Federal Communications Commission chair Ajit Pai is aiming to impose new caps on funding for Lifeline, a program to assist impoverished people living in the U.S. afford phone, cellular and internet access.
The Lifeline program imposes small fees on phone bills to pay for $9.25/month subsidies towards low-income Americans’ telecoms bills (the payments are made to approved service providers, not the individual customers). Pai’s predecessor Tom Wheeler expanded Lifeline, which previously only subsidized phones, to allow the payments to apply towards broadband charges in 2016. As IBT noted, it’s the same program which inspired conservative outcry over the wildly exaggerated issue of “Obamaphones.”
According to Ars Technica, Pai now wants to implement a “self-enforcing budget cap” on Lifeline in a proposal filed last week. Said proposal does not specify what the limit on spending through Lifeline would be, but Pai wrote that “We intend for the program to automatically make adjustments in order to maintain the cap in the event the budget is exceeded.”
Ars Technica also noted Pai’s proposal “suggests eliminating a year-old nationwide approval process that makes it easier for telecoms to offer subsidized service and cutting off subsidies for telecoms that resell network access instead of operating their own networks.”
In other words, Pai’s changes to the program would cut off subsidy expansion when it hits the cap—Wheeler set Lifeline’s budget at $2.25 billion indexed to inflation annually in 2016—and make it more difficult for service providers to participate at all. Earlier this year, Pai halted the expansion of the program to nine broadband providers.
Though a three-year audit by the Government Accountability Office released in June found major waste and fraud in the program, the program is a crucial support mechanism for the poorest Americans. As Wired noted, large numbers of Americans still find it hard to afford either cell phones or broadband, and the FCC is already instituting a verification system to help prevent fraud which should be available nationally by 2019. The FCC has estimated up to 13 million eligible households are not taking advantage of the subsidy in the past.