The Republican-Backed 'CURB Act' Aims to Limit Broadband Aid for the Poor

Two weeks after federal regulators approved an ambitious plan to help low-income people afford internet access, Republicans in Congress are considering steps to limit the program.

Last month, the Federal Communications Commission voted to expand the Reagan-era Lifeline program, which was originally designed to subsidize phone service for low-income people, to cover broadband access, in a move that public interest advocates say could help close the digital divide.

The FCC also increased the Lifeline annual budget to $2.25 billion, and crucially, refrained from imposing a "hard cap" on the program, which means that the agency has the flexibility to increase the budget if necessary.

On Wednesday, the GOP-controlled House Subcommittee on Communications and Technology held a hearing on a new bill that would reduce the Lifeline budget to $1.5 billion and set a hard cap on the program.

Public interest groups say the "Controlling the Unchecked and Reckless Ballooning of Lifeline Act of 2016," or CURB Act, which was introduced by Rep. Austin Scott, a Georgia Republican, could severely undermine the Lifeline program and potentially exclude millions of low-income people from receiving its benefits.

"Capping the fund at roughly its present funding level—when about two-thirds of eligible people aren't getting the support they deserve—is short-sighted at best," Matt Wood, policy director at Free Press Action Fund, said in a statement. "At worst, it's an intentional slap in the face, and a blatant attempt to cut off entire communities from our modern economy and democracy."

In a letter to Subcommittee Chairman Greg Walden, an Oregon Republican, the Leadership Conference on Civil and Human Rights, along with several other public interest groups, expressed their opposition to Scott's bill, saying it runs counter to the spirit and purpose of the Lifeline program.

"This cap could halt payments to eligible consumers mid-stream or result in unacceptable waiting lists for eligible households or other unreasonable and administratively cumbersome management mechanisms," wrote the groups, which include the American Civil Liberties Union, the Center for Media Justice, and Common Cause.

There are several reasons that the FCC voted not to impose a hard cap on the Lifeline program, but perhaps the most important is in order to preserve the agency's flexibility in the event that the hard cap is reached halfway through the year, or a recession or natural disaster necessitates an increase in the program's budget.

During an economic downturn or after a devastating storm, such as Katrina or Sandy, the number of people needing Lifeline assistance could swell dramatically, the Leadership Conference noted, adding that "the FCC's new budget mechanism combines fiscal responsibility with the ability to respond intelligently in the event of an unanticipated increase in need."

Republicans have long argued that Lifeline is rife with "waste, fraud and abuse," which, along with fiscal rectitude, is why they say a spending cap is necessary. Scott said in a statement that his bill would help "end the unchecked spending and lack of accountability in the Lifeline Program." He added: "We have a responsibility to the American citizens to practice the same spending discipline they would in their own homes."

But public interest advocates point out that the FCC's recent Lifeline expansion includes several components designed to crack down on waste, fraud and abuse, including a National Eligibility Verifier, which aims to prevent service providers from enrolling ineligible subscribers. And as a general matter, Lifeline has a much lower incidence of "improper payments," defined by statute as "any payment that should not have been made or that was made in an incorrect amount," than the federal government as a whole.

Phillip Berenbroick, counsel for government affairs at DC-based consumer advocacy group Public Knowledge, pointed out that in 2014, the Government Accountability Office found that the government-wide improper payment rate was 4.5 percent. By contrast, the Lifeline improper payment rate was 0.32 percent in 2014, according to the FCC, or more than ten times less than the government-wide rate.

Berenbroick added that Lifeline's improper payment rate is also lower than the "inventory shrink rate" in the retail sector. "Inventory shrink is the amount lost to shoplifting, employee or vendor theft, and administrative error—somewhat analogous to waste, fraud, and abuse," said Berenbroick. "The National Retail Federation reports that the inventory shrink rate for 2014 was 1.38%—more than three times higher than in Lifeline."

Public interest groups aren't alone in their opposition to Scott's bill. CTIA, the giant wireless industry trade group, also opposes a hard cap on the Lifeline program.

"CTIA believes that capping the Lifeline program may be counterproductive to encouraging low-income consumers to adopt communications services that are essential to participation in today's economy," Scott Bergmann, the organization's vice president for regulatory affairs, testified on Wednesday. "A cap on the Lifeline program will inherently exclude an undetermined number of the eligible low-income consumers."

Scott's bill is also likely to face significant pushback from House Democrats. "Just as we are celebrating this progress for struggling families across the country, our Republican colleagues bring up legislation to take us backwards," Rep. Doris Matsui, a California Democrat, said in a statement.