New FCC Telephone Penetration Statistics Reveal Problems in New York

This week, the FCC released its latest “Telephone Penetration By Income By State” report. The report is based on March 2008 Census Bureau survey data from its Current Population Survey which regularly asks the question:

"Does this house, apartment, or mobile home have telephone service from which you can both make and receive calls? Please include cell phones, regular phones, and any other type of telephone."

The report made the following statistical findings:

• In March 2008, penetration among low-income households (under $10,000 annual income in 1984 dollars) nationwide was 89.7%. This contrasts with an overall nationwide penetration rate of 95.2% in March 2008.

• Since 1985, when the Federal Communications Commission (Commission) first established Lifeline to help low-income households afford the monthly cost of telephone service, penetration rates among low-income households have grown from 80.0% to 89.7%.
  

• Since that have provided a high level of lifeline support for telephone service for low-income consumers experienced an average growth in penetration of 4.0% for low-income households from March 1997 to March 2008. In contrast, states that provided a low level of lifeline support experienced an average growth of 1.4% in telephone penetration rates for low-income households between March 1997 and March 2008.
  

• Among states, penetration rates among low-income households ranged from a high of 97.3% to a low of 81.7% in March 2008.
  

The report shows that the percentage of low income households with telephone service in New York State rose from 84.6% in March 1984, to its peak of 92% in March 2000, backsliding to 88.1% in March 2008. In contrast. the penetration rate for higher income New York households (earning more than $40,000/year in 1984 dollars) was much higher: 98.5% in March 1984, 97.9% in March 2000, and 97.7% in March 2008.

Put differently, the penetration gap between low and higher income households was 13.9% in 1984, 5.7% in 2000, and 9.6% in 2008.

The penetration rate for all New York households was 91.4% in 1984, 96.1% in 2000, and 93.7% in 2008.

Why did telephone subscribership of New York low income households decline in recent years?

PULP believes the major cause for the recent decline and the growing disparity between low and higher income households is that due to policies and practices of the utilities and the PSC, fewer eligible New York low income households receive service at the authorized Lifeline discount rates. Today only about 300,000 out of a pool of at least 1.2 million readily identifiable New York State Food Stamp households receive Lifeline. This is less than half the number of households who received Lifeline rate assistance in the late 1990s.

While we have discussed the reasons behind this in detail in other blog posts here and here, there is no mistake that the sagging Lifeline enrollment has coincided with the drop in telephone penetration. The FCC’s report indicates that New York State has just under 7.5 million households: 6.3% of that figure without a phone means 472,500 mostly low income households in this state lack telephone service in their homes. Assuming 2 -3 persons per household, the number of persons without access to a phone at home may range between 1 - 1.4 million. This is a sorry result in light of the national telecom policy to have universal, affordable telephone service.

Much more needs to be done by the New York State Public Service Commission (“PSC”) to bring these numbers up. The Commission has never aligned itself with the national policy, and in practice has allowed hundreds of thousands of low-income households to go without the benefit of Lifeline assistance. Recently, the PSC launched a universal service proceeding. It is time that plight of Lifeline and low income households are addressed.

Also, this week, the FCC released its “Telephone Subscribership in the United States” report. It contains data from March 2009 and shows that the percentage of households with a telephone in New York stands at 94.7%. Not only is this figure less than the national average of 95.6%, it is lower than the neighboring states of Connecticut (97.6%), Massachusetts (97.9%), New Jersey (94.8%), Pennsylvania (97.6%), and Vermont (97.1%).

The PSC has begun promoting Lifeline Awareness Week, set for the week of September 14th, when eligible people will be encouraged by advertisements to request Lifeline. Inefficient individual sign ups should not be the first way to approach the problem. Also, those who are eligible are likely to run into policy barriers which need to be removed. Systematic changes need to be made by the PSC and other state agencies to seamlessly and efficiently link participants in public assistance programs with Lifeline providers to bring the percentage of low income households having a telephone more in line with all households, as has been accomplished in North Dakota (96.4% and 98.0%), Ohio (95.1% and 97.1%), and Washington (97.3% and 98.3%).

Lou Manuta