Internet Discount Plan Boosted by Biden Caught in GOP Crosshairs

Republican lawmakers are pressuring the Federal Communications Commission to tackle consumer misuse of an internet subsidy program while Democrats want to see enrollment ramp up.

The Affordable Connectivity Program was a main topic of partisan tension during a House Energy & Commerce subcommittee hearing Thursday. FCC chair Jessica Rosenworcel (D, the agency’s other Democrat, and two Republican commissioners testified before the House panel for the first time since the start of the Biden administration.

The program, which offers low-income families a $30 discount on their monthly internet bills, was instituted during the Covid-19 pandemic at a time when there was bipartisan agreement on the need to ensure connectivity for people working and going to school remotely.

Congress made the program permanent and funneled an additional $14.2 billion to the $3.2 billion fund through the bipartisan Infrastructure Investment and Jobs Act (Public Law 117-58) passed in November.

Now Republicans are sounding the alarm over fraud while Democrats are eager to reduce enrollment barriers and sign up millions more. Roughly 11 million households have enrolled in the program since March 28, according to Universal Service Administrative Co. data.

(Photo by Kevin Dietsch/Getty Images)

Rosenworcel testifies during a House Energy and Commerce subcommittee hearing on Thursday in Washington, D.C.

“The challenge for the FCC is two-fold right now,” Rosenworcel said during the hearing. “First, we have to make it easy and simple for those who need the support to sign up while at the same time having appropriate guardrails for waste, fraud, and abuse.”

The FCC inspector general in November found households are fraudulently signing up for the government discount by falsely claiming they have children who qualify for free or cost-reduced lunch programs. The report drew the ire of the commission’s top Republican, Brendan Carr, who reiterated his concern over “what appears to be an egregious and near nationwide scheme” during Thursday’s hearing.

Rosenworcel said the agency must continue fostering relationships with outreach partners at the local level to sign up more of those in need. “We can preach about this program at the agency or from Washington but what matters most is when people hear about it in their communities from people they trust,” she said.

Rep. Marc Veasey (D-Texas) said he’s concerned families are discouraged from signing up because the process can be confusing and burdensome. Groups conducting outreach work at the local level have said they could be signing people up more efficiently if they had dedicated outreach funding.

Commissioner Geoffrey Starks (D) said he wanted to continue engaging with authorities and families living in New York public housing, where he said he witnessed a lack of internet access that has reinforced existing racial inequities. Starks noted a significant percentage of Black and Latino households remain disconnected.

Republicans questioned the need for the subsidy given drops in the price of internet service.

“Americans are getting more broadband for their buck,” Communications and Technology Subcommittee ranking member Bob Latta (R-Ohio) said, citing the FCC’s Urban Rate Survey that shows a 34% price decrease for certain internet services since 2015.

Rosenworcel noted the bipartisan infrastructure law tasks the FCC to study what the prices are for people on the program.”I think that’s going to provide an opportunity to provide updated data and I truly hope that it reflects exactly the kind of data you just shared with me,” she said.

Energy and Commerce ranking member Cathy McMorris Rodgers (R-Wash.) said companies already offer discounted service to low-income Americans.

“At a time when many people lost their jobs and were stuck at home these bipartisan programs provided necessary relief to make sure they could stay connected during the pandemic,” she said. “Now, we must make sure that these funds are not subject to waste, fraud, and abuse and get Americans back to work and off of these temporary, COVID-era government subsidy programs.”

To contact the reporter on this story: Maria Curi at mcuri@bloombergindustry.com

To contact the editors responsible for this story: Giuseppe Macri at gmacri@bgov.com; Bennett Roth at broth@bgov.com