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FCC gives states control of broadband subsidies for the poor

Donald Trump's FCC Chairman Ajit Pai is rolling back rules that help subsidize broadband service for the poor.

Since taking over as Federal Communications Commission Chairman, Ajit Pai (R) has been dismantling policies established by his predecessor Tom Wheeler (L).
Alex Wong, Getty Images

The Republican controlled Federal Communications Commission is taking aim at dismantling another Obama-era policy. This one helps subsidize broadband service for the poor.

FCC Chairman Ajit Pai said Wednesday the agency will start proceedings to eliminate rules the Democrat-controlled FCC passed last year to make it easier for broadband companies to participate in the Lifeline subsidy program.

The 32-year-old program, which originally provided subsidies for phone service, was expanded to include broadband. It now allows low-income people to choose to use their $9.25 subsidy to pay for either phone or broadband service. In an effort to encourage more companies to participate in the program, the FCC last year began approving applications for the program rather than requiring companies to get approvals from each state in which they offered the subsidies.

Pai said in a statement that the FCC had overreached its authority with these rules. He said that even though he is committed to keeping broadband as part of the Lifeline program, he believes states and not the federal government should decide which companies can participate in the program. In addition to doing away with these rules, he also said the FCC won't continue to defend itself against lawsuits from 12 states challenging the rules.

"Congress gave state governments, not the FCC, the primary responsibility for approving which companies can participate in the Lifeline program," he said. "In my view, it would be a waste of judicial and administrative resources to defend the FCC's unlawful action in court."

This is the latest move by Pai and his fellow Republicans to rollback Obama-era regulation. Both the House and Senate have passed bills to kill internet privacy regulation adopted by the FCC last year that would have required broadband companies to ask your permission before sharing your sensitive information. He also closed consideration of rules to reform the cable set-top box market. And he's begun chipping away at controversial net neutrality regulation.

Mignon Clyburn, the lone Democrat on the FCC, who has long championed the Lifeline program, said Pai's move Wednesday will mean fewer poor people will get access to the broadband.

"Chairman Pai's statement confirms that under this administration, low-income Americans will have less choice for Lifeline broadband, and potential providers who want to serve low-income Americans will face greater barriers to entry and regulatory uncertainty," she said in a statement.

Kevin Taglang with the Benton Foundation, a nonprofit that advocates for the expansion of broadband, said that statements Pai has made about encouraging broadband deployment for all doesn't square with today's announcement, which seems to create more hoops for potential Lifeline broadband providers to jump through.

"Here's what today's announcement means," he said. "Less competition in the Lifeline marketplace and less choice for Lifeline consumers."

But Republican lawmakers applauded Pai's announcement. Sen. John Thune of South Dakota said that state participation in Lifeline is crucial, because the states will do a better job preventing waste, fraud and abuse.

"Giving states authority over designating Lifeline providers is what Congress has always intended," he said in a statement. "States play a crucial role in ensuring that Lifeline is run honestly and efficiently."

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