The Effects of Income-Based Lifeline Eligibility on Internet Adoption During the ACP Era: A Regression Discontinuity Analysis

Abstract

This paper examines whether being below the income threshold for FCC Lifeline broadband subsidy eligibility affects household internet adoption. Using a regression discontinuity design that exploits the 135% Federal Poverty Line (FPL) income eligibility cutoff, we estimate the effect of income-based Lifeline eligibility on broadband subscription rates. Drawing on Census American Community Survey (ACS) Public Use Microdata Sample (PUMS) data from 2021-2022, we analyze 683,574 households near the eligibility threshold. Our main finding is a null result: we find no statistically significant discontinuity in broadband adoption at the 135% FPL cutoff. The estimated intent-to-treat effect on broadband subscription is -0.3 percentage points (SE = 0.3, p = 0.32), with a 95% confidence interval that rules out effects larger than 0.9 percentage points. This null result persists across local quadratic specifications (though with some sensitivity at narrower bandwidths), covariate-adjusted models, and donut RD designs that address discreteness in the running variable. We interpret our estimand as capturing the effect of the income-based eligibility pathway, acknowledging that categorical eligibility through programs like SNAP creates some fuzziness at the threshold. Our findings suggest that the Lifeline program's income-based eligibility alone is unlikely to substantially close the digital divide among low-income households. \vspace{0.3cm} Keywords: broadband, digital divide, regression discontinuity, Lifeline, telecommunications policy \vspace{0.3cm} JEL Codes: L96, I38, H51, D12