Federal Phone Subsidy for Low Income Families Could Include Broadband Services

FCC votes to put the Lifeline reform proposal out for public comment

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Now that net neutrality has become a reality, the next challenge the country faces is making sure broadband remains affordable for everyone.

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In an effort to achieve this next step, last week the FCC adopted a framework which could sunset the current Lifeline program installed by President Ronald Reagan more than 30 years ago and replace it with iBridge Now. While Lifeline helped low-income consumers afford the monthly cost of telephone service, the new program could give low-income consumers the choice to use the monthly $9.25 Lifeline subsidy for broadband services that are comparable to everyone else.

Unlike Lifeline, iBridge will “treat consumers with dignity,” said FCC Commissioner Mignon Clyburn, at an event called Making Mobile Broadband Affordable.  “Consumers will no longer be forced to turn over financially sensitive information to an unknown person, in front of a group of strangers, in a parking lot or tent. Seniors, veterans, the disabled, children and others, deserve better and what we endorsed last week proposes to do better. Second-class or inferior service will not be acceptable.”

Access to Broadband is important for many reasons. Nearly 60% of low-income consumers are wireless-only, according to Center for Disease Control data. In fact, many attribute the homework gap to a lack of high speed internet. Roughly one-third of households whose incomes fall below $50,000 and with children ages 6 to 17 do not have a high-speed internet connection at home, reports a Pew Research analysis of the U.S. Census Bureau’s American Community Survey data. Black and Hispanic households make up a disproportionate share of that number.

However, not everyone has embraced iBridge as enthusiastically as Clyburn. The two Republican FCC commissioners, Ajit Pai and Michael O’Rielly, argued that the iBridge proposal failed to set a budget; which could lead to fraud, waste and abuse. They proposed to keep the current $1.6 billion spending cap through 2018, with adjustments for inflation, but were voted down.

“It’s clear the majority wants to spend as much as they possibly can without a hint of restraint or possible change in administration,” said O’Rielly in his dissent.

However, Clyburn asserted that the FCC will adopt enhanced oversight, to further eliminate all incentives for waste, fraud and abuse. A neutral third-party – not the carrier – will determine consumer eligibility, explained Clyburn.

A name change is not formally listed in the proposal to overhaul Lifeline, and Clyburn would have to persuade the other four commissioners, plus FCC Chairman Tom Wheeler — to agree to it.

“I continue to believe that broadband is the greatest technological equalizer of our time, and is an essential lever in helping to break cycles of poverty, despair and hopelessness,” Clyburn maintains. “The program should be focused on being part of a pathway out poverty, poor education, lackluster healthcare options, and more.”

In 2013, the Lifeline program provided $1.8 billion worth of telephone subsidies for qualified low-income people.



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