The nation’s only program aimed at helping low-income American families afford mobile communications is known as Lifeline for a reason. Through a federal subsidy of $9.25 per month, Lifeline helps those most in need obtain the phone or broadband service that the pandemic has made a necessity of everyday life.

Unfortunately, the program is so tied up in red tape that it’s cumbersome and expensive to administer, which reduces the number of participating providers and makes it difficult for consumers to access the benefit. Because of the shortcomings, the program is substantially underutilized, evidence that Lifeline in its current form is inadequate for making broadband available to the less financially fortunate. The Federal Communications Commission’s Universal Service Administrative Co. estimates that there are about 38.6 million Lifeline-eligible households, but only around 9.6 million participate, meaning that only one in four eligible households is taking advantage of the program subsidy.

Modernizing and simplifying the Lifeline Program could extend the benefit to more families in need and open up the program to many more competitive service providers, such as cable broadband operators.

A multitude of companies offers telecommunications services in the United States. They range from small, local companies such as the Hot Springs Telephone Co. in Hot Springs, Montana, to large industry leaders like AT&T and Verizon Communications. American consumers have a buffet from which to choose, but because many companies have decided not to participate in the program, Lifeline beneficiaries order from a limited menu.

Costly Middleman Mandate

The program saddles service providers with the burden of acting as middlemen between the federal government and consumers, an unnecessary and costly responsibility that has greatly reduced the number of participating carriers. Companies are discouraged from taking part by a broad list of Lifeline regulations, including multiple annual audits, many years of required record-keeping, and the necessity of filing reimbursement claims to the Lifeline program for each customer served. Participating providers are also required to bill customers directly and then seek reimbursement from the Lifeline program. This cumbersome and costly process is totally unnecessary.

A structural change could make the Lifeline program far more useful and let it play a larger role in closing the digital divide. The monthly benefit should be converted and greatly simplified, opening the door to use of the program by a larger number of service providers and Lifeline beneficiaries.

Beginning in 2014, I began advocating for the current Lifeline structure to be scrapped. Service providers should no longer be required to engage in extensive record-keeping and submit invoices to the government for reimbursement. Instead, the monthly Lifeline benefit should be provided directly to consumers in the form of a “Lifeline Benefit Card,” a debit-like card that would automatically reload each month. Consumers could then use the benefit card to shop among carriers in order to select the carrier and specific services that best meets the consumers’ needs, and they could choose between telephone service or broadband service or some combination of the two with the monthly benefit defraying all or a portion of the total bill.

SNAP Offers a Model

The Supplemental Nutrition Assistance Program (SNAP) is proof that the provision of government benefits through a debit card is highly workable. Not only would a direct-to-consumer Lifeline Benefit Card empower subsidy recipients to shop among providers, it would also make the program far more attractive to carriers by eliminating the carrier costs associated with record-keeping, auditing and billing. More carriers would be willing to participate, and more participating carriers would increase competition in the marketplace, benefitting consumers by substantially expanding their range of service provider choices.

With internet access now required for working from home, learning virtually, shopping on e-commerce websites and being entertained through the ever-expanding program offerings of a variety of streaming services, subscribing to a broadband service has never been more necessary for everyday living. The Lifeline program can help to provide that essential service to millions more American homes — but only through a modernized program that attracts more carriers and is more accessible to low-income Americans.

Reaction was swift to the House Energy & Commerce Committee's vote to send the Save the Internet Act to the full House for a vote next week, primarily from net neutrality groups buoyed by clearing another hurdle.

“The Energy and Commerce Committee has responded to the overwhelming public support for strong Net Neutrality protections," said Free Press's Sandra Fulton. "It’s now the full House’s turn to pass the Save the Internet Act and take the next step toward restoring the Net Neutrality protections the public demands."

The Democratic-controlled House is expected to pass the bill, the Republican-controlled Senate, not so much, though Free Press and other net neutrality groups are working to turn that tide.

