FEDERAL COMMUNICATIONS COMMISSION 
Mignon L. Clyburn 
Acting Chairwoman 
The Honorable Jeff Sessions 
United States Senate 
326 Russell Senate Office Building 
Washington, DC 20510-0104 
Dear Senator Sessions: 
September 27, 2013 
Thank you for your inquiry concerning the Lifeline program, which provides a veritable lifeline 
to millions of families who otherwise might not have access to affordable phone service in our 
increasingly connected world . I agree with your statement that all federal programs should "be 
effectively administered" and "adhere to the highest standards," and I am proud to have been a part of 
efforts that have fundamentally reformed all of the Commission's universal service programs, including 
Lifeline. 
While the Commission ' s 2012 reforms to the Lifeline program have made significant progress to 
address concerns about the program, I also recognize that our work is not complete. The Commission is 
continuing to monitor the impact of its reforms and evaluating what additional measures are appropriate 
to ensure the integrity of the Lifeline program. I appreciate your views and am grateful for the opportunity 
to share my own, and to address some of the concerns you may have. To provide context for my 
responses, I think it is important to first provide a brief overview of the history of the Lifeline program 
and the Commission's recent reforms. 
Overview of Lifeline History and Recent Program Reforms 
The Federal Communications Commission established the Lifeline program in 1985 in the wake 
of the divestiture of AT&T to ensure that low-income consumers had access to affordable telephone 
service. That original program supported the prevailing technology of the day-wired phone service 
delivered through one wire into the home. In the Telecommunications Act of 1996, Congress codified the 
principle of ensuring that all Americans, including low-income consumers, should have access to 
telecommunications services, including "advanced" telecommunications services. As American 
consumers increasingly began to adopt wireless services, the universal service program adapted to support 
wireless service in rural areas through the high-cost fund and for low-income families under Lifeline. In 
2005, the FCC determined that, under certain conditions, non-facilities-based wireless providers could 
participate in the program as Lifeline-only Eligible Telecommunications Carriers (ETCs). 1 The 
Commission's goal was to foster more competition among providers to improve consumer choice. In 
2008 under the Bush Administration, the first such providers were authorized to receive Lifeline funding. 
Unfortunately, those decisions did not include sufficient safeguards to protect the program, and, as a 
result, the Lifeline program became susceptible to waste and abuse. 
1A carrier must be designated as an ETC, usually by a state public utility commission, but in some instances by the 
FCC, before it can receive federal Lifeline support. 
445 Iih Street S.W. Washington, D.C. 20554 (202) 418-1000 
The Commission took corrective action once it became clear that sufficient protections were not 
in place in the Lifeline program. In the spring of2010, the FCC asked the Federal-State Joint Board on 
Universal Service (Joint Board) for input on reforming the Lifeline program. Building on 
recommendations from the Joint Board, as well as recommendations in a 2010 report from the 
Government Accountability Office (GAO), the FCC initiated reforms of the Lifeline program in 2011, not 
only by commencing a comprehensive rulemaking, but also by implementing intermediate steps directed 
at reducing duplicative support to subscribers. The rulemaking ultimately culminated in a complete 
overhaul of the program in early 2012 when the Commission approved the Lifeline Reform Order. 
The tough, comprehensive reforms unanimously adopted by the Commission last year to combat 
waste, fraud and abuse have already resulted in hundreds of millions of dollars in savings to the Universal 
Service Fund. The Lifeline program is cuJTently on track to save approximately $2 billion by the end of 
2014. These savings will be achieved through reform and modernization of all aspects of the program. 
The reforms include: ( 1) requiring consumers to provide proof of eligibility to participate in the Lifeline 
program at enrollment; (2) requiring consumers to ceiiity that they understand key program rules at 
enrollment; (3) requiring consumers to recertify annually their continued eligibility for support; (4) 
limiting the Lifeline benefit to one per household; (5) eliminating Link Up support (a one-time payment 
for initiating service) for all providers except those that receive high-cost universal service support on 
Tribal lands; (6) establishing a uniform, nationwide floor for consumers' eligibility to participate in the 
program, which states may supplement; (7) enhancing requirements concerning marketing and advertising 
practices of supported carriers; (8) eliminating support for customers who have not used the service in 
over 60 days; and (9) putting in place a robust audit requirement for providers entering the Lifeline 
program and an ongoing independent biennial audit requirement for all providers receiving $5 million or 
more from the Fund per year (a requirement that applies to carriers receiving approximately 88% of total 
annual Lifeline disbursements). 
