The FCC IS Finalizing Its Plan to Subsidize Broadband for the Poor

The Federal Communications Commission released a plan Tuesday to overhaul its low-income subsidy program Lifeline to include broadband internet, marking a new effort to close the digital divide for the millions of Americans who still don't have a home internet connection.

The proposal calls for a $9.25 monthly subsidy for broadband services, the first extension into internet for Lifeline, a $1.5 billion program created in 1985 subsidizing telephone services for low-income Americans that was last updated in 2005 to cover mobile phones.

Under the new overhaul, Lifeline-eligible Americans will be able to use the subsidies for broadband internet, phone services, or both.

FCC Chairman Tom Wheeler has spoken in the past of the importance of a Lifeline expansion into internet, citing more than 64 million Americans "living on the wrong side of the digital divide," the majority of them citing cost as the biggest hurdle to access.

At least 5 million Americans with school-aged children do not have internet at home, and as education and schoolwork increasingly move online, children in these families struggle with the so-called "homework gap," seeing lower grades on assignments and exams due to lack of internet access.

The current version of the plan expands the budget to $2.25 billion a year with provisions to adjust for inflation in the future, an increase that would allow subsidies to reach 5 million more consumers, though officials do not expect that many to immediately join the program. The FCC officials noted that only 40 percent of the 40 million eligible households are currently taking advantage of the Lifeline program currently.

In the months leading up to the overhaul, Republican politicians have called the program a source of "significant waste, fraud, and abuse," with some calling on the FCC to end the program altogether.

"Given the significant problems with Lifeline, it is not surprising that many have lost confidence in the program," a letter from Republican Commissioner Michael O'Rielly and Rep. Marsha Blackburn (R-TN) wrote in July, suggesting, among other measures, a spending cap for the program. O'Rielly doubled down on this sentiment in a blog post on March 3, calling for a hard budget cap on the program.

However, Public Knowledge counsel Phillip Berenbroick told Motherboard that advocacy groups worry a spending cap could lead to people in need being turned away in the future.

"Most of us who have been working on this program have real heartburn for there being a cost control aspect of it, because you never know when there is going to be a natural disaster or an area where you need more money in the program," he said. "A Katrina or Sandy kind of disaster could blow holes in the budget, you never know when you're going to have a crisis."

The FCC sought to address some of the criticisms of the program by proposing new checks and balances, including a third party National Eligibility Verifier to vet applicants, a process that was previously the responsibility of the mobile providers themselves. FCC officials said they believe this provision will cut costs for participating suppliers and incentivize more to participate.

The program will also eventually shift to be broadband-centric, lowering standalone mobile voice call subsidies yearly and eliminating them completely by December 2019. It will have a speed standard of 10 Mbps downloads/1 Mbps uploads and will increase minimum standards of mobile data plans over the next few years.

"Now is the time for Lifeline to address that broadband affordability gap," a senior FCC official said in a press call on Tuesday. "Every day the transformation is delayed is a day low-income consumers are denied the opportunities that broadband access provides, from jobs to education, government services, healthcare, and much more."

The FCC will vote on the plan on March 31.