WASHINGTON D.C. —  Yesterday, TechFreedom filed comments urging the Federal Communication Commission (FCC) to go back to the drawing board before expanding the Universal Service Fund’s (USF) Lifeline program to cover broadband. The FCC has proposed allowing low-income consumers to spend its $9.25/month Lifeline subsidy on either broadband Internet access or telephone service. Given the enormous number of people eligible for Lifeline (34% of American households), this could dramatically expand the size of the program. Any increase in Lifeline spending will be funded by charging all subscribers higher USF fees on telecom services — which now include broadband under the FCC’s Title II reclassification.

“Lifeline is a broken, bloated program, funded by the most regressive tax in America,” said Berin Szoka, President of TechFreedom. “The program needs to be refocused on its most basic goal: bringing phone service to those who otherwise wouldn’t have it. In March, the GAO found that 91% of Lifeline enrollees would have subscribed to phone services even without the subsidies. That’s hardly surprising, given that a shocking 34% of Americans are now eligible for Lifeline subsidies. But it means the FCC isn’t focusing resources on those who truly would not have access to phone services without Lifeline. If the FCC spent Lifeline money more wisely, it could cover basic broadband service without increasing the size of the program — which means, without raising telephone and broadband taxes on those just above Lifeline’s eligibility threshold.”

“Lifeline is the only USF program without a budget or any cap; there is simply no excuse for this,” said Tom Struble, Policy Counsel at TechFreedom. “Even more inexcusable is the FCC’s push to expand the program without first addressing inherently economic questions, most notably: How should the Commission subsidize users who wouldn’t buy the service without hurting those who can barely afford to do so? It’s hard to think of a clearer case where careful cost-benefit analysis would better advance social justice than here — to make sure Lifeline isn’t robbing poor Peter to pay slightly poorer Paul. We urge the FCC to go back to the drawing board, revise its proposal, and issue a further proposal for comment before proceeding to a final order.”

We can be reached for comment at media@techfreedom.org. See more of our work on Universal Service, including:

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