In addition, the FCC, in partnership with the Universal Service Administrative Company 
(USA C), the administrator of the Fund, has also identified and cut substantial amounts of duplicative 
Lifeline support, resulting in the de-enrollment of hundreds of thousands of subscribers with more than 
one Lifeline supported service. And, at the FCC's direction, USAC is building the National Lifeline 
~Accountability Database that will be operational by the end of this year and will detect and prevent 
duplicative support before consumers are enrolled in the program. These reforms are in place, are 
working as intended, and are cutting waste, fraud and abuse from the program while ensuring that low­
income consumers have access to basic voice communications. 
Finally, while these significant reforms to the Lifeline rules are being implemented, the 
Commission has also stepped up its efforts to enforce the rules. In addition to the $1 million in consent 
decrees entered into with two providers this year, the FCC's Enforcement Bureau has issued citations to 
more than 300 Lifeline customers with duplicative subscriptions and has launched numerous 
investigations of company practices that appear to violate our rules. Separately, the FCC's Inspector 
General is investigating allegations of fraud on the Low Income Program and is supp01iing active 
investigations in coordination with the U.S. Depa1iment of Justice and the FBI. We also work closely 
with our pa1iners in the Lifeline program- the states- to enforce our rules. Just last week, the Nebraska 
Commission expelled from the program a provider that failed to comply with eligibility verification 
requirements and earlier this month, an Oklahoma provider withdrew from the program in response to 
state allegations. 
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1.) What is the process for verifying eligibility from those seeking to enroll? Is this controlled by 
the FCC, the states, or the service providers? 
In reforming the Lifeline program, the Commission took several steps to ensure that only eligible 
consumers that affirmatively request Lifeline service are able to receive the benefit. All ETCs 
must adhere to the Commission's requirements, and states may add additional requirements that 
go beyond the Commission's rules. 
The Commission's reforms also require that ETCs affirmatively verify a prospective subscriber's 
eligibility at the time of enrollment and prior to activating a Lifeline service for that consumer, in 
addition to obtaining the written self-certification from the subscriber. A subscriber is eligible if 
he or she can show that his or her household income is at or below 135% of the Federal Poverty 
Guidelines, or by showing proof of participation in one of seven federal assistance programs, or 
certain state assistance programs. The ETC can verify eligibility by querying a state eligibility 
database (e.g., a state database offood stamp recipients) where available, obtaining verification 
from a state Lifeline administrator that the prospective consumer is eligible, or by a review of 
documentation provided by the consumer. 
Consumers must also certify their eligibility for Lifeline at the time of enrollment as under the 
prior rule. In addition, ETCs now must disclose to consumers the rules of the Lifeline program 
(e.g. only one Lifeline benefit permitted per household) and consumers must attest under penalty 
of pe1jury that they understand and will comply with the Lifeline program rules. These 
ce1iification and disclosure requirements work in tandem with the proof requirement described 
above to ensure that only eligible consumers sign up for support. 
In states that have chosen to take a more active role in the Lifeline program, such as California 
and Oregon, a state administrator may examine these certification forms prior to forwarding them 
to ETCs; in other states, ETCs handle the ce1iification process on their own. (Please also see 
response to Question 3 below, which concerns the initial verification process) 
2.) Is there a verification process for those currently enrolled to assure continued eligibility? 
Please provide the details of the process and the number of individuals found ineligible through 
this review. 
In the Lifeline Reform Order, the Commission put in place a robust rece1iification requirement to 
ensure that subscribers in the program remain eligible for the benefit because they are still at or 
below 135% of the Federal Povetiy Guidelines, or continue to participate in one of the designated 
assistance programs. ETCs must rece1iify the continued eligibility of all of their Lifeline 
subscribers each calendar year. Subscribers can be recertified in one of two ways: 1) an ETC 
contacts the subscriber and obtains a certification from the subscriber who attests under penalty of 
pe1jury that he remains eligible for the program; or 2) the ETC can verify that the consumer 
remains eligible by que1ying a state database or receiving notice from a state Lifeline 
administrator that the consumer remains eligible. 
