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Jerry Davich: Free ‘Obama’ cell phone? Sure, but ...

Updated: April 4, 2013 6:13AM



Have you heard about the free “Obama phone”?

These government-backed cell phones are all the rage with welfare recipients, low-income seniors and fraud-minded scammers.

I’m being sarcastic, of course. Not about the phones’ popularity and potential for abuse, but about their name. It’s an urban legend that our “socialist president” rolled out this program immediately after getting elected into office in 2008.

The program had been rolling long before President Obama came around, and its expansion — free cell phones — coincided with his first term in office. How convenient for his critics.

Back in 1985, the federal government set up the Federal Communications Commission’s Lifeline phone service program, beginning with, of course, land lines.

The idea was as basic as the free phone: Provide phone service to low-income consumers to give them simple security and no-frills perks, such as calling their jobs, connecting with family and contacting 911 if needed.

The successful program was lauded for increasing the percentage of low-income households with phone service. In fact, from 80 percent to more than 90 percent, according to FCC data.

The now-controversial program, funded by Universal Service Fund fees on telephone bills (not exactly taxpayer dollars), provides eligible consumers with free cell phones and discounted monthly service. Typically, 250 free minutes every month.

“There are no strings attached, no gimmicks and no bills unless you go over your allotted monthly minutes,” said an older woman from Hobart who’s been using her free phone for several years.

This is all true. But here’s the rub. With such an appealing program offered to our phone-addicted society, guess what happened? That’s right. It was abused, badly, by customers who weren’t eligible for the free phones and service. Anyone surprised? Another well-intentioned government program that got hijacked by greed.

Problems started arising with the mass popularity of cell phones in the ’90s, as well as changes in 2005 and 2008 allowing discounts on low-cost wireless plans. Without adequate safeguards in place, it caused skyrocketing growth in the program which led to a ridiculous amount of “waste, fraud, and abuse,” the FCC later admitted.

Federal rules prohibit consumers from receiving more than one Lifeline discount per household. And also receiving a discount on both a landline and a wireless service. Those rules, however, didn’t stop users from taking advantage of the program.

Plus, with more wireless carriers jumping on the program (free government money!), and more Americans finding out about it, the program’s budget jumped from roughly $800 million in 2008, when Obama took office, to $2.2 billion last year.

Phones still available

Last year, the FCC completed a massive overhaul to reform and modernize the program. To date, the agency’s new rules have eliminated more than 1.1 million duplicate subscriptions, saved nearly $214 million in 2012, with predictions of saving more than $2 billion by the end of 2014.

“Fundamental reforms of the program’s rules are allowing us to vigorously pursue those who had abused the system,” said FCC’s Enforcement Bureau Chief Michele Ellison in a statement. “And to safeguard this vital program for low-income Americans who truly need it.”

Last week, two wireless companies in Oklahoma that were involved in the Lifeline program agreed to pay more than $1 million in reimbursements and contributions to the U.S. Treasury. The companies were accused of violating program rules.

“Today’s enforcement action sends a clear message: the FCC will not tolerate waste or fraud in the Lifeline program,” Ellison said at the time.

Well, good luck with that in the United States of Self-Entitlement.

To be eligible to enroll legitimately, you must either have an income that is at or below 135 percent of the federal poverty guidelines, or participate in one of these assistance programs: Medicaid, food stamps, Supplemental Security Income, Section 8 housing, and Temporary Assistance to Needy Families, among others.

“No consumer will get in trouble for signing up if they are eligible for the benefit, and if they have only one Lifeline subscription per household,” explained FCC spokesman Mark Wigfield.

In Indiana, the government is working with a handful of cell phone providers, including Assurance Wireless, T-Mobile and Safelink Wireless, the initial government provider.

Still, many other companies market themselves as part of the government program when, in fact, they are not.

The FCC shared this website with me, www.usac.org/li/getting-service/default.aspx, which includes Indiana providers and tools for consumers to use for eligibility. To report fraud with the Lifeline program, call the FCC’s fraud tip line, 855-4LL-TIPS (855-455-8477).

“Eligible households can receive up to $9.25 per month in Lifeline discounts,” the site states. “Additional state support may be available. A household applies for the discounts through their telephone company. These companies are then reimbursed through the Lifeline Program.”

So, to review: Yes, free cell phones are still available. Yes, only if you are eligible. And no, this isn’t a socialist plot by Obama to provide cell phones only to minority, welfare-recipient drug dealers.

Find more of Jerry’s writings on Facebook, Twitter, Linked-In, and jerrydavich.wordpress.com.



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