We didn’t need COVID-19 to tell us that broadband internet is a foundation of the modern American economy, a reality that was evident before the pandemic began to leave its trail of destruction. With more Americans than ever working and learning from home, the necessity of having a broadband connection is underscored, and one of the biggest flaws of our communications infrastructure is revealed: It doesn’t reach everyone.
In my career inside and outside of Congress, I have long advocated for policies that will close the digital divide. Those with means, who are in places with high-speed internet availability, live on one side of that divide. Americans living on the other side are stranded by economic circumstances. Either they don’t have broadband access because broadband deployment isn’t economically viable where they live, or they can’t afford it. It’s up to Congress to finance closing the access side of the divide, but with today’s heightened importance of having a broadband connection, we must also confront the affordability question.
In 2016, the FCC took an important step by expanding its $9.25-per-month Lifeline program subsidy to cover broadband, in addition to basic telephone service. The subsidy today is available to those who can show their income to be at or below 135% of the federal poverty level, or that they participate in certain government assistance programs like Medicaid or the Supplemental Nutrition Assistance Program (SNAP). For Lifeline to achieve its potential to help close the broadband affordability gap, a further FCC reform is now necessary.
We know that Lifeline is only reaching a fraction of those it should, and that if the program is used by more eligible individuals, we could substantially narrow the broadband divide for the less financially fortunate. According to the FCC’s Universal Service Fund administrator, only one-quarter of the Americans eligible for Lifeline receive the subsidy. Only 9.6 million out of 38.6 million people who are eligible are receiving the benefit.
This huge disparity doesn’t reflect a lack of need. Studies have consistently shown that, as incomes fall, so do broadband subscriptions.
Broadband has become increasingly important to Americans and the American economy over the years. The pandemic has made it more essential than ever before. Lifeline can extend its reach to far more people, but a major barrier hobbles the program: the knot of red tape that consumers and communications providers must untangle in order to participate.
When the FCC revamped Lifeline, it retained broadband service providers as middlemen tasked with collecting and disbursing the program’s benefits (responsibilities that significantly contribute to carrier costs). Not surprisingly, the rule changes had unintended consequences, as some carriers abandoned the Lifeline program and consumers who were qualified for the program were discouraged from applying.
There is no reason why consumers eligible for Lifeline should have to jump through bureaucratic hoops to get the subsidy, or for service providers to be strangled by red tape. Relatively modest administrative changes would make it easier for both the low-income families who need the benefit and the broadband carriers that want to provide the service.
Policymakers need look only as far as the Department of Agriculture’s food stamp program to find an example of what already works. It serves as an attractive model for a modernized Lifeline program. The SNAP program distributes food assistance benefits efficiently to participants by making monthly deposits directly into their electronic accounts, either a bank account or a food benefit debit card. Consumers can then use these funds to help pay for food at participating retailers.
The FCC needs to establish an easy-to-use, SNAP-like benefit for Lifeline. Consumers could then use these benefits to pay for the broadband or phone services that best meet their needs. A SNAP for Lifeline would slice through the red tape, reducing administrative burdens on providers and their Lifeline customers.
With lower administrative costs, more operators would be encouraged to participate, giving consumers more choices as providers compete for Lifeline customers, just as they do for every other customer.
In normal times, Americans need access to high-speed broadband in order to apply for jobs, access government services, find entertainment and communicate with loved ones. In times like these when we face a pandemic of epic proportions, high-speed internet access is truly a necessity for all Americans. With a simple modernization, the FCC can make Lifeline far more effective at helping to close the digital divide and the Americans with the least means.
Originally published at RealClearPolicy