Uncategorized — July 2, 2015 at 10:20 am

One way to help correct radical income inequality


Federal Communications Commission chairman Thomas Wheeler has proposed increasing the current Lifeline telephone subsidy to help the poor get Internet service. Such access is good for the economy, good for job and service searches, and good for connecting poor children and their families to their schools, churches, health care providers, and governmental institutions.

Most of us know the Lifeline program as “Obamaphones”, even though the service subsidies began in 1985 under Reagan based on some of the same reasons the FCC chairman now promotes the high-speed Internet service. The need for the subsidy is based on the estimate that fewer than half the households with income less than $25,000/year have Internet service, while more than 95% of households with income above $150,000 do have it.

Some in Congress have repeatedly cited fraud in the Lifeline program as a reason not to expand subsidy options. Some of the fraud has included the practice of some smaller companies signing up non-existent customers or two companies enrolling the same individual. But the past three years have seen increased prosecution for this type of fraud and a 25% drop in spending on the program. These numbers, in addition to finding even more ways to uncover fraud and waste, are why Wheeler feels the time is ripe to extend the subsidies to include the Internet.

Wheeler wants to allow eligible families to have the option to apply their approximate $9.25/month subsidy toward a wired or wireless service rather than having to apply it to phone service only. Eligible families are those whose incomes are 135% of the federal poverty level or current recipients of Section 8 housing subsidies, food benefits or Medicaid. Michigan’s eligibility requirements are outlined HERE.

It’s probably not realistic to expect $9.25/month to go very far toward purchasing Internet service considering that one of the least expensive current options is over $60/month. And, indeed, the findings of Nexus, a Michigan company that participated in the pilot program has concluded that while it’s renters and young people who want and need the service, the initial hookup fees, sometimes as high as $519, are largely prohibitive. Nexus’s final report is HERE.

The Nexus conclusion was not surprising. Poor people just don’t have enough money for broadband, even with a modest subsidy. The Lifeline phone service has been highly beneficial to the poor, including the elderly and disabled, but the communication needs of the young go in a different direction related to their daily lives: homework, job search and application submission, location of training and job fairs, securing news, travel and weather information, and so on. Sadly, the widely held belief that the poor who have televisions, phones or cars are not “truly poor” will likely ensure that the Internet will remain beyond their reach–unless they have a conveniently located public library with Internet service. Add in the defeats sustained by the Republicans in the recent Supreme Court rulings, and we will likely see Congress peevishly reject Wheeler’s proposal. (For more optimism, read this summary.)

We need to view the information pipeline like every other utility line in modern life and find ways to provide some “budget” version of it to the poor to enable them to develop some of the basic computer skills needed to learn, work, and recognize opportunity in the 21st Century.

[CC image credit: Rock1997 | Wikimedia Commons]