ASSESSING THE IMPACT OF FCC LIFELINE AND LINK-UP PROGRAMS ON TELEPHONE PENETRATION

Lifeline programs sponsored by the Federal Communications Commission ( FCC) in cooperation with the states and Local Exchange Companies (LECs ) are authorized to increase telephone penetration. Estimates of a var iant of Perl's (1983) economic model with 1990 Census Data broken to t he state level indicate that expenditures on these programs have a pos itive statistical effect on telephone penetration in most models, Howe ver, program elasticities are extremely small, suggesting that very la rge expenditure increases per poor household would have little effect on telephone penetration. Importantly, there is no relationship betwee n the size of the state program elasticity and the level of state inco me or the magnitude of state poverty. We also demonstrate that the 199 0 Census Data is superior to the Current Population Survey as a data b ase.