Federal Lifeline Modernization Order: NCC Webinar Hashes Out The Details

Internet access for low-income households is becoming more affordable, thanks to an FCC modernization order that brings the Lifeline program into the 21st Century. 

Next Century Cities recently offered a webinar for people who want to learn more about changes to the Lifeline program; our own Christopher Mitchell moderated the event. Jaymie Gustafson, Director of Stakeholder Engagement for the Lifeline, and attorney Olivia Wein from the National Consumer Law Center shared their knowledge about the order, discussed how local governments can utilize the program in public housing, and suggested ways local governments can help make the program a success.

The program, which initially provided a $9.25 subsidy to eliminate or lower the cost of telephone services to low-income households, now allows recipients to use the funds to purchase broadband services. Gustafson noted one of the driving factors behind the modernization order:

“We know it’s so important in terms of helping children do their homework, in terms of people being able to search for and keep their jobs, in terms of accessing services, just in terms of interacting with society around you. Right now, broadband is not a luxury. It’s a necessity.”

About The Program

The Universal Services Administrative Company (USAC) governs the Lifeline program, which originated in 1985 and receives funding from the Universal Services Fund. The fund, established in 1935, supports other programs that invest in telecommunications infrastructure in addition to low-income access. Instead of receiving a voucher to purchase services from a carrier or an Internet Service Provider (ISP), the provider receives the subsidy directly from USAC; after the discount is applied to Lifeline participants' bill, the participant pays the remainder to the provider.


Participants are eligible for the Lifeline program if they earn less than 135 percent of the federal poverty line, receive SNAP benefits, use Section 8 housing choice vouchers/rental assistance, use Medicaid, Supplemental Security Income, or qualify for tribal-specific programs. Participants must recertify each year to remain in the program. Only one Lifeline benefit is authorized per household; the $9.25 discount can go toward either phone or broadband services, or toward bundled services.

Changes To The Program 

USAC has implemented a few other changes that will help households use the Lifeline subsidy to get online and encourage ISPs to offer Lifeline services.

First, the modernization order attempts to mitigate ISPs’ hesitation to provide services to low-income households. Providers note that residents in low-income households cancel service at times when they can’t afford it and then sign up again, sometimes with a different provider, when their financial situation is better.

This “churn” is expensive for ISPs, so USAC has implemented a freeze on the Lifeline subsidy. Participants’ Lifeline benefit can be put toward only one broadband service or bundle within one year, ensuring they stay with the same provider for twelve months before choosing a new provider. If they want to change providers sooner than 12 months after signing on with provider A, they cannot use the subsidy with provider B.


Second, USAC has streamlined application and verification processes for ISPs that would provide Lifeline services to low-income households. Instead of applying to be a Lifeline provider through the state in which they operate, which is how telephone providers currently apply, ISPs can petition USAC directly. Additionally, Lifeline service providers will verify subscriber eligibility, with a quicker verification process for ISPs.

The new application process also requires ISPs to provide 10 Megabits per second (Mbps) download speed and 1 Mbps upload speed with standards increasing over the next five years. The Lifeline program will progressively phase out voice services over the next five years.

It’s unsettled, but the modernization order may provide a potential for aggregated services. Public housing groups might be able to sign up for the Lifeline program through a group application, which would encourage more low-income households to use the program. Wein offered an example:

“One of the approved Lifeline Broadband Providers is offering services in one zip code in New York City because it has a partnership with a Public Housing Authority, a very large one within that footprint. What they will be offering is fixed wireless broadband with speeds 20 [Mbps] up, 20 [Mbps] down, no usage limits. The price is $9.75 per month with five connections per unit… There may be opportunities within your communities if you can think of aggregation as a tool to leverage a steady stream of $9.25 per Lifeline eligible household. If you have some relationship with a large pool of similarly situated people to perhaps negotiate with a provider.”

Local Government’s Role


Gustafson identified a few ways local governments can help residents get the most out of the Lifeline program. First, she suggested encouraging state Public Utilities Commissions or the Health and Human Services departments to participate with the national verifier, helping to streamline processes for ISPs to be able to offer services to low-income households. In addition to working with state offices, local governments can reach out to people who may qualify for the program. City and county employees that interface with low-income individuals can at least give information about Lifeline, if not actually help them sign up for the program. Finally, Gustafson emphasized the importance of ISP participation:

“Almost no service provider is required to participate… it really is a choice for the service providers to participate. So making it clear how important it is to have the service available to your low income communities and to really encourage them to get on board is very important.”

One Tool In The Toolbox

The Lifeline program is one way the Federal government is addressing the digital divide. Other examples of federal efforts to improve broadband access include Housing and Urban Development’s Connect Home initiative, changes to federally-funded public housing regulations, and federal grant and stimulus dollars funding infrastructure improvements. These initiatives could look very different under the Trump administration—Wein suggested that Lifeline could have a financial cap in the future because the FCC's Republican Commissioners had advocated for just such a cap.

“One of the sticking points with some of the Republican commissioners was that they wanted to see a cap… so we may see efforts again to cap the amount of the Lifeline benefit. Another line of attack with the Lifeline program, and this is more “on the Hill,” were bills to limit Lifeline support to voice only, to not allow it to support broadband. Now that it’s been modernized I don’t know if that will reappear, but I just wanted to put it on your radar screen… It’s hard to take something away from somebody who has already got the benefit, so I think a likely scenario is that those who are current Lifeline subscribers probably will still have their Lifeline, but the door may shut for those now wanting the Lifeline broadband product if they haven’t been a Lifeline subscriber.”

Because of uncertainty at the federal level, local government’s role is even more important in helping low-income households get online.

Learn more about the program and the webinar at the Next Century Cities website or watch the archived webinar here: