When the Federal Communications Commission (FCC) announced Tuesday it would extend federal Lifeline subsidies to help cover Internet service costs, it again had to decide what Internet speed should be the standard.
The program that currently offers subsidies for low-income Americans to purchase phone service is being shifted to put the focus on help for people to defray the cost of Internet service. A vote is scheduled for later this month.
The monthly Internet data cap on home Internet cannot be lower than 150 GB, according to the draft rules.
If people want to purchase a smartphone plan with the subsidy, they must purchase a plan from a provider that offers at least 500 of Megabits of 3G data per month. That number will increase to 2 gigabits of data per month in 2018. To put that in context, 500 Megabits of data equates to about 35 hours of surfing the web but would support only limited streaming video.
FCC officials said it set those rates primarily because of affordability, and they are in line with standards of some other Universal Service Fund programs.
However, the commission has received criticism from Republicans and service providers in the past for not always using a uniform Internet standard. For example, the FCC's yearly report that measures the adoption of Internet service uses a 25 Mbps download speed threshold. Republicans have accused the FCC of setting the Internet speed benchmark artificially high in the report so it can justify more regulation.
The FCC says that 25 Mbps standard is in line with American homes that have an increasing amount of connected devices. But Tuesday senior officials said that higher speed standard would not be feasible for the Lifeline program because low-income individuals would be priced out of the market.
The federal subsidies given out through the Lifeline program only offer $9.25 every month per household, and requiring faster Internet speeds would be too costly. Officials said threading the needle between affordable service and providing people with Internet speeds that they need is one of the challenges of having a national program.
Of about 126 million households in the United States, about 40 million would qualify for the lifeline program, according to government statistics. Of those eligible households, about 14.2 million have insufficient Internet and about 13.9 million have no Internet.
Currently about 13 million people are signed up for the current phone subsidies through the program.