Last Friday, staff in the FCC’s Wireline Competition Bureau issued a report summarizing the results of the FCC’s Lifeline broadband pilot program. The program was designed to determine how the Lifeline program might address the key barriers to broadband adoption within the low income population. These barriers, first identified in the National Broadband Plan in 2010 are: cost, digital literacy, and a perception among some low income consumers that broadband services are not relevant to their lives.
The projects tested adoption strategies such as varying subsidy levels, varying levels of out-of-pocket costs to the consumer for monthly recurring charges and equipment, and offerings of digital literacy trainings. The projects confirm that cost continues to be a significant factor in adoption rates among low-income consumers. In all but one of the projects, there was some out-of-pocket cost to the consumer. Perhaps not surprisingly, then, the overall participation rates in the pilot projects were far lower than anticipated. Only Virgin Mobile’s project appeared to have included offerings in which the monthly recurring charge was entirely covered by the subsidy. The report notes that these offerings attracted the most consumers, which is not a surprise to ETCs that participated in the pilot program or, indeed, those with experience with the low-income market.
Other points of interest include staff’s findings that where consumers were willing to pay for broadband services, they tended to choose more modest and affordable speeds and data allowances, which suggests that more modest offerings should be part of the solution to closing the broadband adoption gap as the FCC moves to transition the Lifeline program to supporting broadband services. The FCC is expected to vote on whether to begin that transition in its June 18, 2015 meeting.