Smartphone-only internet users vs. the Lifeline program

Claire Dickey
CD
Claire Dickey
Jan 3, 2019

Smartphones are taking over… but why?

There’s estimated to be 237.6 million smartphone users in the U.S., according to Statista. Smartphones simplify the way we search for and obtain information, which makes finding the answers to our questions easier than ever. As a result, many people are cutting the cord with their internet provider for more reasons than just ease.

Allconnect® partnered with YouGov to conduct a survey to see why people are making the switch to smartphone-only internet. According to our research, one of the most common reasons for using a smartphone instead of traditional internet service is cost.

Our survey found that of the 11% of U.S. adults only using a smartphone to connect to the internet at home, 36% did so because traditional internet coverage was too expensive. A majority of our smartphone-only internet participants reported having both an income level under $40,000 and no college education.

This cost factor has created an ever-present “digital divide” between lower-income Americans and those with higher income levels. According to the Pew Research Center, “In 2016, one-fifth of adults living in households earning less than $30,000 a year were ‘smartphone-only’ internet users,” a 12% increase since 2013.

In 2016, one-fifth of adults living in households earning less than $30,000 a year were ‘smartphone-only’ internet users,” a 12% increase since 2013.

Pew Research Center

What’s being done about this digital divide?

Fortunately, there’s a strategy in place to help shrink the divide. Lifeline, a Federal Communications Commission program (FCC), aims to “help make communications services more affordable for low-income consumers,” by providing discounts on select home, wireless phone and broadband internet services.

Introduced by President Ronald Reagan in 1985, the program currently helps around 12 million people receive affordable telephone and internet service, according to Newsweek. Our YouGov survey found 39% of U.S. adults are aware of the Lifeline program, 12% have used it at some point in their lives and 8% are currently using it.

So, what’s the catch?

The FCC is looking into cutting the program by “limiting broadband choices for poor people,” according to an Ars Technica article. This means 8 of the 12 million Americans using Lifeline will lose access to affordable internet service.

The proposal, introduced by FCC Chairman Ajit Pai, will heavily affect territories like Puerto Rico, where, as reported by Newsweek, about 17% of the total population uses the program. There are additional states with high Latino populations that would be heavily set back by Pai’s proposal. According to our YouGov survey, 18% of California’s population, which is approximately 40% Latino, would be affected by the program cut.

Pacific Standard published that of the 69% of California’s Latino population with access to the internet at home, 61% use a smartphone to connect, rather than a computer. The article also states that the most common reason for high smartphone use is cost — data that falls right in line with our survey results — and continues by pointing out the difference in navigation quality between smartphones and computers.

With the digital divide between low-income Americans growing wider, predominantly due to the correlation between access to traditional internet service and one’s socioeconomic status, why would the FCC be looking to cut the Lifeline program when it’s one of the most important factors in decreasing the divide?

…with Pai’s new proposal, those 70% of individuals would lose their primary method of accessing the Internet.

Ars Technica

Spoiler alert: cutting the program is good for business.

An official FCC Fact Sheet published in October 2017 states that the cut would “…improve the business case for deploying facilities to serve low-income households… making deployment of the networks more economically viable.” In other words, the cut would be great for limiting competition and enhancing telecommunications economics, but not-so-great for those relying on the program.

According to Ars Technica, “70% of wireless phone users who rely on Lifeline subsidies buy their plans from resellers, i.e. companies that purchase capacity from network operators and then resell it directly to consumers.” And with Pai’s new proposal, those 70% of individuals would lose their primary method of accessing the internet.

94% of [low-income] families in the survey have internet access, either through a home computer or a smartphone and 52% of those with an internet connection at home say it is too slow.

The Christian science monitor

Are there other benefits to switching to smartphones?

An additional contributing factor to increased smartphone use over traditional internet service is, simply enough, slow internet. Through our YouGov survey, one Comcast internet user revealed that they “have [internet service], but it doesn’t work half the time.” This user represents the 12% of respondents that stated they rely solely on their smartphone due to a lack of quality high-speed internet in their area.

A 2016 study by The Christian Science Monitor regarding low-income families’ access to internet found that “94% of [low-income] families in the survey have Internet access, either through a home computer or a smartphone” and “52% of those with an Internet connection at home say it is too slow.”

Our takeaway

Smartphones have enabled those with lower-incomes to gain dependable access to the internet, whether it’s for job searching or paying bills online. Likewise, Lifeline has increased access to smartphones by providing more affordable data plan options.

With low-income families already feeling the impact of slow or high-priced internet, it’s more important than ever to stay up-to-date on the politics of internet coverage. Follow along in our Resource Center for further information on the future of the Lifeline program.