Easy, affordable access to the Internet is not a reality for all Americans, so to attempt to tackle that behemoth of the broadband age, the FCC is circulating a proposal to approve a potential $9.25/month subsidy for low-income households. Plenty of reaction came streaming in, much of it positive, but some of it doubtful of the plan’s full effectiveness.
Basically, the draft order — circulated by FCC Chair Tom Wheeler and Commissioner Mignon Clyburn on Tuesday — proposes that low income consumers could apply the $9.25 per month to broadband service as well as bundled voice and data service packages as part of the FCC’s Lifeline program. Building on the Commission’s 2012 reforms, the order would reportedly establish a National Eligibility Verifier to try to deter waste, fraud and abuse, which has been a past criticism.
Consumer groups generally came out on the pro side, including Public Knowledge. “The proposal not only modernizes the Lifeline program, but it also takes significant steps to protect the integrity of the universal service fund and ensure Lifeline remains sustainable into the future,” Phillip Berenbroick, counsel for government affairs at Public Knowledge, says.
He adds that the proposal increases competition by allowing more broadband providers to offer Lifeline-supported service. “It also establishes a third-party verifier and sets minimum broadband standards while eliminating virtually any potential for fraud,” Berenbroick concludes.
Comcast blogged its general approval of the FCC proposal, but added the caveat that cost is not the only issue with broadband adoption. David L. Cohen, senior executive vice president and chief diversity officer in public policy at Comcast, says that the program only addresses one of the obstacles.
“Rigorous quantitative research by the Census Bureau and NTIA and economists at the FCC has shown that the primary barrier to adoption is not the cost of the service, but rather is a bucket of digital literacy issues, including a perceived lack of relevance of the Internet and a lack of understanding as to its value or usefulness,” Cohen says. “For example, in October 2014, the NTIA found that 48% of households who do not adopt broadband cited lack of need/lack of interest as the main reason.”
Cohen also underlines that careful attention must remain on eliminating waste, fraud, and abuse in the program, especially since the service is financed by U.S. consumers.
FCC Commissioner Michael O’Rielly came out swinging immediately after the proposal was circulated with the following statement: “I haven’t had a chance to review all 150 pages yet, but as usual, the ‘Fact Sheet’ released this morning raises more questions than answers. It’s impossible to tell whether the ‘budget mechanism’ is actually a budget in any real sense of the word.”
Previously, he’s been very vocal about his worries surrounding the expansion of Lifeline. In a blog he posted last week, he asked for a “hard budget” on any reform.
“Failing a major change in direction, the FCC is preparing to massively expand the size and scope of the Lifeline Program without the necessary inclusion of a hard budget or financial constraints,” O’Rielly states in that March 3 post. “Such irresponsible action will balloon a program plagued by waste, fraud and abuse and result in higher phone bills for every American – including those already struggling in the current economy. In sum, it’s a recipe for disaster, and I can’t and won’t be part of it.”
The proposed order will be voted on by the FCC on March 31.
Filed Under: Industry regulations