It seems like they’ve been looking into it, studying it, debating it, and arguing about it for years. But the Federal Communications Commission last Tuesday finally did what we’ve been urging it to do for many months –- it approved an affordable internet-for-the-poor program similar to Lifeline, its existing free government cell phone program.
To be completely accurate, the program isn’t free. Not yet, anyway. Participants in the program, called Connect America, will be required to pay $10 per month for high-speed broadband service. But the program is so closely allied with the Lifeline free cell phone program that we expect the $10 monthly fee to be dropped in the future. Until then, the highly discounted $10 per month must be considered a huge step forward.
The program, which we predict will eventually be called Lifeline Internet, was officially approved last Tuesday on a unanimous 3-0 vote of the Federal Communications Commission.
Critics ask how a program like this can be adequately funded in today’s difficult economy. The FCC has the answer. They are mandating significant changes to the existing Lifeline program that will eliminate massive fraud and the savings will more than pay for the new benefits.
Specifically, they have called for the creation of a new national database that will prevent participants from getting multiple free cell phones from multiple companies.
The FCC is also cracking down on fraud by limiting the Lifeline program to one phone –- landline or cell –- per household. Consumers will have to choose between one or the other. They can’t have both.
It has already begun auditing Lifeline vendors to ferret out fraud. It’s already found and eliminated almost 270,000 fraudulent subscriptions in 12 states. Mind you, they found 270,000 cases of fraud out of 3.6 million subscribers in those states, saving $33 million for the program. Each vendor will now be independently audited every other year to find other cases of fraud. Extrapolate those numbers out over the entire country and the savings really begin to add up – savings that will then be used to fund the cheap internet service.
In fact, FCC Chairman Julius Genachowski spoke positively of the changes and predicts that they will save as much as $2 billion over the next few years. He believes that will be more than enough to fund cheap broadband services for the poor.
It’s a small start, but the FCC will budget $25 million to begin a pilot program that will reassign these Lifeline funds so that they pay for the new affordable internet service instead of for the free government cell phone service.
“Broadband has gone from being a luxury to a necessity in the 21st century,” Genachowski said.
We applaud the FCC’s vote and the formal approval of this new program. It’s just what America’s poor need in today’s world. Many companies now accept job applications only online, so this will help the poor land jobs for which they wouldn’t otherwise be considered. Many schools demand that homework be done on the internet, so this will allow children in low income families to compete on a level playing field with more affluent students. It will also allow their parents to communicate with teachers more easily.
The roots of the Lifeline program go back to the 1930s, but it expanded from offering discounts on landlines to offering free government cell phones thanks to the Telecommunications Act of 1996. Its growth has been nothing short of phenomenal thanks to the addition of cell phones to the program.
In fact, critics complain that Lifeline is exploding in size. The Lifeline fund has grown from $667 million in 2000 to $1.3 billion in 2010. We estimate that it may top $2 billion when the final numbers are in for 2011. We also estimate that as many as 10 million Americans may now have free government cell phones thanks to Lifeline.
But now, thanks to the FCC’s efforts to root out those who take advantage of this program unfairly, cheap broadband internet service will soon be available to the poor across America. (And as we said earlier, we anticipate that the program will be made free in the not too distant future.)
To qualify for Lifeline’s free government cell phone or the new cheap internet program, you must already participate in any one of a number of other government aid programs, such as the National School Lunch Program, food stamps (SNAP), public housing assistance, Medicaid, Section 8 housing, Supplemental Security Income, various Home Energy Assistance Programs, and other programs. You can also qualify if your household income is no more than 135% of federal poverty guidelines (and as much as 150% in some states).