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FCC chief plans to hand broadband subsidy program’s expansion off to states

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Pai will rework Lifeline program but keep broadband subsidies

FCC Chairman Ajit Pai speaks at Mobile World Congress 2017 in Barcelona, Spain.
FCC Chairman Ajit Pai speaks at Mobile World Congress 2017 in Barcelona, Spain.
Chris Welch / The Verge

The FCC program that subsidizes broadband for low-income households will begin expanding to new providers again once oversight is handed off to the states, commission chairman Ajit Pai announced this morning.

The program, called Lifeline, was one of the first thing Pai touched after taking the reins as chairman. While Lifeline has for decades provided discounts (currently $9.25 per month) on phone service for households near the poverty line, Pai slowed an expansion of the program into broadband subsidies that was approved by his predecessor.

At the time, Pai said he was limiting Lifeline’s expansion so that the commission could first address issues of fraud and abuse. Today he’s offering a new explanation for the program’s delay: he says Congress intended for states, not the commission, to oversee which companies get to offer Lifeline subsidies.

The Lifeline expansion is currently being challenged in court, and Pai says he’s now asking for the case to be sent back to the commission for further review. “In my view, it would be a waste of judicial and administrative resources to defend the FCC’s unlawful action in court,” Pai says in a statement released this morning.

Pai says the FCC “will soon begin a proceeding” to rework Lifeline’s expansion so that states get to decide which companies can offer its broadband subsidies. “The law here is clear: Congress gave state governments, not the FCC, the primary responsibility for approving which companies can participate in the Lifeline program under Section 214 of the Communications Act,” Pai says.

Though Pai has prevented new companies from joining the Lifeline program to offer broadband, he says that there are already 3.5 million people receiving broadband subsidies through existing providers. That figure has increased 16 percent since he became chairman, Pai said.

And despite reworking the program, Pai emphasized that he isn’t taking issue with using Lifeline to offer broadband discounts. “Going forward, I want to make it clear that broadband will remain in the Lifeline program so long as I have the privilege of serving as Chairman,” he says. “And we will continue to look for ways to make the program work even better.”

That’s not a huge surprise to hear from Pai, even after he held up its expansion to new companies. One of his big initiatives as chairman has been to increase broadband access, and Lifeline does exactly that.

In his statement, Pai also says that returning Lifeline oversight to the states will “strengthen” the program. He also quotes senators who say state oversight is “key to policing against fraud.”

So it seems that Pai’s solution to fraud and abuse is for the FCC to step back and hand off the problem. That means some states will be able to make it a little easier and some states will be able to make it a little more difficult for telecom companies to offer these subsidies. But it’s at least now clear what’ll become of the program, even if the timeline for changes is still up in the air.

Correction March 29th, 12:08PM ET: The FCC says that 3.5 million people are already receiving broadband subsidies through Lifeline, whereas this article initially stated that the program was on hold and had not yet begun offering subsidies for broadband. Existing providers can offer broadband subsidies; it’s only the expansion to new providers that’s on hold.