A panel of state and federal regulators yesterday recommended to the Federal Communications Commission that the agency reduce telephone charges up to $2 a month for each low-income customer as a way to help them afford telephone service.
The recommendation by the Federal-State Joint Board, a committee of FCC and state regulators, was angrily denounced by some members of Congress and several consumer advocacy groups who said that the $2 cut was not enough to offset spiraling telephone rates that threaten the concept of telephone service for all Americans.
Several consumer groups had recommended the board adopt a broad federal "lifeline" program requiring phone companies to offer service at a substantially reduced price to low-income customers, but that proposal was dismissed.
"I am very disappointed that the joint board did not seize this opportunity to come forth with a plan that underscores and preserves our long-standing national tradition of universally available and affordable telephone service," said Rep. Timothy E. Wirth (D-Colo.), chairman of the House subcommittee on telecommunications, consumer protection and finance.
"Our worst fears were realized today," said Gene Kimmelman, legislative director of the Consumer Federation of America. "Both federal and state regulators refused to insure that basic phone service remain affordable for all Americans."
The Federal-State Joint Board recommended that the FCC reimburse the local telephone companies if states order the companies to drop the fee for connections to the long-distance telephone system, which was imposed this summer.
If the FCC accepts the program, which commission sources said it is expected to do later this fall, the agency effectively would be extending a waiver, already in place, that allows states to exempt low-income consumers from paying the $1 monthly fee for access to the telephone network.
Currently, the FCC reimburses half of the $1 fee if states are willing to waive the fee. The panel recommended increasing that amount to cover the entire access fee, which will increase to $2 in June 1986, as long as the states agree to reduce local rates an equal amount. The federal funds for such a waiver would be obtained from long-distance companies, which would pass on the cost to consumers' long-distance telephone bills, the FCC said.
"Their proposal is wholly unacceptable as a lifeline proposal," said Pamela Gilbert, staff attorney at U.S. Public Interest Research Group, a national consumer advocacy group. "What the federal government has done is to impose a $1-a-month access charge on consumers and then call it a lifeline program to allow consumers to waive the charge."
The trade group that represents the phone companies, however, praised the board's decision for leaving the determination of eligibility for telephone assistance up to the states.
"We are glad that the Federal-State Joint Board has recognized the primary role that the states need to fashion lifeline plans to their regulatory needs," said Ward H. White, spokesman for the United States Telephone Association. "However, we believe that the financing should be through a state general tax fund as opposed to being financed by other telphone customer ratepayers."
FCC Chairman Mark S. Fowler said the proposal was "very close to what the American Association of Retired Persons had urged." But the AARP said after the meeting that Fowler misrepresented its position.