WRAL TechWire

In an attempt to bridge the so-called “digital divide,” the FCC by a 3-2 vote on Thursday said it would formally consider expansion of the so-called “Lifeline” monthly communications subsidy for poorer Americans to include Internet access.

“30 years after Lifeline was founded, the Commission has concluded it is time for a fundamental, comprehensive restructuring of the program to meet today’s most pressing communications needs: access to broadband,” the FCC said in a statement.

The FCC initially proposed expansion of the program last month. It is seeking comment on the plan and also is seeking ideas for how the qualifications are determined for access to the program.

Voting in favor of the expansion were FCC Chairman Tom Wheeler and the two other Democrat appointees. The two Republican members opposed the change.

Currently, people can use a $9.25 month subsidy per household for telephone or cellular phone access.

“Today begins a proceeding to spend rate payers’ money more wisely, to deliver 21st-century benefits to deserving recipients, and to get to the heart of the historic issues that have haunted this program’s efficiency,” Wheeler said, according to The Washington Post.

In seeking to expand the subsidy. the FCC pointed out that “low income” households and consumers often don’t have high-speed access.

“While over 95% of households with incomes of $150,000 or more have access, only 48% of those making less than $25,000 have service at home,” the FCC said.

“Low-income consumers disproportionately use smart phones for Internet access – but nearly 50% of them have had to cancel or suspend smartphone service due to financial hardship.”

The term “digital divide” emerged to describe the disparity in Internet access with the wealthier Americans and those who live in metropolitan areas having the greatest deal of access.

Addressing that disparity  was a key factor in the creation of the North Carolina Next Generation Network project, which is now being built by AT&T in parts of the Triangle and Triad. Partners in the project (cities and universities) required that Wi-Fi access and free service to numerous public sites be included in the network.

Under a separate program, Frontier Communications, which provides Internet and phone service in Durham County and much of western North Carolina, this week accepted an FCC proposal to spend $283 million to expand high-speed Internet access to more rural areas.

Reforms, changes

The Lifeline program has been subject to substantial political criticism, and the FCC is seeking to address some of those concerns by seeking ideas for:

  • “Adopting minimum service standards for both voice and broadband service”
  • “Whether broadband should be a required offering of Lifeline providers”
  • “How to encourage more competition to improve price and service”
  • “How to encourage more participation by the states”
  • “Streamlining and tightening the process of verifying consumer eligibility by taking it out of the hands of providers”

Two consumer groups support decision

A consumer group that has called for the Lifeline change hailed the vote.

“For decades, Lifeline has been just that — a lifeline helping low-income families stay connected to family, friends, doctors, employers and schools,” said Greenlining Institute Energy and Telecommunications Policy Director Stephanie Chen in a statement.

“Today, more of these daily essentials are moving online, yet too many of our families can’t afford broadband, and are once again left behind. This disproportionate disconnection creates ripple effects in just about every aspect of life, and that’s no longer acceptable. Connected communities have better rates of employment, better rates of civic participation, and better educational, health, and wealth outcomes. Modernizing Lifeline will bring all communities the wealth of opportunities offered by fast, reliable, open broadband.”

Recently, the Consumers Union also voiced support for the move.

“Our nation continues to face a serious gap in broadband availability that leaves millions of Americans unable to realize the economic, educational, entrepreneurial, and social benefits that flow from these services,” said CU policy counsel Delara Derakhshani. “We applaud the Commission’s work to get affordable broadband to as many people as possible.”

Digital divide data

A variety of data points from the FCC and the Census Department as well as the Pew Foundation have documented the digital disparity:

  • 92 percent of households with incomes between $100,000 and $150,000 have broadband
  • 47 percent for households with income below $25,000 have broadband
  • 64 percent for African Americans have broadband
  • 53 percent for Hispanics have broadband
  • 63 percent for people with disabilities have broadband;
  • 51 percent for people with limited English proficiency have broadband
  • 38 percent for households that prefer Spanish have broadband

Who’s eligible?

Lifeline was launched in the Reagan Administration in 1985 as a subsidy for phone service. It was expanded in 2008 to include wireless service.

People eligible for the service are those at 135 percent or less of the federal poverty level or who receive other subsidies such as Medicaid and food stamps.

There are some 12 million Lifeline subscribers currently, according to Consumers Union.

The service is paid for by fees charged to service providers who can pass on the costs to customers.