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Blog // Connect Michigan

FCC To Lower Broadband Internet Prices for Low-Income Consumers - FACT SHEET

By Tom Koutsky

On Thursday, March 31, 2016, the Federal Communications Commission (FCC) will make it easier for low-income families to buy broadband service. It will expand its current “Lifeline” program, which currently subsidizes traditional telephone service for low-income consumers, and allow eligible low-income consumers to lower the price of their qualifying broadband service by $9.25 per month.

Expanding Lifeline to broadband is the largest federal broadband adoption program in history.

The Lifeline program was created in 1985, and it currently provides telephone and mobile voice service benefits to more than 580,000 households across the state. Households can enroll in the program by demonstrating that their income qualifies and that they subscribe to a qualifying voice or mobile service. The $9.25 discount is applied directly to their bill. Today, the Lifeline program provides approximately $74.2 million per year in voice telephone subsidies in Michigan. Subsidies for voice service will still be available, but the FCC will increase the program budget to $2.25 billion nationally to allow for its expansion to broadband.

The Broadband Adoption Gap for Low-Income Families

In Michigan, more than 1 in 4 households (27.1%) do not have broadband Internet at home. Broadband adoption in Detroit (49%), Flint (54.3%), and Dearborn (58.5%) significantly trail the national average.
Source: U.S. Census, American Community Survey (2014)

The broadband adoption gap is most stark in low-income households.
Source: U.S. Census, American Community Survey (2014)

The broadband adoption gap for low-income households in Michigan has grown since 2012.
Sources: Connect Michigan Residential Technology Assessments (2010-2014)

The broadband adoption gap and income inequality matter to future generations: teenagers whose parents have lower annual household incomes are significantly less likely to access the Internet than teens whose parents have higher incomes.
Source: Pew Internet Project, “Technology use by different income groups,” (2013)

A Lifeline Broadband Subsidy Program Can Help Close the Adoption Gap

Cost is the main reason why nearly one in seven low-income adults in the state do not adopt broadband.
Source: Connect Michigan 2014 Residential Technology Assessment

A $9.25/month discount could increase broadband adoption among price-sensitive, low-income households by 11.5%.
Source: Connected Nation and FCC staff research; Octavian Carare, Chris McGovern, Raquel Noriega, and Jay Schwarz, The Willingness to Pay for Broadband Non-Adopters in the U.S.: Estimates from a Multi-State Survey, 30 INFO. ECON. & POL’Y 19 (March 2015)

514,000 households in Michigan do not have broadband Internet at home and will qualify for the Lifeline program.
Source: Universal Service Administrative Company (March 2016); U.S. Census, American Community Survey (2014)

In Michigan, the Lifeline broadband program could reach 380,000 low-income households with children younger than 18 and 133,000 low-income veterans.
Source: Universal service Administrative Company (March 2016)

Nationally, the Lifeline broadband program could potentially reach:

  • 10.8 million children that live in low-income households without broadband
  • 6.4 million low-income seniors without broadband at home
  • 1.4 million low-income Veterans without broadband at home

Source: Universal Service Administrative Company (March 2016)

For More Information

Connected Nation Policy Brief, FCC Chairman Outlines Details of Proposal to Fund Broadband Adoption by Low-Income Households (March 2016).
http://www.connectednation.org/sites/default/files/bb_pp/03082016_fcc_lifeline_proposal.pdf

Comments of Connected Nation to FCC on Lifeline Modernization (August 2015).
http://www.connectednation.org/sites/default/files/connected_nation_lifeline_modernization_comments_8_31_2015.pdf

Reply Comments of Connected Nation to FCC on Lifeline Modernization (September 2015).
http://www.connectednation.org/sites/default/files/connected_nation_lifeline_reply_comments_9_30_2015.pdf

 

Media Contact:
Amanda Murphy, Communications Manager
amurphy@connectednation.org
614-397-9131

 



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