Broadband Equity

FCC Blocks 9 Companies From Providing Low-Income Internet Access

• By Richard Chang
• 02/07/17

FCC regulators are telling nine companies that they won’t be allowed to participate in a federal program intended to help them provide affordable internet access to low-income consumers — weeks after those companies were approved to do so.

The Lifeline program, established in 1985, provides discounted phone and internet service for people in poorer communities to connect with family and access resources for jobs and education. The Federal Communications Commission expanded the program to include broadband last year, and now gives participating households a $9.25 per month credit that they can use for internet access.

The move, announced Friday by FCC Chairman Ajit Pai, reverses a decision by his Democratic predecessor, Tom Wheeler. In a statement, Pai called the initial decisions a form of “midnight regulation.”

“These last-minute actions, which did not enjoy the support of the majority of commissioners at the time they were taken, should not bind us going forward,” he said.

The status of the nine companies will be changed to “pending,” according to CNN, and the FCC will reconsider their participation in the program. Regulators had approved four of those companies on Dec. 1 and five on Jan. 18.

As many as 13 million Americans who did not have broadband service at home may have been eligible for Lifeline, the FCC found. Roughly 900 service providers participate in the Lifeline program, according to the Washington Post.

For Kajeet Inc., one of the companies that was initially granted permission to provide service through Lifeline, the news comes as a shock and a setback.

“I’m most concerned about the children we serve,” Kajeet founder Daniel Neal told the Washington Post. “We partner with school districts — 41 states and the District of Columbia — to provide educational broadband so that poor kids can do their homework.”

Since becoming FCC chairman last month, Pai has stated that closing the digital divide is a central tenet of his policy agenda. While the vast majority of Americans do have access to internet service, there remain distinct gaps in United States broadband penetration, particularly among seniors, minorities and the poor.

Last week’s move seems to run counter to Pai’s stated goals of closing the digital divide.

“The most obvious fact in our society is that high-speed internet is astronomically expensive for the middle class and down,” said Gene Kimmelman, president of the consumer advocacy group Public Knowledge, in an interview with the Washington Post. “So in any way limiting the Lifeline program, at this moment in time, exacerbates the digital divide. It doesn’t address it in any positive way.”