Major announcement: FCC introduces Lifeline Broadband

This is the news that millions of low-income Americans have wanted to hear for years: The Federal Communications Commission just expanded the Lifeline Assistance free government cell phone program and it now includes internet service. In fact, the FCC is changing the whole emphasis of the Lifeline program from free government cell phones to Lifeline Broadband.

This exciting news was revealed in a memo from Federal Communications Commission Chairman Thomas Wheeler. (In fact, this is such exciting news that we’re honestly surprised it wasn’t revealed in a public ceremony complete with puffed-up politicians fighting for camera time, champagne toasts and confetti streaming down from the rafters.)

How much Internet will you get?

You’ll be able to get Lifeline Broadband in two flavors: fixed broadband (cable or DSL) or mobile (on your phone). You’ll be able to choose which is more important to you: a fixed high-speed broadband connection in your home, or free smartphone service with unlimited minutes that comes with a modest amount of internet usage.

Fixed Lifeline Broadband: The new ruling has opened up an entirely new category of Lifeline provider called the Lifeline Broadband Provider. Lifeline Service Providers who accept the FCC’s Lifeline subsidy are required to provide 150GB of data usage per month. If you don’t understand data numbers, that’s practically unlimited for the average user. And you will have 10 Mbps download and 1 Mbps upload speeds, which is considered roughly the average low-priced offering available today.

Mobile Lifeline Broadband: As for mobile internet, some Lifeline phone service providers already offer some data with their Lifeline phone plans (often referred to as Obama Phones), but they are primarily voice and texting plans. the FCC will require Lifeline phone providers to begin including a minimum of 500 MB of Internet data allowance per month by December 1 of this year. That minimum standard will gradually increase to 2 GB per month by the end of 2018. After that time, the FCC will decide if it should be again raised. 3G will be the minimum speed at least until 2019. In addition, voice plans will be required to offer unlimited voice.

What will Lifeline Broadband cost?

The Lifeline Assistance program was born in 2008 when Safelink Wireless handed out the first free government cell phone to some lucky customer in Tennessee. The FCC expects similar companies to spring to life and begin competing in its new Lifeline Broadband program.

This is all conjecture on our part, but here’s what what we anticipate that the final Lifeline line-up will look like:

• Some of those new Lifeline Broadband Providers will figure out a way to offer high-speed broadband service for free (in other words, the $9.25 subsidy per account per month will be their only source of income)
• Others will figure out how to offer that service at greatly reduced monthly rates (in other words, they may resemble current programs such as Comcast’s Internet Essentials that costs low-income consumers a mere $9.95 per month)
• Some major Internet service providers (such as Verizon, AT&T, Sprint, etc) will merely discount their standard Internet plans by $9.25 per month. (In other words, they will do what the bare minimum required of them by the new edicts and nothing more.)

Faster and easier to qualify

The FCC created the National Lifeline Accountability Database (NLAD) as a weapon to crack down on fraud, waste and abuse in the Lifeline Assistance free government cell phone program. That same program is now being expanded to include Lifeline Broadband service, making the NLAD has even more important.

When you sign up for a Lifeline Broadband, your name will immediately be checked against the database to make sure you aren’t already enrolled for a subsidized account. Wait time will be substantially decreased because the check will be performed in real-time. (Of course, that also means that you can be denied in real time if you’re trying to sign up for a fraudulent second Lifeline account.)

How does this impact current low-income Internet providers?

As a result of prior legal settlements, the FCC requires companies such as Comcast and CenturyLink to offer low-cost programs such as Internet Essentials and Internet Basics. These programs are restricted to low-income Americans and generally cost the consumer $9.95 per month.

Will the introduction of Lifeline Broadband make these programs obsolete and force them to gradually disappear? Or will companies such as Comcast and CenturyLink make a few simple changes and transform themselves into Lifeline Broadband Providers?

Comcast seems committed to bringing it’s Internet Essentials program to millions of low-income Americans (although skeptics say Comcast is similar to a drug dealer hanging around a junior high campus, selling his drugs cheaply in order to hook a few more kids and assure himself of future customers), so we wouldn’t be surprised to see it transition into a Lifeline Broadband Provider. CenturyLink, on the other hand, seems far less committed to the program and we would be equally surprised if they don’t exit the cheap Internet business as soon as possible.

Our best guess? Some will, some won’t.

If that sounds like we’re not taking a position, blame it on the fact that we blew all our earlier predictions on the timing of Lifeline Broadband and don’t want to embarrass ourselves again.

Lifeline Broadband: The answer to millions of prayers

Several years ago we predicted that Lifeline Broadband would be introduced by the end of 2014. When that forecast turned out we were overly optimistic, we fearlessly amended that prediction and said it would be introduced by mid-2015. Once again we were overly optimistic about the speed at which government would move.

Prior predictions aside, no one is happier to see this FCC action than we are. We know that millions of low-income Americans will see Lifeline Broadband as a godsend — something that can help them land the jobs they so desperately need, something that can help their kids get better grades in school, something that the truly need to survive and thrive in 21st century America.

And for that we wish to thank all the politicians who fought for this program and all the FCC bureaucrats who worked so hard to make it happen.