A new Federal Communications Commission policy could pull the plug on phone and internet access for poor Americans.
In the midst of a protracted net neutrality fight, FCC Chair Ajit Pai quietly rolled out a series of purportedly anti-fraud “safeguards” for a subsidized phone and broadband broadband program on Tuesday. The new rules crack down on alleged fraud in the Lifeline program, which provides subsidized broadband and phone access to veterans, the poor, and people on federal assistance programs like Medicaid and SNAP. Pai’s new guidelines would de-enroll millions from the program, based on a fraud investigation that one expert describes as “murky,” and which might have mistaken homeless shelters for hotspots of fraud, Pai admitted.
Lifeline, which has provided discounted phone access since the 90s, recently rolled out a broadband program aimed at closing the internet access gap for poor Americans. But Pai, a former Verizon lawyer, put a halt to the fledgling broadband program’s planned expansion within a month of taking office in February.
Like food-stamp programs before it, the Lifeline program has become the subject of hand-wringing by conservatives who claim many people are fraudulently registering for it. In his Tuesday letter, Pai called for mass de-enrollments in what he described as over a million cases of potential fraud by “ineligible subscribers” to the program.
He based that number on a report from the Government Accountability Office, which surveyed Lifeline users who qualified through Medicaid or other federal programs, and was “unable to confirm” whether those million-plus Lifeline recipients actually participated in programs like Medicaid.
Pai, working on the assumption that all unconfirmed Lifeline recipients were ineligible, claimed that “translates into approximately $137 million a year in potentially wasted funds,” or about the price of a single new F-35 aircraft.
Pai also homed in on 59 instances in which an address was “associated with 500 or more subscribers,” writing that “[a]lthough there may be a reasonable explanation in some circumstances (e.g., the address is that of a large homeless shelter) … oversubscribed addresses are also an opportunity for abuse.”
The program is available to people who make 135 percent or less than federal poverty guidelines, an economic group that has less broadband access than any other, and that covers virtually everyone listing a large homeless shelter as their address.
Thirty-three percent of all adults lacked broadband at home and nearly half of African American and rural adults lacked broadband, a 2015 Pew survey found. But the least connected group of all was adults with household incomes of less than $20,000. Fifty-nine percent of these adults — all of whom would qualify for Lifeline — were without broadband.
Lack of internet access is an imposing barrier, particularly for young people and jobseekers, said Chike Aguh, the CEO of EveryoneOn, a nonprofit advocating to expand internet access in the U.S.
“In this country, you have over 75,000,000 people who do not have internet at home. In the country that invented the internet,” Aguh told The Daily Beast. “You have 70 percent of teachers who say they assign online homework every night ... If you are unemployed and have the internet at home, according to the White House Council of Economic Advisors, you’ll be employed seven weeks faster than someone who doesn’t.”
The new FCC rules require providers to de-enroll subscribers whose eligibility for other government programs “cannot be verified,” or “who cannot verify their residence at a location that could reasonably accommodate them.”
Aguh said the FCC’s “narrow-bore” de-enrollment process threatened to remove eligible people from the program on the basis of the “murky” GAO study. He said that any Lifeline fraud is less likely to come from individual users than it is from the internet and phone carriers who verify users’ eligibility for the program.
The service providers “had an incentive to make sure as many people were approved as possible, because that would lead to more revenue for them,” Aguh said.
Last year, the FCC moved to shift the verification process away from internet providers, and to an independent third-party. But Pai’s new plan keeps providers in charge of verification, while hammering down on individual Lifeline recipients.
“The impact of the internet in people’s lives is very real. Not just for Netflix and Facebook, but actually to change their economic future,” Aguh said. “One thing we always say is that you cannot be connected to the American dream without being connected to the internet.”