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February 7 2017

Lifeline Internet Assistance Program (AKA Obamaphones for the Internet) Takes a Hit

Patrice L. Onwuka

Remember Obamaphones? Last year the Democratic-led Federal Communications Commission (FCC) expanded that subsidy program to include internet service.

Last week, the new head of the FCC, Ajit Pai, wasted no time in cutting back the Lifeline program in an effort to reduce waste and fraud and to save us taxpayers some money.

Nine companies were told that they can no longer provide broadband to customers through the federal assistance program, which gives low-income households a $9.25 subsidy to purchase mobile phone service or home internet service. These companies had recently received the green light to participate in the program, which currently boasts about 900 service providers.

Pai explained that the agency should not be bound to this and other “midnight regulations” passed during the waning days of the Obama Administration:

“These last-minute actions, which did not enjoy the support of the majority of commissioners at the time they were taken, should not bind us going forward,” he said.

The program started modestly under President Reagan with landlines than expanded to include cell phones under President W. Bush and then expanded dramatically under President Obama. As we reported, the Lifeline program was made infamous by the Obamaphone Woman in the 2012 election cycle. All phone users bear the brunt of the cost for the program in a fee tacked on to our bills.

Late last year, former FCC Chairman Tom Wheeler decided to expand the program to include internet access growing the annual budget of the program to $2.25 billion a year. According to the FCC, as many as 13 million Americans may be eligible to participate in the program.

Republicans on the FCC at the time were seriously concerned about the program’s waste, fraud, and abuse being magnified by adding internet access into the mix. That concern still remains.

Critics of the FCC and the advocacy community were quick to jump on this reversal as taking internet away from the children:

Consumer advocacy group Public Knowledge said that Pai's "arbitrary decision will likely result in needy families losing access to the critical connectivity they use to communicate with loved ones, look for employment, complete homework assignments, access vital health care information, and engage in civic life."

FCC Commissioner Mignon Clyburn, a Democrat, said that Pai's action "widens the gap" in broadband availability between rich and poor, and it harms the ISPs that were relying on the Lifeline designation. "These providers include a minority-owned business, a provider enabling students to complete their homework online, and others serving tribal lands," Clyburn said.

Before falling for the made-up hysteria, we note that program recipients who may have gained service through one of the nine companies that lost their designation as a provider can search the over 800 other providers for service.

Subsidy programs that are meant to provide a little relief to family budgets have grown out of control. The new FCC chairman is right to assess how they can rein in the opportunities for people to take advantage of the benefit while those who are truly in need of help suffer.

The days of unrestrained free phones and free internet for all are over. There’s a new sheriff in town.

 

Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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