FCC Repeal of Net Neutrality and its Social – Economic Repercussions for Low Income Americans


The Federal Communications Commission (FCC) logo is seen before the FCC Net Neutrality hearing in Washington February 26, 2015. REUTERS/Yuri Gripas

The decision of the Federal Communications Commission to repeal the provisions of Net Neutrality that were set forth by the Obama administration in 2015 will have repercussions on the social and economic well-being of low-income Americans.

A potential casualty of the FCC’s repeal would be the commissions’ Lifeline Program which was established for the purpose of providing subsidies to low – income earning Americans in various cities including tribal regions around the nation so they can afford broadband Internet service.

Currently the subsidies that can be availed through the program include $9.25 monthly aid and $25 for subscribers on tribal lands. In a report by the Brookings Institute, the Lifeline Program was the only campaign in place that made it possible for Americans with compromised incomes to afford Internet service.

This has strong economic repercussions as well because there is growing demand for employees with appreciable levels of technological competence. The Internet has also opened new avenues for budding entrepreneurs to put up online businesses or have careers as telecommuters, virtual assistants or freelancers if the job opportunities in the brick-and-mortar world have dried up.

On the other side of the working arrangement, companies that rely heavily on Internet-based services and those who integrate telecommuters in their work force to streamline monthly operational expenses and increase productivity will be affected at an economic level.

The Lifeline Program was originally drafted by the administration of Ronald Reagan as a way to provide affordable phone services to low-income earning Americans.

The Obama administration expanded the provisions of the Lifeline Program in 2016 to cover Internet subscriptions.

Under the chairmanship of Ajit Pai, the repeal of net neutrality could affect the Lifeline Program in 3 ways:

  1. Prevent resellers or telecommunications companies that provide services but don’t have their own network from offering subsidized subscription plans. Resellers “cover the gap”, meaning provide Internet services in areas the big telecommunications companies otherwise avoid for lack of incentive.
  2. Institute a national spending cap on the program.
  3. Revoke approvals for Lifeline service providers that have already been successfully qualified.

FCC Commissioner Mignon Clyburn has been particularly vocal on the chairman’s repeal of net neutrality:

“Connecting the unconnected is no easy task. Costs of just a couple dollars a month can be insurmountable for families that struggle to put food on the table each day.

But what the FCC majority proposed to do earlier this month is to take away no-cost service offerings and eliminate the business model of 70% of providers in the current market without specifying where existing consumers will go.

I would be hard-pressed to identify a recent FCC action with a more pointed attack on the economically disadvantaged that this one.”

The report from the Brookings Institute also gives its estimate that roughly 37% of low income neighbourhoods have unaffordable subscription rates for broadband services.

Author Details