Low-income broadband in United States

Lifeline is a programme that has, since 1985, brought communications technology to low-income Americans at low cost. Its focus is now on taking broadband into the home, so that the disadvantaged can participate fully in the new digital world.

The challenge

In February 2012, the US Federal Communications Commission (FCC) published the results of its first Broadband Consumer Survey, which focused on ‘non-adopters’, those who they had not so far adopted broadband. The survey results demonstrated that non-adopters were mainly those on low incomes, and the major obstacles to adoption of broadband were “cost, relevance and digital literacy”. [1]

The initiative

The FCC introduced a low-income broadband programme, as part of its ongoing Lifeline programme, with the aim of meeting those three challenges, by lowering the cost, demonstrating the relevance of broadband to life in the 21st century, and improving digital literacy.

The FCC therefore:

  • Established a low-income pilot programme to generate high-quality data about how best to design efficient and effective long-term broadband support mechanisms for low-income consumers.
  • Authorised up to US$25 million to be disbursed directly to eligible telecommunications carriers (ETCs) for up to 12 months of subsidised broadband service.
  • Directed the Wireline Competition Bureau (WCB) to invite applications from ETCs in order to select a relatively small number of projects to test their impact on broadband adoption.
  • Directed the WCB to give preference to proposals that included components involving digital literacy and broadband equipment.

In December 2012, the WCB issued an order authorising up to US$13.8 million of investment in support of 14 selected pilot projects, which spanned 21 US states and the Commonwealth of Puerto Rico.

The public impact

The pilot programmes have so far provided the FCC with a rich series of data sets. These will help them to design a potential nationwide rollout, which will maximise access for low-income Americans to affordable broadband.

However, the government has yet to release comprehensive impact assessments from the pilot programmes, and the US Government Accountability Office (GAO) has criticised the FCC for not establishing an evaluation plan. [2]

At an FCC meeting held on 31 March 2016, a Lifeline modernisation plan was approved, and it included the following provisions:

  • To offer a standalone broadband service, as well as bundled voice and data service packages, and to promote competitive service options for Lifeline consumers.
  • To expand the programme beyond the pilot and give all Americans who are eligible for Lifeline a chance to choose between receiving a phone subsidy or a broadband subsidy.
  • To increase the programme's budget from US$1.5 billion to US$2.25 billion to allow for increased participation generated by support for broadband service. [3]

Although there is no official government estimate, based on these numbers the programme reforms and national roll-out could subsidise broadband access for as many as 14 million Americans.

What did and didn't work

All cases in our Public Impact Observatory have been evaluated for performance against the elements of our Public Impact Fundamentals.

Legitimacy

Public Confidence Good

Pew Research (a well-regarded research and polling company), has found that:

  • Over two-thirds (69%) of Americans indicate that not having a home high-speed internet connection would be a major disadvantage to finding a job, getting health information or accessing other key information – up from 56 percent who said this in 2010. [6]
  • Additionally, Pew found that among non-broadband adopters, 33 percent cite the monthly cost of service as the main reason they lack broadband at home, with an additional 10 percent citing the cost of a computer as their main reason for not having broadband service.

Stakeholder Engagement Strong

The FCC sought buy-in from many of the top telecommunications companies (telcos) in the US, and chose a diverse set of telcos for the pilot programme.

In addition, the US government gave preference to pilot projects where telcos partnered with education and civil society groups to increase low-income citizens’ knowledge about broadband access.

In its 2012 Lifeline Reform Order and Broadband Pilot Public Notice, the FCC clearly laid out the goals and expectations of the programme.

Political Commitment Strong

The government and the ruling Democratic Party were strongly supportive of the expansion of Lifeline:

  • The Democratic Party came out strongly in support of expanding Lifeline to include broadband. Democrats in Congress have spoken in committee hearings and released statements to the press offering their support. In addition, a letter was signed by 81 Democrats in the House of Representatives. [4]
  • The party offered their support for the Lifeline programme expansion and, in 2015, Democrats in Congress proposed a bill allowing the FCC to move forward with the programme.
  • Republicans have expressed support for expanding broadband to more people in the US but have said that the Lifeline programme needs to eliminate “excessive fraud and waste” before it is expanded to cover broadband for low-income Americans. [5]

Policy

Clear Objectives Good

The FCC published two public notices laying out their rationale and requirements before beginning the programme: the 2012 Lifeline Reform Order and the 2012 Broadband Pilot Public Notice.

Evidence Strong

In the 14 pilot programmes that the FCC created:

  • Participating providers were required to collect and submit anonymised data to enable both the FCC and external parties to conduct independent studies and provide observations about the pilot programme. That data is now publicly available.
  • In addition, the programmes each had one of three methodological designs: randomised control experiment, quasi-experimental comparison of group and non-experimental comparison, each of which provides a different type and quality of data.

Feasibility Fair

The pilot programme was completed on time. The funding model is based on grants from the government to private sector organisations or public-private partnerships, which serve to reduce the financial risk to the government.

Currently, the biggest obstacle to expanding the programme further is the legacy of alleged waste and abuse within the Lifeline programme, which is driving Republican opposition to the programme’s expansion.

An obstacle that the GAO found was that consumers were drawn to programmes that offered a full subsidy covering all monthly broadband fees, but that it was difficult to get enrolment in programmes that offered only a partial subsidy. They warned that if that pattern held, a nationwide partial subsidy might not attract as many participants as programme designers would like, and that a full broadband subsidy would require significantly more resources than the FCC would want to allocate.

Action

Management Weak

A GAO report has indicated that the FCC took several shortcuts during the pilot programme, failing to develop a needs assessment or implementation and evaluation plans.

According to the GAO, “FCC officials said they did not set out with an evaluation plan because they did not want to prejudge the results by setting benchmark targets ahead of time. FCC officials said they are optimistic that the information gathered from the pilot projects will enable FCC to make recommendations regarding how broadband could be incorporated in Lifeline. However, FCC officials said they do not have set milestones, time frames, or specific deliverables for their evaluation”. [7]

Measurement Weak

The pilot was set up with a diverse group of trials, including both experimental, quasi-experimental, and non-experimental programmes. However, as the GAO noted, the programme lacked measurable objectives, set standards/criteria for determining pilot performance, a strong methodology and detailed evaluation timelines.

Alignment Fair

That multiple companies across the US participated in the broadband pilot programme suggests that there is alignment between telcos and the government. However, there is evidence that there is a lack of alignment between citizens and the government about programme execution.

The GAO report showed that enrolment for the broadband programme was far lower than expected (only about 7,400 participants as opposed to an expected 74,000), suggesting that there were misalignments in communication with citizens. Additionally, the GAO has reported that some eligible households face challenges in accessing and retaining the more general Lifeline phone benefits, indicating problems that could arise with the broadband programme.