Regulation - What is it Good For?

Don’t Forget Lifeline

There has been a big push nationwide to get customers enrolled in the Affordable Connectivity Program (ACP), that provides a $30 monthly subsidy for broadband providers – a discount that can be applied to any broadband product. With the ACP discount, a qualifying customer can buy a broadband product normally priced at $60 for $30.

Most ISPs seem to have forgotten about the FCC Lifeline program that can provide a monthly discount of $9.25 off a telephone or broadband bill for qualifying customers. Consumers can qualify for the Lifeline discount if the household income is at or below 135% of the Federal Poverty Guidelines or else by participating in Medicaid, SNAP (formerly Food Stamps), SSI, Federal Housing Assistance, VA Veterans pension, or VA survivor’s pension.

It’s a little easier to qualify for ACP since it is available to homes at or below 200% of Federal Poverty Guidelines. The ACP discount is also available to those who participate in Medicaid, SNAP, Federal Housing Assistance, WIC, SSI, or Lifeline.

That last requirement is the important one – customers can qualify for both the ACP discount and Lifeline, meaning an ISP can collect a total subsidy of $39.25 for a qualifying customer.

The FCC made some changes to the Lifeline program in July. The most important change for ISPs is that the cap for a lifeline subscriber was increased to 1.28 gigabytes per month – which is higher than the data cap for ISPs like Comcast. The FCC set the new annual budget for 2023 at $2.57 billion and changed the rule so that the size of the funding will be increased each year using the Consumer Price Index.

There have been a few barriers that have kept many ISPs from participating in Lifeline. Many of them thought that the $9.25 subsidy was too small to bother with. There also is a requirement that an ISP must be an Eligible Telecommunications Carrier (ETC), a status that is granted by State regulatory Commissions. Years ago, this implied that an ETC gained carrier of last resort obligations, which meant they were required to serve anybody in a service area. But since broadband has been largely deregulated, carrier-of-last-resort doesn’t have much meaning these days.

A lot of ISPs said that Lifeline was a pain to implement. There was no easy way for ISPs to know if a household qualified, and audits of the program would often mean rebating funds to the FCC. That issue has largely been resolved since the FCC now maintains a database that is updated monthly of homes that participate in the various federal subsidy programs. An ISP can feel safe in giving the discount to a household on this list.

Any ISP that is participating in ACP in order to reach low-income households should consider the Lifeline discount as well. Extending a $39.25 discount to households is a significant saving.

There are still a few nuances for ISPs that try this. Practically everybody that qualifies for Lifeline will qualify for ACP, but not everybody that qualifies for ACP can get Lifeline due to the lower limit on household income.

There are still a lot of questions about how many ISPs are actually trying to implement the ACP discount. Most ISPs have a lot of customers that qualify, but ISPS don’t seem to be pushing the discount. But for any ISP that wants to bring broadband to as many folks in a community as possible, a $39.25 customer discount can make it a lot easier to make broadband affordable.

One reply on “Don’t Forget Lifeline”

I wanted to comment on the post yesterday and today. We are a subsidiary of an electric cooperative, for reference. We are launching a program we have coined the Digital Education and Affordability Program in 2023. We are going to visit the towns in our territory and host a program informing people on ways the internet can be used to make their lives better while also promoting ACP and Lifeline. While this does not teach people exactly how to use a computer, it at least gets their minds headed in the right direction. Many people do not even understand how the internet can benefit them. I know of plenty of senior citizens here who have learned to use over the top TV services that I never would have dreamed would have even considered it. We are looking forward to helping more in 2023.

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