Subscribers who fail to respond to rece1iification attempts will be de-enrolled from the Lifeline 
Program. Pursuant to the Lifeline Reform Order, by December 31, 2012, ETCs were required to 
obtain ce1iifications for all the subscribers to whom they were providing service as of June 2012. 
Based on the results of the 2012 Lifeline recetiification process, approximately one-third of all 
subscribers that were enrolled in the program in June 2012 were de-enrolled for failure to 
rece1iify their eligibility. Approximately 0.5% of all subscribers subject to recertification 
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responded that they were no longer eligible. Just under 4% of the total subscribers subject to 
rece1iification were determined to be ineligible via a state administrator or an ETC accessing a 
state eligibility database. The remaining consumers were de-enrolled for failure to respond to the 
rece1iification attempts. Subscribers in this last group are not necessarily ineligible for service; 
some may have simply failed to rece1iify or decided they no longer wanted the benefit. 
3.) In the initial verification process, how does the FCC or service provider crosscheck to see 
whether a participant is participating in a qualified federal program or not living in a 
household where a Lifeline phone is already present? 
As noted above, the National Lifeline Accountability Database will be operational by the end of 
the year and will ensure that prospective subscribers or members of their household do not 
already receive a Lifeline benefit. Even pending the completion of the database, ETCs must 
disclose to consumers that there is only one Lifeline service permitted per household, that a 
household is not permitted to receive Lifeline benefits from multiple providers, and that violation 
of the one-per-household limitation constitutes a violation of the program rules. Consumers must 
certify that, to the best of their knowledge, no other members of their households already 
participate in Lifeline. The Commission's reforms also require that ETCs verify a prospective 
subscriber's eligibility at the time of enrollment, rather than obtaining and relying on the 
subscriber's self-certification alone, as under the prior rule, and ETCs are required to make 
specific disclosures to consumers regarding the nature of the Lifeline benefit and the consumers' 
duty to comply with the rules. Consumers must certify their eligibility at the time of enrollment, 
attesting under penalty of pe1jury that they understand and will comply with program rules. As 
previously noted, providers may not activate Lifeline service for a consumer until completing the 
entire enrollment process. An ETC therefore may not provide a service that it represents to be a 
Lifeline service, even on an interim basis while the consumer's application is being processed, 
before verifying eligibility. 
In certain states, state authorities play a significant role in verifying whether a potential subscriber 
qualifies to receive Lifeline service. For example, Texas, California, and Oregon all have state 
eligibility databases. 
4.) How long does it take to process an application fot· Lifeline service and are providers required 
to delay providing a phone or service if they become aware that another application is pending 
or that another provider is servicing an account? 
The Commissi·on estimates that it takes, on average, a consumer approximately twenty minutes to 
complete the Lifeline application process, although it can vary depending on how the consumer is 
enrolled. All ETCs must determine a subscriber's eligibility prior to enrolling a new subscriber in 
Lifeline. Some ETCs may verify eligibility on-site and activate the subscriber's Lifeline service 
at that time. Others may make the determination off-site and only then initiate service. As 
explained above, providers must explain, and prospective subscribers must certify, that they will 
comply with the Lifeline program rules, including the one-per-household rule. If the ETC knows 
or has reason to believe that the prospective subscriber is already receiving Lifeline service, the 
ETC must not provide service to that prospective subscriber. Any ETC that knows or has reason 
to believe that a prospective subscriber is already receiving Lifeline service from another ETC 
violates the FCC rules by providing Lifeline service to, or seeking reimbursement from the Fund 
for, that subscriber. 
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In addition, once the National Lifeline Accountability Database becomes operational by the end 
ofthis year, an ETC must check the database to determine if a prospective subscriber is already 
enrolled with another carrier prior to providing service to that subscriber. The database provides 
an important additional means to eliminate waste, fraud, and abuse in the Lifeline program. 
5.) The underlying intent of Lifeline was to provide "security." Are the phones, often provided 
free-of-charge by providers, limited in capability? That is, are the phones capable of texting or 
using social media or other web-enabled applications? 
The flat-rate monthly Lifeline support amount can only be used to support the provision of voice 
telephony service. The Commission's rules do not permit Lifeline support to be used to support a 
phone or any other device. If an ETC chooses to offer a free or discounted device to Lifeline 
subscribers, similar to that offered to non-Lifeline subscribers, that is an independent business 
decision of the ETC. Similarly, any decisions to offer services beyond voice telephony service 
are independent business decisions ofthe ETCs, but such services are not supported by the 
Lifeline program. 
