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Perspectives from FSF Scholars           May 5, 2014        
Vol. 9, No. 17                       

  


 

Use Your Lifeline: Lifeline and the Lifeline Broadband Pilot Program Can Support the IP Transition

 

by

 

Sarah K. Leggin *

 

[Below is the Introduction to this latest FSF Perspectives. A PDF version of the complete Perspectives is here.]

One of the most important challenges the Federal Communications Commission must confront over the next year is how to further the ongoing IP transition. The FCC took a positive step toward promoting an "all-IP future" by approving voluntary experiments testing the impact of technology transitions in January. These trials are necessary to determine the impact of new technologies on consumers. As the Commission proceeds, the existing Lifeline program and the recently-launched Lifeline Broadband Pilot Program can be used to complement the technology transition trials by filling in service gaps where they exist and by gathering data.

 

The transition from analog narrowband communications services to digital broadband Internet Protocol services is a fundamental shift in technology that has the potential to unleash new investment, improve service quality, and connect more consumers and communities than previously possible. The IP transition is already well underway, and the competitive marketplace environment is providing improved, more cost-efficient communications service to most Americans.

 

At the end of 2011, 99.9% of the population was served by at least one mobile broadband provider, 98% of all consumers in the United States had access to at least two providers, and 90% had access to three or more according to the FCC's latest Wireless Competition Report released in March 2013. U.S. consumers are increasingly choosing wireless voice and broadband services over traditional wireline networks. According to the Centers for Disease Control's Wireless Substitution Survey released in December 2013, 39.4% of U.S. homes reported having at least one wireless device and no landline telephone - and this number continues to grow. In other words,two in every five American homes had only wireless phones as of the first half of 2013.  

 

In limited instances where communications services are lacking, there is a targeted role for the Commission to play in ensuring universal service. By using the Lifeline Broadband Pilot Program and the existing Lifeline program and to determine and meet the changing needs of qualified recipients, the Commission can support and expedite the IP transition and trials. Those who cut the cord are predominantly the poor and minority groups - often the same groups who rely on the Lifeline program for communications services. A majority of adults living in poverty (54.7%) lived in a wireless-only household, versus 47.5% living near poverty and 35.3% of non-poor adults, according to the CDC.

 

New regulations and subsidies are unnecessary, and will swiftly be outpaced by marketplace changes. Further, various proposals to maintain or reassert legacy regulatory foundations will only delay the inevitable retirement of outdated TDM networks and investment in upgrades and new build-out. Such a go-slow approach, inevitably, will impose unnecessary costs on service providers and consumers alike.

 

The Lifeline program can provide subsidized service to eligible low-income consumers to provide a universal service backstop in the IP-world. The Commission still needs to reform the USF program by capping the high-cost fund, reducing available subsidies, establishing a sunset period for ending high-cost fund subsidies, and curbing waste, fraud, and abuse of the Lifeline program. But the Lifeline program and the Lifeline Broadband Pilot Program should be utilized to meet consumer needs and fulfill fundamental communications network functions like public safety and universal service during the IP transition and beyond.  

 

* Sarah K. Leggin is a Legal Fellow of the Free State Foundation, an independent, nonpartisan free market-oriented think tank located in Rockville, Maryland.

 

A PDF of the complete Perspectives may be accessed here.
   

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