Thanks to Jeff Hoel for providing the transcript for the episode 49 of the Community Broadband Bits podcast with Sarah Morris and Ana Montes on the Federal Lifeline Program. Listen to this episode here.
Lisa Gonzalez: Welcome again to the Community Broadband Bits Podcast, from the Institute for Local Self-Reliance. This is Lisa Gonzalez.
This week, Chris Mitchell looked into the Lifeline program. The program offers credit toward landline and wireless phone service for those who would not be able to afford it otherwise. The Lifeline program has come into harsh scrutiny from elected officials. Members of Congress have repeatedly called for more restrictions on enrollees, alleging fraud, waste, and abuse. Their media assault portrays participants as young women with purses full of phones. We wanted to know more about the Lifeline program.
Chris first touched base with Sarah Morris, Policy Counsel for the Open Technology Institute at New America Foundation, and she provided some background, and talked about qualifications for eligibility.
Then Chris spoke with Ana Montes, the Organizing Director for TURN, The Utility Reform Network. Ana works directly with consumers, and sees the impact of the program in the trenches.
Here are Chris, Sarah, and Ana.
Chris Mitchell: So, Sarah Morris, what are the qualifications for the Lifeline program?
Sarah Morris: So, the baseline criteria, as of 2012, is that consumers are required -- consumers who want to use the program are required to have either a household income at or below 135 percent of the federal poverty guidelines, or they have to participate in at least one of a number of federal assistance programs. These included things like Medicaid, the Supplemental Nutrition Assistance Program, among many others.
Chris: So, I can't just wander down the street and find an area to sign up and just sign up, willy-nilly.
Sarah: No. In fact, an additional requirement now is that you actually have to certify that you're eligible. So you have to meet the eligibility requirements. You have to certify, under penalty of perjury, that you meet those requirements. And then every year after that, you have to re-certify, saying that, yes, I still meet the eligibility requirements for the program.
Chris: And this seems rather at odds with this narrative that we've seen among a certain segment of people in Congress, and those who are looking for an opportunity to criticize President Obama. They've been calling this program the "Obamaphone" program, and suggesting that it's out of control. I'm curious what your response is to that.
Sarah: Um, yeah, the "Obamaphone" name is a misnomer for a lot of reasons. First of all, it was actually -- the program was actually started under President Reagan in 1985. It was later expanded, under President Bush, to include wireless service. This was in the wake of Hurricane Katrina, when the FCC realized that one of the best ways to provide immediate, quick, efficient cell phone service to those displaced by the storm was to provide them with pre-paid cell phone services through the Lifeline program. So, it was expanded under President Bush. And it was actually President Obama -- under President Obama -- that the FCC implemented a number of reforms, to help make the program run more efficiently, and to avoid some of the duplicative use, or the use of the program by ineligible consumers. And, just some of the ways that the companies that are using the program have sort of skirted around disclosure requirements, and tightened up the program, and made it more efficient. So, it was actually -- the role of our current President was to make the program run better.
And it's a misnomer on another level, in that the Lifeline program doesn't actually provide users with cell phones. It's a program that's designed to provide a discount on wireline or wireless phone service. So, there -- it doesn't provide for phones. Companies can choose to offer a phone to users, but the Lifeline program itself doesn't subsidize that.
Chris: When you talk about how the program was initiated under Reagan, and reformed multiple times, I wonder, is it still relevant today, with the networks that we're seeing, and the changes that we're seeing? You know, how should a modern Lifeline program deal with making sure everyone has the ability to communicate?
