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    20,000 People Just Urged the FCC to Subsidize Broadband for the Poor

    Written by

    Sam Gustin


    The US government's ambitious plan to subsidize broadband internet access for low-income people received a significant boost Wednesday when a coalition of public interest groups delivered 20,000 signatures backing the proposal to federal regulators.

    The Federal Communications Commission will vote next week on whether to expand the agency’s Lifeline program, which was originally designed to subsidize phone service, to cover broadband access for millions of low-income people.

    Public interest groups call the move an important step toward closing the country’s persistent digital divide for millions of low-income Americans who can’t afford broadband access, which has been a key priority under FCC Chairman Tom Wheeler.

    “Americans increasingly rely on broadband internet for education, employment, health care, news and information, access to government and social services, commerce, and basic communications,” Meredith Whipple, digital content associate at DC-based advocacy group Public Knowledge, said in a statement. “However, for many Americans, broadband is simply not affordable.”

    On Wednesday, Public Knowledge delivered 20,000 signatures to the FCC supporting the plan, along with MAG-Net, which advocates for universal access; Communications Workers of America, a major national labor group; Color of Change, which advocates on behalf of underserved populations; and OC Inc., the media justice arm of the United Church of Christ.

    "To wait is to push these Americans further down the ladder of opportunity."

    Lifeline is one of several federal programs that receive resources from the FCC’s Universal Service Fund, to which telecom service providers must contribute. (The FCC allows these costs to be passed on to consumers—hence the “USF” charge on your bill—but prohibits providers from collecting fees from Lifeline participants.)

    The Universal Service Fund programs are designed to achieve, well, universal service, especially in rural and low-income communities, and the FCC is determined to include broadband access under the USF umbrella, hence the proposed Lifeline reforms.

    Public interest groups say the need to expand the Lifeline program to broadband has become an urgent national priority due to the millions of Americans who lack broadband access, primarily because they can’t afford the cost of monthly service. Only 48 percent of households earning less than $25,000 per year subscribe to broadband service, according to a 2013 US Census report. By contrast, 95 percent of those with incomes over $150,000 are broadband subscribers.

    In a blog post earlier this month, Wheeler and his FCC colleague Mignon Clyburn sought to put a human face on the digital divide, citing “unemployed workers who miss out on jobs that are only listed online, students who go to fast-food restaurants to use the Wi-Fi hotspots to do homework, veterans who are unable to apply for their hard-earned benefits, seniors who can’t look up health information when they get sick.”

    In 2013, the Lifeline program delivered monthly subsidies of $9.25, mostly for no-cost wireless service, to some 14 million low-income recipients at a total USF cost of $1.8 billion, according to the Universal Service Administrative Company, the non-profit corporation designated by the FCC as the administrator of universal service programs.

    The FCC’s new proposal expanding Lifeline to cover broadband service for low-income citizens maintains the $9.25 monthly household subsidy and sets an annual budget of $2.25 billion for the program—a budget that could be increased as the agency evaluates the demand moving forward. The plan would establish a fixed minimum standard of 10 Mbps for downloads and 1 Mbps for uploads, and phase in a minimal mobile standard of 500 MB per month of 3G data, increasing to 2 GB by the end of 2018.

    One crucial question that has yet to be determined is the extent to which broadband providers will be willing to offer low-cost broadband service to which the subsidy could be applied. Most Lifeline recipients currently don’t have to pay for their phone service because the subsidy covers their monthly bill. Public interest advocates hope that the Lifeline expansion will induce broadband providers to expand offerings like Comcast’s $9.95 Internet Essentials plan, which is aimed at low-income families.

    ”There is a lot of concern that the proposal might eliminate any sort of no-cost service,” Public Knowledge government affairs counsel Phillip Berenbroick told Motherboard. “Right now there is a worry that the cost of broadband service is too high and even a subsidy won't make the service as affordable as it needs to be. We hope the expansion will help create a market that helps to bring prices down.”

    The FCC’s proposal has faced significant pushback, particularly from Republican critics of the agency who have argued that the Lifeline program has historically been bedeviled by “significant waste, fraud, and abuse.” Last year, Rep. Marsha Blackburn, the Tennessee Republican who has frequently battled with the FCC, and Michael O’Rielly, a Republican FCC commissioner who famously declared that internet access is “not a necessity in the day-to-day lives of Americans,” called for a “hard cap” on Lifeline expenditures.

    But public interest groups and advocates for Lifeline reform argue that such a “hard cap” on the program could have chaotic and indeed calamitous consequences in the event that a Lifeline budget increase is needed. Such a scenario could occur in the event of an economic downturn or natural disaster, or if the hard cap is met halfway through the year, potentially precluding new recipients from signing up, or causing service to be abruptly cut off due to a lack of funds.

    In their blog post, Wheeler and Clyburn wrote that critics are “ignoring the fact” that the FCC has already instituted Lifeline reforms designed to increase accountability and crack down on waste, reforms that have helped decrease Lifeline payouts by over 30 percent since 2012.

    “More importantly,” Wheeler and Clyburn wrote, “these voices are ignoring the fact that low-income households are falling a little further behind every day without the access to jobs, educational opportunities, services and more that broadband provides. To wait is to push these Americans further down the ladder of opportunity.”

    The FCC is expected to approve the Lifeline reforms along partisan lines—with the agency’s three-member Democratic majority carrying the day—during the FCC’s March 31 open meeting.