Low-income consumer broadband credits mean competitiveness, choice and compassion

With the election of President Trump, policymakers are now focused on tax credits to incentivize behaviors, from the repatriation of jobs to investment in infrastructure. At the same time, an expanding consensus on Capitol Hill recognizes broadband is essential for economic competitiveness. A recent spate of leading politicians have endorsed the importance of broadband deployment – from Sen. John Thune, chairman of the Senate Committee on Commerce, Science, and Transportation to the Senate Democrat’s infrastructure proposal to Rep. Greg Walden (R-Ore.), Rep. Marsha Blackburn (R-Tenn.), and Rep. Frank Pallone (D-N.J.), leaders on the House Energy and Commerce Committee, not to mention trade associations representing everyone from industry to anchor institutions like schools and libraries. 

Driving this interest is a potential infrastructure bill that may or may not include broadband – Democrats and Republicans do not yet agree on the right way to induce further broadband deployment. But despite this lack of consensus, we can all agree on an effective broadband policy strategy: low-income consumer broadband credits. By taking a page from President Trump’s tax credit playbook, we can not only spur deployment by incentivizing demand, but also ensure that lower-income households will be able to afford broadband once it is deployed.

{mosads}A low-income consumer broadband credit offers low-income households that subscribe to broadband services a modest refund. The credit is offered only to eligible consumers and makes all broadband products more affordable. It operates as a public-private partnership, subsidizing consumers to purchase broadband from private companies, and is economically efficient. Furthermore, it promotes competition and consumer choice – operating something like the Earned Income Tax Credit, an anti-poverty measure supported by conservatives and liberals alike. 

And here is the best news: we already have one, because the Reagan administration created the Lifeline program, which began to offer telephone subsidies in the 1980s, and it is still operating today. The Lifeline program was modernized in 2016 by the Federal Communications Commission (FCC) to offer modest financial support for broadband services. The program assists low-income families all over the country whether they live in rural South Dakota or downtown Miami. The program is funded via fees imposed on telecommunications services rather than appropriations, and works alongside, but does not compete with, the companion universal service programs that fund broadband infrastructure in rural America. It targets the neediest among us and does not distort the marketplace – all reasons the conservative Free State Foundation has suggested the Lifeline program should supplant other universal service programs, eventually becoming the FCC’s “exclusive” tool for funds distribution.

Thus, Mark Jamison, visiting American Enterprise Institute fellow and member of the Trump FCC transition team, is clearly straining in his recent attempt to malign the Lifeline program. He acknowledges that existing Lifeline families are often faced with a choice between “food, housing, [or] education” and broadband, even as he claims a Lifeline subsidy does no good. More revealing, he does not oppose a subsidy for broadband, he would just prefer to offer broadband subsidies via programs such as Supplemental Security Income (SSI), subsidized housing or the Supplemental Nutrition Assistance Program (SNAP). 

If the Republican-controlled Congress ever authorized an increase in these programs to subsidize broadband, Lifeline supporters will surely line up in support of Mr. Jamison’s concept. In reality, his attack and others are designed to kill a program that low-income families depend on so they can have food and homes for their families and broadband for acquiring job skills, obtaining health care and doing homework.

Widespread broadband adoption across the U.S. is important for our national competitiveness. Our country cannot compete if we leave large numbers of workers on the sidelines of the modern economy.  Affordable broadband is a critical component of that success, and Lifeline is the efficient, targeted broadband credit that conservatives and liberals can all support. Congress and the FCC should focus on implementing the new Lifeline reforms and stop bashing a program that is the best existing effort to provide affordable broadband for all.

Cheryl Leanza is policy advisor to the United Church of Christ’s media justice and communications rights ministry, OC Inc.