Broadband's Impact

FCC Restricts Options Under the Low-Income Consumer Lifeline Program, to Democratic Outcry

Published

6 years ago

November 16, 2017

WASHINGTON, November 16, 2017 — In a move harshly condemned by Democrats and consumer advocates, the Federal Communications Commission on Thursday voted along party lines to significantly restrict the Universal Service Fund’s Lifeline program, which provides subsidies to enable lower-income consumers to purchase basic telecommunications services.

The vote took place during a contentious open meeting at the commission’s headquarters on Thursday. The Republican majority also voted to end restrictions on media consolidation that have been in force for decades.

Under the new Lifeline rules — which take effect immediately — poor consumers will no longer be able to purchase phone or broadband internet services from telecommunications resellers like TracFone, Simply Wireless, and numerous other service providers.

Such providers are called resellers because they do not own their own networks, and instead resell capacity bought wholesale from network operators like AT&T, Verizon, and Sprint.

Under the new Lifeline rules, only facilities-based carriers need apply

Only so-called “facilities-based carriers” — telecommunications companies that own and operate their own networks — will be allowed to participate in the Lifeline program by offering subsidized plans. The plans are subsidized by the Universal Service Fund, which is funded from small charges on consumers’ landline phone, wireless, and broadband Internet service bills.

The new restrictions will most heavily impact tribal lands, many of which largely depend on resellers for all of their telecommunications services. In addition to the service provider restrictions, the commission eliminated an extra $25 subsidy once available to anyone living on tribal lands. Under the new rules, only tribal consumers living in rural areas will be eligible for the extra $25 subsidy.

Republicans on the FCC said the change was necessary to prevent waste, fraud, and abuse. The Lifeline program has been criticized by conservatives since the program — which began under then-President Ronald Reagan — expanded to allow Lifeline subsidies to be used to purchase wireless phone service.

The Lifeline expansion began as a pilot program under then-FCC Chairman Kevin Martin, the FCC chairman during the George W. Bush administration from 2005 to 2009.

But when providers began advertising the subsidized service to lower-income consumers a few years later, Republicans began to mock the program by calling the subsidized wireless plans “Obamaphones.” Such criticism was amplified by a racially-tinged viral video featuring an African-American woman shouting to “keep Obama in president” because “he gave us a phone.”

Under the new rules, however, far fewer consumers will be eligible for wireless Lifeline services because not all “facilities-based” wireless carriers offer subsidized plans.

Democrats Mignon Clyburn and Jessica Rosenworcel assail the new restrictions

Democratic Commissioner Mignon Clyburn assailed the new restrictions in a statement before the vote, telling the assembled crowd that despite assurances from the GOP majority, the plan would not help bridge the digital divide.

“It is a bridge to nowhere,” she said. “It proposes to shirk one of the four pillars of our universal service promise – affordability – but I can only hope that this commission and its majority sees the error of its ways before it does further harm to those Americans trapped in economic distress.”

Clyburn added that under the new rules more than 70 percent of Lifeline-eligible consumers will be told they cannot continue to use their current plans even though they may not have a Lifeline-eligible carrier to turn to.

Clyburn’s Democratic colleague, Commissioner Jessica Rosenworcel, said that the changes to the program were not “real reform,” but were in reality “cruelty.”

“It is at odds with our statutory duty,” she said. “It will do little more than consign too many communities to the wrong side of the digital divide.”

Rosenworcel also noted that despite Republican assertions that the new rules were needed to prevent fraud, the FCC was in the process of implementing new controls to do just that, and her GOP colleagues were “discard[ing] its possibilities before we even begin,”

FCC Chairman Pai says that his changes would make Lifeline more effective

In a statement, Pai said he was adamant that the reforms were necessary and would accomplish needed goals.

“The reforms that we implement and propose today seek to accomplish two important objectives: (1) curtail the waste, fraud, and abuse that continue to plague the Lifeline program and (2) make Lifeline more effective at bridging the digital divide on behalf of low-income Americans,” he said.

His Republican colleagues also maintained that the changes were necessary. Commissioner Mike O’Rielly said that the reforms were “necessary fixes” and that the FCC had a responsibility to protect taxpayer money, despite the fact that Lifeline isn’t funded by tax dollars.

O’Rielly added that Lifeline was meant to be a discount service program — not a free one — and that there should be some way of requiring a minimum contribution from even the most destitute consumers.

The newest member of the FCC, Republican Commissioner Brendan Carr agreed. “I am glad that we’re now taking action to increase accountability while at the same time considering ways to target Lifeline support to consumers and communities that need it most,” he said.

Markey calls Lifeline the ‘Medicaid of the telecommunications universe’

Sen. Ed Markey, D-Mass., a member of the Senate Commerce Committee that has oversight over the FCC, also assailed the commission’s decision to restrict Lifeline services.

