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Law360 (June 1, 2021, 7:21 PM EDT ) To encourage internet service providers to offer subsidized laptops, tablets and other devices, the Federal Communications Commission has agreed to reimburse ISPs for the equipment even when a user later switches to a different ISP.
In a May 28 order, the FCC clarified that ISPs participating in the Emergency Broadband Benefit program, which subsidizes both connectivity and equipment, can still be reimbursed for the devices they sell to customers even if a user changes providers.
"We find this waiver is in the public interest because it will allow a household's first provider to seek reimbursement for the connected device that initially helped the household obtain the supported connectivity. The waiver also removes a financial disincentive that could discourage providers from offering the connected device," according to the order.
The EBB coronavirus-response program subsidizes up to $50 of a qualifying household's monthly internet bill or up to $75 of monthly internet service on tribal lands. It can also cover $100 toward a one-time equipment purchase that would allow households to get online as long as the household purchases the equipment through its internet provider.
Of the about 1,000 providers that have agreed to become EBB providers, FCC data shows that only about 100 of those companies, or roughly 10%, also offer subsidized devices.
That doesn't mean that participation in the connectivity program has been flagging. According to the FCC, roughly 1 million households signed up for the EBB in the first week that it was available.
Colin Rhinesmith, a senior faculty research fellow with the Benton Institute for Broadband & Society, pointed out in a recent blog post that while interest in the EBB as a whole has been strong, few providers have chosen to add subsidized devices to their list of offerings.
"While the Emergency Broadband Benefit Program represents an important step forward to address the challenges of low-cost internet and low-cost devices, too few internet service providers are offering devices through the Emergency Broadband Benefit Program," Rhinesmith wrote in a May 25 post. "This may be because the subsidy for devices, as mandated by Congress, is too small — or not enough providers had preexisting relationships with computer refurbishers."
The FCC's May 28 order responded to petitions from Cox Communications Inc. and the National Lifeline Association, which both asked the agency to loosen the circumstances under which providers can collect reimbursements for connected devices.
"Grant of the waiver is consistent with the public interest because it supports the EBB Program goal of providing low-income consumers who face financial obstacles to obtaining broadband Internet access service with heavily discounted or free service, as well as a device to connect to that service," the National Lifeline Association wrote. "The limited waiver will encourage EBB participating providers to offer discounted connected devices to subscribers without risking the substantial (up to $100 per subscriber) financial loss that would otherwise occur."
--Editing by Jay Jackson Jr.
For a reprint of this article, please contact reprints@law360.com.
