The Federal Communications Commission announced Thursday that it would be seeking to implement a $1.7bn subsidy plan to benefit low-income internet users.
The plan would expand Lifeline, a program that has since its 1985 inception covered only telephone service. The full proposal is expected on 18 June, and, if approved, could go into effect shortly thereafter.
In a blog post FCC chairman Tom Wheeler said he was seeking to “reboot Lifeline for the internet age.”
“Broadband is key to Lifeline’s future. In 2015, broadband access is essential to find a job: more than 80% of Fortune 500 job openings are online. Americans need broadband to keep a job, as companies increasing require basic digital literacy skills. We rely on broadband to manage and receive healthcare, and to help our children do their homework. A 2012 study estimated that broadband helps a typical US consumer saves $8,800 a year by providing access to bargains on goods and services,” wrote Wheeler.
“But nearly 30% of Americans still haven’t adopted broadband at home, and low-income consumers disproportionately lack access. While more than 95% of households with incomes over $150,000 have broadband, only 48% of those making less than $25,000 have service at home. A world of broadband ‘haves’ and ‘have-nots’ is a world where none of us will have the opportunity to enjoy the full fruits of what broadband has to offer.”
The program’s expansion would allow consumers who qualify for Lifeline to spend its $9.25 subsidy on internet or phone as they see fit.
The largest internet adoption program run by an actual ISP – launched, in fact, as a condition mandated by the FCC when Comcast merged with NBCUniversal – is Comcast’s Internet Essentials, which is available to consumers for $9.95 a month. A senior FCC official, asked about the 70-cent discrepancy, said the pricetag was “the interim amount.” Regulators have proposed to maintain it at $9.25, he said, but have sought comment on whether they should change the number.
This is third major overhaul the FCC has made this year. It’s been just over three months since the agency answered pleas from consumer rights advocates to favor “net neutrality” and declared internet service providers common carriers, alongside telephone companies.
The same day – 26 February – the FCC overrode state laws heavily supported by telecoms that barred superfast municipal broadband providers from competing with big wheels like AT&T and Time Warner. Both rulings have been hotly contested by ISPs, with multiple lawsuits are pending on each of them.
Now, chairman Tom Wheeler and the FCC are doubling down on the “common carrier” designation, asking not just private companies but the state to treat the web like the telephone – and to pass on subsidy money to the ISPs still stinging from the reclassification.
Less than half of Americans – 48% –who make less than $25,000 annually have internet access, and that lack of service puts them, perversely, at a financial disadvantage to wealthier consumers who can afford the monthly fee, since they tend to fall back on smartphones, which charge by the gigabyte for data.
“[B]roadband access is essential for access to education and information, for managing and receiving health care, for daily tasks like accessing government services, checking bank balances, finding bargains on goods and services, and more,” said the FCC in an emailed statement to press.
“People depend on high-speed internet to get their most basic needs met, to exercise their freedom of speech, and to participate in democracy. It’s a good thing that the FCC is attempting to address issues of inequality in broadband access, but it would be better to go to the root of the problem and break up the telecom monopolies that are ratcheting up Internet costs for everyone to line their CEO’s pockets at the expense of our entire society’s wellbeing,” said Evan Greer, campaign director for internet activist group Fight for the Future.
Berin Szoka, president of libertarian think tank TechFreedom said the move would lead to higher taxes for all internet users. Lifeline spending grew 25.9% annually from 2008 to 2012, from $819m to $2.19bn, said Szoka, and needed to be capped. “The FCC is dodging the obvious: expanding Lifeline means new broadband taxes and higher taxes overall on telecom services,” he said.
