Poor people may soon find it more difficult to purchase subsidized broadband plans, and many of them could even be forced to find new carriers. That's thanks to changes pushed through today by the Federal Communications Commission's Republican majority.

The FCC voted 3-2 to scale back the federal Lifeline program that lets poor people use a $9.25 monthly household subsidy to buy Internet or phone service. The FCC proposed a new spending cap that potentially prevents people who qualify for the subsidies from actually receiving them. The FCC is also taking steps to prevent resellers—telecom providers that don't operate their own network infrastructure—from offering Lifeline-subsidized plans.

Some of the changes go into effect immediately. For others, the FCC is taking public comment before making the changes final. A potential ban on resellers participating in the program is going out for public comment.

70 percent may have to find new providers

The proposed reseller ban would effectively force 70 percent of wireless phone users with Lifeline subsidies to find new providers, said Commissioner Mignon Clyburn, one of two Democratic commissioners.

"Over 70 percent of wireless Lifeline consumers will be told they cannot use their preferred carrier and preferred plan," Clyburn said. "On top of that, they may not have a carrier to turn to after that happens."

Excluding resellers from the program would limit competition in the market for subsidized plans and push consumers toward network operators like AT&T, Verizon, T-Mobile USA, and Sprint. Consumer advocates say that some poor people simply won't be able to find a carrier that supports Lifeline.

"In many states, facilities-based providers have opted out of offering Lifeline-supported service altogether and prefer to allow non-facilities-based wireless providers to serve Lifeline subscribers and the low-income segments of the wireless market," consumer advocacy group Public Knowledge wrote.

New limits on support in Tribal lands

Americans with incomes at or near federal poverty guidelines are eligible for Lifeline. People in Tribal areas are given greater support, with an additional $25 monthly subsidy that brings the total to $34.25.

Tribal residents also got bad news from the FCC today. The $25 enhanced subsidy can no longer be obtained through resellers. This change takes effect right away without any further public comment.

The FCC also eliminated the $25 extra subsidy for Tribal residents who live in urban areas. Only Tribal lands in rural areas will still qualify for the extra $25 a month. In urban areas, "the additional $25 a month is not required to make service affordable or to promote deployment," the FCC majority said.

Lifeline is paid for by Americans through fees imposed on phone bills. It has a budget of $2.25 billion, indexed to inflation, but it doesn't have a hard cap on spending. That could change as the FCC is taking public comment on a plan to impose a cap.

The Lifeline program has about 12.5 million subscribers, but only about one-third of eligible households is receiving the subsidies. A budget cap could limit enrollment and prevent many of the remaining households from getting broadband or phone subsidies.

Pai says changes are needed to prevent fraud. Before today's vote, Pai said:

The reforms that we implement and propose today seek to accomplish two important objectives: (1) curtail the waste, fraud, and abuse that continue to plague the Lifeline program and (2) make Lifeline more effective at bridging the digital divide on behalf of low-income Americans.

But the FCC is already implementing "a new system of national verification to reduce waste, fraud, [and] abuse," Democratic Commissioner Jessica Rosenworcel said. The verifier program is still being implemented, but the FCC's majority is "discard[ing] its possibilities before we even begin," she said.

The FCC is also taking comment on a plan to dismantle a one-year-old system that lets the FCC approve new Lifeline broadband providers nationwide so that ISPs do not have to seek approval from each state's government. Pai wants to limit that authority to states alone. Earlier this year, Pai's FCC revoked Lifeline authorization from nine Internet providers that were the first to gain approval under this program.

The FCC said that today's vote also eliminates a restriction "that barred Lifeline consumers from changing Lifeline providers for a year."

In a press conference after today's meeting, one reporter asked Pai to say "roughly" how many Lifeline subscribers he has talked to since becoming chairman. Pai did not provide a specific answer. "I didn't ask them when I met with them, 'are you a Lifeline subscriber?'" Pai said.

Turning off copper networks

The FCC today finalized two other plans we've previously written about. One vote today ended a rule that prevents joint ownership of newspapers and TV or radio stations in the same geographical market.

Another vote today will make it easier for telcos to shut off old copper networks even when they don't replace the networks with fiber or other equivalent service. This could leave consumers with only mobile service instead of wired phone and Internet access.

"Unneeded regulations deter many companies from investing in new networks," Pai said. "Having to maintain two networks—one legacy, one modern—diverts resources away from new deployments."

Clyburn dissented from the order. She said that protections are needed for the 49 million Americans who still have copper landlines.

"This item enables carriers to stop maintaining their copper infrastructure without notice to customers," Clyburn said.

Republicans argue that "carriers have an incentive to maintain their copper, else they will lose customers," Clyburn noted. But carriers with both copper and more lucrative wireless networks have an incentive to let copper networks degrade in order to push people onto wireless plans, she said.

"I heard just last week about a customer whose fixed broadband speeds were so frustratingly slow that she spent hundreds of dollars a month on a mobile hotspot just to stay connected," Clyburn said. "This item will countenance more of that, saddling consumers with increased voice and broadband costs, and [allow] providers to effectively retire their copper without notice."