"We thank the committee majority for rejecting any industry-friendly amendments that might have truly undermined this legislation, and we call on lawmakers to keep listening to their constituents and take this bill to the House floor for a vote as soon as possible," said Fulton.

All the Republican amendments offered at Wednesday's markup were rejected. Those Republicans called the act a heavy-handed government control of the internet.

Center-right limited government group American Action Network definitely agreed with Republicans that the bill was an overreach.

“The internet today is faster and easier to use than ever before," said AAN President Dan Conston. "For thirty years, the internet has flourished because Washington has left it alone. Americans support a fair and open internet, but they strongly reject overregulation by Congress.”

“Unfortunately, liberal activists in places like San Francisco and New York have redefined the concept of 'net neutrality' as a massive government takeover and overregulation of the internet in place of the truly free and open internet we know today.

“Instead of again rehashing the previous debate, Congress needs to look to the future and forge a new bipartisan solution, so the internet continues to drive economic growth and opportunity in today’s digital marketplace.”

"The best way to save the Internet is not the Save the Internet Act," said Internet Innovation Alliance co-chair Bruce Mehlman. "Insisting on utility-era Title II regulatory classification of broadband is both bad policy and a formula for Congressional inaction. By contrast, we see a real opportunity to advance a bipartisan legislative solution consistent with the net neutrality position Democrats held in 2010 and Republicans increasingly embrace today."

But there were plenty of encouraging words for the bill's progress.

“After nearly 15 years of FCC rulemaking, litigation, and talk of legislating, today’s vote by the House Energy and Commerce Committee is another significant step toward enshrining core net neutrality protections in statute," said Public Knowledge senior policy counsel Phillip Berenbroick. "This vote re-confirms the FCC’s responsibility to protect consumers and provide oversight of broadband providers."

"Today the Save the Internet Act (HR 1644) passed a crucial vote in the House Energy and Commerce Committee, despite a wave of disingenuous attempts by telecom funded lawmakers to derail the bill or gut its key protections with bad amendments," said Fight for the Future. "The bill was reported out of the committee largely unscathed, and will now head to the House floor as early as next week."

"We applaud the members of the House Energy & Commerce Committee who voted to advance the Save the Internet Act today," said Demand Progress communications director Mark Stanley."This bill is crucial to restoring the net neutrality protections gutted by Chairman Ajit Pai’s FCC in a giveaway to giant internet service providers."

“An open internet is crucial for small businesses and consumers, and we appreciate the House Energy & Commerce Committee for its swift action and for rejecting attempts to add distracting, extraneous amendments," said Computer & Communications Industry Association President Ed Black. "We look forward to the next step - before the full House - and Congress finally acting to restore strong, net neutrality rules.”

"You better shop around," goes the old song, but those without access to broadband are at a distinct disadvantage.

The Internet Innovation Alliance says that the average family can save about $10,500 per year by using broadband to comparison shop. It is even more--$12,114.09--before subtracting the cost of a home broadband service and mobile data plan ($1,575).

That is based on the Department of Labor 2017 Consumer Expenditure Survey.

IIA says those savings, on necessities like gas, food and housing, result from the ability to "expand buying options, utilize mobile applications to identify nearby deals, and access online-only pricing."

The biggest savings by percentage with broadband was in online bill paying and by raw dollars, not surprisingly, it was big ticket items like cars and houses.

The report, "10 Ways Being Online Saves You Money," was authored by financial planner Nicholas Delgado, principal of Chicago investment bank Dignitas, for IIA.

One of the big reasons the digital divide needs closing is that online-only pricing or discounts for things like paying bills and various government services, like paying for new car registrations online, wind up being a regressive tax since it is usually on rural and lower-income areas that lack broadband but could most use a price break.

“In 2018, online purchasing power is taken for granted by the majority of Americans, but the reality is that many people are still missing out on the possibility of internet-enabled savings," said IIA co-chair Bruce Mehlman. "We need to put policies in place that encourage the expansion and availability of high-speed broadband internet, especially fifth-generation wireless, to help close the digital divide and bring the benefits of broadband to all.”

