In a Monday speech, Federal Communications Chairman Julius Genachowski outlined a draft proposal that would expand a program that provides affordable telephone service for low-income Americans to include broadband Internet service.

“The program is outdated, focused on phone service when high-speed Internet has become our vital communications platform,” he said.

In his remarks, Genachowski said the program, known as Lifeline and which provides discounts on monthly telephone bills, has been successful, but has also been plagued by problems of accountability and efficiency.

Multiple service providers often claim Lifeline subsidies for the same households, he said, because there is no centralized system. To address the issue, Genachowski proposed creating a national database of Lifeline users to prevent duplicative billing.

“The order would make Lifeline reimbursement more transparent and streamlined,” Genachowski said, calling the measure common sense. He said that FCC staff estimate the reforms will save the fund $2 billion over the next two years.

Genachowski also called for participating companies to be subject to independent audits every two years.

The chairman said the FCC would work with existing broadband adoption programs to establish its own pilot program using savings from its budget reforms. It will also look at how to use Lifeline to encourage adoption among those consumers.



Genachowski said the program will be “modernized to meet the needs of low-income Americans in a broadband world” and is in line with the agency’s other efforts on broadband adoption.

The Lifeline program is supported by the Universal Service Fund, which was created to connect all Americans to the telecommunications infrastructure.

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