The Lifeline Assistance Program has helped millions of Americans get back on their feet, by providing free and low cost cell phones to those who need them. There have been many success stories where people have been able to find work by the use of their Lifeline phones. They have also help thousands of elderly and infirmed people keep in touch with the families that love them, and the medical attention they need. Most of these stories never reach the light of day.

For all of the good things that the program is responsible for, it has received a lot of negative attention lately. In the past, most applications for cell phone service did not require the applicant to provide any proof of eligibility if they were applying on the basis of receiving benefits from a government-assistance plan.

Unfortunately, because of the easy application process and some flaws in the oversight process, there has been widespread abuse of the program. Many qualifying applicants have received phones from more than one provider,  breaking the one-per-household rule. Others have continued to keep their phones long after they stopped being eligible. The cell phone companies bear some responsibility as well. Eager for new customers, many of them have sent invitations to thousands of Americans to apply for Lifeline service that were never eligible.  Even though the program is not paid from taxpayer dollars, these abuses have been highly publicized as of late, casting the entire program in a negative light.

Earlier this year, the United States Congress asked the Federal Communication Committee (FCC), which is responsible for regulating the program, to improve the way the program is run. The FCC has recently announced that the program will be overhauled this year. The changes are described below.

National Lifeline Accountability Database

A database which will document all persons receiving phones under the Lifeline Assistance Program across all of the providers will be created and shared among the cell phone companies. In the past, there was no way for a company to know whether an applicant previously received a phone from another provider, as the companies would never share that information. With this database, the companies will be able to eliminate duplicates and prevent new phones from going to households that already have them.

Eligibility Databases

The FCC will create databases that the cell providers will be able to quickly verify whether an applicant is, in fact, receiving government assistance. It is hoped that this will streamline the application process, making it easier for the companies to quickly send out phones to those who need them and to prevent those who do not qualify from receiving them.  This step will also eliminate the need for customers to recertify whether they still qualify for service, as the database will inform the company whether the customer’s service should be continued. This database will prevent people from keeping their service beyond the time they are eligible.

Establishing and Enforcing a One-per Household Rule

Previously, the rule was that only one phone per household could get a Lifeline phone. The FCC has now clarified this to define a household as an economic unit, so that different families living at the same address can now each get Lifeline phones.

With the change, the FCC has also said that it will be more strict in enforcing the penalties regarding having duplicate phones.

Ending Link Up Subsidies

Link Up is an affiliate program to the Lifeline Assistance program. It usually allows people to receive discounts on the installation of landline phones (subject to the one per household rule; you may NOT have a subsidized landline and a Lifeline phone in the same household). Many discount providers, like AT&T, have allowed Lifeline customers to use their Link Up benefit to pay for activation charges. This change will not affect those who are receiving Lifeline benefits in Tribal Lands under the Enhanced Lifeline Plan, nor will it apply to those who are applying for free cell phones. This is the most negative change for the rule-abiding customer, and many of the discount providers have not yet responded how they will react to this change.

Closing Dormant Accounts

The cell phone carriers will now be required to close accounts that have been unused for 60 days. This will prevent the further subsidy of phones that either have been lost or are no longer used for some other reason.

Cost Saving Targets

These changes are designed to save $200 million during the course of 2012 and $2 billion over the next 3 years. The FCC intends to use the saved money to fund the following plans.

  • Finding ways to bring broadband internet access to all Americans
  • Subsidies for providing better broadband access to existing Lifeline customers
  • Increasing digital literacy in schools