FCC’s emergency broadband benefit attracts praise, criticism


Last week, the Federal Communications Commission (FCC) adopted a report and order establishing the Emergency Broadband Benefit Program (EBB), a $3.2 billion program to help low-income families stay connected to the internet during the COVID-19 pandemic. The EBB will provide welcome relief to countless families, and both Congress and the agency should be commended for these efforts. At the same time, the program represents a missed opportunity to learn more about the drivers of the digital divide, meaning the results may be of limited use when crafting long-term solutions once the fund is exhausted.

The program’s design

EBB provides up to $50 per month off the cost of broadband access for eligible households who purchase from a participating broadband provider. It also provides eligible households a one-time credit of up to $100 toward the purchase of a computer or tablet to connect to the internet. Households may qualify for assistance in numerous ways, including by:

  • Qualifying for assistance under the FCC’s Lifeline program;
  • Receiving benefits under federal school lunch programs;
  • Experiencing a substantial loss of income since February 29, 2020;
  • Receiving a Federal Pell Grant; or
  • Meeting the criteria for a broadband provider’s FCC-approved COVID-19 relief program.

Like the Lifeline program, the EBB is distributed through broadband providers. Participating companies receive a subsidy from the program for each eligible customer, which is then passed along via a bill credit. But the EBB is not limited to Lifeline providers, but any interested provider that offers broadband service. The FCC also placed few limits on eligible plans — they must allow a household to engage in telework, remote learning, and telehealth — but otherwise, there are no minimum service standards. The commission also did not limit the subsidy to low-cost plans, though it cannot be used for plans bundled with video service. The program will continue until six months after the end of the emergency period established by Congress or until funds are exhausted — whichever comes first.

The good

There is much to like about the way the EBB is designed. Obviously, a $50 per month discount will be a welcome relief to eligible families. Many (including me) have argued that Lifeline’s existing $9.25 monthly subsidy is likely too low to affect decisions at the margin about whether to purchase broadband service, which can average $50–60 or more. According to Pew surveys, broadband nonsubscribers consistently report monthly cost as a significant deterrent to adoption, suggesting that a subsidy covering most or all of the monthly bill is more likely to improve adoption rates. The EBB also gets points for providing a discount for equipment purchases, which also turns up in Pew surveys as a costly adoption barrier.

The EBB also contains less paternalism than Lifeline. The commission is less involved in micromanagement of the details of eligible plans. Assuming that providers designate a wide range of plans eligible for the subsidy, this allows low-income consumers more flexibility to choose the plan that best fits their household’s broadband needs and budget.

The bad

Unfortunately, the EBB replicates many of Lifeline’s flaws, which may reduce its efficiency. It puts dollars in the hands of providers rather than the households it hopes to help. While the FCC’s restrictions are not as significant as those on Lifeline, households are still limited based on which providers choose to participate and which plans they designate as eligible. I have long advocated instead that the commission put purchasing power directly into the hands of low-income consumers via a voucher program.

More significantly, like Lifeline, the EBB program assumes that all low-income households are equally at risk of losing connectivity without assistance. This may be true, but has never been tested. It is possible, even likely, that significant EBB assistance will go to households that are unlikely to cancel service even without the subsidy. Unquestionably, these homes will benefit from an extra $50 per month in assistance — but the EBB is an inefficient way to provide general welfare assistance. If the purpose is to keep low-income families online, then every dollar spent on families unlikely to cancel service limits the effectiveness of the program — and exhausts the budget more quickly, limiting the assistance to those families truly at risk of falling off the digital divide.

Of course, this targeting would take time, and during a pandemic emergency, one could argue that speed is more important than efficiency. I applaud the commission’s tireless efforts since December 2020 to get EBB going within Congress’s 60-day deadline. But at a minimum, the Office of Economics and Analytics should survey EBB recipients — and households eligible for EBB but declining to accept assistance — to get a better understanding of the drivers of low-income non-adoption. The current order makes little provision for this analysis, which limits the value of this program for ongoing efforts to identify and reduce the digital divide.

Be the first to comment

Leave a Reply