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FCC Approves Low-Income Broadband Subsidies, New Privacy Protections

Lifeline reforms will expand broadband access for millions.

Federal regulators approved an ambitious plan to help millions of low-income people afford broadband internet access on Thursday, in a move that consumer advocates hope will help address the nation's "digital divide."

As expected, the Federal Communications Commission voted 3-2 on partisan lines to expand the agency's Lifeline program to include broadband access. The FCC also advanced a proposal to strengthen privacy tools designed to protect consumers from broadband industry abuses.

Taken together, the two votes amount to the latest evidence of a decidedly pro-consumer bent at a federal agency that has historically been criticized for being too cozy with large cable and telecom interests. The Lifeline expansion, in particular, has long been championed by consumer advocates.

"This is a program that will meet the twenty-first century needs of those who are most worthy and could most benefit from connectivity and what the technological revolution has to offer," FCC Commissioner Mignon Clyburn, who led the Lifeline broadband expansion effort, told reporters after the agency's open meeting on Thursday.

The Reagan-era Lifeline program, one of several federal programs that receive resources from the FCC's Universal Service Fund, was originally designed to subsidize phone service for low-income people, but as the internet has assumed a central role in the US economy, federal regulators have sought to extend the program to cover broadband access.

Public interest advocates call Thursday's vote an important step toward closing the country's persistent digital divide for millions of low-income Americans who can't afford broadband access. 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.

"This expansion of Lifeline is critical to closing the digital divide and fixing an economy that excludes millions of people," said Steven Renderos, senior campaign manager at the Center for Media Justice. "We know the gap between those with internet access and those without cuts deeper among communities of color and exacerbates existing inequalities in education, housing, and jobs."

Former FCC Commissioner Michael Copps, who serves as a special advisor to DC-based public interest group Common Cause, called the Lifeline expansion "a giant leap forward" that will help "extend the awesome power of the internet to those who need it most. School children, jobseekers, the elderly and infirm in particular will all benefit."

During Thursday's meeting, FCC Chairman Tom Wheeler singled out Clyburn for praise. "There is no greater champion for Lifeline than you," Wheeler said. "We take our lead from you, and your strong advocacy on behalf of so many people who often find themselves voiceless."

The FCC's new plan sets a $9.25 monthly household subsidy for broadband access and establishes an inflation-adjusted 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 minimum mobile standard of 500 MB per month of 3G data, increasing to 2 GB by the end of 2018.

Thursday's meeting was delayed for three hours due to last-minute wrangling over a so-called "hard cap" for the Lifeline budget expansion. The FCC's two Republican commissioners had insisted on such a hard cap as a matter of fiscal rectitude. But public interest groups warned that such a cap could be problematic if the limit is met halfway through the year, potentially preventing new recipients from signing up, or causing service to be abruptly cut off due to a lack of funds.

In the days leading up to the meeting, the two Republican FCC commissioners, Ajit Pai and Mike O'Rielly tried to hammer out a deal with Clyburn to include a hard cap in the Lifeline proposal, but the pact collapsed after Clyburn concluded that she could not support it. In response, Pai and O'Rielly lashed out during the meeting at Wheeler, accusing him of "bulldozing" Clyburn at the last minute into rejecting the deal—an allegation that Clyburn vigorously denied and Wheeler called "balderdash."

The FCC's new privacy proposal is designed to regulate how and when broadband giants like Comcast, Verizon and AT&T can use consumer data for targeted advertising and other purposes. Under the FCC's 2015 open internet order—which codified net neutrality, the principle that all internet data should be treated equally—the agency has the authority to issue new rules protecting consumer privacy. As a "Notice of Proposed Rulemaking," the broadband privacy plan will now be the subject of two public comment periods.

Among other things, the proposal would set rules establishing when broadband companies need to obtain "affirmative 'opt-in' consent" for certain uses of consumer data; require broadband companies to provide customers with "clear, conspicuous and persistent notice" about what information they can collect, use and share with third parties; and put in place "common-sense data breach notification requirements" to encourage broadband companies to protect customer data.

"In the broadband age, consumers should not have to be network engineers to understand who is collecting their data, and they should not have to be lawyers to determine if their information is protected," said FCC Commissioner Jessica Rosenworcel.

Gaurav Laroia, policy counsel at DC-based public interest group Free Press, praised the FCC's privacy proposal as a necessary safeguard against industry abuses, such as Verizon's secret tracking of customers, which recently earned the telecom giant a $1.3 million FCC fine.

"By virtue of their position, ISPs have near-unfettered access to our internet traffic, allowing them to build comprehensive profiles of their users by surveilling the websites they visit and tracking the services they use online," Laroia said in a statement. "This is why Congress directed the FCC to take special care in protecting against use of this information without users' affirmative consent."

The Lifeline expansion and the broadband privacy proposals were approved by the FCC's three Democratic commissioners: Wheeler, Rosenworcel, and Clyburn. The proposals were opposed by the two Republican commissioners: Pai and O'Rielly.