FREE CELL PHONES CAUSE CONTROVERSY
Wednesday, 03 October 2012 13:34


For the past several weeks, dozens have lined up in Veterans Park to receive free and discounted cell phone service through the Lifeline Program.  photo by Roland Dorsey

Program under fire in Dundalk and nationally

by Nicole Rodman

With the presidential election just weeks away, the issue of entitlement reform is a hot-button topic across the country.
    One government program currently under scrutiny is the Lifeline Program for Low-Income Consumers.
    The little-known program gained national attention after The Drudge Report website posted a video in which an Obama supporter touts the program, saying, “Keep Obama as president. He gave us free phones.”
    In the wake of the video, people across the country are asking questions about the so-called “Obama phones.”
    For the past few months, residents in Dundalk have  raised their own questions about the program as a table advertising “free phones” has been set up at the Veterans Park pavilion at the Dundalk Village Shopping Center.
    Both nationally and in Dundalk the concerns are the same — who is receiving these free cell phones and who is footing the bill?
    Like the “Obama phones,” the free cell phones in Dundalk are being offered as part of the Lifeline Program for Low-Income Consumers.
    The program is an extension of the Federal Communication Commission’s (FCC) goal to ensure widespread, affordable access to telephone service.
    The genesis of the program was the Communications Act of 1934, passed by Congress to provide “rapid, efficient, nation-wide, and world-wide wire and radio communication service with adequate facilities at reasonable charges” to all citizens.
    The Lifeline Program itself was not founded under President Obama but, rather, under President Ronald Reagan in 1984.
    The program, which at first subsidized only landline telephone service, was expanded with the passage of the Telecommunications Act of 1996, signed into law by President Bill Clinton. This revised act restructed the program so that it would be better able to ensure equal access to information technology and telecommunications for all residents and many public buildings, including libraries and schools.
    It was not until 2005, under President George W. Bush, that the program began offering mobile phone service.
    Today, both landline and cell phone service is offered, though each eligible household may receive just one phone line.
    The Lifeline Program is administered on a state-by-state basis, with most states offering some type of assistance.
    Though it may vary by state, generally, to be eligible for the program, participants must participate in a qualifying state, federal or tribal assistance program (such as Medicaid or the Supplemental Nutrition Assistance Program) or have a household income at or below 135 percent of the federal poverty guidelines.
    For a family of four, this would be an income of $30,173 or less per year.
    Lifeline Program assistance is available through a wide variety of carriers, including Verizon, True Wireless, Sprint and others.
    While some may receive a no-cost mobile phone with basic local service and 90 free minutes per month, others receive up to $10 discounts on low-cost phone service each month.
    For mobile phone users, more minutes can be added at a low cost, $5 for 30 minutes or $20 for 225 minutes.
    Once a participant is signed up with the Lifeline Program, they must re-register each year to reaffirm eligibility in the program.
    But, most importantly, who pays for the program?
    Despite the uproar over the federal program, Lifeline is not funded with taxpayer dollars but, rather, through the Universal Service Fund (USF).
    Created through the Telecommunications Act of 1996, USF is funded by contributions from each telecommunications company in the United States.
    Most companies raise this money by charging subscribers a Universal Service fee, listed on the bottom of most phone bills.
    Companies are required to contribute a portion of their interstate and international revenue to the fund.    
    As of 2012, the USF fee is approximately 15.7 percent of a company’s interstate and international revenue.
    Money from the USF is used to fund the Lifeline Program, providing low-cost phone service to those in need.
    A Jauary 2012 FCC report on the Lifeline Program notes that “When consumers are able to only intermittently remain on the network, they are not fully connected to society and the economy because, among other things, they are unable to apply for and receive call-backs for jobs or reach important social services, healthcare, and public safety agencies on a constant basis.”
    Though the FCC touts the program’s importance, it does not dispute the fact that there have been some abuses in the system.
    Last November, Arkansas Republican Rep. Tim Griffin’s concerns over the program led him to sponsor H.R. 3481, the Stop Taxpayer Funded Cell Phones Act of 2011.
    Though  it is still in committee, the bill, if passed, would prevent mobile carriers from receiving USF funds for the purposes of administering the Lifeline Program.
    While the act refers to “taxpayer funded cell phones,” in a February 2012 article, Forbes.com clarified the issue, writing, “Yes, taxpayers support it but no, not through federal income taxes.”
    Rather, the program is funded by phone subscribers’ Universal Service fees, as collected by their service providers on their phone bill.
    In order to address potential fraud and abuse in the Lifeline Program, in June 2012, the FCC put into place a number of reforms to the program.
    These reforms, set to save an estimated $200 million, according to an FCC press release, include the elimination of duplicate subscriptions and the phasing out of the Link Up program, which subsidized the cost of initial phone connection services.
    Other reforms include tougher proof-of-eligibility requirements and required recertification each year.
    Meanwhile, here in Dundalk, the Lifeline Program, administered by True Wireless, has been moved from Veterans Park, but not because the program is ending.
    The woman administering the program, Nicole Green of True Wireless, was asked to leave the park  last Friday due to her lack of a permit to use the space.
    According to Barry Williams, director of the Baltimore County Department of Recreation and Parks, “The parks are for the purposes of recreation and relaxation.  Any activity that would attract a crowd will need a gathering form permit.”
    He added, “Those who are using the parks for reasons other than what was stated earlier can be asked to leave if no permit has been granted from the Office of Permits, Approvals and Inspections.
    For its part, the Dundalk Renaissance Corporation (DRC) is working with Green to find a more permanent space for the program.
    According to DRC staffer Leah Bunck, Dundalk United Methodist Church has already agreed to let Green set up on Thursday evenings during the church’s soup kitchen program.
    Calls to Nicole Green were not returned by press time.
    For more information on the Lifeline Program for Low-Income Consumers, visit the FCC website at www.fcc.gov/guides/lifeline-and-link-affordable-telephone-service-income-eligible-consumers.