FCC Aims To Expand Internet Subsidies for Low-Income Users

Is a subsidized program the best way to bridge the digital divide? A $1.7-billion federal program might hold the answer. The Federal Communications Commission (FCC) aims to overhaul its Lifeline program, which subsidizes phone service for low-income consumers, to help expand access to high-speed Internet.

The plan, unveiled Thursday by FCC head Tom Wheeler (pictured), was revealed in a commission document seeking comment on modernizing and reforming Lifeline for broadband. About 12 million households used the program last year -- up from 7 million in 2008 -- which began 30 years ago to ensure that all Americans had access to basic telecommunications services.

"Since 1985, Lifeline has helped make phone service affordable for low-income Americans," according to Wheeler's proposal. "But to continue to serve its statutory purpose, Lifeline must evolve to meet todayEUs most pressing communications needs, including access to broadband."

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Lifeline is funded by a small fee on consumers' monthly phone bills. Recipients get a $9.25 monthly subsidy on one phone line per household -- either a land line or wireless -- that is paid to their carriers. Wheeler wants to expand LifelineEUs options to include broadband service.

Households would still be limited to one subsidy, so consumers would have to decide to apply the amount, which would likely remain at $9.25 a month, to either voice or broadband service. Wheeler said he is not planning to increase the fees paid by consumers to fund the program.

While more than 95 percent of homes with annual incomes of $150,000 or more have broadband access, only 48 percent of those households making less than $25,000 have service at home, according to the FCC.

Also, almost half of low-income Americans have had to cancel or suspend smartphone service due to financial hardship. Since low-income consumers disproportionately use smartphones for Internet access, those figures put them...

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