Americans who can't afford broadband Internet access may soon get some help from Uncle Sam.
The Federal Communications Commission said Tuesday it's expanding the $1.5 billion phone subsidy program known as Lifeline to help low-income families pay for broadband Internet service by giving out a $9.25 per month subsidy. The five-member FCC will vote on the plan on March 31, and it's expected to be approved.
The Internet has become central to the daily lives of millions of people, for work and for play, but not everyone has access to broadband. More than 95 percent of US households with incomes over $150,000 have high-speed Internet at home, while just 48 percent of those earning less than $25,000 can afford such service, FCC Chairman Tom Wheeler has said in remarks defending Lifeline. The FCC says affordability is still the largest single barrier to broadband adoption in low-income households, and this reboot is supposed to help alleviate that issue.
Created in 1985, Lifeline was initially designed to provide discounts on traditional phone service for qualifying low-income families. It was revised in 2005 to add prepaid wireless mobile plans to the mix. However, Lifeline has proven controversial as fraud and abuse of the program have been rampant throughout the years.
To guard against waste in the new broadband subsidy plan, Wheeler promised that third parties instead of the mobile carriers will vet participants using eligibility for other federal programs, such as the federal food stamp program and Medicaid. Families eligible for Lifeline will only be able to get one subsidy, which means they will have to choose between discounts on voice service or broadband. The FCC also will publish data about the program, including subscriber counts.
The FCC hopes this expansion will encourage new companies to participate in the Lifeline program, such as large cable operators, which already offer programs to low-income customers. But these new services will have to meet a set of standards set by the agency. For instance, the FCC will require Lifeline broadband services to offer download speeds of at least 10 megabits per second. This is considerably slower than the speed at which the FCC classifies true broadband speed, which is 25 Mbps. Requiring faster speeds would likely increase the price of service beyond what a low-income family could afford even with a subsidy, said an FCC official, who spoke on background about the proposal.
Consumer advocacy groups applauded the FCC's efforts.
"Thirty years ago, the FCC correctly recognized that basic telephone service was critical for Americans to fully engage in our society and created the low-income telephone Lifeline program," said Phillip Berenbroick, counsel for Government Affairs at Public Knowledge, in a statement. "Today, broadband is the essential communications service, and the Chairman's plan to modernize the Lifeline program reflects that fact."
Not everyone is on board with the new plan.
Michael O'Rielly, a Republican commissioner at the FCC, said in blog post on Thursday that the plan will "massively expand" the Lifeline program and increase its price tag without the needed budgetary or financial limits in place. The FCC said it's setting a budget for the program of $2.25 billion. Current spending on the program is about $1.25 billion.
"Such irresponsible action will balloon a program plagued by waste, fraud, and abuse and result in higher phone bills for every American -- including those already struggling in the current economy," O'Rielly said. "In sum, it's a recipe for disaster, and I can't and won't be part of it."