The future of "Obamaphones" - Axios
Featured

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.
Featured

WhatsApp adds Snapchat-like features

WhatsaApp

WhatsApp, the Facebook-owned messaging service that dominates the messaging app market globally, is adding a photo and video sharing capability within their status feature that mimics that of Snapchat and Instagram Stories. Users will have the ability to annotate photos and videos with emojis, text, etc. and photos and videos will expire from users' statuses after 24 hours.

Why it matters: This is just the latest of steps Facebook has taken to mimic Snapchat-like features on its apps. They've already introduced similar features for Facebook Messenger and Instagram. While Facebook has spent the past year adding Snapchat-like product features, Snapchat has spent the past year adding Facebook-like measurement and audience targeting-features.

What we're watching: Mark Zuckerberg's $19 billion bet on WhatsApp in 2014 was based largely on WhatsApp's incredible reach in emerging markets. But in addition to the growth opportunity, the acquisition also gives Facebook the opportunity to experiment with unique new features with lots of users, before potentially integrating them into other Facebook-owned apps. In January WhatsApp announced it was testing the ability to temporarily track friends' locations and the ability to recall sent messages that haven't been viewed yet.

Featured

Trump picks McMaster to replace Flynn

AP Photo/Susan Walsh

Trump told reporters today that Lt. Gen. H.R. McMaster will be taking over as national security advisor. He's replacing Michael Flynn who stepped down after controversy surrounding Russia ties. Trump called McMaster "a man of tremendous talent and tremendous experience."

Who is McMaster? Tom Ricks of Foreign Policy, who says he's known McMaster since he was a major, wrote before the announcement that he's "smart, energetic, and tough" and has good combat experience. Ricks also identifies the key challenge facing McMaster: "To do the job right, McMaster needs to bring in his own people. And it remains unclear if he can get that." Ricks says most people he talked to who have worked for McMaster would follow him into the Trump White House.

Featured

Snapchat sells Spectacles online

Snap Inc.

Snapchat spectacles now available for purchase online.

Spectacles are smartphone-connected glasses that take Snapchats — up-to 10-second videos or stills — with the click of a button. Previously, the glasses were only available for purchase at pop-up vending machines in New York and California, where lines were long and the allure was strong. Now, Snap Inc. is making their glasses available to all consumers for $130 USD.

Why it matters: In its S-1 filing with the New York Stock Exchange, Snapchat calls itself a "camera company" instead of a social media app or a messaging service. This is critical in understanding how Snapchat plans to monetize its reach and technology, which investors are monitoring closely ahead of its IPO. In its S-1 filing, Snapchat noted that Spectacles have not initially generated any revenue. While Snapchat makes the majority of its money from advertising now, opening up sales for its new camera now signals that Snap Inc. sees camera technology and sales as a lucrative business model in the future.

Featured

Russia's UN ambassador dies in NYC

John Minchillo / AP

The Russian foreign ministry says Vitaly Churkin, its ambassador to the United Nations, has died in New York City. He was 64. Russia did not offer details on his death, but said in a statement:

A prominent Russian diplomat has passed away while at work. We'd like to express our sincere condolences to Vitaly Churkin's family — Russian Foreign Ministry
Featured

Not invited to administration Obamacare meeting: Treasury

(Carolyn Kaster / AP)

Members of the Trump administration got together on Sunday to talk about President Trump's plan to repeal and replace Obamacare — but a photo tweeted by White House chief of staff Reince Priebus doesn't show any Treasury Department officials at the table, despite the likelihood that the plan will involve big tax changes.

At the table were many members of the president's health care and policy teams, including Department of Health and Human Services Secretary Tom Price, yet-to-be confirmed Centers for Medicare and Medicaid Services head Seema Verma, and White House aide Stephen Miller.

But no one from the Treasury Department was there, and a source who heard about the snub from a White House economic adviser said the department feels shut out of the process. A White House spokesperson responded that while Treasury Secretary Steven Mnuchin "wasn't in attendance at this particular meeting, he is absolutely involved in the discussion of how best to repeal and replace Obamacare."

Featured

The growing fight to save local newsrooms

Non-profits and media distribution companies are stepping in to support local newsrooms as they navigate the chaotic news cycle of the new administration and the rapidly-changing digital news environment.

The non-profits

Poynter is dedicating a reporter to cover the transformation of local and regional journalism full-time, in addition to launching a weekly newsletter. The Knight-Lenfest Newsroom Initiative made a $5 million investment to continue a program that helps local papers transform their newsrooms to support digital storytelling. Local News Lab relaunched its site to include updated guidebooks to help local newsrooms survive the transition into the digital age. MuckRock started a Slack channel in January to help journalists all over the country, including 50% local news reporters, better cover the Trump Administration.

The platforms

Facebook finally took its initiative to reach out to local journalists to the road, hosting around 70 print and broadcast reporters — mostly from Texas — for a Dallas forum about best practices and the future of news. The move is part of the Facebook Journalism Project. Google introduced a local news source tag in May that algorithmically favors local sources in users' feeds. The tag labels stories that are reported first-hand by local sources.
Featured

10 Axios stories to get you caught up on last week

Lazaro Gamio / Axios

Use the holiday to get caught up on last week.
Featured

Yes, your commute is really that awful

Julie Jacobson / AP

Reuters flags the latest Global Traffic Scorecard from INRIX Inc, a traffic data company based in Washington state. It found that 5 of the 10 most congested cities globally are in the U.S., and that drivers waste an average of $1,200 a year in lost fuel and time sitting in traffic jams.

The five worst U.S. offenders: Los Angeles, New York City, San Francisco, Atlanta and Miami.

The worst road: The Cross Bronx Expressway in New York City.

But at least you're not in Bogota or Moscow: Drivers in those two cities deal with the worst traffic in the world, when you break it down by the percentage of time spent in traffic jams compared to total drive time.