Changing LifeLine could hurt low-income consumers

Assemblymember Steven Bradford claims that AB 1407 is needed to improve California’s LifeLine program (“PUC’s dithering hurts those who depend on basic phone service,” Capitol Weekly, July 29). According to Mr. Bradford, the California Public Utilities Commission has taken too long to revise the program, and AB 1407 will give LifeLine customers more choices while preserving existing consumer protections.

It’s true that the program needs updating. It was designed when there was only one way to make a phone call, and that was over the copper network from a phone in your home or office. Things have changed. VoIP and wireless are the new basic communications, and LifeLine needs to evolve with technology. BUT – and this is the heart of the issue – LifeLine still needs to fulfill its primary purpose, which is to make phone service affordable. AB 1407 doesn’t do that. AB 1407 undermines LifeLine’s essential guarantee of affordable phone service, effectively replacing that guarantee with a coupon.

Mr. Bradford complains that the CPUC has failed to act on LifeLine for over seven years. However, part of this delay occurred during the tenure of CPUC Commissioner Rachelle Chong, a regulator who openly disavowed regulation and removed many consumer protections from telephone service in California. Once Ms. Chong’s term ended, the Commission began work on revising LifeLine, but postponed doing so at the request of AT&T and Verizon.

Mr. Bradford introduced AB 1407 only after the CPUC had already begun to revise the LifeLine program. The CPUC’s proceeding has collected input from carriers, consumer groups, civil rights organizations, and LifeLine customers themselves. All of these groups, including AT&T and Verizon, expressed different opinions about how the Commission should revise LifeLine. The Commission is doing just what it’s supposed to do: consider all interests before issuing new rules.

It appears that AT&T and Verizon, no longer able to delay at the CPUC, are worried that the CPUC may draft rules that are not exactly the revisions the telecom giants want. So they support AB 1407, which is a carbon copy of AT&T and Verizon’s filings at the CPUC.

Under the bill, carriers can pick and choose where they offer LifeLine service. They can offer whatever service quality they choose. They don’t have to provide customers with free access to 1-800 numbers, 911, or customer service. They can offer customers as small a number of minutes as the carrier wants—typically, 8 minutes a day, but potentially even fewer.

Most disturbingly, carriers can set the price for LifeLine as high as they want, because AB 1407 eliminates LifeLine as a service and transforms it into a subsidy. Instead of paying a set, low-cost rate for phone service, subscribers will get a coupon giving them $11.85 off their bill every month.

Assemblymember Bradford states that if LifeLine customers are unhappy with this overpriced, unregulated, low-quality service, they can still choose wireline LifeLine—the very service Mr. Bradford claims that LifeLine customers don’t want. So AB 1407 forces customers to choose between service they don’t want and service they can’t afford.

Actually, it’s worse than that. Traditional wireline phone service is steadily being replaced by VoIP networks, so the choice Bradford offers is a mirage that will soon disappear.

Mr. Bradford rightly says, “[n]o Californian with limited financial resources should be locked out of the LifeLine program.” AB 1407does not solve that problem. AB 1407 does not ensure that phone service will be available to low-income consumers. AB 1407 does not ensure that phone service will be affordable. The only thing that AB 1407 ensures is that telephone users will pay into a system with no hope of actually achieving its goal of making phone service affordable for low-income people.

Assemblymember Bradford’s stated goals are admirable. His purported solution, however, is not.
—
Ed’s Note: Stephanie Chen is Energy and Telecommunications Policy Director at The Greenlining Institute, www.greenlining.org.