The Connected Nation Blog: FCC Ready to Vote on Changes to Lifeline and Link-Up

Monday, January 30, 2012

FCC Ready to Vote on Changes to Lifeline and Link-Up

By Dev Joshi and Travis Lane, Research Analysts, Connected Nation

At its open meeting tomorrow, the Federal Communications Commission is scheduled to vote on its plan to overhaul the Universal Service Fund’s (USF) Lifeline and Link Up programs that currently help low-income Americans pay for home telephone service. In 2010, approximately $1.2 billion was distributed through the program, comprising a significant portion of the overall USF program of $8.4 billion.

This “USF Redux” will include three elements. First, it will create a national database to reduce waste and abuse of Lifeline funds. Second, this new framework will let residents use Lifeline funds to pay for phone service bundled with high-speed Internet service. Third, it will establish a “Broadband Adoption Pilot Program” to test new ways for the Lifeline program to increase broadband adoption among low-income Americans. These pilot programs are expected to be launched later this year, and tomorrow’s vote will shed further light on the scope and scale of these programs.

Connected Nation supports programs that offer unique solutions for the myriad barriers to home broadband adoption. Importantly, such pilot programs should aim to address all the key barriers to broadband adoption. Even among low-income households (for whom price is a key barrier to broadband adoption), our research shows that cost is not the only reason why residents choose not to subscribe. Across seven states where Connected Nation has conducted intensive surveys focused on households that do not subscribe to broadband, over one-half of adults who don’t subscribe to home broadband service (52%) said they would not subscribe at any price. In addition to cost, low-income residents cite a lack of digital literacy and the belief broadband is irrelevant as top barriers to adoption, neither of which will be remedied by merely reducing the monthly cost of broadband service.

To be effective, broadband adoption programs need to address all of these barriers through educational programs to increase digital literacy and awareness of the benefits of having broadband service at home.