The FCC’s Tough Task in Teaching America About Internet Subsidies


The Federal Communications Commission voted in late March to upgrade the federal Lifeline program, originally designed to subsidize low-income households’ phone service, to include internet service.

Now the commission has to sell it.

The new internet subsidies are a big victory for digital rights activists, but they accomplish little if people don’t participate in them. Commission officials have already embarked on the immense task of promoting the program to millions of people across the United States who are eligible for the subsidy but either don’t know about it or don’t care. The commission is coordinating with a host of other welfare organizations and local groups to get the word out.

Due to bureaucratic hurdles, FCC officials most of the changes in Lifeline won’t go into effect until the beginning of December. In theory, that will give them time to promote the program.

Only 33 percent of households currently eligible for Lifeline actually participate in it, according to the Universal Service Administrative Company, the division within the FCC that handles the program. The data shows dismal participation rates in some rural states. Only 1 percent of eligible Wyoming residents subscribe, and 4 percent are enrolled in both Montana and Nebraska. In Idaho, the participation rate is 7 percent.

Even states with large urban populations, such as California (35 percent) and New York (39 percent), don’t have great subscription rates among eligible beneficiaries. The area with the highest participation rate, surprisingly, is Puerto Rico, with 60 percent of eligible recipients enrolled.

According to the FCC officials involved with promoting the new Lifeline, research on other federal assistance programs has shown that the overall value of the benefit usually correlates strongly with the number of participants. Lifeline’s meager $9.25 per month subsidy for a phone line probably plays into low enrollment rates, they say.

Also, Lifeline provides technology rather than a basic life necessity such as food, which might mean people are less likely to seek it out.

Lifeline is a relatively new program — it began in the 1980s — which makes it less well known than other federal assistance programs such as the Supplemental Nutrition Assistance Program, or SNAP. By way of comparison, the Food and Research Action Center says SNAP serves about 85 percent of eligible recipients.

FCC’s research on benefit programs shows that it usually takes several connections with people about the benefit before they choose to enroll. FCC officials plan to use existing community institutions to promote the program.

The commission is coordinating with the agencies that run SNAP, the Social Security Administration and public housing authorities because those groups have sustained relationships with the households that are eligible for Lifeline. Eligibility for other federal assistance programs automatically qualifies a household for Lifeline. People can also prove eligibility by disclosing their incomes.

The FCC also is working with the Department of Housing and Urban Development, local community-based organizations and veterans’ groups. For some officials, that means a lot of travel around the country to foster a grass-roots promotion campaign.

Veterans have been among the most receptive to the program so far, according to FCC officials. Military personnel who are returning to the United States from an overseas deployment are showing enthusiasm about the new Lifeline, they say.

Enrollees in the Veterans Pension benefit program are now automatically eligible for internet subsidies, a big boost in that community. In addition to its own promotion efforts, the FCC is working with Congress on identifying efficient methods to inform veterans of the benefit.

Public interest groups have also been helpful, FCC officials say. Broadband service is seen as one answer to a digital divide that separates low-income Americans from wealthier ones. As such, the benefit is of particular interest to analysts in the telecom and educational fields.

While the FCC wants as many Lifeline enrollees as possible, the number of possible participants is also the subject of a partisan fight in Washington regarding how much money the subsidies will cost taxpayers. Republicans in the House and Senate have voiced concerns, along with the agency’s two Republican commissioners, that the FCC didn’t put in place a hard budget for the program. Democrats argue that putting a hard cap on Lifeline would leave behind millions of unconnected, yet eligible participants.

The new version of Lifeline sets up an annual $2.25 billion target budget, but the spending won’t stop if more money is needed. Instead, after 90 percent of that amount has been used, the FCC will be required to write a report on the program’s rollout and make recommendations to keep costs down. The agency will then be obligated to act no more than six months after the report is finished.

Morning Consult