FCC proposal would extend Lifeline voice subsidy to broadband

The U.S. Federal Communications Commission will consider including broadband within a controversial program that subsidizes telephone or mobile service for poor people.

Recipients of the FCC’s Lifeline program, which provides a US$9.25 monthly subsidy for voice service, could use that money to purchase broadband service instead under a proposal from FCC Chairman Tom Wheeler. Eligible households would continue to receive one $9.25 monthly subsidy, and they could choose whether to apply the money to traditional telephone service, mobile service or broadband, FCC officials said Thursday.

Conservative critics of Lifeline call the program Obamaphone, and they portray it as an attempt to give poor people free mobile phones in exchange for votes for President Barack Obama in past presidential elections. A single YouTube video from the 2012 election season drove part of the misconception about the program.

In some cases, the subsidy is enough to cover the cost of an inexpensive mobile phone and monthly service. But the program predates Obama’s arrival in Washington, D.C., by nearly two decades. The original program was established in 1985 during the presidency of Republican Ronald Reagan. Lawmakers tied its funding to the FCC’s Universal Service Fund in the Telecommunications Act of 1996, eight years before Obama was elected as a U.S. senator.

Calling broadband an essential service, FCC officials said Wheeler’s proposal would “reboot” the Lifeline program. The FCC, in 2012, passed new rules intended to deal with fraud and abuse in the program. About 48 percent of U.S. households making less than $25,000 a year have broadband service, while 95 percent of households making more than $150,000 do, the FCC said.

Under Wheeler’s proposal, the FCC would establish minimum service standards for both voice and broadband covered by the subsidy, and the agency would seek public comments about those service levels.

In addition, Wheeler would establish an new independent administrator to determine eligibility for Lifeline benefits. Now, telecom carriers determine who is eligible for the program, and critics have complained that the current setup invites waste and fraud.

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