Clyburn Warns of FCC 'Poor Tax' to Ensure Lifeline Recipient 'Skin in the Game'

“Why are low-income Americans left out of this promise?" Clyburn asked in a speech at a Lifeline event Tuesday held by the Multicultural Media, Telecom and Internet Council. "Even if a provider is willing and able to provide free data to the most vulnerable citizens, the majority of the FCC has made it clear that it would require low-income households to pay for the privilege. A provider that is offering to provide free data to the most price-sensitive consumer, would not be able to do so under the current construct, and would instead need to ensure that an impoverished household is paying at least 25 percent of the cost of service." She said low-income mothers might have to choose between paying for meals and subscribing to communications services for children to do homework or the family to make 911 calls.

Afterward, Clyburn said she was reacting to talk at the FCC, in the states and elsewhere "about what families would pay" to have "skin in the game" under Lifeline. "There have been conversations at the commission. These are not arbitrary figures that I’ve heard. They have been mentioned,” she told two reporters. Asked if Chairman Ajit Pai had made such proposals, she said, “I cannot say with 100 percent certainty that Chairman Pai has proposed a certain percentage of ‘skin in the game.’ I can just say that there have been conversations on more than one occasion inside the FCC about various scenarios.” The offices of Pai and Commissioner Mike O'Rielly declined comment.

O'Rielly has said Lifeline recipients should make minimum contributions. "To deter waste and stretch program dollars further, all universal service beneficiaries should have skin in the game," he wrote in a 2015 blog post. "In other universal service programs, beneficiaries have been required to pay in at least 10 percent (which is still too low). We should expect the same in the Lifeline program. A minimum contribution also would help deter consumers from signing up more than once, which has continued to be a problem despite enforcement efforts. While some have argued that even a small contribution (such as $1) could make service unaffordable for some, that hypothetical risk is outweighed by the benefit of protecting against known program abuses. Moreover, setting a minimum contribution would better align the current program with the original goal of providing discounted (not free) service.”

Clyburn said the FCC majority is streamlining and removing entry barriers, but not for Lifeline, with nine companies in February losing their LBP designations that were intended to cut red tape and speed entry. She said the Wireline Bureau decision -- which Pai defended -- should have been made by the full commission. The nine companies did "nothing wrong" and were "summarily booted out for no apparent reason," she said. "I believe in parity. I believe in access. I believe in reducing barriers to entry. But what I see right now when it comes to this particular program is mountains and mountains of barriers to entry.”

The majority also "made it quite clear, that it will let companies provide free data and more sponsored data options to consumers in any form or any way they see fit, except when it comes to the one program that seeks to empower poor people," Clyburn said. "Low-income households would have to, in essence, pay what I call a ‘poor tax’ in order to get their no-longer-free data." She said the FCC should "be consistent" and "not discriminate" against low-income consumers: "I am hopeful that this ‘poor tax’ never sees the light of day, but I am concerned that, given the recent actions to foreclose broadband providers from entering the Lifeline program, that this is the direction we are headed.”