Thousands Of Low-Income AT&T Customers In California Could Lose Federal ‘Lifeline’ Discount

About 100,000 Californians can expect their phone bills to go up next year if state regulators grant AT&T permission to stop offering a federal service discount for low-income residents.

The federal Lifeline program, which has been running since the '80s, gives eligible customers up to a $9.25 monthly phone service discount and $34.25 off for those on tribal lands.

Advocates say it's a critical service for older adults, people with disabilities and others who live on a fixed income.

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AT&T is applying to give up its designation as an “eligible telecommunications carrier,” or ETC, which means it would no longer offer the federal Lifeline program to low-income residents and people who live in remote areas.

An ETC receives financial assistance from the federal government to provide high quality, affordable telephone service to customers of all income levels.

(California has its own subsidy program called LifeLine with a capital “L”, which will not be affected).

About 50 other companies offer federal Lifeline, but so far, advocates say AT&T is the only company in California asking to drop the service.

A spokesperson for AT&T says it wants to be relieved of its ETC designation because of the “FCC’s plans to phase out” the federal Lifeline subsidy. The program is expected to run out of money by December unless lawmakers vote to extend it.

Leaders of the consumer advocacy group The Utility Reform Network (TURN) say the November presidential election could determine the future of Lifeline, but that funding is likely to be extended, even on a temporary basis.

Landline service

The request comes at the same time AT&T is seeking permission to phase out landline service in California.

For many low-income residents this comes as a double blow — losing the federal discount in addition to losing the less-expensive landline service.

“The passion that folks have in expressing their needs to have this service, it's just been overwhelming,” said TURN attorney Ashley L. Salas.

The California Public Utilities Commission is accepting public input on both cases until a final decision is made this fall.

Public comments

Thousands of residents have weighed in on AT&T’s requests during public comments in person and online. Here’s a selection:

Sara Sunstein of Richmond said she’s a low-income person and “very much appreciates” having Lifeline rates. “What I don't understand is why the rates seem to increase more and more frequently in recent years. Please vote against AT&T's request to stop Lifeline rates that are subsidized by the federal government anyway.”

Suzanne England in Los Angeles said she relies on her landline with its Lifeline discount. “This is a public utility that I expect should be required,” she said. “I depend on this landline and the ‘Lifeline’ discount. Please do not remove this phone option.”

A. Webb Santa Cruz said they live on a tight budget and have struggled with inflation. “From where would I cut my essential spending to pay for a cellphone?! I am fixed on a very low income, and the Lifeline service I have on my landline fully supports my life needs and daily high volume of local calls to my elderly mother whom I look after every day,” they wrote.

To be approved, AT&T must demonstrate that another ETC provider can offer universal support in the areas where it wishes to surrender service. Here is a map of the different service territories that could be impacted.

The next CPUC hearing on AT&T’s plans will be held April 9.