Chairman Pai wants to impose a cap on broadband funding for poor families

Federal Communications Commission Chairman Ajit Pai wants to impose a budget cap on the Lifeline program that helps poor people buy broadband and phone service.

Under previous Chairman Tom Wheeler, the 32-year-old Lifeline program was expanded to let poor people use a $9.25 monthly household subsidy to buy Internet service. Previously, the subsidy could only be used for phone service. But when Pai took over the chairmanship, he quickly got to work rolling back some of Wheeler's Lifeline changes. Pai, a Republican, ramped up his attempts to place limits on Lifeline recently with a proposal that will likely be approved by the commission at its meeting on November 16.

Pai's plan, titled "Bridging the Digital Divide for Low-Income Consumers," proposes a new "self-enforcing budget cap" that would limit Lifeline spending. Pai's proposal didn't include a specific amount for the cap; instead, the commissioner wrote, "We intend for the program to automatically make adjustments in order to maintain the cap in the event the budget is exceeded."

If the cap is reached, Lifeline would not be able to provide subsidies to additional people even if they are poor enough to qualify for the program.

Chairman Pai's proposal is a Notice of Proposed Rulemaking (NPRM) that asks the public for feedback, so the FCC would need to take a second vote a few months later to implement the change. The NPRM also suggests eliminating a year-old nationwide approval process that makes it easier for telecoms to offer subsidized service and cutting off subsidies for telecoms that resell network access instead of operating their own networks. Together, these moves would lower the number of companies that can offer subsidized broadband to poor people, and they'd force telecoms to get separate approvals for each state in which they offer subsidized plans.