Chairman Pai’s supporters say he’s gone too far with plan that hurts poor people

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Federal Communications Commission Chairman Ajit Pai can usually count on support from broadband industry lobbyists and conservative think tanks each time he announces a new policy. But Chairman Pai's proposal to limit broadband choices for poor people who rely on a telecommunication subsidy program is coming under fire from all directions. Chairman Pai wants a major overhaul of Lifeline, a federal program that lets poor people use a $9.25 monthly household subsidy to buy Internet and/or phone service. Today, more than 70 percent of wireless phone users who rely on Lifeline subsidies buy their plans from resellers, i.e. companies that purchase capacity from network operators and then resell it directly to consumers. Pai's Lifeline plan would force all of those customers to find new carriers, because he proposes to limit Lifeline subsidies to "facilities-based broadband" providers, those that operate their own networks. Excluding resellers from the program would limit competition in the market for subsidized plans and push consumers toward network operators like AT&T, Verizon, T-Mobile USA, and Sprint.

But the reseller ban isn't even getting support from the large broadband companies that the ban seems designed to benefit. Sprint told the FCC that "Resellers have played an important and legitimate role in providing competitive broadband and voice service to low-income consumers, and their elimination could have a significant impact on participation in the Lifeline program." Verizon similarly urged the commission to let resellers stay in the Lifeline program.


Chairman Pai’s supporters say he’s gone too far with plan that hurts poor people