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Phonelessness: The Problem
Phonelessness is a social policy problem that needs to be addressed by the federal government. In particular, it has serious implications for employment, skills development, and the delivery of social services, all of which are central components of HRDC’s mandate.
While overall household telephone penetration rates in Canada are high (98-99%), they are significantly lower among low income households (95-96%). The predominant characteristic of phonelessness in Canada is low income.
Based on Statistics Canada data, it can be conservatively concluded that at least 0.8% of Canadian households, or over 100,000 households, do not subscribe to residential telephone service because they can’t afford it. How many more can’t afford phone service is not clear, given important gaps in Stats Can survey samples.
Those without telephone service for affordability reasons constitute the mere “tip of the iceberg”; many more Canadian households are struggling to keep phone service in the face of ever-increasing basic rates.
In the USA
In the UK, -local service is metered, and mobile service is very popular; -local phone companies are required to offer customers “the option of a more restricted package at low cost”; such services include incoming-only service (not popular), prepaid local service with access code, and a
“light user scheme” which is attractive for those making little use of local phone service;
Targeted subsidies in the USA appear to have had at least some success in raising penetration levels. A recent study concludes that the Lifeline program “has raised penetration rates and the sizes of the increases are related to the amount of assistance provided”.
While phonelessness in the UK has dropped significantly over the past two decades, it is difficult to attribute this to any particular cause.
Penetration rates in Canada appear not to have been affected by the minimal efforts made to date to facilitate subscribership in this country.
Phonelessness is inextricably linked to income. Any program designed to combat phonelessness should therefore focus on low income households.
There are at least three different aspects of the affordability problem, each of which requires its own solution:
The more generous the assistance, and the more effort that goes into promoting it, the more successful it will be in improving the affordability of phone service.
Challenges in designing and implementing a telephone assistance program in Canada
A preliminary challenge is a perception of many that no such program is needed in Canada, given our relatively high telephone penetration rates.
If the goal of the program is to close the phonelessness gap, rather than to make basic phone service more affordable for low income Canadians, a dilemma exists: making benefits available only to the phoneless will create a perverse incentive for subscribing households to disconnect.
If the goal is to make phone service more affordable for low income Canadians and to thereby bridge the phonelessness gap, the key challenge lies in targeting the program at those who need it while minimizing administrative costs.
In order to achieve the goal of truly universal telephone service in Canada, more effort is needed to close the phonelessness gap.
A program designed to reduce phonelessness cannot simply focus on the phoneless; it must focus on all those experiencing telephone affordability problems.
Lower-value, unsubsidized, “budget services” do not respond to the needs of all those experiencing affordability problems, and hence do not offer a full solution.
The two main options for funding a targeted subsidy program are (a) direct taxpayer-funded subsidies, or (b) a subsidy scheme administered via telephone companies, as in the USA. Providing subsidized service through telephone companies, rather than social assistance agencies, is likely to be the most efficient method.
Each of the three problems identified above (connection fees, monthly rate, toll bills) needs to be addressed if phonelessness in Canada is to be eliminated. Currently, only one of these three problems is being effectively addressed, through the CRTC-mandated toll restriction service. Statistics suggest that the other two problems are more significant, and therefore worthy of further attention.
Key elements of an effective program to combat phonelessness in Canada include:
Public Interest Advocacy Centre March, 2002