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Updated 21 hours ago
WASHINGTON — Regulators are telling nine companies they won't be allowed to participate in a federal program meant to help them provide affordable Internet access to low-income consumers — weeks after those companies had been given the green light.
The move, announced Friday by FCC Chairman Ajit Pai, reverses a decision by his Democratic predecessor, Tom Wheeler, and undercuts the companies' ability to provide low-cost internet access to poorer Americans. In a statement, Pai called the initial decisions a form of “midnight regulation.”
“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.
The program, known as Lifeline, provides registered households with a $9.25-a-month credit, which can then be used to buy home internet service. As many as 13 million Americans may be eligible for Lifeline but do not have broadband service at home, the FCC has found.
For Kajeet Inc., one of the companies that was initially granted permission to provide service through Lifeline, the news comes as a blow.
“I'm most concerned about the children we serve,” said Kajeet founder Daniel Neal. “We partner with school districts — 41 states and the District of Columbia — to provide educational broadband so that poor kids can do their homework.”
As many as eight other companies are also subject to the FCC's reversal, according to the text of the decision. The agency can freely reconsider decisions it's made on the matter within 30 days of making them. Four of the nine approvals were revoked in response to a complaint, while the remaining five were revoked within the 30-day window.
Until last year, Lifeline recipients could only apply their federal benefit toward landline and mobile voice service. Significant changes to the program under Wheeler let beneficiaries, for the first time, use their credits to purchase broadband. The expansion was opposed by Pai and other Republican officials, who argued that the measure did not do enough to rein in potential costs or to control waste, fraud and abuse. (Democrats claimed that recent reforms to the program had helped cut down on the latter.)
Revoking the nine approvals “would promote program integrity by providing the ⅛FCC⅜ with additional time to consider measures that might be necessary to prevent further waste, fraud, and abuse in the Lifeline program,” the decision said.
By stopping companies such as Kajeet from accessing the Lifeline program, Pai may be signaling his intention to apply more restrictions to the Lifeline program, policy analysts said. One such restriction could be a strict cap on the program's budget, which is indirectly funded through fees on the bills of telephone customers.
But, they added, those program changes may likely require a formal rulemaking at the FCC, a process that could take months.
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