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FCC expands subsidy program to cover broadband

TRB Chair Javier Rúa-Jovet. (Credit: Joe Colón)

TRB Chair Javier Rúa-Jovet. (Credit: Joe Colón)

In a 3-2 vote, the Federal Communications Commission on Thursday decided to expand its Lifeline Universal Service Program, which currently subsidizes voice telephone service for low-income households, to allow those households to use the program to lower the cost of broadband service.

The decision is expected to incentivize the adoption of broadband on the island, which stands to receive at least $4 million annually from the Lifeline program’s $2.2 billion budget, Puerto Rico Telecommunications Regulatory Board Chairman Javier Rúa-Jovet confirmed.

The Lifeline program was created in 1985, and since that time has only directly subsidized the provision of voice telephone service for eligible low-income households. Today, more than 10 percent of households (12.9 million) participate in the program for discounted dial tone or mobile voice service.

Beginning this December, low-income consumers will be able to apply a $9.25 per month discount to a qualifying home or mobile broadband subscription, whether mobile or fixed.

According to the U.S. Census, 24.9 percent of U.S. households do not subscribe to broadband service. In many cities and communities in the country, broadband adoption is far below that average. For example, San Juan has a home broadband adoption rate of only 45 percent, and broadband adoption in Detroit is only 49 percent, the TRB official confirmed.

The majority of households making less than $20,000 per year do not subscribe to broadband service, compared to 89 percent of households that make more than $50,000. Connected Nation research has shown that cost is the largest reason that low-income households do not purchase broadband service.

By comparison, there is virtually no “voice service adoption gap,” with voice telephone service at near universal adoption (97.6 percent). Because of the federal Lifeline and parallel state funds, voice adoption is high even in economically challenged areas like Puerto Rico, with a 94.3 percent adoption rate. Even among households that make less than $10,000 per year, voice adoption in the United States is more than 90 percent.

Since 2014, the TRB has developed a number of initiatives — including “PAIS Banda Ancha” and “TecnoAbuelos” — to digitally educate the island’s population. Similarly, the agency has focused on facilitating access and broadband adoption by opening Internet service centers, free WiFi services in public squares, and maximizing existing infrastructure in urban centers to deploy optical fiber.

“We are committed to providing access to advanced Internet technologies to our citizens who every day require better services and technological vehicles that allow access to information that is vital to their health and wellbeing,” Rúa-Jovet said.

“The FCC’s decision certainly is a key to continue cultivating successes in the field of communication technologies and information in Puerto Rico and validates all actions that the TRB has taken since 2014 to reform and modernize the Puerto Rico Universal Service Fund,” he said.

Author Details
Author Details
Business reporter with 29 years of experience writing for weekly and daily newspapers, as well as trade publications in Puerto Rico. My list of former employers includes Caribbean Business, The San Juan Star, and the Puerto Rico Daily Sun, among others. My areas of expertise include telecommunications, technology, retail, agriculture, tourism, banking and most other segments of Puerto Rico’s economy.

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