IT Infrastructure & Management

FCC Alters ‘Lifeline’ Program for Subsidized Broadband

By Sarah Schwartz & Benjamin Herold — February 14, 2017 2 min read
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Following a policy reversal by the Federal Communications Commission, nine companies will no longer be able to participate in the federal Lifeline program, which offers subsidized broadband internet to low-income Americans.

The move was engineered by new FCC Chairman Ajit Pai, a Republican originally appointed by former President Barack Obama in 2012 and tapped to head the commission by President Donald Trump this month.

In one of the commission’s first moves under Pai, its Wireline Competition Bureau announced that it would reconsider the companies’ eligibility as approved broadband providers for the Lifeline program. The order limits the companies’ ability to provide subsidized broadband access for families, including students, who rely on home internet access to complete homework assignments.

Hundreds of other companies remain eligible providers.

“There is a serious question as to whether the FCC has the legal authority to designate Lifeline providers or whether such designations must be made by state governments, as has long been the norm,” Pai writes in a blog post defending the order. “Putting the designations on hold gives the FCC the chance to make sure the process is legally defensible and to avoid potentially stranding customers if the courts ultimately deem the process unlawful.”

Lifeline provides a $9.25 monthly credit to qualifying low-income households that subscribers can apply toward communications services. The program, which was launched in 1985, historically covered only phone service. Last year, however, former Chairman Tom Wheeler, a Democrat, led a successful push to expand the Lifeline program to also cover stand-alone broadband service.

‘Midnight Regulations’

Pai, a commissioner at the time, voted against the changes. When he became chairman, he moved to start unwinding it. In a statement, Pai said the commission’s earlier approval of the nine broadband providers were the result of “midnight regulations.”

The FCC was able to reverse those regulations because of a rule that allows the commission to reverse any order within 30 days of its issuance.

At the time of the new order, just one of the companies was aready providing broadband service. Households receiving subsidized broadband from that company, Boomerang, have the option to transfer their service credit to another Lifeline provider, the FCC said.

The decision puts the nine companies’ applications on hold, according to Pai’s blog post. The chairman hopes the commission will consider additional financial safeguards in the program.

Among the firms affected is McLean, Va.-based Kajeet. As part of an initiative dubbed “Education Lifeline,” the company sought to provide targeted broadband services to qualifying households with K-12 students. Through the program, Kajeet would have provided students with a mobile hotspot with 4G LTE connectivity, filtered for educational use.

Kajeet CEO and co-founder Daniel Neal said he remains hopeful that the FCC will eventually approve the company as a designated Lifeline broadband provider.

A version of this article appeared in the February 15, 2017 edition of Education Week as FCC Alters ‘Lifeline’ Broadband Effort

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