FCC Limits Broadband Subsidies, Abandons Prison Call Caps

The Federal Communications Commission last week hobbled a project to subsidize broadband Internet access for low-income families, preventing nine Internet service providers in the Midwest, Puerto Rico, and other areas from participating in the Lifeline program.

The ISPs had been granted permission to become Lifeline providers less than two months ago, a designation that offers their customers a $9.25-per-month discount on their broadband services. In an order reversing that approval, the FCC, under its new President Trump-appointed chairman Ajit Pai, said that it was preventing "waste, fraud, and abuse" in the Lifeline system.

The move was one of a slew of regulation overhauls and other actions announced on Friday, which include abandoning investigations into net neutrality violations and ending support for a cap on prison telephone calling rates. In a statement, Pai explained that the actions were intended to roll back what he called ill-advised "midnight regulations" that the FCC approved under its previous chairman, Democrat Tom Wheeler.

"These last-minute actions, which did not enjoy the support of the majority of Commissioners at the time they were taken, should not bind us going forward," he said. "Accordingly, they are being revoked."

With the Lifeline changes, customers of Spot On, KonaTel, AR Designs, Puerto Rico's Liberty Cablevision, Northland Cable, Kajeet, and Wabash Independent Networks are barred from obtaining the discount. So are customers who subscribe to FreedomPop and Boomerang, which offer broadband service in addition to their more well-known subsidized cell phone plans.

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FCC OKs Broadband Subsidy for Low-Income Families

Meanwhile, the FCC's decision to no longer defend a cap on calling rates that telcos charge to prison inmates means that those companies will have an easier time raising the rates. For a both a 15-minute in-state call and a 15-minute long distance call, the cost is currently capped at $1.65. The companies who provide phone service to jails have argued that these caps set rates below the cost of providing the service.