Friday, May 14, 2010

FCC: Low Income New Yorkers Still Struggling to Afford Phone Service

This week, the FCC released its latest "Telephone Penetration By Income By State" report . The report is based on March 2009 Census Bureau survey data from its Current Population Survey which 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 FCC Report found:
  • In March 2009, penetration among low income households (under $10,000 annual income in 1984 dollars) nationwide was 90.4%. This contrasts with an overall nationwide penetration rate of 95.6% in March 2009.
  • Since 1985, when the FCC 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 90.4%.
  • States that have provided a high level of Lifeline support for telephone service for low income consumers experienced an average growth in penetration of 4.6% for low income households from March 1997 to March 2009. In contrast, states that provided a low level of Lifeline support experienced an average growth of 2.9% in telephone penetration rates for low income households between March 1997 and March 2009.
  • Among all states, penetration rates among low income households ranged from a high of 97.0% to a low of 81.1% in March 2009.
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 90.1% in March 2009. In March 2000, the penetration rate for low income New Yorkers was 92.0%. In contrast, the penetration rate for higher income New York households (earning more than $40,000/year in 1984 dollars) was much higher: 98.4% in March 1984 and 97.3% in March 2009.

The FCC's survey takes into consideration the presence of wireless Lifeline providers, including TracFone's SafeLink service and Virgin Mobile's Assurance Wireless. Even when these are included, the percentage of low income New Yorkers with phone service actually went down in the past decade by nearly two percentage points. Keep in mind that TracFone is now the largest Lifeline provider in New York State, with about 365,986 customers , and the percentage of low income households with a phone has still declined. The 2% shrinkage in New York's telephone penetration means that approximately 160,000 more households lack any phone service.

A Universal Service proceeding has been launched by the New York State Public Service Commission ("PSC"), but it is examining high cost support in rural areas first and may not get to low income issues for a year or more. What more can be done in the meantime to ensure all eligible New Yorkers can benefit from this worthwhile program and increase the state's telephone penetration rate?

Lou Manuta

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