FCC chairman to propose broadband subsidy for low-income Americans

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Federal Communications Commission chairman Tom Wheeler will on Thursday propose subsidizing broadband Internet for poorer Americans, much in the way it currently subsidizes phone bills, officials with the agency said.

Wheeler's proposal may involve giving people an option of phone service, Internet access, or a combination of the two, the officials told the New York Times. Any changes would modify the current Lifeline subsidy program, valued at $1.7 billion. Wheeler will also reportedly propose new anti-fraud measures.

The measure should come to a vote by FCC commissioners on June 18, and the Times noted it will likely pass given the FCC's Democratic majority. The anti-fraud measures would take effect shortly thereafter, but commissioners would then have to work on the rules and details of the broadband initiative, and hold a final vote later in the year.

Pew data from 2013 indicated that only 54 percent of those making less than $30,000 a year had access to broadband, versus 70 percent overall, and 88 percent of those with incomes over $75,000.

Currently Lifeline offers households just $9.25 per month toward phone service. When that was extended to cellphones in 2008, some phone plans effectively became free, but the FCC could have to up the subsidy to make a dent in the cost of broadband. Wheeler is reportedly arguing for minimum Lifeline service standards, which would set a basic amount of voice minutes and/or broadband speed.

Fraud is a major concern with the program, as last year the Justice Department indicted three people on charges of defrauding $32 million from Lifeline between September 2009 and March 2011. By 2012 the FCC had implemented measures such as crosschecking to prevent households from claiming more than one subsidy, and Wheeler is proposing rules like requiring service providers to not only verify a person's eligibility — as they do currently — but keep proof of it for any potential audits.

A Senate subcommittee, headed by Sen. Roger Wicker (R-MS), is due to review Lifeline on June 2 and consider various ways of preventing fraud. Some other Republicans have been critical of the program, including FCC commissioner Micahel O'Rielly, who once called it "inefficient, costly and in serious need of review." A Government Accountability Office report in March noted that of the 11 central reforms the FCC started on in 2012, only seven have been completed.

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