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Is Subsidized Internet For The Poor Finally Here?

New proposals from the FCC & AT&T could bring broadband Internet to millions of low-income Americans.

Is Subsidized Internet For The Poor Finally Here?
[Photo: Flickr user Mario Antonio Pena Zapatería]

The White House unveiled an effort this morning to expand broadband access to low-income households. Under a new federal program called ConnectHome, low-cost broadband connections (even including free Google Fiber access in some markets) will be offered to low-income families in markets across the country. Expanding broadband access means access to job opportunities, homework help, and communication with family and loved ones they wouldn’t otherwise have.

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ConnectHome depends on partnerships with the private sector; broadband Internet access is being offered through providers including Google Fiber, CenturyLink, and Cox Communications at prices ranging from free to $14.95 a month. Most interestingly, the White House’s proposal comes on the tail of several private initiatives by broadband giants to offer discounted access–initiatives designed to placate regulators in the wake of large mergers.

For instance, AT&T’s proposed acquisition of DirecTV could have an unintended consequence. According to filings submitted to the FCC, AT&T is planning to offer low-cost broadband Internet to poor Americans in the event of a merger.

Under the new terms, AT&T will offer DSL at speeds up to 5mbps/download to consumers for $10 a month, and in areas where AT&T’s speeds don’t reach 5mps, the company will offer 1.5mbps service for $5 a month for the first year. In order to receive the discount price, customers will have to receive Supplemental Nutrition Assistance Program (SNAP) benefits from the federal government; SNAP is a successor program to food stamps.

Comcast already offers subsidized Internet for low-income customers. The company’s Internet Essentials program offers a laptop for $149.99 and tax, and subsequent 5mbps service for $10 a month. While AT&T’s proposed program is tied to SNAP, Comcast requires customers have at least one child participating in the National School Lunch Program..

These programs serve a vital role in America’s tech ecosystem, even if they aren’t covered much. Subsidized Internet is the mechanism by which individuals and families facing hard times can apply for jobs, communicate with loved ones in the absence of a car, do homework, or even just watch a movie when there’s no money to go out.

And if America plays its cards right, subsidized Internet could be available to all citizens facing economic hard times.

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A National Lifeline

Nonetheless, Internet Essentials and the proposed AT&T program matter. According to a report published by Comcast in March, more than 450,000 families across America–equaling more than 1.8 million users–signed up for the program. Nearly 24% of low-income residents of the Chicago area receive access through Internet Essentials, and 27% of low-income Coloradans have the service. Despite criticism over difficult barriers to entry, it remains a game changer for households that lack the cash resources to pay for standard high-speed Internet.

As of late 2014, approximately half of low-income households in the United States lack Internet service. Even if 5mbps is slow, and 1.5 mbps painfully sluggish, it’s enough to give access to a wealth of opportunities.

These days, access to the Internet has essentially become a human right. Without it, poor Americans face significant hurdles in everything from paying the bills to searching for apartments to clawing their way into an ever-shrinking middle class.

The Obamaphone Precedent

One of the least-heralded benefits of the federal government to poor families is a project called Lifeline, which has popularly become known as “Obamaphone” (even if it made subsidized cellular phones available during the second Bush administration). Offered through state governments, Lifeline offers heavily subsidized mobile and landline telephone service for approximately $10 a month.

Despite widespread fraud due to poor oversight and limited communication between telephone providers and government agencies, Lifeline has managed to give steady mobile phone access to millions of low-income households.

Extending Lifeline, or creating a Lifeline-like service for Internet, could make things significantly easier for households trying to make ends meet. In 2015 America, that means an awful lot of households. This should go hand in hand with reform efforts for Lifeline to extend the program’s reach while minimizing fraud.

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Enter The FCC

In early 2015, something strange happened at the FCC: People began talking about extending Lifeline to the Internet. According to Politico’s Brooks Boliek, the FCC is considering subsidizing broadband Internet as part of a larger suite of changes that would treat the Internet as something similar to a public utility. The proposal, while mostly supported by Democrats, faces challenges from many Republican lawmakers who view it variously as an unnecessary budget drain or an opportunity for fraud and abuse.

It’s important to note that the first priority for both Comcast and AT&T is assuring government regulators, rather than offering public service: Internet Basics was debuted during Comcast’s merger with NBC, and AT&T’s proposed low-cost package comes out of their proposed DirecTV acquisition. Nonetheless, politically expedient assistance is for better than no assistance at all.

ConnectHome, meanwhile, will likely face political pressure in the legislative branch. It will take time to implement as well. But Internet access is economically transformative, and low-cost broadband guarantees education for children, job opportunities for parents, and English learning for immigrants. Making Internet access cheap and affordable benefits everyone.

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