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Subject: FCC makes it harder for poor people to get subsidized broadband

1.  FCC makes it harder for poor people to get subsidized broadband

Posted Feb 04, 2017 15:31
FCC makes it harder for poor people to get subsidized broadband

Some might pay $9.25 more as ISPs lose ability to sell low-cost Internet plans.

JON BRODKIN - 2/3/2017

The Federal Communications Commission has told nine companies that
they can no longer provide broadband using a federal assistance
program. The program gives low-income people a $9.25 monthly household
subsidy to purchase home Internet or mobile broadband service.

These nine companies were the first to gain a new designation made
possible by the Lifeline phone subsidy program's expansion into
broadband service. Until today, the companies could sell
broadband-only plans in many states to people who were eligible for
the monthly subsidy. The FCC decision released today acknowledged that
some poor people "will see their monthly bills increase by no more
than $9.25" as a result of the decision.

This is one of several decisions made by the commission's former
Democratic leadership that were rolled back today by newly appointed
Chairman Ajit Pai, a Republican. "These last-minute actions, which did
not enjoy the support of the majority of commissioners at the time
they were taken, should not bind us going forward," Pai said.

Today's FCC Wireline Competition Bureau order said the commission is
seeking to eliminate fraud in the Lifeline program. The order said
that rescinding the Lifeline broadband provider designations "would
promote program integrity by providing the Bureau with additional time
to consider measures that might be necessary to prevent further waste,
fraud, and abuse in the Lifeline program."

None of the nine providers (Spot On, Boomerang Wireless, KonaTel,
FreedomPop, AR Designs, Kajeet, Liberty, Northland Cable, and Wabash
Independent Networks) appear to be suspected of any financial fraud.
The FCC order pointed out that Total Call Mobile recently paid a
settlement of $30 million after it claimed reimbursement for duplicate
and ineligible customers. But Total Call wasn't one of the nine
providers that lost their Lifeline designations today.

"I'm most concerned about the children we serve," Kajeet founder
Daniel Neal told The Washington Post. "We partner with school
districts—41 states and the District of Columbia—to provide
educational broadband so that poor kids can do their homework."

We asked an FCC spokesperson why the commission didn't let the nine
providers keep offering service as long as they're not committing
fraud, but the spokesperson said the commission "will let the order
speak for itself." The providers offer a mix of home and mobile
broadband services.

Former FCC Chairman Tom Wheeler, a Democrat, took steps to reduce
fraud in Lifeline during his tenure, including the establishment of a
third-party National Eligibility Verifier to prevent providers from
enrolling ineligible subscribers. Wheeler's FCC also set the Lifeline
program's annual budget at $2.25 billion a year, indexed to inflation.
Republicans wanted to cap the budget at $1.75 billion. Lifeline is one
of four universal service programs paid for by Americans through fees
imposed on phone bills.

Four of the nine providers gained their designation on December 1,
2016 while the others were approved on January 18 of this year. The
FCC can set aside any action within 30 days, so it had no trouble
overturning its own January 18 order. The FCC was also able to set
aside the December 1 approval because, within 30 days of that
decision, the Tribal Telecommunications Association (NTTA) filed a
petition for reconsideration, saying that the providers didn't comply
with an obligation to "provide a copy of its petition to the affected
tribal government and tribal regulatory authority."

This doesn't mean that poor people will be totally blocked from using
Lifeline subsidies to buy broadband. There are more than 900 other
providers in the 32-year-old Lifeline program. While they received
their designations in order to provide subsidized phone service, an
FCC decision under Wheeler last year allowed any of those companies to
sell subsidized broadband to the poor. We don't know how many of those
are selling subsidized broadband. The companies receive $9.25 per
eligible subscriber and must offer voice, broadband, or a bundle of
the two services.

What's unique about the nine providers that just lost their Lifeline
designations is that they were the first to gain a new Lifeline
Broadband Provider designation in many states at once. Last year's
decision "enabled the FCC to approve new Lifeline Broadband Providers
nationwide, instead of following the state-by-state process as used to
be the case, and gradually phases out support for voice so that in the
future, all Lifeline providers would have to offer broadband if they
wanted Lifeline support," an FCC spokesperson told Ars.

Find another provider—or pay more

Today's FCC order discusses the transition of customers already
getting subsidized broadband from Boomerang. The revocation of this
company's Lifeline designation is being delayed slightly.

The FCC directed Boomerang to, within 30 days, notify "any of its
customers who will be unable to receive a Lifeline discount on their
broadband Internet access service as a result of this Order. This
notice must inform customers that they will not receive the Lifeline
discount on their current Lifeline-supported [broadband] beginning 60
days after the effective date of this Order, but that they have the
option of transferring their Lifeline benefits to another Lifeline

Boomerang must de-enroll the subscribers within 60 days. These are the
customers who may end up paying another $9.25 a month if they cannot
find another Lifeline broadband provider.

"Today, the agency reverses course on providing more competition and
consumer choice for Lifeline customers," said FCC Commissioner Mignon
Clyburn, a Democrat. "Rather than working to close the digital divide,
this action widens the gap."

Pai previously said that bringing broadband to all Americans is one of
his primary goals.