FCC moves forward with broadband Internet subsidy for the poor

The Federal Communications Commission (FCC) on Thursday voted to formally consider a plan that would expand a subsidy program for low-income Americans to include Internet service.

The commission voted 3-2 along party lines to move forward with expanding the Lifeline program, which opponents have dubbed “Obama phone” because it also subsidizes cellphone service.

{mosads}Under the plan, the program would provide subsidies for broadband in addition to cell and landline phone service. The program is funded by fees paid by service providers that are generally listed on customer’s telephone bills.

The proposal that the FCC advanced Thursday sets the subsidy value at $9.25 for both broadband and phone service.

It would also add measures that supporters say will enhance the program’s accountability — including having a third party, instead of phone and Internet providers, decide who is eligible for a subsidy. Providers will also immediately be required to take a “snapshot” once a month of its customers receiving subsidies.

The FCC is seeking comments on whether the program should have a set budget and what metrics could be used to better judge the efficiency of the program.

“Today begins a proceeding to spend rate payer’s money more wisely, to deliver 21st century benefits to deserving recipients and to get to the heart of the historic issues that have haunted this program’s deficiency,” said Commission Chairman Tom Wheeler.

Supporters say that it’s high time the Lifeline program address the gap in broadband use between rich and poor Americans. Less than half of households making $25,000 or less have access to broadband.

Democratic Commissioner Mignon Clyburn said that too many Americans are “trapped in digital darkness and abandoned on the wrong side of the digital divide.”

Clyburn and Democratic Commissioner Jessica Rosenworcel said that the expansion would help improve access to healthcare and tools that students need to complete their homework.

Republicans on the commission said that the proposal should include a set budget for the program and take additional steps to target waste.

“We still have a long way to go if we are going to fix this program,” Republican Commissioner Ajit Pai said. “Waste fraud and abuse are still rampant.”

“It is clear that the majority wants to spend as much as it possibly can” before a change in administration, said Pai’s Republican colleague, Michael O’Rielly.

Lawmakers have taken aim at the program as well. Congressional opponents have called for its budget to be capped and for individuals receiving subsidies to be charged co-pays.

“Before again expanding the program, we need to consider what problems remain and how we can address them, since consumers are bearing the cost of funding the program with increasing phone bills,” Sen. Roger Wicker (R-Miss.) said at a hearing last month.

Several Democratic senators have also introduced legislation designed to support the commission’s efforts.

The program was created under former President Reagan, and expanded over time to include mobile phone service. 

— This story was corrected at 2:55 to reflect that the FCC voted to formally consider the expansion of Lifeline. A previous version contained incorrect information.