Home > Uncategorized > F.C.C. Fine-Tunes Plan to Subsidize Internet Access

F.C.C. Fine-Tunes Plan to Subsidize Internet Access

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TECHNOLOGY

By CECILIA KANG

March 7, 2016

WASHINGTON — People who do not have regular access to the Internet can fall behind in school, at work and in other everyday tasks. The Federal Communications Commission is close to what it hopes will be a solution to address that gap: $9.25 a month.

The agency on Tuesday will circulate a final proposal to F.C.C. members to approve a broadband subsidy of $9.25 a month for low-income households, in the government’s boldest effort to date to narrow a technological divide that has emerged between those who have web access and those who do not. While more than 95 percent of households with incomes over $150,000 have high-speed Internet at home, just 48 percent of those making less than $25,000 can afford the service, the F.C.C.’s chairman, Tom Wheeler, has said.

The new plan is part of an overhaul of a $2 billion phone subsidy program called Lifeline and will go to vote on March 31. It is expected to be approved by the F.C.C.’s commissioners, who have a Democratic majority.

“When we talk about digital equity, we need to remember that we’re talking a key part of the answer to many of our nation’s greatest challenges — issues like income inequality, job creation, economic growth, U.S. competitiveness,” Mr. Wheeler said last month in a speech on the plan.

The proposal is the latest incarnation of the Lifeline program, which was created in 1985 to bring landline phone services to low-income families. In 2008, the F.C.C. added mobile phone service to the subsidy. But the program has been dogged by controversy, with critics pointing to a history of abuse of Lifeline.

Investigations have revealed many participants were double billing for landline phone and wireless services when they were allotted only one subsidy per home. In a 2015 report, the United States Government Accountability Office questioned the effectiveness of the plan. In 2012, the F.C.C. reformed Lifeline after complaints and created a database to track subsidies.

Apart from suggesting the $9.25 monthly broadband subsidy, Mr. Wheeler’s Lifeline proposal also tries to clamp down on potential abuse and fraud by appointing a third party to vet individuals for eligibility and to ensure companies are following rules. In the past, Lifeline participants were vetted by mobile carrier companies including Verizon and T-Mobile USA. The F.C.C. will also make data on the program publicly available, including subscriber counts from providers.

Any broadband subsidy could substantially reduce monthly Internet fees that average $52.50 in urban areas, but are often purchased as part of more expensive bundles that include television and phone service.

Michael O’Rielly, a Republican commissioner of the F.C.C., said the new proposal put Lifeline at risk of exceeding the agency’s budget estimates and called for a spending cap.

“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,” Mr. O’Rielly wrote in a blog post last week. “In sum, it’s a recipe for disaster, and I can’t and won’t be part of it.”

Public interest advocates have pushed for faster Internet speeds and unlimited data in the broadband subsidy proposal, arguing that homework and other tasks increasingly require downloading big files and streaming videos that gobble up the monthly allotments. The F.C.C. said the proposed speeds and data limits were in line with consumer averages.

Democratic commissioners at the F.C.C. have argued that there is an urgent need to update the Lifeline fund for broadband as homework, job searches, and health and other services increasingly move online. Seven in 10 teachers, for instance, require students to go online for homework, according to Commissioner Jessica Rosenworcel, a Democrat. Mr. Wheeler and Mignon Clyburn, a Democratic commissioner, spearheaded the reform.

Senior officials at the F.C.C. who drafted the new Lifeline proposal say the agency hopes the subsidy will also encourage Internet service providers like Comcast, AT&T and Time Warner Cable to go into low-income areas where they may not normally make a profit.

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