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Congress

FCC Votes To Reform Telephone Subsidy Program

January 31, 2012

The Federal Communications Commission voted on Tuesday to overhaul a subsidy program to provide communications services to low-income Americans.

The plan adopted by the commission would shift some of the focus of the LifeLine program from telephone to broadband service, while discontinuing most of the LinkUp program, which provided extra money to connect to communications services. The plan will also implement measures to prevent waste, fraud, and abuse.

LifeLine is part of the FCC's universal service program, in which fees collected from telecom companies help subsidize service in underserved areas and communities.
U.S. Telecom, the National Hispanic Media Coalition, and several Democrats on key congressional subcommittees praised the FCC vote.

"In addition to rooting out inefficiencies, the FCC has recognized with these reforms that broadband is an essential communications tool for all Americans," said Rep. Anna Eshoo, D-Calif., ranking member of the House Energy and Commerce Communications and Technology Subcommittee. "The establishment of a broadband adoption pilot program will help close our nation's digital divide, while addressing a key recommendation of the FCC's National Broadband Plan."

But AT&T's Bob Quinn expressed concerns over the fund's ability to pay for itself.
"While the steps the FCC announced today are commendable, we fear the speed of reform is getting far outpaced by the actual dollar growth of the fund itself," he said. "Policymakers must begin to discuss whether it continues to make sense for an independent agency to administer a fund this size with no Congressional oversight or decision-making input to the appropriate size of the fund."

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