The FCC to Take Steps Towards Subsidizing Broadband Internet for Low Income Households

Published: June 19, 2015 5:35 AM /



The Internet has become an integral part of living in the modern world. Most households in the United States have access to the Internet in one way or another and in 2012 the UN declared Internet access a human right. However with Internet prices as high as they are in the US, many low-income families do not have access to the web from their homes. According to the Federal Communications Commission, 95% of households making $150,000 per year or more have access to the Internet, while only 45% of households that make $25,000 or less have access. Often the people from these households can only access the Internet via smart phone or by finding some sort of free connection, such as the timed connections at public libraries. Since the Internet is such an important part of life in the US, the FCC has decided formally consider subsidizing the Internet for low-income families using the Lifeline program.

The Lifeline program, often called "Obamaphones" by people who don't know the program was started under Reagan, is designed to subsidize phone services for low-income households. If someone falls within 135% of the national poverty line in the US or participates in Social Safety Net programs such as food stamps, they qualify for a phone service subsidy. The program started in 1985 because the telephone was considered essential to living in a modern society because of its importance in finding jobs, communicating with family or calling in case of emergencies.

On of June 18th the FCC voted to begin taking steps to expand the Lifeline program to include broadband Internet, using the same arguments as the telephone. According to The Hill, the proposal passed an FCC vote 3-2, with the votes falling along party lines (Democrats voted yes, Republicans voted no). The item proposed will provide a $9.25 subsidy from the federal government to help households who qualify pay for broadband Internet and phone service.

The members who voted Yes on the item argued that the Internet is important to everyday life in the US. As mentioned earlier, only 45% of households making $25,000 or less have home access to the Internet. According to Democratic Commissioner Mignon Clyburn, too many Americans are “trapped in digital darkness and abandoned on the wrong side of the digital divide." However the two detractors, Republican Commissioners Ajit Pai and Michael O’Rielly, held different opinions on the matter.

Both of these Commissioners made arguments based around fiscal Conservatism, with Michael O’Rielly saying that the Democratic supporters were looking to spend as much money as they can before the change in administration (the Obama administration ends in January, 2017). Commissioner Pai argued that the program simply isn't ready yet, and “Waste fraud and abuse are still rampant.” According to an article in the Wall Street Journal, Commissioner Pai does make a valid point, as the article says 41% of the Lifeline program users were not eligible for the program in 2012, leading to millions in wasted tax dollars.

Since then, the FCC has taken steps to cut fraud and abuse of the system by tightening the rules and will continue to do so with this item. On the FCC page on subject, the item also proposes changing who decides what customers are eligible for Lifeline program. Suggested changes include creating a third-party "national verifier" who decides what customers are eligible for the subsidies, instead of the current system which is determined by the providers themselves. The detractors to the item also would like to see a set budget be created for the program to cap spending. Finally the item suggests requiring providers to keep paperwork for customer eligibility, making it easier to audit these companies and fine them if they are committing fraud.

As of now the FCC has decided to move forward and start deliberating the details for expanding the Lifeline program to include broadband Internet. The vote signifies that it will be coming when the commission finalizes an actual expansion, which they have decided to start seeking comment on now. What we know now is that the United State's Lifeline program will be getting a fundamental restructuring.

What do you think of the Lifeline program? Do you see expansion of the program to include broadband Internet as essential for helping lower-income households, or do you see this as a waste of money that has to be better reformed to prevent fraud and abuse? Feel free to leave a comment down below and discuss the issue.


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