Thursday, November 30, 2017

LifeLine Program Loses Its Life Line

People with low income may soon find it more difficult to purchase subsidized phone and broadband plans, and may even be forced to find new carriers. This is the result of decisions made November 16th, 2017 by the Federal Communications Commission. The FCC voted 3-2 to scale back the federal Lifeline program that lets low-income individuals use a $9.25 monthly household subsidy to buy Internet or phone service. The FCC also proposed a new spending cap that potentially prevents people who qualify for the subsidies from actually receiving them.

The FCC is also taking steps to prevent resellers, telecom providers that don't operate their own network, from offering Lifeline-subsidized plans.  This includes some carriers mentioned on our sites like Q-Link, Assurance Wireless, and Safelink.  Some of the these companies could be put out of business, overnight.

Some of the changes go into effect immediately. For others, the FCC is taking public comment before making the changes final. The proposed reseller ban would effectively force 70 percent of wireless phone users with Lifeline subsidies to find new providers, said Commissioner Mignon Clyburn, one of two Democratic commissioners. "On top of that, they may not have a carrier to turn to after that happens." Excluding resellers from the program would limit competition in the market for subsidized plans and push consumers toward dealing directly with network operators like AT&T, Verizon, T-Mobile USA, and Sprint.  "These carriers opted out of offering Lifeline-supported service on their own and prefer to allow non-facilities-based wireless providers to serve Lifeline subscribers and the low-income segments of the wireless market," consumer advocacy group Public Knowledge wrote.

Tribal residents also got bad news from the FCC. The $25 enhanced subsidy also can no longer be obtained through resellers. This change takes effect right away without any further public comment.
Now, only Tribal lands in rural areas will still qualify for the extra $25 a month.

Lifeline is paid for by Americans through fees imposed on phone bills. It has a budget of $2.25 billion. The Lifeline program has about 12.5 million subscribers, but only about one-third of eligible households is receiving the subsidies. FCC Commissioner Pai said, "The reforms that we implement and propose today seek to...curtail the waste, fraud, and abuse that continue to plague the Lifeline program..."

There are indeed smaller wireless carriers in the US that are "facilities-based" and will be able to continue to offer Line programs.  Follow-up to this fairly major turn of events will be monitored on our web sites, Mountain Wireless, Mountain Prepaid and Cellular Back Door, with major events also reported here in the Noise.

story credit: arstechnica

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