The Federal Communications Commission (FCC) on Friday blocked nine companies saying they will no longer be allowed to participate in a federal program providing cheap internet to low-income families.
The program, called Lifeline, provides low-income households registered for the program with $9.25-a-month allocation, which they can use for home Internet service. Accordingly, there are 13 million Americans that are eligible for Lifeline, the FCC has found. According to The Chicago Tribune, there are roughly 900 service providers, who are participants in the said program.
The nine companies directly affected by the new FCC ruling are Spot On, Boomerang Wireless, KonaTel, FreedomPop, AR Designs, Kajeet, Liberty, Northland Cable, and Wabash Independent Network. Said companies were approved for the program just weeks ago. Four of the companies were approved for the program on December 1, and the other five was approved on January 18.
FCC Chairman Ajit Pai, in a statement, said that the nine companies' inclusion in the program is a form of "midnight regulation." Additionally, he said that the last-minute actions did not have the full backing of the majority of commissioners at the time, should not bind the commission going forward, he said.
Accordingly, the FCC officials plan to reconsider the participation of the said companies into the program to consider measures to prevent waste, fraud, and abuse in the program. None of the named companies appears to be suspected of any financial fraud.
However, the order also pointed out Total Call Mobile reportedly paid a settlement of $30 million after claiming reimbursement for duplicate and ineligible customers. Total Call Mobile was not one of the providers that were removed from the program.
Established in 1985, the Lifeline program provides poor communities with discounted phone and internet service to access resources for jobs and education. The program was expanded last year to include Broadband as well as providing registered households the $9.25 credit they use for the access, reported CNN Tech.
The news comes as a bog blow for Kajeet Inc., which services 300 school districts in 41 states including Washington D.C. in providing students with the internet if they do not have it at home. The company filters out Facebook and Netflix, letting kids connect only to the resource for homework.
Democrat FCC Commissioner Mignon Clyburn said the reversal order widens the gap of the digital divide rather than working to close it. Pai previously stated that bringing broadband to all Americans is one of his primary goals.