Sarah: You know, as we've seen with the evolution of the program itself, communication needs of end users change and evolve over time. This is one of the reasons that a wireless service is actually very useful for current Lifeline subscribers and a lot of circumstances, because they often don't necessarily have as stable a housing situation, they move around a lot during the day, they need access in a different context than what we traditionally see as the wireline home phone system. What we're also seeing, though, is that communication needs are continuing to evolve. And we're moving towards an era where broadband is an important -- some argue, critical -- resource for communicating with loved ones, for finding employment, for managing one's day-to-day life. We've actually advocated to the Commission that the program should be expanded to include the option to -- for users to apply their discount to broadband service. Right now, currently, under the Commission's reforms in 2012, users of the Lifeline program can use their discount for bundled packages -- packages that include phone service AND Internet service, for example -- but can't currently use their discount for stand-alone broadband service. So, that's one area where we think that, as this program continues to modernize and continues to evolve, that we would hope that he Commission would look at ways in which the Lifeline discount might be used for broadband service as well.
Chris: All right. That's really helpful. Thank you.
Sarah: All right. Thanks, Chris.
Chris: I'm on the phone right now with Ana Montes. Ana, can you please tell us about your organization?
Ana Montes: Sure. I'm the Organizing Director for TURN, which is "The Utility Reform Network." We're based out of California, and we're a statewide organization. TURN is almost 30 years old. It was actually started by a senior citizen who had had enough with the rising electric rates, as well as changes and rising rates for telephone services. Since then, it has grown. And we now work on -- continue to work on energy, telecommunication, telephone issues, water, solar -- different -- other different areas impacting utility consumers in California. So, what we've done throughout the years is, we've protected consumers from hundreds of millions of dollars of unnecessary rate hikes posed by energy and telecom utilities, through our involvement at the California Public Utilities Commission. And we've done a lot, in working with other groups as well, to win consumer protection measures in the state, either through the California Public Utilities Commission or through the California Legislature.
Chris: Yes. We've actually worked together a little bit on a couple of proceedings here or there. And I've really appreciated the work that you've done. One of the projects that you've been working on lately has been the Lifeline program, which is a federal program. Can you tell me a little bit more about that?
Ana: The Lifeline program was actually adopted, or created, in 1985, as part of the Reagan Administration. And it was created to provide a discount on phone service for low-income consumers, to make sure that all Americans have the opportunity and security to have telephone service that was affordable. So, in 2005, the program was modernized. And the pre-paid Lifeline phone service was created. Now, while this program was created at the federal level, every state also implemented their own state Lifeline program. There were still certain rules they had to follow. But basically the program was created to help low-income consumers have the opportunity to connect to individuals with a telephone, so that they could reach -- they could do the things that they needed to do. So that they could have access to telephone services. It's very important to be able to communicate effectively, with reliable telephone service, for many different reasons. So, California, for example, implemented the Lifeline program. Probably around the same time -- 1985. And every state is a little bit different, in terms of eligibility requirements, etc. Although that is no changing, and it's becoming standard nationally.
Chris: Why exactly does it matter if a person has access to a telephone? Now, I think it's NICE to have a telephone. But what does it really matter if a person just doesn't have access?
Ana: One of the things that we've been doing, actually, is, we've been working with -- directly with individuals. Because we have ideas of why it's important, based on our own experiences. But you don't really know the full impact until you start really talking to people, to really understand how important it is, and why it's important to maintain a Lifeline program. But we've worked with a lot of individuals that, if they did not have a telephone, they would not be able to communicate in an emergency situation. They would not be able to call their doctors. They would not be able to deal with Social Security, or take care of any businesses -- any business that they need. Not everybody has a car. Not everybody can afford to travel. Transportation is becoming more and more expensive. Everybody doesn't have a car. Gas is becoming very, very expensive. And a lot of things are becoming automated. So, there's many times where you cannot even go into an office.
We've also talked with a lot of people who really require a telephone so that they can meet basic needs. For example, finding a job. Many employers will do their screening by phone. If you don't have a phone, and you cannot do that screening, you will lose out on opportunities to find a job.