6.) How much service does participation in the Lifeline program provide? Does the program 
provide any funding for data or· text transmissions? How many minutes per month does the 
progr·am pay for participants? 
In the Lifeline Reform Order, the FCC considered but declined to adopt minimum Lifeline service 
requirements. The flat-rate support amount of$9.25 per month can only be used to support the 
provision of voice telephony service. Texting is not a supported service. As noted above, any 
decisions to offer services beyond voice telephony service are independent business decisions of 
the ETCs, but such services are not supported by the Lifeline program. As the FCC noted in the 
L[fe!ine Reform Order, the typical market-driven offering for pre-paid Lifeline wireless service 
suppotis 250 minutes per month. 
7.) How are participating service providers selected and are there eligibility requirements for 
providers? Explain the financial incentives for providers and how they ar·e compensated. 
The states have an impotiant role in overseeing the Lifeline program- they have been partners 
with the FCC in reform and in oversight and enforcement. Under section 214( e )(2) of the 
Communications Act, states designate providers as ETCs to participate in the Lifeline program, 
and to receive Lifeline suppoti, including, in most cases, wireless ETCs. Currently, all but ten 
states and the District of Columbia handle the designation of Lifeline-only wireless ETCs to 
patiicipate in the program. States have broad authority to conduct thorough reviews of ETC 
applications. 
In addition to the statutory requirements, the FCC's reforms require that providers demonstrate 
that they are "financially and technically capable of providing Lifeline service in compliance with 
program rules." In deciding whether to designate a provider to patiicipate in Lifeline, a state or 
the FCC must, among other things, examine how long the company has been in business, whether 
the provider intends to rely exclusively on universal service disbursements to operate its business, 
whether the provider receives or will receive revenue from other sources, and whether it has been 
subject to enforcement action or ETC revocation proceedings in any state. As part of the 
Commission's ongoing commitment to combat waste, fraud, and abuse in the program, all non-
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facilities-based providers seeking to become Lifeline-only ETCs are now required to have a 
compliance plan approved by the FCC staff before being designated as an ETC by a state or the 
FCC. FCC staff thoroughly reviews these plans to ensure that providers have procedures in place 
to adhere to the new stringent program requirements. 
A provider's decision whether to seek designation as an ETC is based on its business judgment. 
Properly designated providers of Lifeline service are compensated by the Fund each month, based 
on a submission to USAC showing the number of Lifeline subscribers actually served. 
8.) There appears to be an ongoing recruitment process to enroll people in Lifeline. Is the FCC in 
charge of the recruiting process and how are those recruiters paid? Is payment for r·ecruiters 
provided through USF? Are recruiters offered bonuses for the number of individuals enrolled 
or for those who apply, or are you aware of any other type of incentives that could increase 
taxpayer costs by targeting individuals for enrollment beyond the intended scope of the 
program? The USAC Annual report indicates that in 2012, administrative expenses were $110 
million. Of that, how much was spent on recruitment material and personnel for the Lifeline 
program? 
Neither the FCC nor USAC provides Lifeline service directly to consumers, and neither entity is 
involved in recruiting or enrolling Lifeline subscribers. Section 214 of the Communications Act 
requires ETCs to advertise the availability of Lifeline service in a way that will reasonably reach 
qualified individuals. The Commission's Lifeline Reform Order specifically requires that such 
advertising to include specific information, including the rules of the program. 
ETCs use company employees, agents or contractors to enroll qualified subscribers. The 
Commission's rules make clear that ETCs' marketing and recruiting costs are not paid for or 
reimbursed by the Lifeline program. 
To the extent your question is based on concerns about the actions of sales representatives, we 
note that the ETCs are liable for the actions of such representatives. To that point, the FCC's 
Enforcement Bureau recently issued an advisory reminding ETCs that they are liable for the 
actions of their agents, contractors, and representatives. 
