By Kelcee Griffis

Law360 (June 25, 2021, 12:13 PM EDT) -- A grandfather in New York forced to pay $70 more for internet service to get a $50 discount; a housing administrator in Pennsylvania whose residents can't afford newly subsidized internet; dozens of frustrated customers who can't get their ISPs to enroll them in COVID-19 benefits.

These are just a few of the consumers flummoxed by disconnects between benefits touted as part of the federal Emergency Broadband Benefit program and the frequent failure of internet service providers to deliver on those promises.

Law360 analyzed over 300 consumer complaints filed during the EBB's first three weeks and found that some internet service providers are forcing consumers to change plans in order to get the $50 monthly subsidy or not validating customers' already-established eligibility to participate.

The data spanning from mid-May to early June, which Law360 obtained through public-records requests, showed that about 19% of the complaints reported service-tier issues that complicated their participation in the program. Most of these consumers told the Federal Communications Commission they were being required to upgrade their plans — or in a few cases, to downgrade — in order to qualify for the benefit.

Another 30% of the complainants said they experienced difficulties with getting ISPs to recognize their eligibility to receive the benefits, even after qualifying for the program through the FCC's sign-up portal. The other half of complainants reported miscellaneous issues with the program.

As of publication, 2.8 million households have been enrolled in the program since it went live on May 12, according to a tracker maintained by the Universal Service Administrative Co., which administers FCC subsidies.

Established by Congress in late 2020, the EBB is supposed to respond to a widespread lack of affordable internet service at a time when Americans have largely been working and learning remotely.

The limited-run 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. The discounts will end when the $3.2 billion in federal funding is exhausted.

Some of the growing pains that people reported can likely be attributed to the sheer size and complexity of the program, said Preston Wise, an associate at Akin Gump Strauss Hauer & Feld LLP who previously served as an adviser to former FCC Chairman Ajit Pai.

"In many ways, this is uncharted territory. The commission has simply never done a program of this scale set up this fast," Wise said. "I think some kinks in the system are to be expected."

Still, consumers reported that some of these kinks are preventing the EBB from reaching them quickly enough or in ways that actually help.

On the first day that the EBB was live, a Verizon subscriber wrote that the company required them to receive high-speed Fios service to qualify for the discount — an option that isn't accessible for struggling families in their northeast Pennsylvania enclave.

"Lots of low-income people in my area have the basic package, which is the only one available for lots of us," the customer wrote. "We are the people who need the help, not the people who can afford the higher-end package."

Similarly, a Section 8 housing coordinator in the Philadelphia suburbs reported that Verizon required low-income senior citizens to adopt its Fios "Mix and Match" internet and TV bundle in order to qualify for EBB, averaging $70 more than the plans they currently have.

"It is totally unfair and unethical to force low-income seniors to have to switch to a more expensive plan to get the EBB discount," the housing coordinator wrote on May 17.

Another person in New York City complained that their 89-year-old grandfather is also being forced to add a Fios Mix and Match plan, which would allegedly "cost $70 more per month, while the $50 discount would only be good for six months."

"Verizon appears to [be] leveraging the program to upsell customers into more expensive plans, while effectively shutting out low-income customers from relief funds," the person wrote on May 19.

Verizon said that as of May 19, it has discontinued these practices. But the phenomenon isn't isolated to one carrier. Customers of major ISPs including AT&T, Charter Spectrum, Comcast Xfinity and T-Mobile also reported a number of eligibility and billing hurdles.

A handful of AT&T customers reported the opposite phenomenon, in which they were told to adopt a lower speed tier in order to qualify for the program. A customer in Fort Worth, Texas, said they felt tricked by AT&T's approach to the program.

"They are forcing people to downgrade their plans and slow up the internet speeds so they can get the government assistance," the customer wrote on May 19. "What they are doing is illegal and against their disclosures. It is discrimination against people who qualify for assistance through this program."

An AT&T spokeswoman told Law360 that it offers "a range of options to meet customer needs. She also noted that the company continually evaluate[s] eligible plans."

Angela Siefer, executive director of the National Digital Inclusion Alliance, told Law360 that the EBB is a totally voluntary program for ISPs. As such, the FCC crafted its program rules to be as enticing as possible to ISPs, allowing them to decide which plans are included in the EBB, she said.

