Expand Lifeline, But Keep Consumer Choice

[Commentary] The Federal Communications Commission (FCC) is nearing a historic vote to expand the Lifeline program, which subsidizes communications for low-income Americans. After the rules go into place, recipients will be able to put the $9.25-per-month subsidy towards broadband Internet access instead of the voice telephone service the program originally supported. ITIF would like to join the chorus of others to reiterate our concerns with the rules as previewed by the FCC.

A primary concern is the Commission’s plan to institute a minimum standard of service that companies must offer to qualify as part of the program. Specifically, the FCC appears intent on requiring a certain level of broadband speed (10 Mbps for downloads and 1 Mbps for uploads), as well as other requirements around data caps, voice minutes, etc. There are two main concerns motivating the Commission’s lean towards minimum standards. First, many want to ensure Lifeline recipients are not “left behind” with substandard Internet service. Such standards will disproportionately hurt rural recipients, where low population density makes high-speed networks uneconomical. Instead of setting paternalistic up-front standards for what service should look like, the FCC should encourage as many carriers to participate as possible, maximize consumers’ flexibility in choosing supported services, and rely on competition to drive improvements to offerings over time. A second possible motivation for minimum standards is somewhat subtler: Minimum standards could act as a roundabout control on the program’s budget. If the minimum standard is such that broadband service would cost more than $9.25, it would require participants to contribute some personal funds before being able to connect, which would help rein in spending.


Expand Lifeline, But Keep Consumer Choice