November 10, 2015
A new paper from Anna-Maria Kovacs, Ph.D., CFA published by the Georgetown Center for Business and Public Policy makes a convincing case that the FCC can save hundreds of millions of taxpayer dollars as it reboots Lifeline for the broadband age.
The full paper, “Regulation in Financial Translation: Rebooting Lifeline for Broadband,” is available for download, but here are some highlights:
The FCC’s FNPRM states that the FCC seeks to make the program more efficient by “targeting support to those low-income consumers who really need it while at the same time shifting the burden of determining consumer eligibility for Lifeline support from the provider. We further see to leverage efficiencies from other existing federal programs and expand our outreach efforts.” An effective way to accomplish this goal is to link Lifeline to SNAP [Supplemental Nutrition Assistance Program] for eligibility verification and enrollment.
As Kovacs points out in the paper, reducing waste, fraud and abuse of the Lifeline program is important. But just as important is ensuring those reduction efforts aren’t duplicative. Again, from the report:
As the FCC’s FNPRM indicates, the job of verifying that households have low-income is already being verified by other federal agencies. Most notably, the USDA verifies the eligibility of those households that quality for SNAP. SNAP not only enrolls those households whose low income qualifies them, but de-enrolls them if their income rises. In other words, SNAP already does the job the FCC duplicates at a cost of roughly $600 million. Thus, the first argument for relying on SNAP for eligibility verification is that doing so would save roughly $600 million in wasted administrative efforts.
$600 million is obviously a lot of savings. But as Kovacs goes on to note, the benefits of linking Lifeline to SNAP go beyond the monetary because:
It would provide automatic enrollment for low-income households that need Lifeline, and make it easier for them to apply the discount to the technology and provider of their choice. By making it easier for both providers and low-income households to participate in Lifeline, the FCC would also enhance competition.
For more on rebooting Lifeline for the broadband age, check out this op-ed from our Honorary Chairman Rick Boucher that was recently published in The Hill. An excerpt
With bipartisan support in Congress, the FCC now has a unique opportunity to completely overhaul and reshape the program for the 21st century. The central challenge is to add broadband as a Lifeline benefit without a significant increase in program costs. Tinkering with the existing program or making minor modifications to program administration at the edges will likely fail to deliver the promise of ubiquitous and modern high-speed broadband access for low-income consumers.