Chris: This was actually brought home for me, because I moved, shortly after my college graduation. And the telephone company made a mistake and disconnected my line, rather than transferring it to my new house -- the new apartment where I was living. And I had just sent my resume out to a bunch of places, and I had applied for a bunch of jobs. And, you know, this was a time when there wasn't a whole lot of us who had cell phones. And so, I felt just totally disconnected, and furious, because I had this opportunity where I had applied for jobs, I was excited to try and find a job. And I had six days where nobody -- where anyone who called me, they would have gotten no answer. It would have said service was disconnected, or something like that. And I had to rely on a pay phone. And pay phones are great for outgoing calls, it really hurts when you're trying to accept incoming calls.
Ana: Exactly. And today, you can't even find a pay phone.
Chris: Right. Absolutely. That's even worse today.
Ana: Yeah. Yeah. So, it's just -- I mean, the phone has really become a way to communicate directly with employers, with doctors, social workers, your children. Being able to communicate over the phone really helps to keep a person, also, mentally healthy. If you are disabled, or you're elderly, and you're stuck at home, not being able to communicate to the outside world can really, really impact a person's mental health. And so, we have a lot of low-income, fixed-income seniors that -- whose Lifeline is literally a lifeline. People looking for jobs -- it is a lifeline.
Chris: So, let me ask you something, then, you said about the program being modernized.
Ana: Um hum.
Chris: Now, I presume that means that you can use wireless now. And I'm curious what some of the limits are, in terms of how that works.
Ana: Sure. And I'm going to share a story with you, along the way, as well. So, we've been working with quite a few individuals in California that are homeless, living in single-residents-only hotels, families, seniors, etc. -- all kinds of different situations. And a lot of people have become mobile out of necessity. So, you have a lot of people that are using cell phones. Although, based on current information, current studies, CDC, we also know that a lot of people still have both. So we know people are using both cell phones and landline telephones. But when you're dealing with a lot of people who are mobile, they are becoming more and more dependent on cell phones, until they can get their lives situated. So, we have people that have the need to have affordable cell phone service. There's a federal program right now, that is called the -- it's being offered by different companies -- where people can get a free 250 minutes. We have a lot of people that have subscribed to the 250-minutes free cell phones. And we're really finding out that it is not meeting their needs. It's almost like a teaser. You know, for 250 minutes -- or eight minutes a day -- you can make a phone call. We've been told stories by people that the 250 minutes can be eaten up in a few days. I had a person that told me that they were trying to contact the unemployment department, because they were on unemployment. And, you know, unemployment now does interviews by the phone -- over the phone. So, there was a person that was talking to a counselor from the unemployment office, who got cut off -- couldn't even finish the call, and couldn't call back, because the 250 minutes had run out. And, at the same time, we were also told that contacting the unemployment office is just as bad as trying to contact DMV. Because everything is becoming automated. It's -- you know, it's becoming a lot tougher. And also, with deregulation, where certain rules are no longer being enforced or in place, that's also contributed to people being placed on hold. You know, there used to be a time when, if you called the phone company, you would get a live voice.
Chris: OK. So, just to sum up then, if you're on Lifeline, at home, on a wired connection, you have a subsidized connection that you can afford. And it's unlimited. And then, if you're on the wireless Lifeline program, then you're more limited -- you have 250 minutes. You have to pay for time, both for the calls that you're making as well as the calls that you're receiving. And it works out to eight minutes a day.
Ana: Right. The 250 minutes free phone service works out to eight minutes a day. And everything gets counted, from the moment you pick up that phone and get a dial tone. Or whether you're answering it or whether you're making a call. It is all counted.
Chris: Um hum.
Ana: California is looking at a California wireless Lifeline plan. And we're concerned about having enough minutes to be able to find that job, or to have a conversation with your doctors, or social workers, or family members. But we're also really concerned about the quality of the phones. And on the federal Lifeline plan. You know, people don't reach -- For example, when you call 9-1-1, you do not get local emergency services.
Chris: Um hum.