"Some of that appealing language, like 'You can choose which plans apply,' in function is frustrating" to consumers, Siefer said.

Even though ISPs are allowed to choose which service tiers they subsidize, the optics of so-called forced upgrades could undermine trust in the program and contribute to a slowdown in program signups, said John Horrigan, a broadband adoption expert with the Benton Institute for Broadband and Society.

"These are populations on pretty tight budgets," he said. "If they don't feel they can trust providers, they may hesitate to sign up."

The other bucket of issues stems from disparities between the federal government's signup portal that lets consumers document their eligibility and the ISPs' own recognition of that eligibility.

The EBB is modeled after the FCC's Lifeline subsidy program — which generally offers $10 monthly phone and internet subsidies to low-income households — but it applies to a larger swath of Americans and offers more money than the base program. People are eligible for the benefit if they qualify for Lifeline, Medicaid or SNAP benefits, are in the free or reduced-school lunch program, have had a substantial drop in household income since the pandemic started, or received a Pell grant for the current academic year.

People who wish to participate in the EBB must first apply for the program and document their eligibility on the federal side at GetEmergencyBroadband.org. Then, they must separately apply for subsidized service through a participating ISP. The enrollment process often breaks down at this point, when ISPs must search for the eligible participant on their end. Often, that search doesn't reflect the person's identity that was already established through the National Verifier database.

An AT&T customer in Los Angeles told the FCC they felt caught in the middle of the information gap.

"After a long going-back-and-forth [with AT&T], I was told to call EBB directly. However, the EBB web page instructs [people] to contact [the] internet provider directly. Obviously, both are [telling me] to contact the other to resolve [the] issue," the customer wrote on May 21. "The EBB program is a failure if the aim was to help low income consumers like us, just a PR stunt with [a] lot of TV ads but nothing concrete."

AT&T told Law360 that, once a customer determines their eligibility, "we work with customers to complete their enrollment in the program and expect enrollment enhancements to be available soon."

John Heitmann, a Kelley Drye & Warren LLP partner who specializes in FCC subsidy programs, said that while customers are experiencing issues on the provider side, providers are hobbled with red tape and limited functionality in the government portals meant to verify that consumers are eligible for the program.

Indeed, a Comcast spokesperson confirmed to Law360 that a customer's information must match exactly, "to the letter, abbreviation, and number, the information they enter in the National Verifier" for the ISP to verify the customer's eligibility. T-Mobile, Charter and industry trade group USTelecom also acknowledged the disconnects and said they're committed to working with government program administrators.

"The FCC has been too slow to fix glitches in their systems that create far too much friction for eligible consumers getting their benefit," Heitmann said. "The FCC and USAC should be far more transparent about the glitches that are causing consumer problems, because without such transparency, consumers are likely to blame the carrier rather than the National Verifier."

An FCC spokesperson told Law360 that the agency couldn't anticipate every flaw in the EBB and that "early hiccups should be expected in a program of this size that was established, per Congress, so quickly."

"Given these anticipated challenges, we are trouble-shooting constantly to see what improvements we can make and what problems we can solve," the spokesperson said. "We will continue with that problem-solving mindset as we head into month two of the EBB Program."

Acting FCC Chairwoman Jessica Rosenworcel recently issued a strong warning to ISPs that are flouting the spirit of the program, but she also acknowledged that the EBB is still in its infancy and that the agency will continue tweaking the program.

"If carriers are making it difficult for consumers to use their programs or get on board, they need to knock it off," Rosenworcel said during a June 17 press conference, in response to a question from Law360. "This is a program we got up and running in record time ... we'll make adjustments if needed as time goes on."

These adjustments appear to be ongoing both in the government and private sector. Throughout June, USAC rolled out several "system enhancements" to help ISPs look up and verify customers' eligibility and to sign them up more seamlessly. A Comcast spokesperson said these improvements should "further streamline this process for customers."

In the meantime, Akin Gump partner Jennifer Richter said the program is a start toward providing millions of families with subsidized broadband on an unprecedented scale.

"There are a lot of kinks to work out, for sure," she said. "But I think one of the things we've realized due to COVID is just how important our broadband connections to the outside world really are."

--Editing by Alyssa Miller.

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