The FCC Chairman Tom Wheeler, has emphasized that Internet access is a critical component of modern life, key education, communication and finding a keeping a job.
With the net neutrality rules released earlier this year, the agency redefined broadband as a public utility, like the telephone, giving it stricter oversight on how online content gets to consumers. That triggered lawsuits from Internet service providers.
The proposal Thursday to expand the Lifeline phone program to Internet service aims to narrow the "digital divide" — those with access to the Internet and other modern technologies and those without.
According to a Pew Research Center report from 2013, 70 per cent of U.S. adults have a high-speed Internet connection at home. Only 54 per cent of households earnings less than $30,000 a year do. The FCC says low-income Americans are more likely to rely on smartphones for Internet access. According to the Pew report, 67 per cent of households that make less than $30,000 a year have home broadband or a smartphone.
Lifeline was started in 1985 and expanded to include wireless phones in 2005. The FCC's proposal calls for extending Lifeline's $9.25 monthly credit to give low-income households a choice of phone service or Internet access, via a wire to the home or a smartphone.
"Voice is no longer sufficient to be able to participate in society today," said Harold Feld of Public Knowledge, a consumer advocacy group. "The broad assumption is that you've got broadband access somehow."
But Lifeline has been criticized for being susceptible to fraud, and the proposal may get pushback from Republicans. The FCC's proposal says it will build on anti-fraud measures that were put in place in 2012, such as extending the period that providers must keep documents on customers' eligibility for the programs.
Senator David Vitter, R-La., said in a statement Thursday that the FCC has "failed to manage Lifeline efficiently in its current form, and I cannot support any expansion of a program that has so few safeguards in place to protect the legitimacy of the program and the American taxpayers who pay into it."
FCC commissioners will vote in June on whether to proceed with expanding Lifeline to broadband service.
In 2014, Lifeline served 12 million households and cost $1.7 billion, paid for by surcharges on the country's telephone customer bills.
Eligibility depends on income being at or less than 135 per cent of the federal government's poverty line, or participation in programs including Medicaid, food stamps or free school lunch.
As Internet access is often more expensive than $9.25 a month, program participants may have to pay an additional amount for service.
Some broadband providers already offer low-cost Internet to households that get food stamps or are in the school lunch program. But Comcast's $10-a-month Internet Essentials program, for example, has been criticized as having too-slow speeds of up to 5 megabits per second and for too few people being eligible.
The FCC defines broadband as having download speeds of 25 megabits per second and higher.