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Court halts FCC plan to revoke low-income internet subsidies on tribal lands

Court halts FCC plan to revoke low-income internet subsidies on tribal lands

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FCC Chairman Ajit Pai Testifies Before House Appropriations Committee
Photo by Alex Edelman/Getty Images

A $25 monthly subsidy that’s meant to help low-income households on tribal lands get phone or internet service will remain in place for the time being, after a court found that the Federal Communication Commission’s plan to largely remove the subsidies seems to have been made without properly considering the harms to customers and businesses.

A federal court said on Friday that petitioners — including tribes, nonprofits, and wireless carriers — were likely to prove that the commission’s decision was “arbitrary and capricious,” meaning that it failed to fully consider the changes it was making. In particular, the court said, the FCC appears to have failed to look at whether residents of tribal lands will have alternative options to get online once these changes are in place or to prove that the changes would not lead to “mass disconnection.” The ruling was spotted by Ars Technica.

The FCC cut urban subsidies, hoping it would drive rural internet buildout

Changes to the subsidy came as a result of FCC chairman Ajit Pai’s continued work to scale back the commission’s Lifeline program, which offers subsidies to help people near or below the poverty line get phone or internet service. Pai has claimed the program is rife with fraud and wasted spending and that it doesn’t do enough to encourage internet providers to reach homes that still lack access to broadband.

The major change at issue came in November 2017. Residents of tribal lands are eligible for a $25 per month subsidy from Lifeline (on top of the $9.25 received elsewhere), and the FCC largely voted to strip it from them. The commission’s vote immediately did two things: it limited the $25 discount to people in rural areas, and it limited the discounts to internet providers that own and operate their own network.

That meant that even if you still qualified for the subsidy, you couldn’t buy service from an internet provider that branded and resold another company’s network — something that’s extremely common among wireless plans marketed to lower-income consumers. The FCC also hopes to apply this rule nationwide, which would mean that “over 70 percent of wireless Lifeline consumers will be told they cannot use their preferred carrier and preferred plan,” then-FCC commissioner Mignon Clyburn said at the time.

Friday’s ruling is a victory for tribal members who “rely on Lifeline service for their telephone and broadband needs,” Gene DeJordy, an attorney for the Crow Creek Sioux Tribe, who are among the plaintiffs, said in a statement.

The FCC’s plan would have gone into place later this year. But with this ruling, it will be halted at least until this lawsuit can be seen through. With a judge willing to freeze the policy, however, it appears that the FCC is likely to lose — at least in this round of litigation. That means the commission will either have to keep fighting or go back and rework the proposal so that it passes review.