Making Telephone Service Affordable for Low-Income Households: An Analysis of Lifeline and Link-Up Telephone Programs in Florida

Abstract

The seemingly low participation rates in Florida's Lifeline and Link-Up America (Link-Up) have led state officials to ask questions about the effectiveness of Florida's policies affecting both programs. These programs, which are part of nationwide programs created by the Federal Communications Commission, upon recommendation of the Federal-State Joint Board, provide low-income households with discounts on prices for basic local telephone service and service installation: The Lifeline program reduces the monthly telephone bill by up to $13.50. The Link-Up program reduces the cost of telephone installation by 50 percent. Florida's participation rate - which is the number of households enrolled divided by the number of households eligible for program benefits - has attracted widespread interest among policymakers in Florida. Specifically, state policymakers and others have expressed concern that program participation rates in Florida are too low compared to those of the rest of the nation. Policymakers, regulators, telecommunications companies, and consumer advocates share a desire to improve program effectiveness. There is controversy over the accuracy of the reported participation rates. If the reported number of households eligible for Lifeline and Link-Up is inaccurate, it follows that the participation rate will also be flawed. Therefore, one objective of this research is to develop a reliable estimate of the number of households in Florida that are eligible for Lifeline and Link-Up program benefits. Another objective is to provide more information about the determinants of participation in these programs to help policymakers consider policy changes.