California has a longstanding goal of “Universal Service”—providing telephone service to every Californian. Now, that goal is in serious danger. First, some background:
Any program designed to achieve universal service must ensure the following:
--Availability. People can’t use phone service unless it’s available, i.e. they can actually access the phone network. This can sometimes be difficult. For example, it can be expensive to extend phone lines out to remote communities, and can be technically tricky to provide clear wireless signals in areas with lots of tall buildings. And phone service needs to be reliable: The network must stay up during natural disasters, call quality must be sufficient, etc.
--Affordability. In some instances, phone service may be available, but too expensive for people to afford. Charges like installation fees, early termination fees and overage charges contribute heavily to phone service being unavailable.
--Awareness. Finally, the fact that there’s affordable phone service available means nothing if customers don’t know that the service exists. For example, a low-income consumer may not realize that there are programs to provide low-cost phone service, and may just believe they can’t afford a phone.
For most Californians, getting and paying for phone service isn’t a problem. However, about three million low-income Californians have trouble affording phone service at the rates set by carriers. As a result, we’ve created a reasonably successful regulatory program—LifeLine—that ensures those Californians can get phone service. We require carriers to offer phone service to everyone in their service area in order to make sure that low-income consumers have access. LifeLine subscribers pay a set rate for phone service every month (about $7), and carriers get a ratepayer-funded subsidy to make up the difference between what carriers charge and what the subscriber can afford. Carriers are required to inform potential LifeLine subscribers about the program and help them enroll.
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