Updating the Lifeline Program
Author
Key Points
Broadband is a critical aspect of modern life but Lifeline funding is outdated.
Providing a benefit directly to the consumer—rather than to the ISP—allows flexibility and choice for the recipient and spurs competition between providers.
Introduction
Across the country, Americans rely on broadband connectivity to work, learn and stay connected with friends and family. Unfortunately, many still lack reliable broadband connectivity. Accordingly, the American Jobs Plan President Biden revealed last month allocated $100 billion to subsidize broadband deployment. For many communities—especially rural areas with limited potential revenue—a direct subsidy may be the best chance they have of getting connected. But, while Biden’s plan works toward greater deployment (and in spite of its potential pitfalls), it does not directly address the corresponding issue of broadband adoption, especially in areas with existing options for consumers.
While there are many factors that contribute to the relatively low adoption rates of broadband service, price remains a primary challenge for those with lower incomes. Some internet service providers have made attempts to offer more budget friendly pricing plans, however, such efforts only scratch the surface of a deeper issue. Similarly, pandemic related responses are only temporary fixes that leave larger underlying issues looming ahead. In light of this, one possible solution may be to update the Federal Communications Commission’s (FCC) Lifeline program. The Lifeline program originally provided financial assistance for landline telephony, as voice service became essential to everyday life. Since then, broadband has quickly overtaken telephony as a pseudo-essential, and while it is not necessarily required for all, society continues every day to go more virtual. Accordingly, the FCC has expanded Lifeline to include broadband, but many of the processes remain outdated, unworkable and subject to exploitation by bad actors. For this reason, industry leaders have recently begun calling for drastic reforms to the program. This policy short therefore analyzes the proposed changes and the possible impact these reforms would have on broadband adoption, as compared to the existing Lifeline subsidy.
