Re-Evaluating FCC Policies Concerning the Lifeline and Link-Up Programs

We examine low participation rates in the Lifeline assistance program in the United States. Lifeline provides a discount to for low-income households off of their basic telephone service. Despite numerous efforts by regulators and industry to encourage participation, only about 1/3 of the eligible households nationwide participate. We find that lack of awareness, distrust of assistance programs, and stigma play significant roles in discouraging participation. We also find that the most low-income households have telephone service - approximately 90 percent in Florida - despite these low participation rates. We conclude that a more general low-income assistance program that lets consumers use the subsidy for whatever communications services they most value, might improve participation and would make it more economical for low-income households to migrate to more advanced technologies.