Capitol Alert
By Jim Miller
January 22, 2016 – 5:56 PM

  • Total charges have gone from 2.78 percent at end of 2012 to 7.894 percent
  • Universal Lifeline program driving increase
  • Lifeline program expanded to wireless plans in 2014

If your monthly cellphone or landline bills seem higher these days, take a look at the state surcharges.

Since the fall, California phone bills have included almost 8 percent in telecommunication surcharges, the highest in nearly 30 years. They generate revenue for programs designed to bring phone or broadband service to millions of residents with low incomes and people who live in remote parts of the state.

The main driver of the growth has been the Universal Lifeline Telephone Service, a program that provides discounted residential telephone service to poor people. Scrambling to generate enough revenue to keep the program solvent, state utility regulators approved three surcharge increases in a span of 12 months, a nearly fivefold increase. Customers have not been happy.

7.894% State surcharge rate on California phone bills, used to subsidize service to some customers

“There was an estimation problem,” said Sarah DeYoung, executive director of the California Association of Competitive Telecommunication Companies. The back-to-back-to-back surcharge increases, she said, “got people’s attention.”

Six state telecommunication surcharges show up on California telephone bills. Others, such as a fee for the advanced services fund, help pay for broadband service in places that have none, provide discounted coverage to certain schools and other government facilities, and services for the deaf and disabled. All told, the programs will spend almost three-quarters of a billion dollars in 2015-2016, according to Gov. Jerry Brown’s proposed budget this month.

The largest is the lifeline program. Created by the federal government and launched in California in 1984, it offers discounted phone service to low-income residents, with the program limited to one person per household. Each participant gets a monthly discount of up to $12.65 from the state lifeline program, and a federal discount of up to $9.25.

To read expanded article, click here.