FCC Lifeline Program: Cap On Broadband, Phone Support For Poor Families Proposed

Ajit Pai, the chairman of the Federal Communications Commission (FCC), proposed implementing a budget cap on the commission’s program that helps Americans with low incomes pay for broadband and phone services.

Pai’s plan, titled "Bridging the Digital Divide for Low-Income Consumers," would place a "self-enforcing budget cap" on the FCC’s spending on its Lifeline program. The proposal is likely to be voted on during the FCC’s meeting on Nov. 16.

The proposal from Pai, Donald Trump’s appointee to the head of the commission, does not include a specific amount for the budget cap. Instead, the chairman wrote, "We intend for the program to automatically make adjustments in order to maintain the cap in the event the budget is exceeded."

Under the plan, when the cap—which is not defined—is reached, the Lifeline program will cease providing subsidies to individuals even if they were to qualify for the program. According to Pai, the cap will "ensure that Lifeline disbursements are kept at a responsible level and to prevent undue burdens on the ratepayers who contribute to the program.”

The Lifeline program, first launched in 1985, provides households a $9.25-per-month credit to be put toward the purchase of home internet service or mobile phone subscriptions. The program serves more than 13 million low-income Americans.

Before 2016, Lifeline participants could only apply for the program to receive support for landlines or mobile phone plans—some may recognize the program as part of the “Obamaphone” controversy that falsely claimed welfare recipients were receiving free cell phones from the Obama administration.

Under former FCC Chairman Tom Wheeler, the commission passed the 2016 Lifeline Modernization Order, which extended the financial benefit to broadband internet. Current FCC Chairman Pai—then a commissioner occupying one of the two Republican seats on the commission—and fellow Republican commissioner Michael O’Rielly opposed the decision at the time, arguing it left open the possibility to fraud and abuse of the system.

That issue remains at the center of Pai’s current plan to place a cap on the Lifeline program. The chairman has long criticized the Lifeline program as being plagued with "waste, fraud, and abuse.”

Before the November vote, Pai’s proposal will undergo a public feedback period as a Notice of Proposed Rulemaking (NPRM). The NPRM also suggests the possibility of eliminating an approval process put in place by the previous administration that makes it easier for telecoms to offer subsidized services to low-income users.

FCC Commissioner Mignon Clyburn, one of two Democratic representatives currently on the commission, said in a statement that Pai’s proposal would jeopardize efforts to make broadband and phone services affordable for low-income households.

“If the goal of the current FCC majority is to widen existing divides, and ensure that our nation's most vulnerable are less likely to be connected, this item sets us on that path,” she said. “It will harm those less fortunate, those who need to dial 911, stay in touch with their children's educators, keep a job, and stay healthy. The day we head down such a path, is a sad one indeed.”

Clyburn said she was committed to doing everything in her power to ensure that the Lifeline program would continue operating and reaching as many people as possible, though the chairman’s proposal is expected to pass when it comes to a vote.

Earlier this year, Chairman Pai overturned an approval granted by former FCC Chairman Wheeler that would have allowed nine companies to join the Lifeline program with the intention of bringing subsidized internet access to low-income households and other underserved communities.

Pai derided the approval of the companies as a “midnight regulation” passed in the lame duck session by the previous administration and claimed the actions “did not enjoy the support of the majority of commissioners at the time they were taken.”

The FCC sought public comment on whether it should continue with its decision to prevent the expanded rollout of broadband internet subsidies for low-income households after a petition was filed by more than 30 organizations, including the NAACP and Public Knowledge, asking the commission to reverse the decision—though the FCC chose not to do so.