Illustration: Eniola Odetunde/Axios

The federal government's main program to keep lower income people connected is only serving one-fifth of the people it could help, even during a pandemic that has forced school and work online.

Why it matters: Millions of Americans still lack access to the high-speed internet service that's become vital as people remain stuck at home and reopenings reverse.

How it works: The Lifeline program, administered by the Federal Communications Commission, provides a $9.25 monthly subsidy (more on tribal lands) to companies that provide phone or broadband service to low-income consumers, generally at no out-of-pocket cost to the customer.

  • Yes, but: Less than a fifth of the 38 million households that qualify for the program are actually enrolled. And despite a recent uptick, enrollment remains down sharply from the Obama era.
  • "It's very clear that the program is needed now more than ever," Democratic FCC Commissioner Geoffrey Starks told Axios. "It's a program that is severely underutilized, and it has got to really meet the moment here."

The intrigue: Starks and other critics lay the low participation rate at the feet of FCC Chairman Ajit Pai, a Republican appointed by President Trump in 2017 to lead the commission. They highlight two factors in particular as contributing to anemic enrollment:

  1. Pai rolled back an Obama-era change that let the federal government approve internet service providers to participate in the program nationally, instead leaving that determination up to the states. That means any provider looking to take part in the program has to take it up with every state where they operate.
  2. A database to determine who's eligible for subsidized service envisioned during the Obama administration stumbled out of the gate and isn't fully operational yet. That could make it harder to sign up new participants.

Another problem: The subsidy is too low to cover the cost of broadband, argues Gigi Sohn, who advised former FCC Chairman Tom Wheeler, a Democrat.

  • "$9.25 gets you a cheap mobile phone and 2GB of data, and that’s basically it," Sohn told Axios. "It’s a tiny amount — it’s certainly not enough to do your homework on or telework on."

The other side: Pai has overseen changes and enforcement actions aimed at curbing waste and fraud in Lifeline, which also brought recorded enrollment numbers down.

The FCC has made temporary changes in recent months to the Lifeline program in response to the coronavirus pandemic, an agency spokesperson noted, including:

  • Waiving Lifeline usage requirements and de-enrollment procedures until Aug. 31 to help ensure current subscribers aren't kicked off the program.
  • Waiving a requirement that consumers must provide three consecutive months of income documentation to qualify for the program.

The FCC also is promoting Lifeline awareness by coordinating with agencies that administer programs like SNAP and Medicaid to alert enrollees to Lifeline, the spokesperson said.

  • Starks said the agency should do more to advertise Lifeline and ensure that new enrollees in a program like SNAP are notified they also qualify for Lifeline.

By the numbers: Enrollment has climbed slightly during the pandemic.

  • Although it's still well below the roughly 12.5 million subscribers Lifeline served in 2016, the program went from about 6.7 million subscribers in February to about 7.2 million in May, according to figures from Lifeline compliance firm CGM compiled using disbursement data from the Universal Service Administrative Company, which oversees Lifeline.

Meanwhile, some broadband providers including Comcast offer their own programs for low-income customers.

  • Comcast is also giving new Internet Essentials customers two months of free service as part of its coronavirus response efforts.

What's next: Washington continues to look for ways to better connect economically disadvantaged Americans, including through a massive infrastructure package the Democrat-controlled House passed last week that envisions a federally funded $50 monthly discount on broadband plans for low-income people.

  • Sen. Amy Klobuchar (D-Minn.) introduced a Senate version of the broadband provisions.

The bottom line: Without new legislation that passes both houses and gets the president's signature, only existing programs like Lifeline can help with the affordability gaps that contribute to the digital divide.

  • "Lifeline is more essential than ever for millions of Americans, and we've got to do better by them," said Starks.

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