LITT: E-Services

Background and History of Lifeline

• When & Why It Was Created: Lifeline was created in 1985 and aimed at making phone services more affordable. But its true roots go back way further than that. In 1913, AT&T made the “Kingsbury Commitment” to settle a federal antitrust case, promising to provide “universal service.” The Communications Act of 1934 made the universal service objective a law. Section 1 created the Federal Communications Commission (FCC). Its mandate is to make “available…to all the people of the United States…a rapid, efficient, nationwide, and worldwide wire and radio communication service with adequate facilities at reasonable charges.” To support this, urban users helped fund rural wiring, and long-distance fees subsidized local service. When AT&T was broken up in 1984, the FCC was concerned that local service rates would become unaffordable. The separation of AT&T’s long-distance services from the new local companies meant that the long-distance subsidy would end. In response, the FCC launched the Lifeline program in 1985, using authority granted by the 1934 Act, to provide discounted local phone service to low-income households.
• Evolution: There are now four programs paid for by the Universal Service Fund: Lifeline, E-Rate, the High Cost Fund, and Rural Healthcare. This fund is not supported by taxes but by fees collected from phone users, based on their long-distance and international usage (check your phone bill to see the charge). Major changes came in 2005 under the George W. Bush Administration. The FCC expanded eligibility to include wireless carriers and removed the requirement that providers must own the infrastructure they use. This allowed companies like TracFone, which lease network services, to participate. These changes paved the way for free or low-cost wireless services. In 2016, the program expanded again to include broadband internet access.
• Administering Agency: While the FCC oversees Lifeline, it doesn’t manage the program directly. Administration is handled by the Universal Service Administrative Company (USAC), which manages the entire USF—currently totaling nearly $10 billion.

How the Lifeline Program Works

• Eligibility:
  • Income-based (135% of Federal Poverty Guidelines) or
  • Participation in programs like Medicaid, SNAP, SSI, Federal Public Housing, etc.
• Benefits:
  • Subscribers get up to $9.25/month discount on phone or internet. They can get the benefit on either mobile, home internet, or bundled service, but they can’t use the benefit to pay for separate mobile and home service.
  • It’s up to $34.25/month for Tribal lands.
• Participating providers: Providers have to register as eligible with the FCC and USAC. There are eligible providers available on USAC’s website. For folks with existing service, it’s probably easiest to call their providers and ask about Lifeline.
• Application process: is through the National Verifier system. Folks need documentation to prove eligibility. People can apply directly through their current providers as well, which if often easier.
• Relevant links:
  • https://www.lifelinesupport.org/do-i-qualify/#programs
  • Get Started – Universal Service Administrative Company
  • Companies Near Me – Lifeline Support – USAC
  • Home – National Verifier

Lifeline’s Impact and Importance

• Who It Helps: Here’s a quick rundown of the most common ways folks qualify for Lifeline.
  • Medicaid at 49%
  • Multiple state eligibility programs at 20%
  • SNAP at 6%
  • Income at 2%
  • Federal Public Housing at 1%
  • Veterans’ Pension at 0.2%
  • SSI at 0.2%
• Use Cases: The goal of universal service is to have everyone connected.
  • Emergency services: People need to be able to call 911 no matter their income level or their location in a rural versus urban neighborhood.
  • It also helps people gain and keep employment. Most employers these days require you to have a cell phone. They want to be able to contact you. This is especially true for jobs that require any travel during work hours. For safety and liability, you need access to mobile communications.
  • And of course, there are educational reasons. Students who don’t have access to the internet at home have lower educational attainment than those who do have access. This is mostly due to their ability to complete homework, and is often described as the homework gap.
• Data/Stats: for Lifeline program in 2024
  • US Total Subscribers: 6,947,443
  • ID Total Subscribers: 15,852
  • 94% of subscribers have bundled phone and internet
• Relevant links:
  • Open Data Portal | USAC | Data Platform

The Future of Lifeline

• Funding mechanism: Telecom providers are required to contribute a certain percentage of their interstate and international service end-user revenues. The problem is that the contribution rate continues to go up (as of now, it’s 36.6%), but those revenues are shrinking as more people subscribe to broadband over traditional telephone services. This creates a bit of a dilemma. So, how to fix it
• Modernization Needs: Most people believe that contributions to USF should come from multiple sources to reduce the fee amount assessed to any one service. Spreading around who pays may be politically more difficult, but it would reduce the percentage of the contributions. Industries that are often in the conversation to contribute are internet providers and web-based services, such as Amazon, Netflix, etc. The argument goes that anyone who profits off consumers having access to the internet should be required to pay into the Universal Service Fund. Obviously, no one industry group is keen on taking on the fees. Congress has been working on the issue for a few years, but they haven’t made any changes as of yet.
• The future of the USF: As we already mentioned, the FCC partners with USAC, a private non-government entity, to manage universal service. USAC calculates projected demand and contribution factors using FCC formulas, submits these proposals to the FCC for approval, and then uses the approved figures to determine individual contribution amounts. Consumers’ Research challenged the constitutionality of the 1996 Telecommunications Act’s universal service requirements and the FCC’s implementation of those requirements. Their primary arguments were twofold: first, that Congress unconstitutionally delegated its legislative power to the FCC through the universal service provisions, and second, that the FCC improperly delegated its authority to USAC to manage the universal service fund. Two circuit courts upheld the constitutionality of the current system, but the 5^th Circuit court ruled in favor of Consumers’ Research. The government appealed that decision to the Supreme Court. The court heard arguments on March 26^th. The final ruling will probably be available in July. Depending on the Supreme Court’s decision, the future of all the FCC’s universal service programs could be on the line. Most folks are cautiously optimistic that the court will not rule the entirety of the funds unconstitutional, but no one will know for certain until the final ruling comes down.
• Relevant links:
  • Federal Communications Commission v. Consumers’ Research – SCOTUSblog

Device Affordability

• Relevant links:
  • Human-I-T | Technology Donations to Create Social Good | Nonprofit
  • Monetary Grants – Idaho Commission for Libraries
  • PCs for People
  • Idaho Assistive Technology Project