The FCC has hit a snag in its plan to curb broadband subsidies for low-income homes. A DC appeals court has issued a stay order temporarily blocking the regulator from limiting the $25 monthly Lifeline subsidy in tribal lands, arguing that native groups and small carriers are likely to win their case opposing the cuts. The court agreed with plaintiffs that the FCC’s move would likely lead to a “major reduction, or outright elimination” of vital communication for many tribal residents, and “substantial, unrecoverable losses” for providers that might lead to them going out of business.
The judges behind the ruling also rejected the FCC’s claim that cutting the subsidies would spur carriers to build their own networks in tribal areas. The Commission didn’t show historical evidence that reduced subsidies would lead to more telecom investment, according to the court. If anything, the judges said, the evidence suggested the opposite. The plaintiffs pointed out that providers have typically refused to offer Lifeline service in their lands since the tribal Lifeline initiative started roughly two decades ago, and that the stricter requirements don’t give companies an incentive to expand.
The FCC unsurprisingly objected to the stay. It claimed that the plaintiffs hadn’t demonstrated the likelihood of “irreparable harm,” and insisted that blocking the Lifeline changes would amount to “wasting public funds” on areas it didn’t think should receive full subsidies.