Chairman Pai works to cap funding for rural and poor people, gets GOP backing

The Federal Communications Commission has preliminarily voted to cap spending on the FCC's Universal Service programs, which deploy broadband to poor people and to rural and other underserved areas. The recent approval of a Notice of Proposed Rulemaking is a preliminary step—the FCC will take public comment on Chairman Ajit Pai's plan for three months before moving to a final vote. The FCC technically won't begin the public-comment period until after the NPRM is published in the Federal Register, but the FCC proceeding's docket is online.

The proposed cap of $11.4 billion is the same as the sum of the four programs' budgets for 2018 and would be indexed to keep pace with inflation under Chairman Pai's proposal. The new cap wouldn't have an immediate impact on actual spending, because it's higher than current spending. The FCC projects that the USF's total disbursements will be $10.2 billion in 2019 and remain below $10.5 billion annually through 2023. But the USF's Lifeline program is underutilized. It provided subsidies to 10.7 million low-income subscribers in 2017, even though 38.9 million American households met the program's low-income requirements. There's still room for Lifeline to grow, as actual spending was $1.14 billion in 2018 despite a budget of $2.28 billion. But the proposed budget cap could rule out expansions that either dramatically raise enrollment among low-income Americans or significantly raise the subsidies, which are typically just $9.25 per household per month.