The FCC’s Emergency Broadband Benefit Program Will Subsidize Low-Income Americans’ Broadband Bills

By Heather Mills, V.P. for Grant & Funding Strategies

Cat Blake, Civic Technology Analyst

Among the many broadband funding streams included in the federal appropriations package that became law in late December, the new Emergency Broadband Benefit Program will have the most immediate impact on the digital divide—and could help families in rural, suburban, and urban communities across the country.

We explain the basics of the new program below; to learn how localities and state governments can play a key role in helping their residents maximize the program’s benefits, see our post here.

CTC’s Grant and Funding Strategies Team will continue to analyze this opportunity in the weeks to come. Please don’t hesitate to contact us if you have questions.

What is the Emergency Broadband Benefit Program?

The program is designed to provide a broadband subsidy for eligible households that will appear as a discount on their monthly bills. Once the program is up and running (we expect to see at least the rules for the new program by the end of February), the FCC will reimburse internet service providers up to $50 per month per eligible household ($75 per month for households on tribal lands). The program will continue until six months following the official end of the Covid-19 public health emergency.

Notably, the program also subsidizes the cost of a laptop, desktop computer, or tablet for each eligible household; ISPs can be reimbursed up to $100 for a connected device, as long as they charge the recipient no more than $50 for it.

Who is eligible to receive the subsidy?

The Emergency Broadband Benefit will subsidize broadband service for low-income families and households that have lost income during the Covid-19 pandemic. As we describe here, though, the FCC’s rules will address two intertwined issues: Who is eligible, and how will those participants be able to prove their eligibility?

First, who is eligible? The law defines eligibility broadly as a household in which at least one member:

  • Qualifies for Lifeline (i.e., has income at or below 135 percent of the federal poverty guidelines; receives benefits from Medicaid, the Supplemental Nutrition Assistance Program, Supplemental Security Income, Federal Public Housing Assistance, or a Veterans and Survivors Pension Benefit)
  • Participates in the National School Lunch Program or the School Breakfast Program
  • “[h]as experienced a substantial loss of income since February 29, 2020, that is documented by layoff or furlough notice, application for unemployment insurance benefits, or similar documentation”
  • Received a federal Pell grant during the current award year
  • “[m]eets the eligibility criteria for a participating provider’s existing low-income or Covid-19 program”

Verification of a customer’s eligibility to participate in the program is a key point the FCC will need to define during its 60-day comment period.[1] The appropriations bill spells out some clear approaches around the existing Lifeline program verification process, but gives the FCC latitude on accepting other methods.

Participating ISPs will be able to verify household eligibility in one of three ways:

  1. Based on the National Verifier or the National Lifeline Accountability Database
  2. Based on a school’s verification of a household member’s participation in the National School Lunch Program or the School Breakfast Program
  3. Based on the ISP’s “alternative verification process” (which must be deemed sufficient by the FCC “to avoid waste, fraud, and abuse”)

Who can deliver subsidized services?

Eligible telecommunications carriers (ETC) are automatically eligible to participate in the program. ISPs that are not ETCs will need to go through an approval process before they can participate. The approval process for ISPs is another one of the issues the FCC is addressing during its comment period; the law stipulates the approval process be “expedited,” given that the program is intended to quickly help bridge the digital divide.

How will residents sign up for the program?

As with the federal Lifeline service and other established subsidy programs (such as the State of Alabama’s “ABC for Students” program), the enrollment process is expected to be straightforward: An eligible resident of your community should be able to call a participating ISP and provide information that verifies their eligibility—then the ISP should enroll the resident, deliver service, and apply the $50 or $75 monthly subsidy to their account. The ISP will then request reimbursement from the FCC.

The law establishing the program has some built-in consumer protections: The National Verifier is required to approve an eligible household within two days of a request for verification. ISPs cannot require a household to pay an early termination fee if the household enters into a contract in order to receive the service. And households cannot be subject to a waiting period to receive service based on having previously received service from the provider.

How long will the Emergency Broadband Benefit Program last?

The law states the program will run six months beyond the end of the public health emergency, but that is only if the funding is sufficient to cover the ISPs’ charges for all of the participants. We are optimistic the $3.2 billion allocated to the program might provide a year’s worth of funding. That said, we anticipate there will be appetite in Congress to appropriate future funds to keep the program operating—given the enormous need for broadband that has so clearly been illuminated by the Covid crisis. We already have observed lobbying in Washington to make the program permanent, but we have real doubt whether the political will for that exists.

What are the long-term benefits of this program?

The short-term impacts of the Emergency Broadband Benefit Program are clear: Participating households will save $50 to $75 per month on their broadband service. But beyond the important financial implications of the subsidy, this program also might have a positive long-term effect on broadband adoption rates among households that have never had broadband service before (or who have had to give up broadband because it became unaffordable for them). To the extent that cost has been the barrier preventing residents from subscribing to available services, this program might convince non-adopters to try broadband—and, if they find value in the service, potentially to keep the subscription once the subsidy sunsets.

[1] https://www.fcc.gov/document/fcc-seeks-comment-new-emergency-broadband-benefit-program

Published: Wednesday, February 10, 2021 by CTC Technology & Energy