Being offline means missing out — on jobs, on education, on health, and on information. And the events of the past year have made lack of a broadband connection even more dire. Working and learning from home, using telemedicine for basic health care, shopping online, and staying in touch with family and friends via video calls is lost to those without internet access.
Alarmingly large numbers of American families are currently excluded from the digital world. Either they live in regions where it is uneconomical for the broadband providers to deploy infrastructure or they find the services to be unaffordable.
The infrastructure access problem, largely centered in rural America, can be addressed by the Biden Administration and Congress through the provision of federal dollars to the Federal Communications Commission (FCC) to allocate in partnership with private broadband providers, using the FCC’s reverse auction mechanisms.
Solving the affordability problem — three times bigger than the availability issue, according to National Urban League’s recently released Lewis Latimer Plan for Digital Equity and Inclusion — will be the province of both the FCC and Congress through reform of the 36-year-old Lifeline program, initiated in 1985 and largely underutilized today.
Lifeline is the primary way the federal government seeks to make communications services affordable for low-income Americans. Through a $9.25 per month benefit, participating consumers can defray all or part of the charge for broadband and/or telephone service. But the FCC estimates that only one in four eligible households takes advantage of the federal program. Today, Lifeline is utilized almost exclusively for mobile, rather than in-home broadband, which offers greater capabilities for its use and application.
Moreover, consumer choice is limited by the decision of many carriers not to take part in the program because of red tape, including back-office system administration, record-keeping and reporting requirements, which add costs for participating providers. With one straightforward reform, the administrative burdens of the carriers could be eliminated encouraging more of them to offer services, while simultaneously expanding the range of choices to consumers, a move that should result in more low-income families participating in the program.
Today, the carriers are the middlemen in the transaction between the Lifeline program and the eligible Lifeline consumer: Service providers must discount their bills, then wait for reimbursement from the federal government for the monthly Lifeline benefit for each eligible customer they serve. Participating carriers are required to maintain their records for a lengthy period and undergo audits to ensure that reimbursements were properly made.
With the advent of widely-available, easy-to-use digital technologies, it is long past time to simplify the program and convert Lifeline assistance into a direct-to-the-consumer benefit that puts recipients in the driver’s seat. An electronic Lifeline benefit card, modeled on the electronic benefit transfer card issued by the SNAP food assistance program, should be issued to eligible subscribers. Families participating in Lifeline could then use the funds to help pay their preferred service provider for the broadband and/or telephone service they choose. Participating providers would simply accept payments from consumers’ Lifeline benefit card through their existing payment platforms.
A direct-to-consumer benefit would empower the Lifeline beneficiary to shop among providers for the broadband or telephone service that best suits his or her needs, providing consumers with a greatly simplified program that should make it easier for more of them to use it. Given the importance of broadband, put into sharp focus over the past year, Lifeline reform should be an early priority for both Congress and the new leadership at the FCC.
It is also increasingly clear that the existing $9.25/month Lifeline benefit just isn’t enough for broadband. In fact, Congress has established a temporary $50/month Emergency Broadband Benefit to help consumers impacted by the COVID-19 pandemic pay for broadband. Congress appropriated more than $3 billion to pay for the Emergency Broadband Benefit Program, which brings us to a second major reform that requires congressional action.
At present, the Lifeline program is funded as part of the FCC’s Universal Service offerings, which rely upon a “tax” on traditional long-distance and international telephone services. But use of those services, and correspondingly, their revenues, are declining — such that the Universal Service assessment rate is now more than 31 percent of the non-local component of landline telephone bills. As these trends continue, that percentage will only grow. The National Center for Health Statistics last week revealed that the percentage of adults living in households without a landline grew by more than three percent from 2019 to 2020, now 62.5 percent of U.S. adults. In recognition of the great importance of the internet to our economy and our broader social fabric, it’s time for Congress to provide direct appropriations for the program and bring to an end the current wobbly reliance on a tax on fading traditional telephone service.
These are necessary reforms because, today, Lifeline isn’t just a life line — it’s a jobs line, an education line, a health line, and an information line. With timely reform, the program’s future can help participants meet the challenges of our day.
Originally published at RealClearPolicy