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Minnesota regulators worry about changes to federal assistance for phone, internet service

Officials concerned that changes to the Lifeline program, which offers discount phone and internet services, could confuse Minnesotans who use it — or cost them their access to it.

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ST. PAUL — State regulators worry changes to a federal assistance program could disrupt a discount phone and broadband service for some low-income Minnesotans.

Called Lifeline, the program launched in 1985 as a way to make landline telephone service more affordable for poorer households. It has since grown to offer broadband internet and wireless phone service as well.

In an effort to crack down on fraud and abuse, the Federal Communications Commission has for several years been working to streamline the program's application process. Other social services like the Supplemental Nutrition Assistance Program, formerly known as food stamps, have faced similar proposals for reform under the Trump administration.

As the changes to Lifeline take effect in Minnesota, they have stoked fears that some of the program's subscribers will lose their discounts in the transition. To qualify for the program, one must either show proof that they meet or fall below the federal poverty line, or show that they are already enrolled in one of five federal benefit programs: SNAP, Federal Public Housing Assistance, Medicaid, Supplemental Security Income or Veterans Pension and Survivors Pension.

Under the old system, companies that offer Lifeline services in Minnesota could re-enroll their own customers for the program. Recipients of the five programs are automatically considered eligible.


Companies could then ask the Minnesota Department of Human Services to check their subscribers' eligibility against their records of benefit recipients when it came time to re-enroll.

However, the new system requires Lifeline subscribers to enroll or register again for the program directly through the Universal Services Administrative Cooperative, or USAC, the nonprofit designated by the FCC to administer it. Some subscribers might already be familiar with the organization because it previously handled outreach and re-enrollment upon request for many of the companies that offer the program's services.

But because the "the USAC is not a household name," as a Minnesota Public Utilities Commission analysis put it, it tends to receive fewer responses from subscribers than companies do when contacting them on their own. The concern now is that the organization's lack of brand recognition will persist even as it takes on new households to deal with.

Officials worry that, going forward, some Lifeline subscribers might simply dismiss mailings from the USAC or mistake its requests for personal information as a scam.

"That’s going to look odd, I think, to a lot of customers," Commissioner John Tuma said at a PUC meeting on Thursday, Feb. 27.

And failure to reapply for the program could cause them to lose out on services for which they still qualify — at least temporarily. In an email, PUC executive secretary Will Seuffert said that de-enlisted subscribers will be able to re-apply for Lifeline immediately after they have been removed.

Complicating the transition is the fact that in Minnesota and several other states, the USAC has not yet connected to state databases of federal benefit recipients. Using the databases, the organization can automatically and electronically re-enroll qualifying Lifeline subscribers each year.

There is no official word on when the USAC will connect to Minnesota's databases, which are maintained by the state Department of Human Services. A spokesperson for the organization said that its new application and re-enrollment system, called National Verifier, currently has access only to the federal Medicaid and Federal Public Housing program databases for automatic re-enrollment.


"For many consumers, recertification occurs without them knowing — if our electronic check finds you in a database, you’re recertified without any action from the consumer," said USAC spokesperson Jaymie Gustafson. "For those who need to manually recertify, USAC will mail them the paper recertification form and follow up with up to three robocalls or reminder postcards."

National Verifier, meanwhile, will launch in Minnesota in late March.

After the launch, subscribers in Minnesota will only be able to recertify themselves for the program through the USAC. Initially, according to the PUC, its possible that some subscribers may have to do so even if they just recently reapplied through their phone or broadband companies.

In other words, they could be asked to fill out the same information twice.

Although the PUC analysis found USAC's past re-enrollment efforts to be less effective than company-driven ones, CenturyLink general counsel Jason Topp defended the organization's subscriber outreach services during Wednesday's meeting. CenturyLink has tasked the organization with re-enrollment for several years, he said.

The PUC could not say how many Minnesotan's subscriptions could be cancelled by mistake as a result of the switch. Only about 50,300 Minnesotans subscribed to the program as of January 2018, according to the PUC.

For most subscribers, the program provides a discount of $9.25 per month per household. Subscribers on tribal lands, however, can receive a monthly discount of up to about $34. Many of the companies that offer Lifeline in Minnesota, according to the PUC, also offer free voice, text and data services to their subscribers as well as a free cellphone.

Minnesota's state Telephone Assistance Program, by contrast, offers landline phone discounts of up to $7.


At its meeting Thursday, the PUC considered a measure to direct companies that offer Lifeline to provide written notice to their customers about the transition to the USAC-managed enrollment system. Officials from other state agencies who were present for the meeting expressed support for the idea, which Gustafson said USAC recommends as well.

Commissioners ultimately tabled the measure and plan to take it up at their meeting in March, saying they need to discuss the amount of oversight the PUC should have over the effort.

Minnesota Telecom Alliance President Brent Christensen said that while the new process is simpler, it might complicate the relationship that smaller companies have with customers. The trade group has been in communication with the PUC throughout the transition.

But Christensen said that it's too soon to tell how, or if, the new rules will affect Lifeline providers and subscribers.

"The focus that we have right now is making sure that we comply with the new federal requirements," he said.

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