Californians commenting on the future of the state’s Lifeline pro...

Lifeline program. As part of a September order approving basic exchange rate increases for the state’s largest incumbent telcos, the PUC approved a Lifeline rate increase of 81 cents monthly, effective Jan. 1, seeking comment on whether it should minimize rate shock for Lifeline customers and on how the rise might affect Lifeline service affordability (Case R-06-05-028). Large incumbents supported the increase while consumer advocates urged freezing Lifeline rates at present levels. AT&T said record evidence indicated Lifeline rates could rise more than 81 cents without undue harm to low-income households. It also said the Lifeline program should become a fixed benefit program in which eligible customers get the same amount of subsidy regardless of a carrier’s local rates. It said this approach would ensure competitive neutrality. Verizon backed larger Lifeline increases, provided they were phased in over two years. Verizon suggested an affordability study and that the PUC address program expansion issues. AT&T and SureWest urged disconnecting existing ties between Lifeline rates and AT&T’s basic local rates since AT&T faces competition that drives its pricing. Sprint Nextel and T-Mobile said the PUC should allow wireless carriers to receive state Lifeline subsidies to expand consumer choice and be technologically neutral. But consumer group TURN opposed expanding the Lifeline carrier roster until the PUC studies the effects on the Lifeline program and its surcharges. TURN urged the PUC to be “extremely careful” in revamping Lifeline in light of how it says telecom deregulation has turned out in the state. The state Division of Ratepayer Advocate also called for caution in making changes. It urged a Lifeline rate freeze until the PUC gauges how changes affect fund size, fund surcharges and overall universal service policy.