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1 1 (March 30, 2016)

handle is hein.amenin/aeiabca0001 and id is 1 raw text is: niversal service has Ilong been an integral cormpo nen t of American telecor.mun cations policy----and rightly so. As more activities move onhine, it becomes increasingly im-portant to narrow the digita divide by helping thos, who cannot afford Internet accessto get onto the network. Regrettably, the proposal fror the Federal Co:rnrriunications Cor m i ssdion (FCC) to expand L:feline is unlikely to heip solve this problem. The agencvy roposes to spend $2.25 billion annuaily to transform a Reagan-era telephone assistance program into a broadband subsidy, Yet when prompted by the GAO the agency adm;tted it has no proof that the existing subsidy of $9.25 monthly per household meaningfully increases telephoqe penetrahion rates, and independent acadermic studies suggest that as much as 88 percent of program funding iswasted each year. Now the FCC- proposes to extend the same rnonthiy subsidy to broadband access. but it offers no plan to limit the proposad subsidy to households that otherwise would not purchase I nternet access and no proof that an extra S9.25 each mont h would entice those households to buy Internet access. Itsdefinition of qualifying broadband service is inconsistent with earlier agency rulings, and its desi re to phase out telephone support is unnecessai ly paternalistic. The poroposal would increaseLifeline expend:tures by 50 percent without addressing serious structural flaws in the existing program, such as runaway costs and an unsustai nable funding mechanism. Even if it passes, a broadband Lifei ine prograr does nothing to address other, potentiaiy more significant barriers to I nternet adoption, such as low; nterest in buyinqg household Internet access and the high cost uf compu t r's. 1ie E'Cs proposal amounts to a$2.25 billion annuai bet that giving a little bit of money to rm:iI ionsof low-inco.e households will somehow soive the broadband gap. We can, and must, do better. AMERICAN ENTERPRISE INSTITUTE

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