State Regulators Could Ask FCC to Fund Broadband for Low Income Households

WASHINGTON, February 14, 2009 – State utility commissioners are considering a resolution to “strongly encourage” Federal Communications Commission implementation of a pilot program to make broadband internet access service eligible for subsidies drawn from the Universal Service Fund.

The measure is entitled “Resolution on Lifeline and Link-Up Program Support for Broadband Internet Access Services and Devices.” Sponsored by District of Columbia Public Service Commissioner Betty Ann Kane, it was introduced at the winter meeting of the National Association of Regulatory Utility Commissioners here on Friday afternoon.

The Lifeline Assistance program has provided discounted rates on local phone service to low income consumers since 1985. The Link-Up America program began in 1987, and covers the cost of initial connection charges for phone service.

Both programs are administered jointly by federal and state regulators and funded by assessments on all telecommunications services, as part of the Universal Service Fund.

The USF is designed to provide universal telephone service. With the exception of the eRate, which funds internet connections to schools and libraries, FCC rules limit USF subsidies to voice communications.

The Telecommunications Act of 1996 requires the FCC to make “advanced telecommunications and information services” available to all at “just, reasonable and affordable rates.”

In November 2007, the Federal-State Joint Board on Universal Service, an FCC-NARUC body which administers the funds, recommended that the FCC “revise the current definition of supported services to include broadband Internet service.”

The FCC agreed with the Joint Board’s recommendations in November 2008, and issued a notice seeking comments on two competing proposals. Both proposals would establish a three-year, $300 million “Broadband Lifeline/Link Up Pilot Program” to support broadband internet access for households already eligible for subsidized telephone service.

If adopted, the resolution would publicly assert NARUC’s belief that affordable broadband Internet service is “critical to the provision of public education, public health, public safety and other services.” It asks the FCC to modify its proposed pilot program to give each state’s regulatory body the authority to distribute funding for the program to any broadband provider it deems eligible.

Not all subcommittee members were convinced that even a temporary pilot program is necessary. During Saturday afternoon discussions, some members suggested the broadband portion of the economic stimulus bill passed late Friday night might render the program redundant.

But the stimulus bill, which directs $7.2 billion to building broadband networks in unserved and underserved regions, doesn’t address the high cost of broadband service. High prices were cited in a 2008 study by the Pew Internet and American Life Project as one key greatest reason why consumers didn’t subscribe to broadband.

The NARUC telecommunications staff subcommittee will finalize its version of the resolution Sunday, after which the full committee will begin consideration of the measure. If approved, it will be submitted to the NARUC board of directors for a final vote. The NARUC winter meeting runs through Wednesday, February 18.