Thune Open to Lifeline Bill if McCaskill Writes One, Doesn't Anticipate Own Legislation

Senate Commerce Committee Chairman John Thune, R-S.D., and other committee members told us Wednesday they Are receptive to calls to delay discussions about a replacement or major overhaul of the Lifeline USF program until the national verifier program instituted in the FCC's 2016 Lifeline overhaul order fully rolls out in 2019. Most witnesses at Commerce's Wednesday Lifeline hearing said Congress should give the FCC a chance to fully implement the 2016 order's provisions. Thune and other committee Republicans also signaled interest in working with Senate Homeland Security Committee ranking member Claire McCaskill, D-Mo., on a Lifeline bill if offered.

McCaskill, a leading Lifeline critic, told reporters she will wait until after she hears testimony at a planned Sept. 14 Senate Homeland Security Lifeline hearing before beginning work on a Lifeline bill, but she's already interested in partnering with Thune and committee Chairman Ron Johnson, R-Wis., on legislation. A critical GAO report on Lifeline, which precipitated the Senate Commerce and Homeland Security hearings, is “pretty damning” because it shows there's still “too much fraud and waste” in the program despite FCC attempts to fix it, McCaskill said. The report, released in June, said the Lifeline program’s management remains deficient despite FCC and Universal Service Administrative Co. efforts to improve control over finances and enrollment by low-income consumers (see 1706290037).

“We’re either going to have to restructure [the Lifeline program] or cap it,” McCaskill said. “As long as you incentivize companies to sign up to get a phone, you’re going to have a lot of people get phones that shouldn’t have them.” McCaskill said she would “love to see” some of the Lifeline funds “go into the broadband effort,” saying “it's the broadband divide right now that is really critical in so many communities, both rural and urban.” Thune told reporters Wednesday that “we're not in the process of drafting any bills” but if McCaskill moves toward drafting legislation that she would “like to see us take a look at, I'd certainly welcome the opportunity.” Thune said it might make sense to include a McCaskill Lifeline bill in FCC reauthorization legislation, noting he doesn't believe Senate Commerce will move on a reauthorization bill this year (see 1709060048). Senate Communications Subcommittee Chairman Roger Wicker, R-Miss., told us he's also interested in some form of Lifeline legislation.

McCaskill predicted at least “some buy-in” from Senate Democrats this year on a Lifeline revamp, though it shouldn't matter “whether you wear blue or red.” Senate Communications ranking member Brian Schatz, D-Hawaii, told us he would need to review an actual bill before he would commit to supporting it. He said he believes the FCC needs to improve its Lifeline oversight, but said senators need more context about the program's progress than was included in the GAO review. Sen. Catherine Cortez Masto, D-Nev., told us “we should wait” until the FCC fully implements the 2016 Lifeline order before pursuing legislation.

Witnesses took largely expected positions (see 1709050073) on the report's findings. The national verifier program is a “good step forward” in improving Lifeline's management but its ultimate implementation is “going to be very important,” said GAO Forensic Audits and Investigative Service Director-Audit Services Seto Bagdoyan. He said the report was based on an extensive analysis of 2014 Lifeline data and the FCC agreed to implement all recommendations in the GAO report. Free Press Deputy Director Jessica González criticized the “sensationalized narrative” about the review, saying its findings are an “old snapshot” of progress in fixing Lifeline's problems. Lifeline critics “exploited this report” at the expense of poor people, she said.

American Enterprise Institute visiting fellow Jeffrey Eisenach urged policymakers to “develop a new approach” to providing telecom and broadband service to low-income Americans, saying the existing Lifeline program “is not an effective efficient means of achieving these goals.” Citizens Against Government Waste Director-Technology and Telecommunications Policy Deborah Collier believes the national verifier program must be allowed to fully implement before fully assessing FCC progress in improving Lifeline oversight. She said Congress should require USAC to implement a front-end verification process and the FCC to engage in stronger enforcement actions against companies that “actively” register ineligible or duplicate Lifeline recipients. South Dakota Public Utilities Commissioner Chris Nelson emphasized the need for a strong ongoing role for the states in Lifeline, including maintaining state public utility commissions' role in the eligible telecom carrier designation process. The federal government also must ensure that the federal Lifeline program works synergistically with the 23 state Lifeline programs, Nelson said.