The US Federal Communications Division on Thursday voted 3-2 to consider a proposal from FCC Chair Tom Wheeler that would expand the government’s Lifeline program to help subsidize the cost of home broadband service to the nation’s poorest people. The program, originally put into place during the Reagan administration — but often referred by critics as “Obamaphone” — currently provides a small subsidy to help disadvantaged people afford cellular phone service.
The vote was split along party lines, with the two Republican commissioners complaining that the program had suffered some “waste, fraud, and abuse,” in the words of commissioner Ajit Pai. In 2014, for example, three people were convicted of defrauding the program of some $32 million between 2009 and 2011.
Pai said that the program needs to work harder to focus on people who need help the most, and also advocated cutting the $1.6 billion subsidy, which works out to about $9.25 per month to the largely poor and senior users who are in the program. In order for the broadband expansion to come about, the budget for the program would have to be increased, rather than decreased, substantially.
The current amount of suspected waste or abuse is not known, but is believed to have fallen to dramatically lower levels since the implementation of more rigorous cross-checks and other measures implemented after the fraud case came to light. Some of the recommended reforms have not yet been implemented, but will likely be added to the proposal in an effort to garner more Republican support.
Low-income citizens in the US disproportionally rely on smartphones as their primary source of Internet access, according to studies cited by Wheeler. The inability to afford Internet service on mobile devices or at home makes it more difficult to do nearly everything in modern US society, from sign up for health care to handling routine banking transactions. Services most cellphone users take for granted, such as looking up when the next bus arrives or checking for important email or voicemail messages, is not possible without a ubiquitous mobile connection, since most poor people work or are otherwise away from home for much of their time.
The Wheeler proposal suggests expanding the subsidy to also help deserving recipients afford home broadband, now defined by the FCC as 10Mbit per second downstream or faster. The industry group CTIA, which includes both cellular and broadband providers, endorsed the deal as its members would be the primary beneficiaries of the subsidies.
Android-centric outlets have benefitted the most from the program thus far, since poor people tend to buy low-end Android-powered models so that they can take advantage of cheaper plans or pay-as-you-go services. Tracfone, in particular, received some $430 million in subsidy payments in 2013, while Sprint gained $320 million from the program that year. Some 14.5 million Americans qualify for and are enrolled in the program, according to figures from 2013, noting a downward trend from the year prior.
