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Subsidized Internet Use for Low-Income Customers to Be Stopped by the FCC?

By Peter Clarke, JD on February 07, 2017 | Last updated on March 21, 2019

FindLaw columnist Eric Sinrod writes regularly in this section on legal developments surrounding technology and the internet.

Changes keep coming fast, and now nine companies that recently have been part of a program intended to offer subsidized internet access to low-income users have been informed by the Federal Communications Commission that they must not offer this service, according to a recent article by the International Business Times. This position by the new leadership of the FCC represents a complete pivot from a ruling only weeks before by prior FCC Chairman Tom Wheeler.

The explanation for this about-face, provided by Ajit Pai, the new head of the FCC, is that Wheeler's decision to give the green light for the provision of low-cost internet access constituted a "midnight regulation" passed during a lame duck session, as reflected in the IBT article. Indeed, Pai is quoted as stating that "these last-minute actions, which did not enjoy the support of the majority of commissioners at the time they were taken, should not bind us going forward."

Pai's decision arguably thwarts the FCC's Lifeline program. This program, initiated in 1985, offers $9.25 per month for low-income households toward the subscription of home internet service, and it offers a credit for mobile phone subscriptions. The Lifeline program serves 13 million low-income people, according to the IBT article.

Just two days before President Trump's inauguration, Wheeler, on January 18, granted approval for nine specific carriers to be part of the Lifeline program. And in 2016, under Wheeler, the FCC passed the Lifeline Modernization Order. This order extended financial benefits with respect to broadband internet. When the order was being considered, Pai opposed it, taking the position that it created uncertainty with respect to potential fraud.

In now reversing Wheeler when it comes down to the Lifeline program, Pai is quoted as saying that this reversal "would promote program integrity by providing the [FCC] with additional time to consider measures that might be necessary to prevent further waste, fraud and abuse in the Lifeline program," as reflected in the IBT article. Furthermore, the reversal is not necessarily final; there is a 30-day period for the FCC potentially to reconsider its decision.

Of course, efforts to prevent any possible fraud and abuse can be laudable. However, here, let's hope that bureaucracy does not get in the way of attempts to bridge the digital divide between haves and have nots.

Eric Sinrod (@EricSinrod on Twitter) is a partner in the San Francisco office of Duane Morris LLP, where he focuses on litigation matters of various types, including information technology and intellectual property disputes. You can read his professional biography here. To receive a weekly email link to Mr. Sinrod's columns, please email him at with Subscribe in the Subject line. This column is prepared and published for informational purposes only and should not be construed as legal advice. The views expressed in this column are those of the author and do not necessarily reflect the views of the author's law firm or its individual partners.

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