Future Tense

The Biden Administration Should Increase Phone and Internet Subsidies for Low-Income Americans

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This article is part of the Future Agenda, a series from Future Tense in which experts suggest specific, forward-looking actions the new Biden administration should implement.

When life moved online with the advent of the COVID-19 pandemic, more than 77 million people were left behind. Those who lack an adequate home internet connection struggle to keep up with distance learning, stay in touch with family and friends, receive public health and emergency alerts, apply for jobs, and continue working from home.

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High service costs are a key reason why millions—including a disproportionate number of older Americans, veterans, Native Americans, Black, Hispanic, and low-income consumers—do not have home broadband. But it doesn’t have to be this way. By expanding Lifeline, the only federal program dedicated to making telecommunications service more affordable, the incoming Biden administration can help connect more people and lead the way to universal broadband access.

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Lifeline was established during the Reagan administration to provide support for low-income households to purchase landline phone services, and it’s changed a bit since then. Currently, the Lifeline program provides a $9.25 monthly subsidy to qualifying households, with an additional $25 monthly for tribal participants, and it can only apply to one subscription to one of the following: phone, home internet services, or a bundled wireless phone and data plan. Individuals must apply to receive the subsidy, with those eligible having incomes at or below 135 percent of the Federal Poverty Guidelines. Households can also qualify for the program if an individual already participates in other federal assistance programs, including the Supplemental Nutrition Assistance Program, Medicaid, Veterans Pension, federal public housing assistance, Food Distribution Program on Indian Reservations, and Bureau of Indian Affairs general assistance. Each household is restricted to just one subsidy, even if multiple eligible individuals live there.

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Currently, however, the Lifeline subsidy is not enough to cover the high cost of internet service in the United States. According to recent research from my organization, New America’s Open Technology Institute, the current $9.25 Lifeline subsidy only covers 14 percent of average monthly costs for fixed home internet service in the United States, which come to $68.38 a month. (New America is a partner with Slate and Arizona State University in Future Tense.) The subsidy is even weaker in the Navajo Nation, which has the country’s largest land area retained by an indigenous tribe, where the average monthly price for internet service is a steep $127.51. Although the tribal Lifeline subsidy is higher at $34.25, it doesn’t come even close to covering the difference in average prices for internet service in tribal versus nontribal lands.

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Moreover, because the subsidy can apply to only one subscription, it does not even come close to covering the total costs a household might incur to stay connected. Subscribers are forced to choose between mobile service and home internet, even countless studies have demonstrated that mobile broadband is not a substitute for fixed broadband—a conclusion even the Trump FCC has agreed with.

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The Biden administration should start by increasing the Lifeline subsidy from $9.25 to $50—and $75 for tribal users—for at least the duration of the pandemic. Enormous numbers of people are out of work, prices for broadband service are increasing, and internet in the home is more necessary than ever. But it would be even better to permanently increase the subsidy to help ensure those most in need can stay connected in both the short and long term.

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The incoming administration should also work to increase enrollment in Lifeline. Participation in Lifeline has dropped steadily year over year, from 33 percent of eligible households subscribing in 2016 to just 23 percent in July 2020. (Reasons for the steady decline include major carriers like AT&T leaving the program over the years, and the FCC’s preoccupation with proposing harmful rather than helpful changes to the program.) The participation rate is significantly lower than participation rates in SNAP and Medicaid, even though it is through their participation in these programs that the majority of people qualify and enroll in Lifeline. Better cooperation with other federal assistance programs like SNAP and Medicaid would make it easier to ensure that those eligible for Lifeline apply for and receive additional help on their internet bills. Those working at other agencies responsible for programs where participation can be used to prove eligibility for Lifeline can ensure that when people sign up for their programs, they also know about and apply for Lifeline at the same time.

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There are a number of other, specific changes that would further improve the effectiveness of the Lifeline program, but two may be the most important. First, the FCC should immediately abandon the various “death by a thousand cuts” proposals for Lifeline that have been pending at the agency for several years. These proposals have all undermined Lifeline and its subscribers. For instance, some would monitor subscribers on their usage of the program and ban service providers from offering Lifeline customers handsets and other devices free of charge. Such devices faced particular backlash several years ago and were smeared as “Obamaphones,” even though companies, not the Lifeline program itself, offer these devices on their own dime, mobile service became a part of the program during the George W. Bush presidential administration, and people need devices to actually utilize their subsidized services. Second, the FCC and Congress should begin the process of reforming Lifeline’s contribution system to make the program sustainable long term.

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Access to the internet isn’t a luxury or a nice-to-have, but absolutely essential. Currently, 15 million to 16 million children are unable to learn from home because their families don’t have an internet connection or a device to support distance learning. The numbers are even worse for nonwhite households, with 26 percent of Latinx, 30 percent of Black, and 35 percent of Native American student households lacking adequate home internet access. Roughly 1 in 3 rural Americans are without broadband access, cutting them off from services like telemedicine during this health crisis. By making internet service accessible to those who normally can’t afford it, Lifeline is well-positioned to improve digital equity. There is no need to reinvent the wheel here—Lifeline is the government’s only program specifically tailored to address the issue of low-income individuals afford communications services. Bolstering the program will be an easy and quick lift for the Biden administration to get more people connected.

Future Tense is a partnership of Slate, New America, and Arizona State University that examines emerging technologies, public policy, and society.

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