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FCC slows expansion of low-income broadband subsidies

Newly appointed FCC chairman Ajit Pai reversed a number of his predecessors’ actions this afternoon, including shutting down a series of inquiries into net neutrality violations.

While those were the more attention-grabbing changes, Pai also took actions that suggest he’s planning to alter Federal Communications Commission programs that subsidize broadband for schools and low-income families.

One order reverses a small expansion of the FCC’s Lifeline program, which offers $9.25 per month off broadband or phone services for households near or beneath the poverty line.

Individual broadband providers have to apply to the commission before offering these subsidies to customers. The last FCC chairman had extended the program to nine more providers, but Pai is making them wait until alternations are made to the program before receiving approval.

This is a small reduction — The Washington Post reports that around 900 service providers are already part of the Lifeline program — but it indicates that Pai has plans to alter the program before rolling it out any further.

That’s not really a surprise. Last year, Pai claimed that the program lost around $476 million annually to waste. Others contend that this figure is way off base, but either way, it illustrates Pai’s concerns with the program.

In explaining why the Lifeline expansion is being withdrawn, the FCC lists — among other reasons, including, in three cases, companies failing to contact tribal governments affected by the expansion — “preventing waste, fraud, and abuse” as a key reason for the dismissal.

The commission writes that it won’t rule on these companies’ requests to join the Lifeline program “until the [FCC’s Wireline Competition] Bureau has additional time to assess measures that might be necessary to prevent further waste, fraud, and abuse in the program.”

That makes it sound pretty likely that we’ll see Lifeline reform in the near future. When that happens, the big question will be whether the changes will legitimately curtail abuse — and there has been some — or whether they make it harder for legitimate low-income households to participate.

In addition to taking actions on Lifeline, the FCC also withdrew a progress report on the expansion of E-rate, a program that subsidizes broadband and computer equipment for schools. For now, it’s hard to say exactly what that means since the report doesn’t strictly do anything — it provides an overview of the state of the program and makes recommendations for the future. Presumably those could be changed if the report is reissued.

Pai put out a statement saying that all of his actions today are meant to reversed rushed decisions by his predecessor. “In some cases, Commissioners were given no advance notice whatsoever of these midnight regulations. In other cases, they were issued over the objection of two of the four Commissioners,” he says.

The commission declined to comment on future plans to revisit the Lifeline and E-rate proceedings.

Democratic FCC commissioner Mignon Clyburn criticized Pai’s “Friday news dump” and said the actions were hastily pushed through. “It is a basic principle of administrative procedure that actions must be accompanied by reasons for that action, else that action is unlawful,” Clyburn writes. “Yet that is exactly what multiple bureaus have done today.”

In his first two weeks on the job, Pai has indicated that expanding broadband access is a priority of his, so it’s entirely possible that these are just temporary hiccups as he updates certain aspects of the commission to his liking. Pai wrote yesterday that the commission is already considering “two separate orders to spur the buildout of mobile and fixed broadband networks in rural America.”


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