California withdraws plans to limit internet and cell phone discounts for low-income users

A day before the California Public Utilities Commission voted on a rule that would have cut subsidies used by low-income residents for phone and Internet services, officials withdrew the item from the commission’s agenda.

under the proposal Base, low-income California families who qualify for federal assistance to pay for phone service and Internet access may lose some or all of their monthly California LifeLine deductions. The result: Instead of being able to stack three discounts, most California LifeLine users were limited to two, for a total of $39.25 in discounts per month.

The committee was scheduled to discuss and vote on the proposal at its meeting on Thursday, but officials removed it from the agenda without a written explanation. A spokesperson for the commission did not respond to requests for comment.

The withdrawal comes after months of objections and mounting pressure from state lawmakers, LifeLine provider companies, and ordinary Californians who submitted 38 public comments to the committee.

The California LifeLine program provides discounts for low-income families for phone and Internet services. It is similar to the Federal Lifeline program and is sometimes used with it.

In August, Assemblywoman Sharon Quirk Silva, a Democrat from Buena Park, and eight other lawmakers sent a letter to the committee urging it to amend the proposal.

Quirk Silva wrote: “This proposed decision will make much-needed broadband services to millions of low-income Californians even more difficult as they grapple with the adverse effects of the pandemic and record inflation.”

The bipartisan group also expressed concern in the letter about the committee’s analysis of its new rule, which claims 6 gigabytes of wireless data is enough for low-income Californians.

By contrast, the average US smartphone user used 11GB or more per month in 2020, according to Ericsson, a Swedish telecommunications company.

Costs of staying in touch

Likewise, more than 8,000 Californians signed an online petition urging the commission to allow residents unlimited wireless access with all three state and federal discounts.

Until March of this year, low-income families were able to take deductions of up to $75 per month from a combination of three benefits. They can “stack” two federal subsidies and one California LifeLine subsidy to pay for the phone and the Internet.

In May 2021, the federal government created the Emergency Broadband Benefit, a subsidy of $50 per month to support families struggling to stay connected during the pandemic. The government phased out the program late last year and replaced it with an affordable calling plan, at a slightly lower discount of $30 a month.

“This proposed decision will make much-needed broadband services…broadband services difficult to afford for low-income Californians at a time when they are grappling with the adverse effects of the pandemic and record inflation.”

Assemblyman Sharon Quirk Silva, Democrat from Buena Park

At the same time, California’s LifeLine program offered a rebate of $16.23 per month for low-income families.

Consumers can currently apply the affordable calling discount and one LifeLine plan per household, whether it’s a state or a national LifeLine plan.

The proposed rule would have permanently reduced the amount of California LifeLine benefits to $9.25 for a family who also receives federal support, giving them a maximum of $39.25 per month.

But now with the plan withdrawn, the commission has a number of options to move forward, al-Qaeda supporters said. He can make revisions to the proposal, suggest a new proposal, or not vote on any one at all.

Under current rules set by the commission, LifeLine plans must offer unlimited voice and text plus 6GB of data per month.

Is it a victory?

Ashley Salas, an attorney with consumer advocacy group The Utility Reform Network, doesn’t know why the committee withdrew the decision.

“I wouldn’t put much importance in that,” Salas said. “Currently, there is no service provider offering discounts (affordable calling plan) and LifeLine service in California. It is not moving anything right now.”

However, LifeLine providers see the withdrawal as a step in the right direction toward expanding how low-income consumers can use their phone and internet discounts. More generous and flexible subsidies would also add to the companies’ bottom line.

Rudy Reyes, Verizon’s vice president and general counsel, said the pullout was a “great victory” in the larger battle to improve service for consumers at California LifeLine. Last year, the phone giant acquired Tracfone Wireless, provider of LifeLine.

It’s a sign that the panel is listening to the needs of low-income consumers, Reyes says, but the panel still needs to clarify how providers can use the affordable calling plan feature and what that will mean for consumers.

“I cannot count the number of times things have withered on the vine in the committee,” he said. “Procedures like this can go on for years without a solution.”

The committee is scheduled to meet on October 20.

CalMatters is a nonpartisan, nonprofit media organization that explains California politics and policies.

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