Making Lifeline a Snap For Eligible Households

Joan Marsh
August 4, 2020
Broadband Access and Affordability

Making Lifeline a Snap For Eligible Households

Benefit programs designed to help vulnerable populations have been improving their processes for many years through technology.  The USDA’s Supplemental Nutrition Assistance Program (SNAP) program replaced “food stamps” with Electronic Benefit Transfer (EBT) cards in the late 1990s, providing beneficiaries broad choices in shopping and enabling them to pay with “plastic.”

To add further convenience, in 2019 the USDA launched a two-year SNAP pilot program in New York State to allow SNAP recipients to shop for groceries online.  Today, 40 states are participating in that program. “As technology advances, it is important for SNAP to advance too” noted Agriculture Secretary Sonny Perdue, so SNAP recipients have the same “shopping options” as everyone else.

The current Lifeline program, however, lags far behind.  Although Lifeline eligibility is now linked directly to the SNAP program, Lifeline has adopted none of the technology advances designed to make it both consumer and provider-friendly.  If the Lifeline program is to play a bigger role in addressing the well-documented internet usage gaps for low income Americans, the program must be modernized.

To be sure, the Lifeline program made major strides forward with the introduction of the National Verifier to determine consumer eligibility.  For years, consumers had to apply for this federal benefit with each individual telecom provider.  Now, consumers can apply to a centralized National Verifier. But consumers and providers are still caught in a web of Lifeline regulations: document productions, reimbursement claims, advertising requirements, years of record keeping, multiple annual audits and more.  All to deliver what is now little more than $100/year in benefits.

Virtually all the baggage that weighs down the Lifeline program can be traced to the fact that the benefit does not go directly to the consumer.  Participating providers are instead required to bill customers and then seek reimbursement from the program Administrator.  With millions of dollars flowing directly to service providers, it’s no surprise that a thicket of checks and controls are in place to make sure the reimbursement is legitimate.

But it doesn’t need to be that way.  The Lifeline program would be improved dramatically if the service providers were removed from the middle of the transaction and the benefits flowed directly and electronically to eligible households via widely adopted electronic payment technologies.

In a modernized Lifeline program, eligible households would apply to the National Verifier and get a Lifeline Benefit Card in the mail.  Loaded (and reloaded) with the monthly benefit amount, the Lifeline Benefit Card accounts would function like the millions of prepaid cards, health savings account cards, or merchant gift cards already in common use.  Lifeline customers could use their Benefit Card account to help pay for broadband services from any participating provider.  Any amount owed in excess of the Lifeline benefit would be the consumer’s direct responsibility.

A modernized Lifeline program would also attract more service providers to participate in the program.  If providers are no longer in the middle of the money flow, many of the current arcane regulatory requirements and costly controls could be eliminated.  Broadband providers would not need to be an Eligible Telecommunications Carrier (ETC) to provide broadband service to low-income consumers.  And the controls encoded into an electronic benefit card will offer far more protection against fraud and abuse than any regulatory designation and audit.

Moreover, getting certified to participate in the program will be much less onerous.  Grocery stores are authorized to participate in SNAP via an online application that demonstrates they sell the eligible food staples.  There is no reason why participation as a Lifeline service provider needs to be more complex.  More providers participating means more options for low-income consumers. As with SNAP, those consumers deserve the same broadband “shopping options” available to every other consumer.

As Congress debates substantially increasing the Lifeline benefit and funding it through direct appropriations, it should also require that the program be modernized for seamless delivery of the benefit directly to consumers.  There is broad consensus that now, more than ever, broadband must be more accessible for all Americans.  The Lifeline program can play a bigger role, but only if we dramatically rethink how the benefit is delivered.

p.after-p sub span { line-height: 20px !important; }