Regulation - What is it Good For?

Lifeline Data and the Digital Divide

FCC_New_LogoThe FCC recently approved moving forward with the process of establishing a low-income subsidy for landline data service. The target subsidy they have set is payment of $9.25 per month towards the broadband bill of qualifying households. I’m really not sure how I feel about this.

Certainly we have a digital divide. While there are still many millions of rural homes that have no broadband alternative, there are even more urban households who can’t afford broadband. The numbers bear this out. A Pew Research survey earlier this year reported that the broadband penetration rate for homes that make less than $25,000 per year is 60% while 97% of homes that make more than $150,000 per year have broadband. The overall national average broadband penetration right now is at about 74% of households and it’s clear that poorer homes have a hard time affording broadband.

If you accept the premise that broadband is becoming a necessity to participate in our culture, and even more importantly that broadband is vital at home for school kids, then we do need a way to get broadband to people who need it.

But I wonder if this program is really going to make a difference and if it will get broadband into a whole lot more homes (versus giving payments to some of those 60% of low income homes that already have broadband). The dollar amount, at $9.25 doesn’t feel like a very big discount on broadband bills that are likely to be $40 or higher in most places. If a home is having trouble affording a $40 broadband bill, I wonder if reducing that to $30 is really going to make it affordable? I’m not sure that the policy makers who are deciding this really understand how little disposable income most working poor families have.

And paying for broadband isn’t the whole cost because homes that can’t afford broadband also have a hard time affording computers. It’s not like you can buy a computer once – I know I have rarely had a computer that lasts more than three years, with some of them dying earlier than that.

I know that many cities already have programs that tackle the computer issue. I know of programs that distribute refurbished computers to homes. And there are more and more school systems that are giving school kids an iPad or other computer so that they don’t have to worry about having a computer at home. For this federal program to be really successful is going to require more of those kinds of programs.

I also wonder how the FCC will cap the amount of money this is going to cost. It’s not going to take a whole lot of households to eat up any funds they set aside for this. The current Lifeline telephone subsidy cost $1.6B in 2014 and pays a $9.25 subsidy for a landline or a cellphone for homes that are below 135% of the poverty line established by the Department of Health and Human Services.

The revised plan is going to keep the $9.25 subsidy and somehow use it to cover both telephone and data connections. The exact details aren’t out, but it was said that no household could collect more than one $9.25 subsidy. If a home is already getting the phone subsidy then they wouldn’t get any additional break on their data connection.

I think every school kid ought to somehow have access to a computer and broadband. I just don’t know that this particular program is going to change the current situation a whole lot and I wonder if there ought to be a different approach. The digital divide is real and kids in poor families are the most affected by it. If this program doesn’t make a big difference I hope we are willing to try something else.

2 replies on “Lifeline Data and the Digital Divide”

How will land line telco deliver 25 Mbps down 3 up on their crumbling copper wire infrastructure? How will “broadband” be verified by FCC prior to giving payola to corporate sponsors??

I will bet anything that to qualify for it you won’t have to buy the FCC defined broadband. There are still tons of DSL and cable products on the market that are under 10 Mbps and those are the cheapest ones that will probably be bought.

But good questions. In case folks don’t realize, all of the money from this fund goes directly to ISPs and not to low income people.

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