Defending the Indefensible: Chairman Pai’s Lifeline Reversal Will Widen the Digital Divide

[Note: This item comes from friend Geoff Goodfellow. DLH]

Defending the Indefensible: Chairman Pai’s Lifeline Reversal Will Widen the Digital Divide
By Gigi Sohn
Feb 9 2017

To my great surprise and delight, the recent move by the Federal Communications Commission’s new majority to revoke the designations of nine companies as Lifeline providers has provoked a firestorm in the press, on social media, and on the Hill.

The furor has been so intense that FCC Chairman Ajit Pai felt moved to defend the decision on Medium this week. But the Chairman doth protest too much.

His thin arguments fail to mask two clear truths:

• His actions will make the market for Lifeline broadband services less competitive, limiting choice and keeping prices high. As a result, fewer low income Americans will be able to afford broadband; and
• He, and fellow FCC Commissioner Michael O’Rielly, fundamentally disagree with the structure and goals of the Lifeline program and will seek to undermine it in word and deed.

First, a Brief Lifeline Primer

On March 31, 2016, the FCC modernized Lifeline – one of its four programs intended to ensure that all Americans have access to modern communications. The Lifeline program provides a small, monthly subsidy ($9.25) to low-income Americans for telecommunications services. Since broadband is essential for full participation in our economy and society, the Lifeline Modernization Order allowed that subsidy to be applied to broadband Internet access service for the first time.

The Lifeline Modernization Order was not only about providing affordable broadband service to low-income people; the FCC also reformed the program to ensure it is efficient. To decrease administrative burdens on service providers while also cracking down on waste, fraud, and abuse, the FCC established a National Eligibility Verifier, taking the task of determining whether a person is eligible for Lifeline support out of the hands of carriers. And the FCC established, for the first time, a budget mechanism for Lifeline.

Importantly, the Lifeline Modernization Order also sought to inject new competition in the market for providing broadband service to low-income households. A number of participants in the Lifeline proceeding complained about the burden of seeking state-by-state approval to provide Lifeline services. The Commission decided that a streamlined approval process would encourage broadband providers who were not currently providing Lifeline services to sign up to participate in the program. The order set up a new category of telecommunications provider – called a Lifeline Broadband Provider or LBP – allowing broadband providers to seek approval from the FCC to provide Lifeline service anywhere in the US.

The thinking was this – the more Lifeline providers, the better and more affordable the service will be, leading to an increase in Lifeline subscribers. Imagine, for example, if one of the cable companies currently providing broadband service at decent speeds for $9.95 a month became a Lifeline provider. That could change the entire Lifeline marketplace and drive the cost of good broadband service down to nearly zero for Lifeline-eligible homes. The impact on the digital divide would be astonishing.



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