FCC passes broadband-focused Lifeline reform following failed bipartisan agreement

The FCC voted along party lines to upgrade the Lifeline program to enable low-income residents to get broadband access, but the passing of the reform was fraught with controversy over an earlier proposal that failed to take flight.

Ultimately, the three Democrats on the commission voted to pass the new rules, while the two Republicans expressed concerns about the budget process for Lifeline.

A proposal that was apparently still on the table as early as Thursday morning called for a "moderate, bipartisan deal" set between Democratic FCC Commissioner Mignon Clyburn -- one of the regulator's champions of Lifeline reform  -- and fellow Republican Commissioners Ajit Pai and Michael O'Rielly failed.  

Interestingly, the FCC delayed its monthly meeting on Thursday while deliberations over Lifeline continued.

Among the key issues in the bipartisan agreement were setting a $2 billion a year budget cap on the Lifeline program. Today, there's no cap on the Lifeline program.  

Pai proposed the Lifeline should have an annual budget of $1.75 billion.

"This is enough money to offer Lifeline-supported Internet access to every single Lifeline-qualifying household that isn't online today, as well as to maintain landline voice service as proposed by Chairman Wheeler," Pai said in a statement.

O'Rielly said earlier this month that Wheeler's proposal would "massively expand the size and scope" and "balloon a program plagued by waste, fraud, and abuse."

In addition to the budget proposal, the agreement proposed to set minimum standards of 25 Mbps for fixed broadband services and 4G LTE for mobile broadband services. 

Matthew Berry, chief of staff to Commissioner Pai, told Reuters that FCC Chairman Tom Wheeler had "bullied" his fellow Democrat Clyburn into abandoning the "moderate, bipartisan deal" set forth.

Commissioner Clyburn said in a statement that while she wanted to be on common ground with other commissioners. She said the other proposal did not meet her vision.

"I have been consistent in saying that a cap should not be imposed and to be honest and completely transparent, I continue to hold that view," Clyburn said in a statement. "However, I have also been steadfast in my desire to reach consensus and seek compromise whenever possible, and I remain vocal in my call for fiscal responsibility for our universal service programs – all of which are capped except Lifeline. So, I negotiated in good faith to have a budget mechanism in place, that ensures millions of new households will have the opportunity to afford advanced telecommunications services. Upon further deliberation, I concluded that such a mechanism could not fully achieve my vision of a 21st century Lifeline program, but I applaud the deliberative process and want to thank Commissioners Pai and O'Rielly and their staff for engaging well into the night and morning."

Under the new revised Lifeline program, the FCC will support stand-alone broadband service as well as bundled voice and data service packages. In order to give consumers more competitive service options, the rules will unlock the Lifeline broadband marketplace to attract additional providers.

Regardless of the controversy created by the Lifeline proposals, one of the key hopes commissioners have with the Lifeline program lies in its ability to close what FCC Commissioner Jessica Rosenworcel calls the homework gap.

The homework gap effectively has hindered a large base of college and high school students from being able to complete homework assignments because they could not get access to a broadband connection.

Clyburn told the story about a re-entry student from San Francisco, Calif. who has been working to get a college degree to start a new career after being let go from her job, but was faced with the reality that a lack of an Internet connection made it hard to complete coursework.

"In order to fulfill the homework assignments for four out of five of those classes, she needs access to the internet," Clyburn said. "But broadband is currently a luxury, she simply cannot afford."

The new proposal promotes offering of mobile devices with Wi-Fi and hotspot functionality.

"Our decision modernizes lifeline that the devices used for Lifeline broadband services are able to access Wi-Fi signals and that these devices can be turned into Wi-Fi hot spots," said FCC Commissioner Jessica Rosenworcel. "For a student with a computer but no way to connect at home, a hot spot could mean a difference between keeping up in class and falling behind.

One remaining issue that could raise the ire of various telcos that provide services under the Lifeline program is the 10/1 Mbps requirement.

CenturyLink and Frontier, in particular, have expressed concern in FCC filings that the 10/1 requirement could leave behind some lower-income users that can't afford this speed.

"The company also cautioned against making participation mandatory for any providers or applying a rigid 10/1 Mbps minimum service level for wireline broadband service, as it would limit options for consumers who may prefer less expensive options or who live in areas where only lower speeds are be currently available," CenturyLink said in a FCC filing earlier this month.

Frontier took it a step further saying that some rural customers might not be able to use Lifeline for wireline broadband if they reside in a market where a 10/1 Mbps service isn't supported by their local provider.

For more:
- see the FCC release

Related articles:
CenturyLink: 10/1 Mbps broadband requirement is too rigid for Lifeline customers
Broadband-centric Lifeline proposal gets mixed response from commissioners, trade groups
FCC advances plans for Lifeline broadband service subsidy
Net neutrality lawsuit delays USF fee decision, Lifeline revamp
Frontier: FCC's 10/1 Mbps Lifeline proposal could lock out rural customers

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