Netflix’s stunning admission that, for five years, it reduced the video speeds of customers of Verizon Wireless and AT&T Wireless — while not doing so for customers of Sprint and T-Mobile — is little short of breathtaking. It was an exercise in hypocrisy to claim that broadband providers were degrading the quality of its video when, in fact, Netflix — without notifying its customers — was doing precisely that.

Recall the history here to understand why Netflix’s actions were so brazen and deserving of governmental review. Traditionally, peering agreements among content networks and last-mile Internet-service providers (ISPs) were never regulated, but were always negotiated between private parties.

For Netflix, arm’s-length negotiations posed a problem, because as the share of total bandwidth taken by its content grew (up to 37% at peak hours, according to one survey in March of 2015), its position became ever more untenable. It wanted ISPs to build more bandwidth to consumers for Netflx’s use, but it didn’t want to help pay for that. It didn’t want its own business model constrained.

SHIFTING THE COST BURDEN

Instead, Netflix tried to shift the real costs of its service onto others — the local network operators. In fact, it wanted “free interconnection” with the ISPs shouldering all of the costs of the upgrades required to carry the ever-growing volume of Netflix traffic. Then, as the flood of Netflix content caused consumers to experience problems with video quality, Netflix was quick to put the blame on the ISPs.

Also remember that Netflix was a driving force in advocating for network neutrality. The company’s CEO, Reed Hastings, pushed first against Comcast and then against ISPs more generally, accusing them of “purposeful congestion” and pushed free interconnection for Netflix’s services. In a sharp departure from an unbroken history of peering agreements being negotiated by private parties through which the network responsible for delivering a greater proportion of traffic to the other network would bear the resulting cost, he demanded that “they (ISPs) must provide sufficient access to their network without charge.”

Hastings blamed video quality problems on a lack of interconnectivity, even as — without disclosure — Netflix itself was slowing down video. Then, while continuing to complain about video quality degradation, the company persistently and successfully urged the Federal Communications Commission to include regulatory oversight over interconnection for the first time as an aspect of the net-neutrality rulemaking. That unprecedented assertion of authority is now a central feature of the litigation presently pending on the net-neutrality order.

ISPs, whether cable, wired telco or mobile, weren’t throttling or slowing Netflix video. Netflix was. This fact matters for yet another reason. One of the central responsibilities imposed by the net-neutrality order on broadband providers is transparency in network management practices. It must be noted that while being one of the strongest advocates of the FCC using last-century common-carrier rules to impose net neutrality obligations on the ISPs, the company was simultaneously secretly violating one of the core net-neutrality principles, the necessity of being transparent in its network management practices. The practice of degrading video for customers without notice was anything but transparent.

A MATTER OF MATH

Network-management practices that deliver fast, reliable Internet content rely not on blog posts and banging drums for government action, but on sound engineering and sound mathematics. The French writer Stendahl wrote, “Mathematics allows for no hypocrisy and no vagueness.” Nor should legal proceedings. Now that Netflix’s actions are publicly known, there is a clear path forward.

The Federal Trade Commission has jurisdiction over unfair trade practices in the Internet ecosystem. Advertising one service, such as level of video quality, while delivering a lesser service falls within the ambit of an unfair trade practice. Did Netflix advertise a service it failed to deliver? Were its conduct and its disclosures to customers consistent with fair trade practice?

Congressional committees may also legitimately ask about the circumstances that led the FCC to take the unprecedented step of departing from voluntary peering arrangements and asserting regulatory authority over interconnection between networks. In both venues it’s timely to ask some serious questions regarding Netflix’s behavior. These proceedings could even become a new Netflix hit, a true-life House of Cards.

Former U.S. Rep. Rick Boucher (D-Va.) was a House member for 28 years and chaired the House Energy and Commerce Committee’s Subcommittee on Communications and the Internet.