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Business

AT&T dropping out of Kansas ‘Lifeline’ phone program for the poor

April 28, 2017

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— Communications giant AT&T; has notified Kansas utility regulators that in most parts of the state it is pulling out of a state-funded program that provides subsidized landline telephone service for low-income customers.

For the customers affected, the subsidies will end May 31. AT&T; said it will notify those customers so they have time to find another phone service provider that participates in the program.

The Kansas Lifeline Service Program offers up to $17 a month in subsidies for local phone service to people who receive public assistance such as food stamps and to people who meet income-eligibility guidelines.

But AT&T; said the people intended to be served by the program have generally shifted to other carriers, especially wireless services, for both phone and internet access.

“Increased competition and a growing number of other service providers, particularly wireless, offering Lifeline discounts to eligible consumers has led to a dramatic reduction in our Lifeline subscribers — leaving us with just 6 percent of the Lifeline subscribers in Kansas," company spokeswoman Molly Kocour Boyle said.

AT&T; notified the Kansas Corporation Commission in October of its plan to withdraw from the program in mostly urbanized parts of the state where the company and its predecessor, Southwestern Bell, had been the sole phone service provider before the breakup of the Bell system in 1984.

It also notified regulators in six other states that it will pull out of their programs as well.

The KCC issued an order Thursday recognizing the decision. Because participation in the program is voluntary, regulators had no authority to block it.

As part of its filing with the KCC, the company noted that while the overall number of customers enrolled in the Lifeline program has more than doubled to nearly 62,000 since 2009, AT&T;'s share of that customer base has plummeted to fewer than 3,000.

For the time being, AT&T; says it will continue offering Lifeline discounts in certain, largely rural, areas of the state that the Federal Communications Commission has designated as high-cost areas that lack robust broadband service.

For years, AT&T; received federal funding to support voice service in those areas. But in 2011 the FCC transformed that program so the money is used instead to deploy broadband-capable networks.

In 2015, AT&T; accepted $428 million of that money to deploy high-speed broadband service in those high-cost, rural areas in 18 states. As part of that project the company has committed to connect more than 35,000 Kansas customers to those networks by 2020.

The move comes at a time when AT&T; is shifting much of its focus from phone service to internet and television service. In January it completed the purchase of DirecTV, which offers satellite television, phone and internet service.

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