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Increasing Internet Access Through Lifeline Program

23 Mar 2016, Posted in All Posts, Analysis, Blog Posts

On March 31, the Federal Communications Commission will vote on a new plan for the Lifeline subsidy, which will help the program’s recipients apply the subsidy to mobile or fixed broadband should they choose to do so. The program originated in 1985 to provide discounted landline phone service to low-income customers, and was expanded in 2005 to cover some wireless service plans as well. This new proposal could dramatically expand the programs use an increase the number of eligible Americans who choose to enroll.

Lifeline is available in every state and territory in the U.S. The subsidy of up to $9.25 per month is funded through the Universal Service Fund, which collects money through a tax on all mobile phone bills in the U.S. To be eligible for the subsidy, an applicant must earn less than 135 percent of the federal poverty line or qualify for a specified list of other government assistance programs.

While this change may seem relatively minor, it could actually go a long way in making Internet access more affordable to low-income individuals or families. According to Inside Sources, 40 million people are currently eligible for the program, while only 13 million are enrolled. The new plan increases the anticipated budget to accommodate an additional 5 million subscribers. To further encourage participation in the broadband program, the FCC will begin to reduce subsidies for the voice only plan in 2017.

The Lifeline program certainly has detractors. Each session of Congress since at least 2011, at least one Member has introduced a bill that would end the program. Representative Austin Scott (GA) introduced the “End Taxpayer Funded Cell Phones Act of 2015” this Congress, which would do exactly what the title implies. Further, FCC Commissioner Ajit Pai has pointed out that the program is ripe for fraud and is the only FCC program that has no cap on enrollment or spending, which exposes all Americans with cell phones to unwarranted taxes.

There is no doubt that all Americans should be protected from taxes that are used to fund fraudulent activity. If fraud in the Lifeline program can’t be brought under control and eventually stopped completely, the program should be ended. But, if the program can be corrected, applying the subsidy to broadband service seems to be the right course of action. If the intent of the program was to provide a means of communication to those who otherwise could not afford it, then the Internet is the communication tool today that landlines were in the 1980s and cell phones were in the 2000s.