The Federal Communications Commission will soon vote on a plan to give low-income Americans $9.25 a month to purchase home Internet service or cellular data. The plan would change the existing Lifeline program, which has provided phone subsidies since 1985, to focus on providing access to broadband.

FCC Chairman Tom Wheeler and Commissioner Mignon Clyburn wrote in a blog post today that millions of Americans don't have Internet service because they can't afford it. "Only half of the nation’s households in the lowest income tier subscribe to broadband," Wheeler and Clyburn wrote. "And 43 percent of all people who don’t subscribe to broadband at home say that affordability is the reason. Of the low-income consumers who have subscribed to mobile broadband, 44 percent have had to cancel or suspend their service due to financial constraints and for those whose only access to the Internet is their smartphone, 48 percent have had to cancel or shut off service for a period of time due to financial hardship."

Wheeler and Clyburn released details of the plan today and said the commission will vote on it on March 31.

Lifeline pulls money from the Universal Service Fund, which is paid for by surcharges on phone bills. Subsidies are geared toward people with incomes at or near federal poverty guidelines. About 64.5 million Americans either have no Internet service or dial-up only, according to data from the organization that administers the FCC's universal service programs. Meanwhile, 39.7 million households qualify for Lifeline.

The FCC plan would maintain the existing monthly subsidy at $9.25 per month per household but allow it to be used to buy standalone Internet service or bundled voice and data packages. The proposal would also promote "appropriate Lifeline-supported mobile devices with Wi-Fi functionality" in order to close the "homework gap" in which children from poor families have trouble completing assignments that require Internet access outside of school.

Consumers can keep using Lifeline to buy voice-only service, at least for now. The plan would phase out Lifeline support for voice-only mobile service so that after 2019, providers accepting Lifeline subsidies "will be required to include broadband as part of any supported service," an FCC fact sheet on the plan said. Support for landline phone service without bundled Internet will continue beyond that date because of "ongoing affordability challenges," the FCC said.

The plan also has a new requirement that subsidized mobile voice service include unlimited minutes, starting on December 1 of this year.

The FCC believes that large cable companies and other Internet providers will be interested in participating in Lifeline after it begins supporting broadband, a senior FCC official said in a call with reporters today. The $9.25 subsidy could nearly cover the cost of certain programs targeted at poor Americans. For example, Comcast's Internet Essentials provides 10Mbps Internet service for $9.95 a month.

To qualify, providers of home Internet service would have to offer speeds of at least 10Mbps download and 1Mbps uploads, with a minimum monthly usage allowance of 150GB. The 10Mbps/1Mbps standard is lower than the FCC's definition of broadband, which is set at 25Mbps/3Mbps. The FCC is setting the Lifeline minimum speed lower to ensure that more Americans can afford the service. Even with the $9.25 subsidy, 25Mbps/3Mbps service could be out of reach for many low-income customers, an FCC official said.

Minimum standards for mobile broadband service will be phased in gradually. At first, mobile providers would have to offer at least 500MB of data per month at 3G speeds, and then at least 2GB per month by the end of 2018.

Lifeline spending today is about $1.5 billion a year, an FCC official said. The FCC plan would increase the annual budget to $2.25 billion, indexed to inflation, to account for increased participation. But actual spending wouldn't necessarily hit that cap right away.

Lifeline has been marred by fraud, a problem the FCC has been addressing with penalties against providers and rule changes. The new proposal is supposed to reduce abuse further, in part by "establish[ing] a National Eligibility Verifier as [a] neutral third-party entity that removes the opportunity for providers to enroll ineligible subscribers."

The March 31 vote will be a final one putting the new rules in place. A tentative version of the proposal was approved in June by a 3-2 vote, with Republicans Ajit Pai and Michael O'Reilly dissenting over concerns the plan didn't do enough to reduce fraud.