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Free cell phones for low income people

Posted by on Feb. 8, 2012 at 7:38 PM
  • 99 Replies

Can we really afford this?   Why is a good use of funds?

Washington Footing the Cell Phone Bill for Millions of Low Income Americans

Last year, a federal program paid out $1.6 billion to cover free cell phones and the monthly bills of 12.5 million wireless accounts. The program, overseen by the FCC and intended to help low-income Americans, is popular for obvious reasons, with participation rising steeply since 2008, when the government paid $772 million for phones and monthly bills. But observers complain that the program suffers from poor oversight, in which phones go to people who don't qualify, and hundreds of thousands of those who do qualify have more than one phone.

Last summer, a Pittsburgh Tribune-Review story shed some light on a government program that relatively few Americans knew existed. (Read more about it here.) The Lifeline program provides low-income Americans with free cell phones (basic ones such as those made by Tracfone, not smartphones) and covers up to 250 free minutes each month. As many as 5.5 million residents in Pennsylvania alone could qualify for the program, which is funded primarily by the Universal Service Fund fee added to the bills of land-line and wireless customers.

The program came to be after the Telecommunications Act of 1996 was passed, and the FCC created the Universal Service Fund to help "to promote the availability of quality services at just, reasonable, and affordable rates," among other things. All telecommunications carriers must pay into the fund, and many do so by tacking on a fee to each of their customers' bills. It's probably added into your monthly wireless bill and your landline bill, if you still have one.

The Universal Service Fund provides discounts on phone services, or in some cases, entirely free services to low-income Americans. The fund helps pay for landlines or cell phones, whichever the recipient prefers. There's also a one-time discount of up to $30 to cover an installation fee or a cell phone. Considering how cheap some cell phones are nowadays, the money more than covers the costs of a basic phone. Then, the fund covers phone bills to the tune of $10 a month, which typically translates as 250 minutes for wireless plans of the types of phones we're talking about. Americans who receive food stamps, Medicaid, or other federal aid, or who earn up to 135% of the federal poverty guidelines, qualify for the program.

Now, Bloomberg Businessweek reports, we have a pretty good idea of how much the program pays out -- and how quickly it's growing as more and more people find out about it. In 2011, Lifeline paid out $1.6 billion, more than double the amount paid in 2008 ($772 million).

(MORE: Is Cell Phone 'Bill Shock' Going Away?)

What's more, an FCC audit of the program last year showed that many participants in the program were taking more than their fair share. According to Businessweek:

269,000 wireless Lifeline subscribers were receiving free phones and monthly service from two or more carriers.

Senator Claire McCaskill (D-Mo.) has been taking a closer look at the program since she personally received an invitation to apply for a free, government-subsidized cell phone in the mail. McCaskill has asked the FCC to investigate Lifeline. As a result, the FCC is building a database to see if a subscriber has more than one subsidized phone. In other words, until recently, such a database didn't exist.

(MORE: How Apple's iPhone and Google's Android Left Blackberry in the Dust)

The FCC, which announced the changes by using the euphemism that it is "modernizing" Lifeline, has set a goal of saving $200 million on the program in 2012. After eliminating nearly 270,000 of the duplicate subscriptions discovered in the audit last year, the FCC said it has already "saved" $33 million.


by on Feb. 8, 2012 at 7:38 PM
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Replies (1-10):
toomanypoodles
by Ruby Member on Feb. 8, 2012 at 8:16 PM
4 moms liked this

 Nice, huh?

Good grief, when will the entitlements stop and people have to be SELF reliant!?!?!?

mommy2angels427
by Bronze Member on Feb. 8, 2012 at 8:17 PM
1 mom liked this

 another waste of my tax dollars.... when will the entitlements stop?  when will people provide for themselves??  when will people support themselves?

toomanypoodles
by Ruby Member on Feb. 8, 2012 at 8:18 PM
1 mom liked this

 I lived 40 years with no cellphone.  It is NOT a necessity!

I have one, but don't NEED it and hardly ever use it. 

Just DUMB. 

prettygirl326
by Member on Feb. 8, 2012 at 8:19 PM
1 mom liked this

 well i have 2! thanks obama!

toomanypoodles
by Ruby Member on Feb. 8, 2012 at 8:23 PM
4 moms liked this

 

stacymomof2
by Ruby Member on Feb. 8, 2012 at 8:26 PM
3 moms liked this

I think everyone will agree that double dipping on the program is not OK.  But $10 per month is a good deal and needed if we expect people to be job hunting.  For people on disability they would need a phone for emergencies, also.

This goes back to what exactly are we trying to do with benefits programs?  Is the idea to get people out of poverty, or is the idea just to keep them from dying?  A phone is the difference between getting a job and not.

stacymomof2
by Ruby Member on Feb. 8, 2012 at 8:31 PM
1 mom liked this

It's cheaper than a land line.  I would drop my land line completely if I didn't get a bundle that makes the internet cheaper.  A land line with no thrills is about $30/month in my area, my sister who lives about an hour away from me would have to pay $60 per month for a land line (she has a really expensive service in her area, the only one available.)  She has a cell phone, $50 total price unlimited everything.  To include internet on her landline would be close to $120 per month.  So why wouldn't she get a cell phone?  It's cheaper!

ETA FRILLs not thrills, lol

Quoting toomanypoodles:

 I lived 40 years with no cellphone.  It is NOT a necessity!

I have one, but don't NEED it and hardly ever use it. 

Just DUMB. 


raven1114
by Member on Feb. 8, 2012 at 8:33 PM

This is ridiculous to me. I could understand if we're talking about a family with a spouse or child with a severe disability that needs to be able to be reached at all times but not just because 'oh we're poor and want a free phone'

Euphoric
by Bazinga! on Feb. 8, 2012 at 8:50 PM
1 mom liked this

 Ridiculous.

LilyofPhilly
by Gold Member on Feb. 8, 2012 at 8:51 PM
10 moms liked this

My daughter had one of these phones at one time. She qualified because she is disabled, and has limited income. I am glad she had it when she was taking buses to and from work, and late at night at that. If you all have a problem with poor people having this little bit of security, then you can kiss my ass. Your tax dollars go to far worse things. It's a cheap phone, with very limited minutes, something that the average 10 year old would snub her nose at.

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