Tags: Barack Obama | fcc | democrats | extend | obamaphone | subsidy | internet

Dems at FCC Plan to Extend 'Obamaphone' Subsidy to Internet

By    |   Friday, 29 May 2015 05:24 PM

The Democratic majority on the board of the Federal Communications Commission (FCC) is planning to extend the reviled "Obamaphone" program to the Internet, and Republicans, both on the board and in Congress, are not happy about it.

Describing the action as a "reboot" of the "Lifeline" program which began in 1985 as a subsidy to help low-income families obtain cell phone and landline service, FCC Chairman Tom Wheeler said, "While over 95 percent of households with incomes of $150,000 or more have (broadband) access, only 48 percent of those making less than $25,000 have service at home.

"Because low-income consumers disproportionately use smart phones for Internet access, this puts them at a disadvantage at a time when broadband access is essential for access to education and information, for managing and receiving health care, for daily tasks like accessing government services, checking bank balances, finding bargains on goods and services, and more."

The Daily Caller reports that last year 12 million households received $1.7 billion in subsidies under the program, or more than double the $809 million paid out in 2005, but less than the $2.2 billion paid out in 2012.

Sen. David Vitter, R-La., said that even after FCC's reforms, "We continue to have regular reports of fraud and abuse. The free government cell phone program is beyond reform and should be ended," Politico noted.

The "Lifeline" program provides a $9.95 subsidy per month for those earning below 135 percent of the poverty line. It is paid for from the Universal Service Fund (USF), through fees paid by telephone subscribers, adding up to 16.1 percent of their bill, CNS News reports.

Since 2008, the USF has increased from $7.2 billion to $10.34 billion last year, and is expected to rise to $12.1 billion next year, not including any increase for broadband service in the cost, CNS News reports.

FCC Republican board member Michael O'Rielly wrote in a blog piece, "The Lifeline program was originally intended to provide low-income consumers with a discount to help make wireline telephone service more affordable.

"Over time, it began to pay for prepaid wireless service, and the 'discount' often covers the entire monthly bill. That shift has more than doubled the size of the program. It also created problematic incentives that opened the door to waste, fraud and abuse that have never been sufficiently resolved. This is unacceptable."

"There is a legitimate debate whether the Lifeline program should be abolished or significantly scaled back rather than expanding its mission."

Sen. John Thune, R-S.D., told Politico, "Lifeline obviously is kind of a controversial program and one that doesn’t enjoy a lot of support up here, at least from Republicans. An expansion of the program is probably not something there’s going to be a lot of support for."

Rep. Greg Walden, R-Ore., told Politico, "This is still taxpayer, ratepayer money, and I think it’s important for us to do some oversight in that area, to look at how it’s being spent, who’s getting it, what are the controls."

The full content of Wheeler's proposal will not be made available until board members vote on it on July 18, but the Daily Caller noted that with a 3-2 Democratic majority on the board, approval of the final proposal is likely.

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The Democratic majority on the board of the Federal Communications Commission (FCC) is planning to extend the reviled "Obamaphone" program to the Internet, and Republicans, both on the board and in Congress, are not happy about it.
fcc, democrats, extend, obamaphone, subsidy, internet
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2015-24-29
Friday, 29 May 2015 05:24 PM
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