Since 1985, the government has provided low-income Americans with a monthly subsidy to help them connect to telephone service. But in 2016, the Internet has topped the phone as a more vital service, so the FCC wants to expand its subsidy program, known as Lifeline, to cover broadband.
FCC Chairman Tom Wheeler and Commissioner Mignon Clyburn today circulated an order among their fellow commissioners that would "reboot Lifeline to enable all Americans to share in the opportunities broadband connectivity provides." The agency is expected to vote on their proposal on March 31.
A revamped Lifeline would provide low-income residents with a $9.25 per month discount on broadband service, or bundled voice and data services—the same rate they can currently get for phone service.
"The biggest reason [low-income] Americans don't sign up for broadband is cost," Wheeler and Clyburn wrote in a blog post. "Only half of the nation's households in the lowest income tier subscribe to broadband. And 43 percent [who don't get broadband at home] say that affordability is the reason.
"We must never lose sight of the fact that what we're really talking about is people – unemployed workers who miss out on jobs that are only listed online, students who go to fast-food restaurants to use the Wi-Fi hotspots to do homework, veterans who are unable to apply for their hard-earned benefits, seniors who can't look up health information when they get sick," they continued.
Under the revamped Lifeline program, ISPs would be required to provide a minimum standard of service: 10Mbps download/1Mbps upload. The agency is not requiring its 25Mbps threshold for broadband because Lifeline is, at its core, about affordability, a senior FCC official said.
Meanwhile, the FCC will make it easier for ISPs to sign up to provide service via Lifeline. The agency will authorize a third-party National Eligibility Verifier database that ISPs can use to see if a potential customer is eligible for Lifeline, rather than having to do the legwork themselves.
This database will also serve to combat something that has plagued programs like Lifeline for years: waste, fraud, and abuse. "This verifier will use existing trusted programs such as Medicaid and the Supplemental Nutrition Assistance Program (SNAP) to determine eligibility," Wheeler and Clyburn said.
The verifier will also use Supplemental Security Income (SSI), Veterans Pension, and Tribally Administered Temporary Assistance for Needy Families (TTANF) to determine eligibility. Even if you're not a part of any of those programs, you can be considered if income is at or below 135 pecent of the federal Poverty Guidelines.
In an effort to free up funds and get people to move to broadband, those who are currently getting Lifeline funds for mobile voice service will continue to receive $9.25 per month until Dec. 1, 2017, after which it will reduce to $7.25. A year later, that will go down to $5.25, before being eliminated at the end of 2019. Funds will be available at the full $9.25 for those who subscribe to a mobile voice and data bundle, though.
The program is paid for via the Universal Service Fund (USF), which telecom companies pay into to provide telecom service to those who cannot afford it. The FCC has set a budget of $2.25 billion for this update, up from a current level of $1.5 billion. FCC officials, however, don't expect to spend $2.25 billion at this point. But if more providers sign on for Lifeline, it might boost interest, requiring more funds.
For context, about 40 million households are eligible for Lifeline at the moment, but only 32 percent take advantage. With $2.25 billion, the FCC could add another 5 million to 5.5 million households to the program, or about a 50 percent penetration rate, FCC officials said.
Some ISPs already provide discount Internet service to low-income Americans, from Comcast's Internet Essentials to Google bringing gigabit Internet to affordable housing complexes.