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    An Evolving Level of Service

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    Wednesday, December 1, 2021

    Digital Beat

    How Lifeline and the New Affordable Connectivity Program Can Deliver the Broadband Low-Income Households Need

    John Horrigan
         Horrigan 

    How will the Infrastructure Investment and Jobs Act impact universal service policy and, specifically, the Lifeline program? The new law sets up a transition from the Emergency Broadband Benefit, a program that is only six months old, to the new, more permanent Affordable Connectivity Program. If fashioned to work in conjunction with Lifeline (used mainly for wireless phone service), low-income consumers could well have access to a level of digital connectivity most in the U.S. depend on every day.

    In 1996, Congress defined “universal service” as an evolving level of services that:

    • are essential to education, public health, or public safety;
    • have, through the operation of market choices by customers, been subscribed to by a substantial majority of residential customers;
    • are being deployed in public telecommunications networks by telecommunications carriers; and
    • are consistent with the public interest, convenience, and necessity.

    Moreover, Congress asserted the principle that rates should be “affordable,” and that access should be provided to low-income consumers in all regions of the nation.

    Although universal service has traditionally meant telephone service—first traditional wireline and then wireless telephony, in 2016, the Federal Communications Commission explicitly said that “broadband has evolved into the essential communications medium of the digital economy.” Today, according to the Pew Research Center, 85% of Americans have a smartphone. And smartphone access goes hand-in-hand with wireline broadband subscriptions at home for most Americans. The norm for internet access is using Wi-Fi at home off of a wireline subscription for many data-intensive applications, thereby conserving data allotments in mobile broadband plans for use on-the-go.

    Some 2019 American Community Survey data shows how having two modes of access plays out across income categories. For households whose annual incomes are $50,000 or greater, 75.1% have a wireline broadband service at home and a cellular data subscription. For low-income Americans, just 36.3% have both services, according to 2019 American Community Survey data.

    A July 2021 survey of Philadelphia households shows a similar pattern. Some 91% of households whose incomes were above $50,000 annually had both a wireline home high-speed subscription and a cellular data plan.[1] Among households whose income were $20,000 or less, that figure was 59%. The Philadelphia survey adds another dimension – the impact of discount programs such as Comcast Internet Essentials or subscriptions aided by the Emergency Broadband Benefit. Without those programs, just 42% of low-income households (i.e., households with annual incomes below $20,000) would have both wireline and wireless subscriptions.

    All of this is to say the following: A strong majority of households above the median income have both wireline and wireless internet subscriptions. Except for programs that offer subsidies for connectivity (per the Philadelphia survey), just 4 in 10 low-income households would have both means for connectivity.

    In response to COVID-19 and the increased reliance on working, learning and accessing healthcare from home, Congress in late 2020 created the Emergency Broadband Benefit Program which provides low-income households a $50/month discount on broadband service. The recently signed Infrastructure Investment and Jobs Act tweaks the Emergency Broadband Benefit Program, reducing the discount to $30/month, renames it the Affordable Connectivity Program, and provides substantially more funding to significantly extend the program’s life.

    Early enrollment data from the Emergency Broadband Benefit offers signs about how the Affordable Connectivity Program could work with Lifeline. Uptake has been fairly quick, with 7.4 million enrollees by early November. This means that more people use the Emergency Broadband Benefit than currently participate in the Lifeline program. Many Emergency Broadband Benefit enrollees may be those already using Lifeline, as 68% of Emergency Broadband Benefit enrollees are using the discount for mobile broadband. It is likely that many Lifeline subscribers use the more generous benefit level to upgrade their cellular data plan.

    At the same time, 31% of those signing up for the Emergency Broadband Benefit are choosing wireline broadband— indicating that there is a fairly sizable demand for this type of service among low-income consumers seeking to make service more affordable.

    The data indicates that it is likely that using the Affordable Connectivity Program will be part of a “both/and” evolution of universal service for many households (i.e., using the government benefit to add the service to which they currently do not subscribe). The Lifeline subsidy will serve wireless access needs and the Affordable Connectivity Program subsidy will defray costs for in wireline subscriptions for low-income households.

    Data also shows that the Affordable Connectivity Program’s benefit level is likely to help maintain connectivity when hard times hit, not just expand it for those who have never had service. The Philadelphia survey found that one-third of Philadelphia households are “subscription vulnerable,” that is, they lost home internet connectivity when the pandemic hit, their income was near poverty level, and they had difficulty affording home broadband service. Given this reality, the Affordable Connectivity Program can help people weather economic storms by ensuring they have a tool (broadband service) that offers a leg up to recovery.

    Policymakers must devise rules for the universal service market to ensure that eligible households can sign up for the $30 per month benefit with relative ease. Care should be taken to guard against waste, fraud, and abuse, but it is equally important not to install safeguards that make enrollment difficult. Making sure bad things do not happen need not come at the expense of a sign-up process that encourages participation.

    To ensure that the market for universal connectivity is well-functioning, policymakers should:

    • Establish a “connectivity baseline” for Lifeline: Having both wireline and wireless data is the norm for a majority of Americans and that is the goal on which policymakers should set their sights. Policymakers should also consider service speeds for plans offered in connection with the Affordable Connectivity Program. Low-income households should not have internet speeds that do not support applications necessary for working from home, distance education or telehealth.
    • Fund outreach and communications: Survey data shows that just 23% of lower-income Americans (as of July 2021) were aware of the Emergency Broadband Benefit program, underscoring the need for outreach. The newly passed infrastructure bill allows the FCC to conduct such outreach and the Build Back Better spending bill would allocate $100 million for outreach efforts through the FCC.
    • Provide a reliable funding stream: The current contribution method for the Universal Service Fund is strained. By law, there must be specific, predictable and sufficient Federal and State mechanisms to preserve and advance universal service including Lifeline. The infrastructure bill requires that the FCC develop a plan to reform universal service, that does not diminish its goals while possibly asking Congress to expand them. Funding these goals must be part of this plan.

    Notes:

    [1] Philadelphia’s median household income in 2019 was $45,900.


    John Horrigan is a Benton Senior Fellow and a national expert on technology adoption, digital inclusion, and evaluating the outcomes and impacts of programs designed to promote communications technology adoption and use. He served at the Federal Communications Commission as a member of the leadership team for the development of the National Broadband Plan. Additionally, as an Associate Director for Research at the Pew Research Center, he focused on libraries and their impact on communities, as well as technology adoption patterns and open government data. Horrigan is leading Benton’s research on the FCC’s Lifeline program.

    The Benton Institute for Broadband & Society is a non-profit organization dedicated to ensuring that all people in the U.S. have access to competitive, High-Performance Broadband regardless of where they live or who they are. We believe communication policy – rooted in the values of access, equity, and diversity – has the power to deliver new opportunities and strengthen communities.


    © Benton Institute for Broadband & Society 2021. Redistribution of this email publication – both internally and externally – is encouraged if it includes this copyright statement.


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    Kevin Taglang

    Kevin Taglang
    Executive Editor, Communications-related Headlines
    Benton Institute
    for Broadband & Society
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