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February 12 2013

About those Obamaphones...

Charlotte Hays

Free talk is not cheap.

The Wall Street Journal reports:

The U.S. government spent about $2.2 billion last year to provide phones to low-income Americans, but a Wall Street Journal review of the program shows that a large number of those who received the phones haven't proved they are eligible to receive them.

The Lifeline program began in 1984 to prevent poor families from being cut off from jobs, families, and emergency services. I can see pros and cons of such a program, if very, very carefully managed. That’s not my issue at this moment….

First: I want to take issue with the Wall Street Journal’s on a not-minor point. The government is the conduit for the money for these phones. But you and I pay for them through monthly charges on our phone bills, both for landline and wireless-phone users.  

But the Journal deserves a medal for blowing the whistle on the magnitude of the abuse:

Suspecting that many of the new subscribers were ineligible, the Federal Communications Commission tightened the rules last year and required carriers to verify that existing subscribers were eligible. The agency estimated 15% of users would be weeded out, but far more were dropped.

A review of five top recipients of Lifeline support conducted by the FCC for the Journal showed that 41% of their more than six million subscribers either couldn't demonstrate their eligibility or didn't respond to requests for certification….

The FCC until last year allowed consumers to self-certify, without requiring documentation, that they met federal poverty guidelines. Subscribers didn't have to recertify once they were enrolled in the program, and there were few checks on whether households signed up for more than one cellphone.

Though the free phones antedate the Obama administration, the cost of supplying them has shot up dramatically from the $819 million price tag in 2009 to the current $2 billion.

As you may recall, the phones became known as Obamaphones during the presidential campaign.

Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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