? Or the "low income americans that voted them in." Could you please give some examples of heavy handed regulation from conservatives??

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    2. "With that said, the current administration and congress are only in power because of all the "low-income Americans" who voted for them.

      Which means they are the party of low-income Americans, who voted in their own interest.

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  6. @AnonymousFebruary 24, 2018 at 1:35 AM

    I can not speak for every company but Safelink does not verify income. They fabricated verification for years. Fear of an FCC audit recently motivated Safelink to shed 600,000 ineligible customers.

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  7. FCC assessed ~$100M in fines against Lifeline providers for cheating and stealing back in 2013. Tracfone's share was $4.5M, so their current comments are rich.
    More than two years later in 2015 the Obama administration had not even collected the fines.
    They just kept dishing out the money. At the USF fee continued to go up and up. We pay the USF fee in our bills, whether you see a separate charge or not.

    http://fortune.com/2015/11/23/fcc-never-collected-lifeline-fines/

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  8. once again... exactly how would anyone ABUSE this program? examples?

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  9. Ineligible customers are able to receive free service at taxpayer expense when the carriers fail to verify applicants' income.

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    1. We taxpayers do not pay for the lifeline services. The government imposes a tax on the companies. The government also gives these companies the options to have its customers reimburse them for the taxes paid. Most, if not all companies exercise that option.

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    2. Lifeline is funded by the USF. USF is a federal tax that applies to all cellphone bills, whether included in the phone service price or charged separately. Taxpayers also pay the salaries of the federal government employees who oversee the program through their income taxes.

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  10. Dennis - you're quoted in Footnote 24 of Tracfone's FCC briefing! (It's linked from the Fierce Wireless article.)

    And apparently it's not the first time, either:

    https://www.google.com/search?q=site%3Afcc.gov+("Dennis+Bournique"+OR+"Bournique+D.")

    https://www.google.com/search?q=site%3Afcc.gov+"prepaidphonenews"+-bournique

    You're becoming part of 'The System' -- congrats ;)

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