FCC chairman Ajit Pai is proposing to scale down the Lifeline program, which offers subsidies for internet and phone service to low-income Americans. The plan would effectively cut affordable internet access through the program for 8 million people, about 70 percent of the Lifeline’s recipients. This reduction would be particularly devastating for Puerto Rico, where about 500,000 people, or 17 percent of the population, have relied on the Lifeline program since Hurricane Maria.
Last week, 11 Democratic senators, including California Sen. Kamala Harris and Vermont Sen. Bernie Sanders, sent a letter to the FCC asking the commission to reconsider the cut backs. “The Lifeline Program is essential for millions of Americans who rely on subsidized internet access to find jobs, schedule doctor’s appointments, complete their school assignments, interface with the government, and remain connected in a digital economy,” the letter reads, in part. “The program helps Americans—including disproportionate numbers of families with children, veterans and people of color—survive.” A group of 68 House members sent a similar letter.
Under the current program, people at or below 135 percent of the federal poverty guidelines are eligible for a discount of $9.25 per month on internet and phone subscriptions.* The Reagan administration introduced Lifeline in 1985 to subsidize phone service, and it was expanded in 2016 to include internet. Pai’s revisions to the program would prevent smaller companies known as resellers, which don’t have their own infrastructure, from buying network capacity from big telecom providers and then selling it back to low-income consumers at cheaper rates. A majority of Lifeline recipients purchase their internet access from resellers.
“Removing resellers from the program is going to significantly undermine the reach and usefulness of the program,” Eric Null, policy counsel at New America’s Open Technology Institute, told Slate. “If the proposal goes through, those folks need to either be transitioned to a new Lifeline provider or would lose their access completely.” (New America is a partner with Slate and Arizona State University in Future Tense.)
True to form, Pai has made a free market argument for these changes, writing that they will “improve the business case for deploying facilities to serve low-income households.” He also noted that resellers often abuse the Lifeline program, referencing reports that many recipients are deceased or fictional.
Yet even some of Pai’s most formidable corporate cheerleaders, such as Verizon, Sprint, and the United States Telecom Association, have submitted comments to the FCC stating that the plan would hurt low-income consumers. For example, Verizon wrote in its comments, “The proposed exclusion of resellers from the Lifeline program would be highly disruptive to existing Lifeline beneficiaries and is at odds with the Commission’s goal of supporting affordable voice telephony and high-speed broadband for low-income households.” The Democratic senators also wrote in their letter that the FCC has provided “no evidence, analysis, or data” that the proposed move would spur investment.
Another contentious provision in the FCC’s proposal to institute a maximum lifetime benefit limit for individuals in the program. “That essentially requires the FCC to institute a new way to track people across their lifetimes. It creates some pretty serious privacy concerns,” Null said. “It would be very cumbersome for the consumer and very cumbersome for the FCC.”
Pai is perhaps most notable for guiding the FCC to reverse Obama-era rules protecting net neutrality in December, a decision widely panned by the public and Silicon Valley tech companies. He’s also come under fire for introducing loopholes into media consolidation rules that would allow Sinclair Broadcasting to extend its grasp on local news by acquiring Tribune Media.
*Correction, April 6, 2018: This post originally misstated the discount offered by the Lifeline program. The program allows users to get a discount is $9.25 per month off their bill; it doesn’t allow them to get internet for $9.25 per month.