The Low Income Support Mechanism is a telecommunications discount program authorized by Congress under the Telecommunications Act of 1996. Telephone service is considered a necessity for modern life, yet the cost of activating and maintaining such service may be prohibitively expensive for low income subscribers. Through Lifeline, Link Up, and Toll Limitation Service, the Low Income Support Mechanism enables these customers to establish and maintain telephone service through discounts on services from local telephone companies.
The support mechanism is comprised of three components:
Lifeline support reimburses local service providers for providing discounted telephone service to eligible low income consumers. Lifeline support enables low income consumers to save at least $5.25 per month and up to $8.50 per month on their local telephone bills.
In addition, enhanced Lifeline support enables low income consumers living on tribal reservations to save up to $33.50 per month on their local telephone bills. Consumers living either on or off reservations may also qualify for an additional $3.50 per month in matching support from their state, tribe, or carrier. Lifeline customers living on reservations must pay at least $1.00 per month for local telephone service.
Link Up support reimburses local service providers for providing discounted connection charges to eligible low income consumers. Customers qualifying for Link Up support are eligible to save up to 50 percent on installation fees, not to exceed $30.
In addition, enhanced Link Up support enables low income consumers living on tribal reservations to save up to $100 on any connection charges the service provider customarily assesses to connect subscribers to the network. Eligible connection charges include facilities-based charges associated with line extensions or the construction of facilities needed to initiate service. Discounts do not apply, however, to charges for facilities or equipment that fall on the customer side of the demarcation point.
Toll Limitation Service support compensates local service providers for the costs incurred in establishing toll limitation service for low income subscribers. Toll limitation includes toll blocking, which prevents the placement of any long-distance calls, and toll control, which limits the amount of long-distance calls to a pre-set amount selected by the consumer. Service providers are required to offer toll limitation service at no cost to low income subscribers.
Qualifications for participation in the Low Income Support Mechanism vary by state; local telephone companies and state commissions can provide information on the individual states' requirements. In states that do not provide additional state support, a consumer must participate in one of the following programs in order to qualify for support: Medicaid, food stamp programs, Supplemental Security Income, federal public housing assistance, or the Low Income Home Energy Assistance Program. Consumers living on reservations may participate in one of the following additional programs in order to qualify for support: Bureau of Indian Affairs general assistance, Temporary Assistance for Needy Families, Head Start (if income-eligible), or the National School Lunch Program.
tilization
- Since the expansion of the Low Income Support Mechanism in 1998 to include
a baseline amount of support to companies in all states, more than 1,500
telephone companies in all 50 states, the United States territories, and
the District of Columbia have provided assistance to more than 5 million
consumers. Support to low income consumers totaled nearly $381 million
in 1998, almost $488 million in 1999, more than $553 million in 2000,
and more than $584 million in 2001. Appendix B provides funding information
by state.
Western Wireless
In 2000, the FCC expanded the Low Income program to provide additional support to low income customers living on Native American reservations.
The Oglala Lakota, the largest tribal group in the Lakota nation, live on the Pine Ridge reservation in South Dakota - an area that represents the poorest county in the United States. With 30,000 people living on the reservation and 85 percent unemployment, the Low Income Support Mechanism represents an opportunity to gain basic telephone service for many people. Suzie Rao, an attorney for Western Wireless, a company serving the Pine Ridge Reservation, explained that bringing service to the reservation is a work in progress. "Forty-two percent of the tribe is completely without telephone service," she said. "But they're getting closer to national subscribership rates."
Western Wireless is a wireless telephone company serving rural areas over 19 states. Roughly 30 percent of its customers receive Low Income support. "Some of our customers cannot receive landline telephone service, for various reasons - some live in an area where there is no landline service available, while others can't pass the credit test or afford the deposit needed to obtain landline service," said Rao. Western Wireless, like many other companies, strives to make its customers aware of Low Income support through advertising of the programs.
The FCC's Tribal Lands Order expanded Low Income support for eligible low-income consumers on reservations, allowing basic service to be available for as little as $1 per month. This represents a substantial decrease from the standard rate in South Dakota, which is $30.25 per month. For the Oglala Lakota, where the majority of the population live in poverty, the Low Income Support Mechanism represents a significant opportunity - a chance to receive affordable basic telephone service for the first time.
"Forty-two percent of the tribe is completely without telephone service but they're getting closer to national subscribership rates."
Suzie Rao
Attorney
Western Wireless