FOR IMMEDIATE RELEASE NEWS MEDIA CONTACT

April 17, 2000 Linda Paris 202-418-7121

Michael Balmoris 202-418-0253

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## FCC CHAIRMAN KENNARD AND COMMISSIONER GLORIA TRISTANI JOINED PRESIDENT CLINTON IN ANNOUNCING A PLAN TO PROVIDE LOCAL PHONE SERVICE FOR \$1 A MONTH IN INDIAN COUNTRY

### A Promise to Make Sure No Corner of America Is Left Behind

Washington, D.C. -- William E. Kennard, chairman of the Federal
Communications Commission (FCC), and Commissioner Gloria Tristani joined
President Clinton today in announcing a plan to provide basic local
phone service for as low as \$1 a month for members of
federally-recognized Indian tribes. FCC Chairman Kennard proposed a new
investment of approximately \$17 million in the existing annual \$500
million Lifeline program which provides a discount on local phone bills
for low-income customers.

Kennard noted, "This proposal would virtually eliminate affordability of
monthly bills as a barrier to local service. It would create a market
which telecommunications companies will be eager to serve, and result in
an increase in modern infrastructure in Indian Country."

Chairman Kennard said, "This investment in the Lifeline program will
encourage phone carriers to expand services to Indian reservations. I am
hopeful that over 300,000 Indian households will benefit from this new
discount."

Kennard commented, "It is disgraceful that while we have a telephone
system that is the envy of the world, basic telecommunications services
are not widely enjoyed by our land's oldest people. Indians have among
the lowest phone penetration rate of any demographic group in this
country." Only 47% of Indians on reservations have phones, compared to
94% of households nationwide. The Navajo Reservation has one of the
lowest telephone subscribership levels, with only 22% of households
receiving service.

Kennard and Tristani accompanied President Clinton on his visit today to
the Navajo Reservation and to the Navajo Reservation Community Boys and
Girls Club where the President highlighted the Lifeline program
announcement and other efforts to close the gap forever on the digital
divide.

\- more -

The Lifeline program, created in 1985, provides a discount on local
telephone bills for low-income customers so that basic local phone
service is more affordable. Among the basic services covered by the
discount are voice grade access to the public switch network, emergency
services, and operator services.

For many customers, local phone bills, before any discount, are about
\$20 a month. The current federal Lifeline program reduces eligible
customers' local phone bills by as much as \$7 per month. Many states
provide additional discounts. Some states, like New York, bring basic
local service to as low as a \$1 a month.

This Lifeline proposal is part of a larger FCC effort to ensure that
Indians on reservations gain the same access to telephone services
enjoyed by other Americans. To this end, the Commission continues to
engage in a national results-oriented dialogue with Indian tribes to
find ways to encourage phone and wireless carriers to expand services to
underserved areas. The Commission has already held two field hearings,
plans to offer a seminar for Tribal leaders this coming fall and has a
proposed rule to promote universal service on tribal lands and other
insular areas.

Like the successful E-rate program to wire schools and libraries to the
Internet, the Lifeline program is paid for out of the FCC's Universal
Service Fund, which is funded by an assessment on carriers' interstate
and international end-user telecommunications revenues.

This Lifeline proposal would increase the Universal Service Fund by
approximately

four-tenths of one percent (.004). Today, 5.6 million customers receive
Lifeline service nationwide.

Kennard has devoted his chairmanship to working to narrow the digital
divide by wiring schools and libraries to the Internet through the
E-rate program; speeding deployment of advanced services to rural areas;
and ensuring that people with disabilities have complete access to
telecom services and equipment.

\- FCC -

# [Fact Sheet]{.smallcaps}

## [INDIAN LIFELINE SERVICE]{.underline}

**LIFELINE PROPOSAL**: Increases the current discount for basic, local
phone service for income-eligible members of federally-recognized Indian
tribes.

# Summary of Proposal

-   Eliminates lack of affordability as a barrier to local phone
    service, by making local phone service available to all members of
    Indian tribes for as low as \$1 per month.

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-   Encourages the build-out of telecommunications infrastructure.
    Companies will now have a predictable revenue stream to warrant
    facilities construction in areas previously regarded as high risk
    and unprofitable.

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-   Attracts new entrants and new technologies to provide service to
    these communities.

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-   Will result in a minimal increase to the Universal Service Fund
    (approximately 0.4%).

1.  **Lifeline Program Background**

-   In 1985, the Lifeline Program was created to provide discounts on
    basic telephone service of up to \$7.00 to all income eligible
    telephone customers.

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-   Today, 5.6 million Americans receive Lifeline service.

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-   The Lifeline program, a part of the Universal Service Fund, is
    included in the universal service assessment on carriers' interstate
    and international end-user telecommunications revenues. The Lifeline
    component of the Universal Service Fund amounts to about \$500
    million a year.

# Indian Country Phone Penetration

-   In spite of the existing Lifeline discount, telephone subscribership
    among members of federally-recognized Indian tribes remains low.

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-   Only 22% of Navajo Reservation households have a phone, according to
    the 1990 census; Navajo Nation's more recent statistics show 27% of
    households with a phone.

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-   Nationwide, penetration rate for Indians on reservations is 47%.

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-   Penetration rate for United States is 94%.

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-   Low incomes make it difficult for Indians to have a phone even where
    facilities are available.

-   Average annual income on the Navajo Reservation is \$6,352.

-   Average per capita annual income of Indians on reservations or trust
    lands is \$4,478.

-   Average per capita annual income in the United States is \$14,420.