Ana: You will get the Highway Patrol. And that in itself is -- can create an emergency situation. So, we're also very concerned about the lack of quality, in the federal plan, too, in terms of 9-1-1. Now, to be fair, that is something that they do know about, and they have been working on it. But we really feel that there's nothing like being able to reach a local provider. If you are in an emergency situation, you don't want to be transferred.
Chris: Is there anything else we should know? Are there any other stories of people that are using Lifeline to -- that you know of, in particular?
Ana: Um -- so we do have a lot of folks that live in single residences. And they're really dependent upon the Lifeline. And if they did not have access to that program, they would be totally without the ability to make any kinds of phone calls. And so, we get -- we have a lot of conversations with people that really want to see improvements in the program, both on the federal level and on the national level. And we've had stories of people who -- elderly people -- who had an emergency, where they had an accident. And if they hadn't had that telephone in the house, they would have not been able to reach anybody in an emergency situation. They would not have been able to have -- answered the phone, you know. And you mentioned yourself, you had a story of where you had missed opportunities. They would have missed the opportunity to get a phone call from an employer, or it would have missed an opportunity to get a phone call about food. And shelter. So we hear a lot of different stories from people. But I would say that you do have particular stories for single residents only. Very, very poor people. Then, the everyday person. You do have a lot of stories of missed opportunities. And the need for having access to a phone to either -- because of an emergency situation -- needing to reach your children's school, needing to be able to communicate with your children, needing to communicate with other resources.
We have a lot of people that, because of the economic downturn, who have never needed to use these programs before. Now, it's become even more important than ever. So, for many people, Lifeline telephone services is very, very important. It's not just for the, you know, very, very low-income. People, as I mentioned, are having a lot of hardships, and are now qualifying for a service that they never thought they would qualify for. And so we're hearing those stories. I had an ex-millionaire call, who was very, very embarrassed. But he -- there was -- you know, given the economic downturn, he lost everything.
Chris: Um hum.
Ana: With the market -- crash of the market. He found himself in a position where he just didn't know what to do, didn't know what to turn. And so, he called us, because he needed some help on some things. And so, it's such an important service, that people really need to support it. I would say that fraud is not as rampant as people are led to believe. There's very strict eligibility requirements. We do NOT need to make it stricter. The stricter we make it, the harder it is for people to use the service.
Chris: Right. I think sometimes people lose sight of the fact that there's a tradeoff, right? Which is to say, we'd all like to see no fraud and no waste in a system. But if there's -- let's just say that there's $10 of waste in a system, and you spend $30 to try and eliminate that waste, they you're really taking away $30 worth of benefits to other people. Because -- or $20 of benefits, depending on how you want to do the calculation. Because you're spending so much more to stop a small bit of waste. It's just -- it's not a wise use of money.
Ana: Exactly. And those same people may find themselves in a position of needing that service someday. If they don't, you know -- of course, we don't want to see people in those positions. But they may find themselves in that position. Plus, those same people that end up needing that service, also, at one time or another, probably paid into it. You know?
Chris: Um hum.
Ana: Because Lifeline is supported by a surcharge. We all pay that surcharge. So, it's -- you know, the thinking that, well, I don't want to support that person because they don't work, they need to go out there and get a job -- that's not the case. I mean, these are people that probably paid into the fund at one time or another, and now find themselves in a position where they really need to use that service, so that they can get ahead again.
Chris: Right. Well, thank you so much for taking the time to come on, and to help us learn more about Lifeline. I really appreciate it.
Ana: Thank you. And I appreciate the opportunity to talk with you about it.
Lisa: You can learn more about the program, and find out some specific actions you can take on the turn.org website, and the New America website, at oti.newamerica.net .
We want to hear your reactions. E-mail us at email@example.com . You can also follow us on Twitter. Our handle is @communitynets . This show was released on June 11, 2013. Thank you to Eat at Joe's for their self-titled song, licensed using Creative Commons. Thanks for listening.