“The FCC also voted to advance a proposal that threatens to cut the very lifeline that helps tens of thousands of Bay Staters access critical telephone and internet services,” Markey said.

“The Lifeline program is the Medicaid of the telecommunications universe, and any attempt to cap funding, limit benefits, or reduce the number of providers for this critical program could exacerbate the digital divide and deprive disadvantaged communities the opportunity to access key educational, employment, and emergency services.”

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Andrew Feinberg

Andrew Feinberg was the White House Correspondent and Managing Editor for Breakfast Media. He rejoined BroadbandBreakfast.com in late 2016 after working as a staff writer at The Hill and as a freelance writer. He worked at BroadbandBreakfast.com from its founding in 2008 to 2010, first as a Reporter and then as Deputy Editor. He also covered the White House for Russia's Sputnik News from the beginning of the Trump Administration until he was let go for refusing to use White House press briefings to promote conspiracy theories, and later documented the experience in a story which set off a chain of events leading to Sputnik being forced to register under the Foreign Agents Registration Act. Andrew's work has appeared in such publications as The Hill, Politico, Communications Daily, Washington Internet Daily, Washington Business Journal, The Sentinel Newspapers, FastCompany.TV, Mashable, and Silicon Angle.

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Broadband's Impact

Tech Trade Group Report Argues for USF Funding from Broadband Companies

Consulting firm Brattle Group said in a report the move would be economically sound.

Published

6 days ago

September 19, 2023

Jake Neenan

Screenshot of Chip Pickering, INCOMPAS CEO

WASHINGTON, September 19, 2023 – Tech company trade group INCOMPAS and consulting firm Brattle Group released on Tuesday a report arguing for adding broadband providers as contributors to the Universal Service Fund.

The USF spends roughly $8 billion each year to support four programs that provide internet subsidies to low-income households, health care providers, schools, and libraries. The money comes from a tax on voice service providers, causing lawmakers to look for alternative sources of funding as more Americans switch from phone lines to broadband services.

The Federal Communications Commission administers the fund through the Universal Service Administration Company, but has left it to Congress to make changes to the contribution pool.

The report argues that broadband providers should be one of those sources. It cites the fact that USF funds are largely used for broadband rather than voice services and that broadband adoption is increasing as phone line use decreases.

“The USF contribution base needs to change to account for the fact that connectivity implies not just voice telephone services, but predominantly broadband internet access,” the report says.

It also rebuts arguments for adding tech companies like INCOMPAS members Google and Amazon to the contribution pool, saying they represent a less stable source of income for the program and that added fees for services like streaming could affect .

The report is the latest salvo in an ongoing dispute between tech companies and broadband providers over who should support the USF in the future, with broadband companies arguing big tech should be tapped for funding as they run businesses on the networks supported by the fund.

Sens. Ben Lujan, D-N.M., and John Thune, R-S.D. established in May a senate working group to explore potential reforms to the program. The group heard comments in August from associations of tech and broadband companies, each outlining arguments for including the other industry in the USF contribution base.

Broadband's Impact

Florida Broadband Grants, Support for Microsoft-Activision, IQ Fiber Investment

Comcast, Conexon, and Cox received $247 million in Florida broadband grants.

Published

1 week ago

September 18, 2023

Ryan Barba

Photo of fiber-optic installation from 2018 by CTA

September 18, 2023 – Service providers Comcast, Conexon, and Cox are receiving the biggest awards totaling $247 million in Broadband Grants in the state of Florida, Telecompetitor revealed Thursday.

Cox is receiving $80 million for 11 projects, Comcast is getting $60 million for 34 projects, and Conexon is receiving roughly $40 million. Additional companies receiving funding include, Charter Communications, AT&T, CenturyLink, Suwanee Valley Electric Cooperative, Consolidated, TDS, IBT, and Myakka, Telecompetitor noted.

The state announced the $247 million in broadband grants this July, but did not include the names of the providers who would be providing the services.

The grants were made possible through Florida’s Broadband Infrastructure Program, which received funding through the Treasury’s Capital Projects Fund.

Nine Amicus briefs filed in support of Microsoft’s purchase of Activision Blizzard

Nine amicus briefs were filed Thursday in support of Microsoft’s $68.7 billion purchase of Activision-Blizzard by a group of parties that included the U.S. Chamber of Commerce and Communications Workers of America among others.

The briefs come in response to the Federal Trade Commission’s attempt to appeal its loss against Microsoft to prevent the sale in the United States, alleging that Microsoft’s acquisition of Activision-Blizzard would allow it to manipulate access to Activision’s products for rival gaming consoles to Microsoft’s Xbox, therefore suppressing competition in the gaming industry.

