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The FCC is slowing internet subsidies for low-income Americans

Feb 9, 2017

The Federal Communications Commission is telling nine network service providers they won't be able to participate in a federal program designed to provide internet services to low-income consumers - at least for now.

The Lifeline program provides subsidies for discounted communications services to families who are eligible for programs like the Supplemental Nutrition Assistance Program and tribal and veteran benefits.

Until last year, qualified households could only apply the funds to home or mobile phone services. The program expanded when the FCC approved a $9.25 monthly broadband subsidy to help millions of low-income households connect to the internet.

Last week, new FCC Chairman Ajit Pai reversed the addition of the nine providers that were recently approved for the program. The companies were approved in the last days of the Obama Administration, despite the objections of two of the four Commissioners, according to Pai.

The network providers make up a small percentage of the roughly 900 service providers that participate in the Lifeline program.

Kajeet Inc., one of the affected companies, partners with schools and districts to provide home internet access to students. CEO and co-founder Daniel Neal told The Washington Post:

I’m most concerned about the children we serve. We partner with school districts — 41 states and the District of Columbia — to provide educational broadband so that poor kids can do their homework.

Pai defended his decision to revoke the designations in a Medium post published Tuesday. He said the decision was made to allow the FCC time to review the program and to implement anti-fraud measures. Pai wrote:

Every dollar that is spent on subsidizing somebody who doesn’t need the help by definition does not go to someone who does. That means that the Commission needs to make sure that there are strong safeguards against waste, fraud, and abuse before expanding the program to new providers. My investigation last year into these matters revealed serious weaknesses in federal safeguards, allowing providers to indiscriminately override checks that are supposed to prevent wasteful and fraudulent activities. (These checks include common-sense steps like verifying the identity of would-be Lifeline recipients.) From October 2014 until June 2016, wireless resellers had overridden such safeguards 4,291,647 times in total.

Nearly 5 million households with school-age children don't have access to high-speed internet. Low-income families, especially black and Hispanic ones, make up a large share of that 5 million, according to Pew Research Center.

And when kids don't have reliable internet access at home they often have trouble completing homework assignments, which are increasingly shifting online, leaving them behind their classmates. That's why Neal is hopeful Kajeet Inc. will eventually be approved as a Lifeline service provider. He told Education Week:

School has, in part, gone online. We’re excited about the opportunity to partner to find more tools in the collective toolkit to make more homework broadband available to kids.