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

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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.”

 

Andrew Feinberg is 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.

Digital Inclusion

Lack of Public Broadband Pricing Information a Cause of Digital Divide, Say Advocates

Panelists argued that lack of equitable digital access is deadly and driven by lack of competition.

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September 24, 2021- Affordability, language and lack of competition are among the factors that continue to perpetuate the digital divide and related inequities, according to panelists at a Thursday event on race and broadband.

One of the panelists faulted the lack of public broadband pricing information as a root cause.

In poorer communities there’s “fewer ISPs. There’s less competition. There’s less investment in fiber,” said Herman Galperin, associate professor at the University of Southern California. “It is about income. It is about race, but what really matters is the combination of poverty and communities of color. That’s where we find the largest deficits of broadband infrastructure.”

While acknowledging that “there is an ongoing effort at the [Federal Communications Commission] to significantly improve the type of data and the granularity of the data that the ISPs will be required to report,” Galperin said that the lack of a push to make ISP pricing public will doom that effort to fail.

He also questioned why ISPs do not or are not required to report their maps of service coverage revealing areas of no or low service. “Affordability is perhaps the biggest factor in preventing low-income folks from connecting,” Galperin said.

“It’s plain bang for their buck,” said Traci Morris, executive director of the American Indian Policy Institute at Arizona State University, referring to broadband providers reluctance to serve rural and remote areas. “It costs more money to go to [tribal lands].”

Furthermore, the COVID-19 pandemic has only made that digital divide clearer and more deadly. “There was no access to information for telehealth,” said Morris. “No access to information on how the virus spread.”

Galperin also raised the impact of digital gaps in access upon homeless and low-income populations. As people come in and out of homelessness, they have trouble connecting to the internet at crucial times, because – for example – a library might be closed.

Low-income populations also have “systemic” digital access issues struggling at times with paying their bills having to shut their internet off for months at a time.

Another issue facing the digital divide is linguistic. Rebecca Kauma, economic and digital inclusion program manager for the city of Long Beach, California, said that residents often speak a language other than English. But ISPs may not offer interpretation services for them to be able to communicate in their language.

Funding, though not a quick fix-all, often brings about positive change in the right hands. Long Beach received more than $1 million from the U.S. CARES Act, passed in the wake of the early pandemic last year. “One of the programs that we designed was to administer free hotspots and computing devices to those that qualify,” she said.

Some “band-aid solutions” to “systemic problems” exist but aren’t receiving the attention or initiative they deserve, said Galperin. “What advocacy organizations are doing but we need a lot more effort is helping people sign up for existing low-cost offers.” The problem, he says, is that “ISPs are not particularly eager to promote” low-cost offers.

The event “Race and Digital Inequity: The Impact on Poor Communities of Color,” was hosted by the Michelson 20MM Foundation and its partners the California Community Foundation, Silicon Valley Community Foundation and Southern California Grantmakers.

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Broadband's Impact

USC, CETF Collaborate on Research for Broadband Affordability

Advisory panel includes leaders in broadband and a chief economist at the FCC.

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Hernan Galperin of USC's Annenberg School

WASHINGTON, September 22, 2021 – Researchers from the University of Southern California’s Annenberg School and the California Emerging Technology Fund is partnering to recommend strategies for bringing affordable broadband to all Americans.

In a press release on Tuesday, the university’s school of communications and journalism and the CETF will be guided by an expert advisory panel, “whose members include highly respected leaders in government, academia, foundations and non-profit and consumer-focused organizations.”

Members of the advisory panel include a chief economist at the Federal Communications Commission, digital inclusion experts, broadband advisors to governors, professors and deans, and other public interest organizations.

“With the federal government and states committing billions to broadband in the near term, there is a unique window of opportunity to connect millions of low-income Americans to the infrastructure they need to thrive in the 21st century,” Hernan Galperin, a professor at the school, said in the release.

“However, we need to make sure public funds are used effectively, and that subsidies are distributed in an equitable and sustainable manner,” he added. “This research program will contribute to achieve these goals by providing evidence-based recommendations about the most cost-effective ways to make these historic investments in broadband work for all.”

The CETF and USC have collaborated before on surveys about broadband adoption. In a series of said surveys recently, the organizations found disparities along income levels, as lower-income families reported lower levels of technology adoption, despite improvement over the course of the pandemic.

The surveys also showed that access to connected devices was growing, but racial minorities are still disproportionately impacted by the digital divide.

The collaboration comes before the House is expected to vote on a massive infrastructure package that includes $65 billion for broadband. Observers and experts have noted the package’s vision for flexibility, but some are concerned about the details of how that money will be spent going forward.

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Broadband's Impact

Technology Policy Institute Introduces Data Index to Help Identify Connectivity-Deprived Areas

The Broadband Connectivity Index uses multiple datasets to try to get a better understanding of well- and under-connected areas in the U.S.

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Scott Wallsten is president and senior fellow at the Technology Policy Institute

WASHINGTON, September 16, 2021 – The Technology Policy Institute introduced Thursday a broadband data index that it said could help policymakers study areas across the country with inadequate connectivity.

The TPI said the Broadband Connectivity Index uses multiple broadband datasets to compare overall connectivity “objectively and consistently across any geographic areas.” It said it will be adding it soon into its TPI Broadband Map.

The BCI uses a “machine learning principal components analysis” to take into account the share of households that can access fixed speeds the federal standard of 25 Megabits per second download and 3 Mbps upload and 100/25 – which is calculated based on the Federal Communications Commission’s Form 477 data with the American Community Survey – while also using download speed data from Ookla, Microsoft data for share of households with 25/3, and the share of households with a broadband subscription, which comes from the American Community Survey.

The BCI has a range of zero to 10, where zero is the worst connected and 10 is the best. It found that Falls Church, Virginia was the county with the highest score with the following characteristic: 99 percent of households have access to at least 100/25, 100 percent of households connect to Microsoft services at 25/3, the average fixed download speed is 243 Mbps in Ookla in the second quarter of this year, and 94 percent of households have a fixed internet connection.

Meanwhile, the worst-connected county is Echols County in Georgia. None of the population has access to a fixed connection of 25/3, which doesn’t include satellite connectivity, three percent connect to Microsoft’s servers at 25/3, the average download speed is 7 Mbps, and only 47 percent of households have an internet connection. It notes that service providers won $3.6 million out of the $9.2-billion Rural Digital Opportunity Fund to provide service in this county.

“Policymakers could use this index to identify areas that require a closer look. Perhaps any county below, say, the fifth percentile, for example, would be places to spend effort trying to understand,” the TPI said.

“We don’t claim that this index is the perfect indicator of connectivity, or even the best one we can create,” TPI added. “In some cases, it might magnify errors, particularly if multiple datasets include errors in the same area.

“We’re still fine-tuning it to reduce error to the extent possible and ensure the index truly captures useful information. Still, this preliminary exercise shows that it is possible to obtain new information on connectivity with existing datasets rather than relying only on future, extremely expensive data.”

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