FCC Takes Steps to Radically Reshape and Shrink the Lifeline Program

On November 16, 2017, a divided FCC voted 3-2 to adopt a controversial order and new rulemaking proceeding, adopting and proposing many changes that will radically reshape—and significantly shrink—the Lifeline program.

The steps taken in the item signal that the now Republican-controlled FCC seeks to drastically reduce the role of the Lifeline program in the Universal Service Fund (“USF”) ecosystem. Furthermore, the FCC seemingly changes the goal of the Lifeline program from an affordability mechanism, to building broadband-capable networks, which has long been the goal of the high-cost (Connect America Fund) USF program. While some of the FCC’s reforms will only affect areas currently eligible for additional Tribal Lifeline support, many of the FCC’s proposals, if implemented, will effectively shrink the program by eliminating the very providers interested in serving qualified consumers.

From a technical legal perspective, the adopted document incorporates four different “orders,” including a continuation of a rulemaking proceeding launched in 2011, a ruling on a petition for reconsideration, etc., in addition to a notice of a new rulemaking proceeding. The key distinction for industry to understand is that the rules adopted in the orders are slated to become final FCC rules, whereas the rulemaking is merely proposing additional rules that could undergo significant changes during the required public comment period. In this advisory, we first discuss the changes adopted in one of the four orders, and then discuss the rulemaking proposals.