The AT&T logo.Difference between federal and state Lifeline programs:• Federal — The Federal Lifeline program provides a discount for both landline and wireless telephone service for eligible consumers. The FCC reimburses providers of discounted voice service, including telephone companies and wireless providers.• State — When it was originally established, the Federal Lifeline program provided a larger discount if state commissions created a matching program. Most states created an additional state Lifeline discount to get the maximum federal match.Source: AT&TChange in phone subsidies• State: $3.50, carriers pay out of pocket, for landlines only.• Federal: $10, reimbursed by federal government, can go toward cell phones.Proposed subsidies• State: $0, reduction pending.• Federal: $9.25, reduction already implemented.Who’s affected in Tennessee?• Eligible for Lifeline program: 625,162• Enrolled in Lifeline program: 406,500• Cell-phone users: 313,000*• Landline users: 93,687• Not affected by state subsidy cutsSource: Tennessee Regulatory Authority, Office of the Attorney General
Subsidies for low-income phone usersA telephone industry group led by AT&T wants to eliminate a $3.50 subsidy for low-income landline subscribers, calling the discount outdated, anti-competitive and discriminatory.
The push to end the state landline subsidy comes after the federal government chopped its own monthly payout to low-income phone users to $9.25 from $10, and also cut incentives to states that support the federal program.
If the state subsidy is eliminated, low-income cellphone and landline users still would receive the $9.25 federal discount.
But consumer advocates say that the proposal comes at the worst possible time for hundreds of thousands of Tennessee families for whom the landline subsidy could be their only way to call 911.