“This Commission’s hostility to the procompetitive and efficiency-enhancing prospects of mergers is well-known—but the Commission’s position is not supported by merger case law,” said Bilal Sayyed, TechFreedom senior competition counsel, former director of the FTC’s Office of Policy Planning.

Among the briefs released, five independent publishers and studios that included Curve Digital, Finji, iam8bit, Strange Scaffold, and Studio Wildcard – going under “amici”’ in support of the acquisition – hint the deal will positively benefit the development community.

“Amici are five independent companies, of all shapes and sizes, that publish or develop video games for a range of game-streaming platforms, including Microsoft’s Xbox Game Pass service on Xbox,” the brief stated. “Thus having first-hand experience with Microsoft’s Game Pass subscription and its effects on the market for independently published and developed games.

“While the FTC argues that the merger will stifle competition, amici have had precisely the opposite experience with Microsoft’s Game Pass service.”

In June 2022, the CWA was able to enforce a Labor Neutrality Agreement with Microsoft if the acquisition were approved. Under the agreement, workers with Activision Blizzard would be able “to freely make a choice about union representation.”

“While the labor neutrality agreement at Activision does not take effect until the merger closes, Microsoft has already proven its commitment to abide by the agreement by extending its provisions to its own employees,” CWA wrote on their website.

IQ Fiber starts construction of fiber-optic network in northwest Gainesville, $40 million invested in phase one of project

IQ Fiber has started its first phase of construction Friday, a $40-million investment to bring a fiber-optic network to the Northwest Gainesville and Alachua County in Florida.

The company, based in Jacksonville, is bringing its services to Florida’s Alachua, Duval, Clay, Nassau and St. Johns counties, which is its “first major network expansion outside of the Jacksonville region.”

IQ Fiber expects online service to be available for “a few” Northwest Gainesville neighborhoods near the start of 2024.

Gainesville Mayor Harvey Ward said in a press release that extending broadband competition in the community was always a priority and is hopeful that IQ Fiber’s presence will provide a plethora of opportunities for the neighboring communities.

Since starting in 2021, the company has developed over 600 miles of fiber-optic cable across North Florida.

Digital Inclusion

Broadband Association Argues Providers Not Engaged in Rollout Discrimination

Trade group says telecoms are not discriminating when they don’t build in financially difficult areas.

Published

1 week ago

September 18, 2023

Hanna Agro

Image of redlining from historic map of the Home Owners’ Loan Corporation of Richmond, Virginia, from PBS.

WASHINGTON, September 18, 2023 – Broadband association US Telecom sent a letter to the Federal Communications Commission last week saying internet service providers don’t build in certain areas because it is financially difficult, not because they are being discriminatory.

The FCC proposed two definitions of digital discrimination in December 2022: The first definition includes practices that, absent technological or economic constraints, produce differential outcomes for individuals based a series of protected characteristics, including income, race, and religion. The second definition is similar but adds discriminatory intent as a necessary factor.

“To make business determinations regarding capital allocation, an ISP must consider a host of commercially important factors, none of which involve discrimination,” said the September 12 letter from USTelecom, which represents providers including AT&T, Verizon, Lumen, Brightspeed, and Altafiber.

“As the Commission has consistently recognized, such deployment is extremely capital-intensive…This deployment process is therefore subject to important constraints related to technical and economic feasibility” added the letter.

US Telecom explained that ISPs’ will choose to invest where they expect to see a return on the time and money they put into building broadband.

The association added that factors like population density, brand reputation, competition and the availability of the providers’ other services all go into deciding where broadband gets deployed.

“The starting point of the Commission’s approach to feasibility should be a realistic acknowledgement that all ISPs must prioritize their resources, even those that invest aggressively in deployment,” added the letter.

The association also highlighted the fact that it hopes to see as little government intervention in broadband deployment activity as possible, a concern that has been echoed by lobbyists before.

“Rather than attempting to use Section 60506 to justify taking extra-statutory intrusive actions that could paradoxically undermine ongoing broadband investment, the Commission must enable ISPs to make decisions based on their own consideration of the kinds of feasibility factors discussed above” read the letter.

Section 60506 of the Infrastructure, Investment and Jobs Act says that the FCC may implement new policies to ensure equal access to broadband.

The FCC is also looking to develop guidelines for handling digital discrimination complaints filed against broadband providers.

USTelecom said that ISPs should be allowed to demonstrate financial and logistical concerns as a rebuttal to those claims, in addition to disclosing other reasons for directing investment elsewhere to demonstrate non-discriminatory practice.

Reasons for investment elsewhere would include rough terrain, low-population density, MTE owners not consenting to deployment, zoning restrictions, or historical preservation review.

“To aid in the success of the Infrastructure Act and facilitate equal access, the Commission must continue to foster an environment conducive to ISP investment in the high-speed broadband infrastructure that Congress rightly views as central to our connected future,” concluded the letter.