The Federal Communications Commission (FCC) yesterday (Jan. 31, 2012) adopted its long-awaited Report and Order and Further Notice of Proposed Rulemaking (Order and Rulemaking) reforming and modernizing the federal Low Income program, with the goals of preserving this important program while introducing significant program funding reductions and cost savings. The Order sets a savings target of $200 million in 2012, and seeks to save up to $2 billion over the next three years.

As we have described in our Mar. 7, 2011 and Aug. 9, 2011 advisories, the Low Income component of the Universal Service program has provided subsidies for telephone services to low income Americans by paying a portion of their monthly recurring charges (Lifeline) and service activation fees (Link Up). The full text of the FCC’s Order has not yet been released; we will provide a more detailed report when it becomes available. Based upon the FCC’s brief News Release, FCC Commissioner and staff statements during the FCC’s meeting and a subsequent press conference yesterday, we can report the following key elements of the Order...

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