DRA Says California LifeLine Customers Still At Risk Despite Recent CPUC Actions

From YubaNet.com

CA
DRA Says California LifeLine Customers Still At Risk Despite Recent CPUC Actions
Author: Division of Ratepayer Advocates
Published on Jul 19, 2009 - 6:33:16 AM

SAN FRANCISCO, Calif. July 17, 2009 - The Division of Ratepayer Advocates (DRA), an independent consumer advocacy division of the California Public Utilities Commission (CPUC), welcomes the recent withdrawal of Commissioner Rachelle Chong's proposed decision imposing substantial changes to the California LifeLine program.

DRA understands that some LifeLine reforms are needed to align the program with the existing California regulatory framework, but advocated for Commissioner Chong to withdraw her proposal from consideration by the CPUC's Commissioners, as it left crucial implementation details unanswered. Commissioner Chong withdrew the proposed decision from consideration at the CPUC's July 9, 2009, meeting.

However, DRA said its elation is tempered by CPUC President Michael R. Peevey's statement at the July 9 meeting that a proposal for LifeLine program changes "will reappear in some form in the fall … it will be back." DRA believes it is critical that the CPUC address the unanswered questions regarding implementation of these changes before introducing another proposal.

"LifeLine service should continue to be a safe harbor for low income residents to receive basic phone service at an affordable and predictable rate," said Dana Appling, director of DRA. "Before making changes to a program that has been successful for 25 years, at an unknown cost to all California telephone customers (who pay the subsidies via a line item on their bills), the Commissioners need to collaborate with interested parties to address unanswered questions."

California LifeLine provides discounted telephone service to eligible low income customers. DRA believes that Commissioner Chong's proposed decision would have radically changed the program, putting the low income customers in danger of losing the full benefits originally intended by the LifeLine program, such as access to basic telephone service, including free unlimited access to 911, and an affordable predictable monthly telephone bill.

Currently LifeLine customers pay approximately $5-$6 per month for flat rate service. Under the proposal, customers would essentially receive a $12 per month discount voucher. It is likely, however, that customers' out-of-pocket payments would be higher because there are no price controls on wireless service. By a previously approved order of the CPUC, regular phone companies' prices will also be set at the discretion of telephone companies after January 1, 2011. The proposed system includes no guarantees that the new vouchers will cover an acceptable portion of rising phone bills for low-income consumers, said DRA.

DRA agrees that customers eligible for LifeLine should be able to apply the discount to wireless or landline telephone service, but is concerned about escalating program costs, public safety implications, and the debatable legality of adding wireless service to the program; -in fact, some wireless companies have indicated they may not participate due to the unanswered legal and business questions.

DRA encourages concerned residents to call and write their representatives and the CPUC, as these officials need to know that Californians value LifeLine's current predictable, affordable rates. DRA believes that eligible LifeLine consumers will benefit from measured, well-considered program improvements and that well-intentioned yet poorly reasoned changes to the program will deteriorate the quality of the LifeLine program

DRA encourages people to call and write their representatives and the CPUC Commissioners. To contact the CPUC Commissioners directly, visit http://www.cpuc.ca.gov/PUC/aboutus/commissioners/ or write to the Public Advisor's Office at 505 Van Ness Ave., Room 2103, San Francisco, CA 94102; or call 866-849-8390 or 415-703-2074; or email public.advisor@cpuc.ca.gov. Contact information for your legislators is available at http://www.legislature.ca.gov.

See DRA Fact Sheet: http://www.dra.ca.gov/NR/rdonlyres/8B0B5BD1-1794-4975-BCAD-5FF50FD480A5/0/LifeLineFactSheet071709.pdf