Telephone Lifeline for Residents of Homeless Shelters

On July 17, 2009, TracFone Wireless sent a letter to the FCC raising an interesting question: Since the FCC’s Rules specifically limit Lifeline discount telephone service to “one-per-household,” how can residents of homeless shelters receive Lifeline? This may not have been an issue when Lifeline was only offered by traditional landline telephone companies, but now that TracFone, Sprint, and Verizon Wireless are all offering wireless Lifeline service in New York, it has become a potential matter of concern. The FCC was intrigued enough with the request to issue a Notice for Comment on October 21, 2009. Comments are due by November 20th, with replies due by December 7th.

TracFone has been offering Lifeline in New York since March 2009. Their “SafeLink” service provides a 68 minute calling plan on a monthly basis at no cost to qualifying customers as well as a free SafeLink wireless phone. Additional minutes beyond the first 68 free minutes can be purchased directly from TracFone in various plans, which cost in the neighborhood of 20 cents per minute.

TracFone explained the basis of their concerns:

The rule is the ‘one-per-household’ rule. Pursuant to that rule, only one telephone line (wireline or wireless) per household may receive Lifeline support from the federal Universal Service Fund and Lifeline applicants are required to certify under penalty of perjury that they comply with that requirement. The rule is intended to prevent so-called ‘double dipping’ whereby families or households obtain multiple Lifeline benefits. As indicated by the attached informal complaint recently sent to TracFone by the Commission’s Consumer & Government Affairs Bureau, the one-per-household rule is having an unintended adverse impact on residents of homeless shelters. The complainant’s name and address are redacted from the attached copy and TracFone will respond to the complaint in conformance with the Commission’s complaint response requirements. However, there can be little doubt that homeless shelter residents are among America’s most needy and should be entitled to Lifeline benefits.

In other multiple dwelling situations, such as apartment buildings, there are individual room or apartment numbers and TracFone’s concerns are a non-issue. As a result, the situation described by TracFone is unique to locations where unrelated people live without individual addresses. As such, TracFone concluded by writing that it wants the FCC “to clarify that the one-per-household rule is not intended to limit the availability of Lifeline-supported service to more than one otherwise qualified low income resident of homeless shelters . . .”

In its Notice, the Commission expanded on TracFone’s inquiry and wrote:

In addition to homeless shelters, the clarification and guidance sought by TracFone may be applicable to other group living facilities, such as nursing homes, assisted-living facilities, apartment buildings, trailer-home communities, halfway houses, and group homes. As such, we seek comment on the effects of the one-per-household rule for Lifeline support in the context of group living facilities. . . . Finally, we seek comment on whether and how ETCs [Eligible Telecommunications Carriers] that provide Lifeline-supported service to homeless individuals who do not use shelters could comply with the one-per-household rule.

TracFone has been specifically targeting shelters and homeless people in their marketing. PULP has received numerous contacts from residents and managers of shelters and SROs over the past few months asking the same questions. In each instance, it was mentioned that TracFone representatives had visited the shelter and were looking for people to bring the issue to the FCC for clarification.

A person should not be denied Lifeline assistance just because they are homeless or live in a building without individual units identified in their street address. Resolving this issue could be an important tool for helping homeless persons communicate.

In the pre-wireless-Lifeline world, this really was not an issue. Consumer advocates generally supported the one-per-household rule because the Lifeline and Linkup programs were initially designed to provide an affordable link to every household, not multiple connections. Now, this issue may be clarified by the FCC in an environment when personal communication through wireless devices, and the expectation of communicating by telephone with people outside the home is becoming the norm.

According to the Coalition for the Homeless, there were 35,486 individuals living in New York City homeless shelters in September 2008 . The Youth Service Opportunities Project reports that 2,700 soup kitchens across New York State serve two million New Yorkers annually . Providing discount telephone service to this most needy population is a worthy proposition, but TracFone may not be the right entity to provide the service.

While TracFone’s phone itself and the first 68 minutes a month are “free,” those minutes are for both incoming and outgoing calls. They can be used up very, very quickly and then the customer must either wait until the next month in order to use their phone again, or pay regular TracFone pricing, where 100 additional minutes costs $19.99. PULP is concerned that residents of homeless shelters will sign up for the “free” service, with Tracfone receiving its reimbursement from the federal Universal Service Fund as an ETC, leaving the customer saddled with charges for minutes that they can not possibly afford and phones shut off without sufficient notice or any of the protections of the New York Telephone Fair Practices Act, which the New York PSC has not extended to cover wireless service. Yes, the ability of homeless people and shelter residents to have Lifeline telephone service is an important question worth pursuing, but not through providers whose rates are not policed by the FCC and whose terms and conditions of service are not regulated by the New York PSC.

In the bigger picture, bringing Lifeline discount telephone service to all for whom the rising cost of telephone service is a hardship continues to be a major concern. Lifeline enrollment has been shrinking in recent years: now there are are over 800,000 readily identifiable Lifeline-eligible Food Stamps households in New York State who do not receive the benefit. Meanwhile, all New York’s telephone customers are paying more in universal service charges than come back to benefit New Yorkers, and low income New Yorkers living in hardship are paying hundreds of millions of dollars more to phone companies than necessary, with the result that they cannot spend the savings for other essentials of life in the local economy.

Lou Manuta

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