Lifeline Low Income Phone Subsidy to Include Broadband

The US government plans to offer a subsidy to help people on low incomes get cheaper access to broadband Internet. Recipients would get a choice of using it on fixed-line or mobile services.

The plan is an extension to an existing program called Lifeline, which has been running for around thirty years. Its funded by a levy on phone companies and allows people who meet low income eligibility requirements to get a monthly discount of $9.25 on phone line rental.

Since 2005, the plan has allowed recipients to opt to use the discount of a pre-paid cellular phone plan instead of a landline. Now the government plans to give recipients the option of applying the discount to a broadband service instead - or to a single package that bundles phone and Internet services. The reasoning here is that phones have always been a vital tool for finding a job and being part of society; similarly, getting online is a necessity, rather than a luxury.

The $9.25 subsidy figure will remain unchanged and recipients will only be allowed to use it for one monthly plan per household. As with the existing set-up, recipients wouldn't actually get a hold of the money at any point; instead the service providers would apply the discount and then claim it back from the US government.

Subsidized Plans Must Meet Speed Threshold

The Federal Communication Commission (FCC) announced the principle last year and has now published a draft of the details. These include the subsidy only being available for broadband packages that offer at least 10 Mbps downloads and 1 Mbps upload, and any monthly data cap being at least 150 GB. (Source: fcc.gov)

Critics have pointed out that this seems inconsistent with the FCCs own definition of broadband (for the purposes of measuring national availability and take-up) which is 25 Mbps download. However, officials say it wouldn't be viable to use that definition while still having the packages be affordable to low-income people after applying their discount. (Source: thehill.com)

There will also be an option to use the subsidy on a mobile data plan. In that case, the plan will need to offer at least 500 MB of data each month, a figure that will rise to 2GB in 2018.

Wasteful Spending Under Attack

Opponents of the proposal say the Lifeline plan is already overly bureaucratic and inefficient, wasting public money, and that this needs reforming before the plan is expanded.

The FCC says the changes would be accompanied by an overhaul in administration, including creating a single database to not only confirm recipients are eligible, but also make sure they don't receive the discount from multiple providers.

What's Your Opinion?

Do you agree with the principle of Lifeline and, if so, should it be expanded to cover broadband as well as phone service? Are the FCC's proposals for the expansion sensible? Can such a program ever be managed efficiently and, if not, it's that a price worth paying to achieve its aims?