David McCabe Feb 9, 2017
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The future of "Obamaphones"

Photo illustration: Greg Ruben / Axios

The FCC subsidy program that pays for phone and internet service for low-income people — derisively called "Obamaphone" by critics—stands to be overhauled now that Republicans are in control.

The so-called Lifeline program, which was actually created during the Reagan administration, started to see signs of change last week when new FCC Chairman Ajit Pai revoked the participation of nine providers in the program, saying the applications needed more review.

Democrats worry the FCC will take more drastic measures. While Pai and Republicans in Congress have long argued the Lifeline program needs reform to cut waste and fraud, they haven't yet laid out a roadmap for how they'll change it.

Adding a budget cap: In 2015, as the FCC headed toward expanding the program to cover internet service, Pai said the agency should have considered placing a cap on the program's budget of $1.6 billion to align with spending on the subsidies that year. "A budget induces careful spending," he said in a dissent the next year. The idea has support in Congress, where one bill would set the cap at $1.5 billion.

  • The counterpoint: Opponents of a cap say that it would arbitrarily keep eligible Americans out of the program. "A cap on the Lifeline program will inherently exclude an undetermined number of the eligible low-income consumers," said Scott Bergmann, an executive with wireless trade group CTIA, in congressional testimony last year.

Targeting subsidies more narrowly: Pai and Republican Commissioner Michael O'Rielly both support the idea of targeting the program's subsidies. That's echoed in Congress. Marsha Blackburn, who now chairs the House subcommittee on Communications issues, wrote with O'Rielly in 2015 that "the program must be better targeted to eligible low-income individuals who would not otherwise sign up for service."

  • The counterpoint: Jessica Gonzalez, Deputy Director and Senior Counsel at advocacy group Free Press, said that restricting subsidies could cause trouble for poor people who are stretched thin financially. "When you're right on that line, you're making hard decisions," she said.

Asking subscribers to contribute: Pai floated the idea in 2015 of "requiring Lifeline subscribers to pitch in as a condition of getting service." (It wasn't included in a dissent he wrote the next year when the commission voted to expand the subsidy to broadband.) O'Reilly has also backed the idea of a minimum contribution.

  • The counterpoint: Gonzalez said that requiring even a small contribution would push some Lifeline recipients into making tough spending choices. "A dollar, five dollars, that can feed a family dinner," she said.

Looking closely at fraud: Republicans want to cut down what they see as significant fraud in the program. "I think all of us would say we want Lifeline to meet the needs of those that have a need, and we want to make certain that the waste, fraud and abuse of the program is routed out," Blackburn said Wednesday.

  • The counterpoint: Amina Fazlullah, the Director of Policy for the Benton Foundation, said the FCC has already been "diligently working" to make the program more efficient.

More power to the states: Pai recently questioned whether the FCC has the authority to designate providers for the program at all, rather than the state-level officials who have traditionally done so. He said that putting "the designations on hold gives the FCC the chance to make sure the process is legally defensible and to avoid potentially stranding customers if the courts ultimately deem the process unlawful."

What's next: We wait. The FCC recently asked a federal court to hold off for 90 days on proceeding with two cases related to the FCC's expansion of the program to broadband. Pai has declined to comment on his plans for the program, as did an FCC spokesman on Wednesday.

Congress is also not yet ready to announce concrete actions, but Blackburn indicated this week that lawmakers on the House Energy and Commerce Committee plan to take a look. "I think that E&C has jurisdiction over this issue and when we decide what the appropriate action is going to be, we will take it," she said.

The bottom line: Closing the digital divide is going to be an ongoing topic of conversation, especially as Pai has made it priority. Once again, Lifeline is going to be a flashpoint in that debate over how government subsidies should be used to connect poor people in hard-to-reach regions.

Zachary Basu 2 hours ago
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Uber pauses self-driving car tests after pedestrian killed

An Uber self-driving Volvo
An Uber self-driving Volvo. Photo: Uber

A pedestrian was struck and killed by a self-driving Uber in Tempe, Arizona, early Monday morning, according to ABC15. Tempe police said that the vehicle was in autonomous mode, though a safety driver was behind the wheel at the time of the crash.

Why it matters: The New York Times notes that this could be the first pedestrian ever killed by a self-driving vehicle. Uber says it's closely following its incident response process, though it declined to share more details about what that entails. The company has also paused its self-driving cars in all locations (Pittsburgh, Tempe, San Francisco and Toronto).

Stef W. Kight in 1 min
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How Trump plans “to keep the damn drugs out”

Donald Trump lifting hand at mic with red tie and navy suit
Photo: Mandel Ngan / Getty

In a speech in New Hampshire addressing the opioid crisis, President Trump said that the Department of Justice needs to be tough toward drug dealers and "that toughness includes the death penalty." He went on to praise other countries who execute drug dealers, saying "they don't play games."

Why it matters: Trump said he's not only addressing the opioid crisis, but "the general drug crisis." Trump said "unless you have really bad penalties, led by the death penalty...we won't get anywhere."