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Nearly 30 percent of Americans still don’t have broadband at home, which remains too expensive for many of the nation's poorest families. That's why the Federal Communications Commission has updated a Reagan-era subsidy originally intended to help the poor afford phone service. By the end of next year, families eligible for the program could receive a discount of $9.25 per month on their broadband bill.
To be eligible, a participating households must have an income of no more than 135 percent of the federal poverty level, which is $24,300 for a family of four, or receive other federal assistance, like food stamps, Medicaid, or discounted school lunches. The so-called Lifeline program is paid for by the Universal Service Fund, a pot of money the FCC collects from telecoms to help fund basic communications services for low income consumers.
The United Nations has long considered access to the Internet a basic human right, and it isn't unusual for governments to subsidize utilities like water, gas, and electricity. Still, updating the Lifeline program faced formidable opposition. Republican members of the FCC and Internet service providers both argued against the minimum service speed of 10 Mpbs, but for opposing reasons. The Republicans argued for a higher speed---suggesting 25 Mbps---while some telecoms said the 10 Mpbs the FCC ultimately adopted was too high.
What's going on here? While we can only speculate on motives, the logic behind both arguments is clear. Higher minimum speeds would mean the subsidy would apply only to pricier plans that low-income users couldn't afford even with help. On the other hand, slower speeds would let Internet providers offer even cheaper service, attracting more users---but with a potentially inferior connection. Either way, the battle over the speed of subsidized broadband highlights the not-so-simple fact that politics are a far greater hindrance to universal Internet access than the availability of the technology itself.
According to the Washington Post, right before the FCC finalized the Lifeline vote on Thursday, Republicans sought a deal with Democratic Commissioner Mignon Clyburn that would have raised the minimum speed to 25 Mbps. Clyburn, who said Thursday that she was trying to strike a bipartisan deal approving the Lifeline program, has long been among the commission's most vocal advocates for the subsidy.
The effort to forge consensus collapsed, however, and the 3-2 vote in favor of the historic update fell along party lines. Republican committee members argued that, by endorsing a 10 Mbps minimum speed, the FCC was violating its own standard for measuring the actual rollout of broadband, which the commission defined as 25 Mbps by the last year.
Republican Commissioner Ajit Pai "does not believe that low-income Americans should be stuck in the slow lane with service the FCC considers substandard in other contexts,” said Matthew Berry, chief of staff to the commissioner. And it's worth noting that, according to Akamai's annual State of the Internet report, the average speed Internet customers in the U.S. receive clocks in at 12.6 Mbps.
But it's hard not to think another kind of calculation may have been in play. If the minimum speed required for Lifeline eligible service were set to 25 Mbps, that would mean that those who are so disadvantaged that they qualify for the federal subsidy will only be able to apply it to a more expensive option.
How does that break down on paper? Comcast's cheapest option, Internet Essentials, starts at $10 a month at 10 Mbps (Verizon's least expensive plan starts at $20 monthly). The cheapest 25 Mbps Comcast service, meanwhile, starts at $40 a month, meaning the subsidy would cover less than 25 percent of the cost. As a result, a 25 Mbps minimum means fewer people would be likely to actually use the Lifeline subsidy in practice, an outcome that fiscal conservatives might appreciate.
On the other side of the opposition sat Internet providers, who also opposed the Lifeline program on the grounds that the 10 Mbps minimum speed was problematic. One Internet provider, CenturyLink, cautioned in a filing to the FCC against a rigid 10 Mbps minimum service for Lifeline subscribers, "as it would limit options for consumers who may prefer less expensive options or who live in rural areas where only lower download and/or upload speeds are currently available."
Frontier, another Internet provider, also opposed the 10 Mbps minimum on grounds that the speed was too high to make some consumers eligible for the subsidy, given the service available where they live.
In effect, the combined opposition begins to look like a Catch-22. If the minimum speeds are too high, people on the wrong side of the digital divide won't actually be served. And if minimum speeds are too low, there's a chance that the second class service would only work to perpetuate Lifeline users' disadvantage.
Regardless, if Internet companies are anything like phone companies (of course, many are both), industry is not going to let the cost of providing discounted service hit their pocketbooks. Internet users may start to see a USF charge on their bill, similar to what phone companies have been doing for years.
Access to the Internet is a daily necessity. People require the Internet to find and apply for jobs, communicate with those they love, and find out where to go and how to get there. And without it, study after study shows, families fall behind.
“The evidence is all around us,” said Commissioner Jessica Rosenworcel in a statement. "Nearly 50 percent of students say they have been unable to complete a homework assignment because they did not have access to the Internet or a computer. On top of that, 42 percent of students say they received a lower grade on an assignment because they didn’t have access to the Internet or a computer.”
And while many might argue that mobile access has helped to fill the gap, according to a 2015 study by the Pew Research Center, 48 percent of low-income smartphone users have canceled or suspended service due to the cost of mobile service .
Right now the average cost of a home broadband connection in the United States is $47.30 a month. Of the 39 million families in the United States who qualify for the Lifeline subsidy, 13.5 million have no home Internet access, largely because they can't afford it. Yet access to the Internet helps people save money. Research shows that families with access to the Internet are able to save more than $8,800 a year by having access to Internet-only discounts and other cost saving options, like free shipping, offered in the digital marketplace.
The broadband subsidy is expected to take effect next year. And whatever the reasons people have for opposing it, one thing is clear: if other Internet providers are willing to offer low cost options, like Comcast's $10 a month plan, the $9.25 a month subsidy, for many, will go a very long way.