Low-Income Americans Could Soon Receive Subsidized Internet

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In just the past year, lawmakers and telecommunications experts have built a broad consensus that the federal government should incorporate internet connections into a federal aid program for poor Americans. Their efforts are likely to pay off early next year.

Between legislation on Capitol Hill to rulemaking procedures at the Federal Communications Commission, the telecom industry appears to have successfully lobbied to change the government’s existing subsidy for phone service, called Lifeline, to include internet connections.

The first step likely will come with the FCC. “I hope we’re doing this early in the new year,” FCC Chairman Tom Wheeler said Thursday. “Commissioner [Mignon] Clyburn and I are working close together on that.”  He declined to get into the specifics of the proposal.

Rick Boucher, honorary chair of the Internet Innovation Alliance, has worked extensively on the issue and watched the FCC closely over the last year. “It appears to us that they’re well down the road digesting the many comments they received and formulating a reform which they then would put out as a proposed rule,” he told Morning Consult.

Boucher also served as a congressman from 1983 to 2011. In the House, he helped move major internet and telecom-related policies including the Telecommunications Act of 1996. He expects the FCC to expand Lifeline in the first half of 2016.

The FCC voted to approve a proposed Lifeline overhaul in June. The comment period ended in August. The proposal squeezed through the commission on party lines with a 3-2 vote.

Since then, the commission has sifted through the comments to finalize what a new version of Lifeline will look like. They widely support expanding the program to include broadband connection. Lifeline currently only subsidizes phone service for poor Americans.

It’s hard to find people who are openly opposed expanding Lifeline subsidies to include internet. Think tanks like IIA and the Internet Technology and Innovation Foundation have filed comments in support of it. AT&T Inc. has strongly supported it as has the cable company Cox Communications. The open internet advocacy group Public Knowledge is for it, as is the Communications Workers of America. The National Cable and Telecommunications Association and Verizon Communications both support legislation to do the same thing.

“Everyone is generally on board with the idea of transitioning Lifeline to broadband, but, as always, the devil is in the details,” said Doug Brake, a telecommunications policy analyst at ITIF. “There are a lot of outstanding questions, such as what a national database or databases for eligibility looks like, how much flexibility recipients have in using their subsidy, and how the commission might deal with the potential problem of more participants signing up than the system can support.”

Republican FCC commissioners don’t necessarily disagree with the idea of subsidizing internet connections, but they worry about the cost. “Adequate controls and deterrents should be in place against waste, fraud, and abuse before considering a revamp of the program to include broadband,” said Commissioner Michael O’Rielly when the FCC voted on the proposed Lifeline expansion.

Commissioner Agit Pai said the proposal should require beneficiaries to make “a minimum contribution of at least 25% of the cost of service.”

Capitol Hill took up the call for subsidized internet this year with the introduction of Sen. Chris Murphy’s (D-Conn.) Broadband Adoption Act.  The measure would amend the Communications Act to include broadband connection as a subsidized utility for low-income Americans under Lifeline.

Sen. Cory Booker (D-N.J.), a cosponsor of the bill, spoke about the responsibility of the federal government to help poor families access the internet last week.

“Does the government have a role in finding ways to subsidize [internet access]? I think fundamentally yes, because I equate it with the federal role and the state and local role in subsidizing education,” Booker said at Brookings Institution event. “We have come to a point in human existence where you cannot dissect education from internet access.”

“Helping families financially bridge that gap so that they can get access to internet, these are things the federal government should be committed to, because they’re investments that make a return on investment that’s pretty extraordinary,” he added.

Booker framed the case for subsidized broadband as a case for education equality. It’s not just about how many assignments students now need the internet to complete, he argued, but it’s also a vital stimulant for curiosity.

It’s the government’s job to step in, he added, because the private sector has not been able to give low-income families an easy route to internet connectivity. “Where the free market is not working, we’ve got to create a public pathway to access…the untapped genius of particularly poor kids, and rural poor kids,” Booker said. “It’s not about creating more competition, it’s about getting the job done.”

The comments filed with the FCC shows that there is a “broad consensus” regarding two other suggested modernizations of Lifeline, according to Boucher.

Experts say the responsibility to determine a customer’s eligibility for the Lifeline program needs shift away from the phone carrier to the government. Because providers are the ones that now grant Lifeline eligibility to customers, they benefit from signing up as many users as they can. That can lead to a waste of program resources, opponents say.

Some critics of adding broadband to Lifeline have suggested that the government should instead coordinate enrollment with other federal aid programs such as the Supplemental Nutrition Assistance Program. There’s one problem, though, according to Brake. One of the biggest objectors to that idea is the U.S. Department of Agriculture, which is concerned that a Lifeline subsidy administered through SNAP would put too much strain on the system.

Commenters also say the FCC should give recipients the $9.25 subsidy in the form of a card, like food stamps, that they can use to shop around for carriers themselves.

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