telecom@eecs.nwu.edu (TELECOM Moderator) (01/06/91)
Beginning February 1, phone companies in Illinois will reduce phone bills by $6.72 per month for poor people, but raise bills 15 cents for everyone else. According to the brochure now being circulated to the estimated 620,000 low-income residents in our state, this will appear each month on phone bills as a 'reduction for low-income customers'. To qualify for the program, called Link-Up II, a phone subscriber must participate in a low-income program such as food stamps, the Illinois general assistance program, or Aid to Families with Dependent Children. Half the funding for the monthly reduction will come from federal funds, and half from a fifteen cent monthly charge imposed on the other customers of the telcos. The program is designed to ensure that everyone can afford basic phone service. Illinois Bell estimates tbat about 95 percent of all households in its territory have phones. The amount of the subsidy and offsetting customer charge is detirmined by a forumula set by the federal government. Illinois Bell states they had nothing to do with setting the amount or the method in which the subsidy would be collected. Currently, the minimum monthly phone bill in Chicago and densely populated suburbs is about $10 for a customer who does not have Touch-Tone or custom calling services. The minimum charge is about $12.50 in most other suburbs of northern Illinois. The $6.72 per subscriber reduction will come off these amounts. A second phone subsidy for low-income residents which is already in effect pays for half ($27.50) of the $55.00 service installation charge. This subsidy is funded by the federal government. It seems like the more things change in the telecom industry, the more they stay the same: Here we are coming back to the concept laid out by Ted Vail at the start of the twentieth century, that universal telephone service is a desirable goal. But Vail and his associates said *all* residence service should be subsidized by business service. The main reason that business service has always been more expensive than residential service in the USA is because of the belief of early telephone people that universal service was desirable for all, and especially desirable from the point of view of business subscribers. Business places would find phone service particularly useful if they could call residences. So let the businesses pay the subsidy to insure phone service for all, argued Vail, and that thinking has prevailed since. What happens when *I* can no longer afford my phone service? Patrick Townson
sichermn@beach.csulb.edu (Jeff Sicherman) (01/06/91)
In article <15805@accuvax.nwu.edu> telecom@eecs.nwu.edu (TELECOM Moderator) writes: >It seems like the more things change in the telecom industry, the more >they stay the same: Here we are coming back to the concept laid out by >Ted Vail at the start of the twentieth century, that universal >telephone service is a desirable goal. >But Vail and his associates said *all* residence service should be >subsidized by business service. The main reason that business service >has always been more expensive than residential service in the USA is >because of the belief of early telephone people that universal service >was desirable for all, and especially desirable from the point of view >of business subscribers. Business places would find phone service >particularly useful if they could call residences. So let the >businesses pay the subsidy to insure phone service for all, argued >Vail, and that thinking has prevailed since. It seems to me that the *real* problem is that phone service is really a commodity that ought to be strictly priced based upon level and time of usage but at a much lower unit cost. Then poor people could easily afford to pay for low usage rates, BBS's could be free but the callers would *all* pay for the time consumed (NOte I am proposing that there be *no* free-calling areas, just very cheap per minute charges) and the big users would pay their fair share for heavy usage. I am obviously not an economist on phone system matters (or any other for that matter) but it seems we are paying phone companies for a lot more things than the real cost of providing phone service and maintaining the system. I am with those who say that the wires ought to be like sewers, water, etc. and be municipally owned and maintained and the supplying of dialtone be deregulated and/or auctioned to the lowest *qualified* bidder within an area. >What happens when *I* can no longer afford my phone service? I guess you'll have to cut down on some of the curiosity-satisfying calls that you make and report here, cancel some of the fancy features you have opted for, and live with less lines. Living outside of means does not entitle you to a subsidy, but a minimum level of service of a utility which is essential for health and safety in our society at a price affordable to those who would suffer either without it or at the regular rates is a desireable and even cost-effective social goal. Jeff Sicherman