Telephone and Utility: New Rules Help Cut Costs of Phone Service


March 1998

The Iowa Utilities Board put new rules in effect to make telephone service cost lessfor low-income Iowans. Changes took effect January 1, 1998. The new rules apply to anyone who takes part in the Medicaid, food stamp, SSI, federal public housing assistance, or Low-Income Home Energy Assistance Program ("LIHEAP") programs.

Telephone companies must now charge less money to connect basic telephone service for eligible persons. The cost must be $30 or half the normal fee, whichever is less. The new rules say phone companies can't cut off local phone service just because a customer fails to pay their long distance telephone bill. Phone companies must give lower local phone service rates to those who qualify. Finally, no one (whether or not they are poor) can be charged a deposit for phone service if they agree to limit the types of calls they can make. The goal of the changes is to get basic telephone service to every household.

The names of the new programs are "Link-up" and "Lifeline." Link-up makes it easier to connect to phone service. Lifeline lowers the monthly charge for basic phone service.

Link-up helps people start their basic, local phone service. Service can be started for half the normal charge, but no more than $30. Customers can get help under Link-up only once at the same address. Link-up also requires phone companies to offer the chance to pay later for getting phone service connected now. If long distance ("toll") service is also connected, it can cost a lot more than $30. Now people can pay the connection charges for basic and toll service over time. The payments in a payment plan have to be the same every month. This means phone companies cannot make a customer pay most of the charges up front. No interest can be charged as part of the plan. Payments can be spread over a period up to one year.

After phone service starts, Lifeline should help low-income Iowans keep their phone service. The usual home phone bill includes a federal charge of $5.25 per month. For people who qualify for Lifeline, the federal charge is waived. The result is a lower monthly phone bill.

Customers who agree to "toll blocking" on their phone line do not have to pay a deposit for toll charges before they can get local phone service. Toll blocking means you can't make long distance or other toll calls on the line. It does not block access to "800" or "888" toll-free numbers.

Some people want to be able to make long distance calls. "Toll control" is a service to control the costs of those calls. Toll control lets a person set a limit on the amount of toll charges that can be made on the line.

Phone companies cannot disconnect any (not just low-income) customer's local phone service for not paying their long distance (toll) charges. The companies cannot charge for toll blocking or toll control service.

Phone companies must tell all who order new service or transfer home service of the Link-up and Lifeline programs. They have to ask if anyone wants details. If you get Medicaid, food stamps, SSI, housing assistance or LIHEAP and already have phone service, check with your local phone company. The new programs may help lower your monthly telephone bill. Ask to sign up for Lifeline.

Forms to apply for Link-up and Lifeline are very short and simple. They just ask three questions, plus your name, social security number, and address. You can pick up the forms to apply for Link-up and Lifeline at county offices of the Department of Human Services, Community Action Program, and Area Agencies on Aging.

Last Review and Update: Sep 05, 2002

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