As you note in your letter, USAC' s annual report indicated administrative expenses of $110 
million in 2012. None of this money was spent on recruitment material and personnel for the 
Lifeline program. OfUSAC's $110 million administrative budget in 2012, USAC attributes $8.4 
million to administration ofthe Lifeline program. Ofthat,just over $1.3 million was attributed to 
USAC salary and payroll expenses for USAC employees specifically assigned to the Lifeline 
program. USAC's Lifeline team is particularly focused on implementing the Lifeline Reform 
Order, which, among other things, directed USAC to continue targeted checks for duplicate 
Lifeline subscribers and create the National Lifeline Accountability Database for eliminating and 
preventing duplicative support. USAC is also responsible for conducting audits of Lifeline 
providers to ensure they are in compliance with FCC rules. 
9.) What is the process for monitoring provider· activity? Have any providers been sanctioned or 
debarred by the FCC for over-enrollment or failing to properly verify eligibility? 
The Commission takes seriously its responsibility to ensure its rules are followed and to identify 
and deter any program abuse, and the Commission has worked on several fronts to eliminate 
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waste, fraud and abuse prior to the release of the Lifeline Reform Order. For example, to 
eliminate duplicative support, the Commission in conjunction with USAC initiated targeted audits 
known as In-Depth Data Validations (IDVs) in 2011. To date, through the identification and 
elimination of duplicate subscriptions, the IDV process has produced savings of over $200 
million on an annualized basis. The Lifeline Reform Order contained new requirements to 
increase oversight of Lifeline providers and enhance the auditing program. USAC must now 
audit all newly designated Lifeline providers that have not previously provided Lifeline service to 
ensure they have established effective controls and procedures to comply with the Commission's 
rules. As part of vigorous accountability and oversight for the largest recipients in the program, 
the Commission's reforms require all Lifeline providers that draw $5 million or more from the 
Lifeline program on an annual basis to hire an independent audit firm to assess the ETC's overall 
compliance with the program's requirements. 
In addition to the audit requirements, the Commission is actively enforcing its rules. Recently, 
the Commission's Enforcement Bureau pursued actions against two providers that resulted in an 
enforcement action worth over $1 million; other investigations of company practices that appear 
to violate our rules are ongoing. These investigations concern possible enrollment of ineligible 
subscribers, failure to de-enroll ineligible subscribers, and seeking support for customers who did 
not actually apply for service. Separately, the FCC's Inspector General is investigating 
allegations of fraud on the Low Income Program and is supp01ting active investigations in 
coordination with the U.S. Department of Justice and the FBI. 
In addition, the Enforcement Bureau has issued nearly 300 citations to individuals in eight states 
notifying them that they violated the Lifeline program rules by receiving multiple Lifeline 
benefits. These citations order the consumers to cease and desist from applying for-or 
receiving-more than one Lifeline-supported phone service, and warn them that the Commission 
may impose a monetary fine if the violations continue. Beyond this, the FCC has launched a 
dedicated tip line and conducted outreach campaigns to make consumers and companies aware of 
our rules- and the penalties for violating them. 
lO.)According to the FCCs own review, a number of customers have been found to be in violation 
of the one phone per household limit. In those instances, are those customers disqualified from 
participation the program? Are ther·e any sanctions for customers that violate the parameters 
of the program, criminal or othenvise? 
The FCC's Enforcement Bureau has issued citations to nearly 300 consumers for violating the 
FCC's rules by obtaining and receiving more than one Lifeline supp01ted service. Under section 
503(b)(5) ofthe Act, the Commission may not impose f01feiture on a person ifthe person does 
not hold a license, permit, cettificate, or other authorization issued by the FCC. In situations 
where such a person violates the FCC's rules, the Act forbids the FCC from proposing a 
forfeiture unless the FCC issues a citation and provides the person an opportunity to talk directly 
with the FCC, and the person subsequently engages in the same illegal conduct described in the 
citation. Section 54.8 of the FCC's rules also permits the FCC to debar persons by excluding 
them from activities associated with or relating to the universal service programs. Causes for 
debarment are conviction of or civil judgment for attempt or commission of criminal fraud, theft, 
embezzlement, forgery, bribery, falsification or destruction of records, making false statements, 
receiving stolen property, making false claims, obstruction of justice and other fraud or criminal 
offense arising out activities associated with or related to the universal service programs. 
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I appreciate your interest in this matter. Please let me know if I can be of any further assistance. 
Sincerely, 
Mignon L. Clyburn 
Acting Chairwoman 
Federal Communications Commission 
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