The U.S. Government’s Internet Lifeline for the Poor Isn’t Much of One

A new proposal to offer low-income Americans a monthly subsidy for broadband Internet access is just the latest reflection of the Federal Communications Commission’s concern that the country is facing a “persistent digital divide.” But given the relatively high cost of a decent Internet connection in the U.S., it’s hard to see the policy, which would pay $9.25 per month to eligible households, making much of a difference.

According to a blog post published on March 8 by FCC chairman Tom Wheeler and commissioner Mignon Clyburn, the subsidy is meant to help the more than 64 million Americans missing out on the benefits of broadband Internet access—mostly people who have low incomes or live in rural areas. But the average price of broadband in the U.S., now defined as 25 megabits per second for downloads and three megabits per second for uploads, is more than four times  the $9.25 subsidy, so prospective new Internet users will still need to shell out a fair amount to connect.

In practice, the average connection speed in the U.S. is 11.9 megabits per second, and the minimum speed for fixed Internet under the new plan is 10 megabits per second for downloads and one megabit per second for uploads (or 500 megabytes of data at 3G speeds for mobile). But the average monthly cost in the U.S. for an unlimited fixed plan with download speeds of less than 10 megabits per second is still $33.12, substantially higher than the cost in many other countries.

The FCC’s policy is, simply put, badly outdated. It is essentially a revamped version of a Reagan-era measure aimed at helping low-income households purchase landline telephone service. Called Lifeline, it has been updated to include mobile phones, and some 13 million households subscribe to the program. But it is politically controversial, and its opponents say it’s wasteful and mismanaged. Because of that, the FCC is in no position to attempt to increase the amount the policy pays. And $9.25 is probably not enough to narrow the digital divide very far.

(Read more: Washington Post, “America’s Broadband Improves, Cementing a ‘Persistent Digital Divide’”)