Yet another wireless provider has launched a Lifeline reduced price phone service for low-income customers in New York. Virgin Mobile, which received its authorization to offer Lifeline in New York last fall , is calling its service “Assurance Wireless.” The company joins Sprint , Verizon Wireless (for upstate NY only) , and TracFone as wireless Lifeline providers in the state. All 40 incumbent landline local exchange carriers are authorized to offer Lifeline, in addition to 16 competitive local exchange carriers.
Like TracFone, Virgin Mobile is a reseller and does not have any of its own facilities. And, like TracFone, Virgin Mobile is not charging for either the use of a handset or for a bucket of free minutes every month. Neither company charges an activation fee. That’s where the comparison ends. TracFone only offers 68 minutes a month of service (including incoming and outgoing calls) and charges 20 cents a minute thereafter. Once the monthly allotment of minutes has expired, calls can not be made to the TracFone business office, and the customer would be precluded from seeking Lifeline service from another provider to make or receive calls for the remainder of the month.
The Assurance Wireless service from Virgin Mobile includes 200 minutes a month and will accept applicants who live in Section 8 housing or participate in the National School Lunch Program in addition to the roster of public benefit programs used by all other Lifeline providers. Since all Lifeline providers receive reimbursement from the federal Universal Service Fund (“USF”), it is unclear how Virgin Mobile can offer such a significantly higher number of minutes each month – three times more – than TracFone.
The addition of another Lifeline provider in New York is a welcome event. As PULP has reported on numerous occasions, the number of Lifeline subscribers in the state has dropped from over 750,000 in 1996 to about 300,000 in 2009 , despite a significant increase in the number of eligible customers due to the recession. This drop not only costs eligible families at least $15 more a month than they should be paying for their telephone service, but results in New York State sending significantly more money into the federal USF than it receives in return. PULP is looking into ways to reverse the hemorrhaging of Lifeline subscribership and expand enrollment to make phone service more affordable.