The head of the Federal Communications Commission has proposed an update to the FCC’s 30-year-old Lifeline program. The program was created in 1985 as a way of ensuring that low-income households would not lose phone service if company rates were raised. Under the old provisions of the program, the FCC provides these households with a subsidy of $9.25 to use to pay for mobile/landline phone service.
At the time of the program’s conception, it was phones that were considered crucial to participation in the economy and society. In the modern day, however, it is the internet that is most useful in the rapid exchange of information. FCC Head Tom Wheeler recognizes that the internet serves as a vital gateway to economic opportunity and recently proposed a new dimension of the program—giving the subsidy recipients the choice of putting the money toward internet, phone service, or some combination of the two. Wheeler argues that the existing Lifeline program doesn’t provide enough, as broadband rates are too high; the current subsidy barely covers cell phone bills.
What would an update to the program cost? The proposal outlines that the expanded program will be covered by the universal service fee that consumers pay on the bills from landline telephone companies and wireless phone service providers. In 2014, at least 12 million households were served by Lifeline at the cost of $1.7 billion, paid for by surcharges on customer phone bills.
Although internet access seems pervasive in American society today, only 48% of American adults making under $30,000 have access to internet, in contrast to the 95% in the $150,000 and up income bracket. This means no access to educational programs, employment opportunities, or online social programs that could help pull these households above the poverty line. The reason isn’t that low-income consumers don’t see the benefits of the internet. They simply cannot afford the often astronomical broadband rates.
Providers like CenturyLink, Cox, and Comcast already have programs helping to grant internet access to low-income families, but these efforts have come under attack. Comcast, for example, offers an Internet Essential program at a monthly cost of $10. A limited number of customers are eligible for the program, however, and it has been criticized for very slow speeds of 5MB per second. Broadband, as defined by the FCC, should have download speeds of up to 25MB per second and higher.
Non-profit organizations hope that the proposed change will help bridge the so-called “digital divide” that contributes to the vast income gap. If America paves the way on this issue, perhaps other countries will follow suit in assisting their underprivileged populations.
Wheeler believes that if the subsidy helps to make even a marginal difference, internet providers will see the benefits in giving discounts to low-income consumers. The private sector will gain access to a whole new market.
In addition to the suggestion of an expanded subsidy, some point out that the government could alternately pay subsidies directly to broadband providers. This way, they could get a better deal than low-income families can get on their own.
The new proposal is scheduled to undergo voting on June 18, and a final vote is expected to take place by the end of the year.
– Katie Pickle
Sources: Wired, Tech Times
Photo: Trinity P3
