FCC Votes To Deregulate Media Ownership Rules, Lifeline Program

The United States Federal Communications Commission (FCC) voted Tuesday on a number of measured proposed by the new administration that will roll back a number of rules, regulations and consumer protections.

Thursday’s vote during the commission’s monthly Open Meeting removed roadblocks intended to prevent media consolidation in local markets, placed new limits on broadband internet and phone subsidies provided to low-income Americans and lifted quality requirements for carriers replacing old networks, among other actions.

The Republican-majority commission led by President Donald Trump’s appointed Chairman Ajit Pai, moved forward with its new agenda that prioritizes removing regulations in an effort to free up telecommunications and media companies to operate without restriction, though many of the commission’s actions have received criticism for favoring the interests of corporations at the expense of consumers.

Reconsideration of Broadcast Ownership Rules

The commission voted 3-2 on party lines to eliminate rules that prevented a single company from owning both a newspaper and a broadcast network in the same media market. The rule, which had existed for 42 years prior to Thursday’s vote, has been cited by a number of major media organizations as a hurdle to expansion into certain markets.

FCC Chairman Ajit Pai called the rule “utter nonsense” and argued the rule was out of date in the current media environment, where publications and broadcast networks have increasingly moved online, where the idea of media markets are more nebulous.

Democratic commissioner Jessica Rosenworcel disagreed with Pai’s characterization of the rule. In a statement provided to International Business Times, the commissioner said Thursday's vote “dismantles [our] values” and “sets [the agency’s] most basic values on fire.”

“As a result of this decision, wherever you live the FCC is giving the green light for a single company to own the newspaper and multiple television and radio stations in your community,” Rosenworcel said. “I am hard pressed to see any commitment to diversity, localism, or competition in that result.”

Fellow Democratic commissioner Mignon Clyburn echoed the dissention on the vote, saying that while the FCC’s majority presented the rule as an attempt to help boost small, struggling media companies, the removal of the rule “is really about helping large media companies grow even bigger.”

The FCC has already drawn criticism from a number of groups over the vote. Carmen Scurato, the director of policy and legal affairs for the National Hispanic Media Coalition, said the FCC “has laid the groundwork for even greater corporate ownership of the public airwaves.”

Scurato pointed to the pending acquisition of Tribune Media by Sinclair Broadcast Group, which would give the conservative-leaning media company the ability to reach 72 percent of U.S. households—well beyond the FCC’s limit of 39 percent for a single company.

“Local and diverse voices on our airwaves were already sparse before the FCC vote today, Scurato said. “They will become even more rare as large national conglomerates now have the greenlight to force owners of color out of the market.”

U.S. Senator Bill Nelson, D-FL, also spoke out against the vote. The senator, who in September signed on to a letter with 23 other Senators raising concerns about the potential elimination of the FCC’s media ownership rules, said, “By eliminating media ownership limits, the FCC is delivering a blow to localism and diversity in our broadcast media.”

Nelson warned, “this act will pave the wave for massive broadcast conglomerates to increasingly provide local viewers with nationalized cookie-cutter news and corporate propaganda that’s produced elsewhere.”

Bridging the Digital Divide for Low-Income Consumers

In another party line vote, the FCC moved to scale back the scope of its Lifeline program, which offers subsidies for low-income Americans to purchase landline and mobile phone plans and broadband internet services.

As a result of the vote, the FCC will now place a spending cap on the amount of subsidies the commission will provide to households that apply to the program and introduced for public comment a proposed ban on resellers, or telecommunications service providers that don't operate their own network infrastructure, from offering Lifeline plans.

The Lifeline program, first launched in 1985, provides households a $9.25-per-month credit to be put toward the purchase of home internet service or mobile phone subscriptions. The program serves more than 13 million low-income Americans.

Before 2016, Lifeline participants could only apply for the program to receive support for landlines or mobile phone plans—some may recognize the program as part of the “Obamaphone” controversy that falsely claimed welfare recipients were receiving free cell phones from the Obama administration.

Under former FCC Chairman Tom Wheeler, the commission passed the 2016 Lifeline Modernization Order, which extended the financial benefit to broadband internet. Current FCC Chairman Pai—then a commissioner occupying one of the two Republican seats on the commission—and fellow Republican commissioner Michael O’Rielly opposed the decision at the time, arguing it left open the possibility to fraud and abuse of the system.

That issue remained central to Pai’s now-approved plan to place a cap on the Lifeline program. The chairman has long criticized the Lifeline program as being plagued with "waste, fraud, and abuse.”

Commissioner Clyburn dissented on the vote and warned the proposed new restrictions, including the ban on resellers, for the program designed to help low-income households would create significant issues for the very population it is intended to serve.

Clyburn warned that more than 70 percent of wireless Lifeline consumers “will be told they cannot use their preferred carrier and preferred plan, and on top of that, they may not have a carrier to turn to after that happens.” She said “the impact of these actions and proposed actions will be severe, but the actions themselves are heartless.”

Commissioner Rosenworcel offered similar sentiments, stating, “This is not real reform. This is cruelty. It is at odds with our statutory duty. It will do little more than consign too many communities to the wrong side of the digital divide.”

The National Consumers League also voiced its discontent with the vote, which it believes will threaten access to phone and internet services for the most vulnerable of Americans.

“The current FCC leadership would like the public to believe that its vote today will help bridge the digital divide. In reality, the FCC’s action threatens to exacerbate the current digital divide, with low-income consumers are relegated to expensive, low-quality Internet service while those with means enjoy access to 21st century broadband,” Sally Greenberg, executive director of the National Consumers League, said.

The decision was not without its supporters. The Taxpayers Protection Alliance applauded the vote, and TPA President David Williams encouraged the FCC to continue to preserve the program while “curbing the ongoing waste, fraud and abuse.”

Accelerating Wireline Broadband Deployment

In a third 3-2 vote, the FCC voted to update its rules on broadband deployment in an attempt to encourage network providers to update their existing networks and more quickly deploy modern options in areas where companies are removing outdated networks.

Notably, the decision also eliminates a “functional test” put in place in 2014 under the previous administration that required telecom companies planning to abandon copper networks to ensure that Americans are provided with networks that are at least as good as the networks being replaced.

While the FCC has described the test as having “deterred and delayed carriers from upgrading their networks,” the dissenting votes from the two Democratic commissioners warned that the removal of the test would leave consumers without any guarantee of a capable network when companies tear up their existing infrastructure.

“This item enables carriers to stop maintaining their copper infrastructure without notice to customers,” Commissioner Clyburn said. “I heard just last week about a customer whose fixed broadband speeds were so frustratingly slow that she spent hundreds of dollars a month on a mobile hotspot just to stay connected. This item will countenance more of that, saddling consumers with increased voice and broadband costs, and allowing providers to effectively retire their copper without notice.”

Commissioner Rosenworcel noted that while networks unquestionably need to be updated and providers need to have the ability to swap out old services to replace them with new and improved infrastructure, the FCC’s rule change doesn’t accomplish that.

“It defies logic to suggest that this can be done without working with the customers and communities where network change occurs,” she said. “To those who are affected by change—consumers, businesses, state officials, tribal authorities, and first responders—the FCC says tough, figure it out, you’re really on your own.”