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McCaskill Requests Wasteful Lifeline Funds be Used for School Broadband Initiative

Senator tells FCC the rationale for the Lifeline program has become obsolete, requests funds be redirected into ‘ConnectED’

June 13, 2013

WASHINGTON - U.S. Senator Claire McCaskill, who has led the effort to reform the Lifeline government phone subsidy program, today called on the Federal Communications Commission (FCC) to shift Lifeline funds into the recently-announced "ConnectED" initiative, which aims to connect 99 percent of America's students to the Internet through high-speed broadband in schools and libraries over the next five years.

The Lifeline program is funded by the Universal Service Fund (USF), which receives its resources from a fee telephone users pay on their phone bills. The FCC oversees the USF and, accordingly, the Lifeline program. USF contributions have been identified as the likely source of funding for ConnectED.

"The Lifeline program has been plagued by waste, fraud, and abuse for years-while the ConnectED initiative has incredible potential to improve the lives of young folks around the country-especially students in lower-income and rural areas," said McCaskill, former Missouri State Auditor and Chairman of the Senate Subcommittee on Financial & Contracting Oversight. "It's common sense that we concentrate existing money on the program with promise, and eliminate the one that's proved to be obsolete and a target for fraud and abuse."

Lifeline, which provides a discount on phone service for qualifying low-income consumers, cost $2.2 billion in 2012. The program currently accounts for approximately 25 percent of total USF disbursements. In her letter to Acting FCC Chairwoman Mignon Clyburn, McCaskill argues that redirecting those funds to the ConnectED initiative could provide approximately $10 billion over the next five years to connect virtually every American school and library with high-speed broadband Internet access.

In 2011, McCaskill urged the FCC to provide stronger oversight of the little-scrutinized federal program-which provides subsidies to phone companies-after she received a solicitation at her home for a free cell phone from a participating provider in the Lifeline program. The mailer did not require documentation for proof of eligibility. McCaskill is not eligible for the program.

Following those demands, the FCC issued new orders aimed at addressing waste, fraud, and abuse in the program.

"I have serious questions about the continued need for a federal program to subsidize basic phone service at a time when wireless and wireline service are more affordable than ever," McCaskill's letter to Clyburn reads.

Last year, in a letter to the FCC, McCaskill requested detailed information on the program's contracts, including documents related to the agreement between the FCC and the companies responsible for managing Lifeline and the number, value and scope of contracts. McCaskill also offered an amendment to the recent Senate Budget resolution aimed at ending the controversial program-in addition to recently requesting a forensic audit of the entire Lifeline program.

A copy of McCaskill's letter can be found on her website, HERE.

Read more about McCaskill's fight for stronger accountability in Washington, HERE.

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