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FCC votes in favor of allowing Lifeline low-income subsidies for Internet plans

The Federal Communications Commission on Thursday voted 3 to 2 in favor of extending the U.S. government's Lifeline program to offer subsidies for broadband Internet, and not just basic phone service.




The vote was split along party lines, with Democrats in favor, Bloomberg reported. In a statement, the FCC noted that poorer Americans are often dependent on phones for Internet access, and not being able to cover a data plan creates a disadvantage when trying to use services like banking and healthcare.

The changes were proposed by FCC chairman Tom Wheeler, who is also working to address concerns about fraud. One Republican commissioner, Ajit Pai, complained that "waste, fraud and abuse are still rampant" in Lifeline. In 2014, three people were indicted for defrauding Lifeline of $32 million between September 2009 and March 2011.

A variety of anti-fraud measures have been enacted since 2012, including crosschecks to stop households from claiming more than one subsidy. Some reform measures have yet to be implemented, but Wheeler's proposal will likely bring further rules into effect.

One party backing the extension of Lifeline is the CTIA, a cellular industry association whose members —such as AT&T and Verizon —benefit financially from the program. In 2013, for instance, $430.3 million went to TracFone parent company America Movil. $320 milion went to Sprint, and $153.3 million went to AT&T. Verizon ranked ninth, with $59 million.

That year Lifeline users dropped from 17.2 million to 14.5 million, however. Between 2012 and 2014, total government spending on Lifeline fell from $2.2 billion to $1.6 billion.

Lifeline recipients receive very little money for phone service, currently just $9.25 a month. The FCC could have to raise that amount to meaningfully help with data plans.