Low-income Georgia residents now will pay $5 a month for Lifeline phones

Oct 16, 2013 by Kristi E. Swartz

Georgia on Tuesday became the first state to charge low-income residents for what is now free cellphone service aimed at assuring the poor have access to basic communications.

The Georgia Public Service Commission voted 3-2 to charge $5 a month for the federal service, created during the Reagan administration to make sure all residents have a phone to make essential calls. The fee is scheduled to go into effect Jan. 31, 2014. A that would prevent the charge from being implemented is pending.

"This was a decision that clearly was against public policy. It was against the interests of . It was against the interest of seniors," said Robert Patillo, an attorney for Rainbow/PUSH, a civil rights group founded by the Rev. Jesse Jackson Sr.

CTIA - The Wireless Association, a national association of wireless companies, will appeal the PSC's decision and has filed suit, a spokeswoman said.

"CTIA will continue to challenge the Georgia Public Service Commission's decision to set rates on wireless service, which would make Georgia consumers pay more than they do today," said Michael Altschul, and general counsel for CTIA.

The Lifeline program was created in 1984, when AT&T was broken up into regional Bell companies, as a way to protect low-income consumers in a newly competitive telephone industry.

Consumers can get a Lifeline-subsidized phone if they earn less than 135 percent of the federal poverty guidelines - for instance, $31,117 for a family of four. They would also qualify if they receive benefits from federal programs such as Low-Income Energy Assistance, National School Lunch or Low-Income Housing Assistance.

In most cases, consumers fill out an application and are supposed to show proof that they qualify. They receive a free bare-bones cellphone and 250 minutes of talk time. When those minutes are used up, customers can buy prepaid cellphone cards to continue using the phone. Using that information, the government is supposed to keep track of the participants.

Lifeline gets its money from the Universal Service Fund, one of the surcharges that shows up on nearly everyone's landline and wireless phone bills each month. The program expanded in 2005 to let mobile phone companies participate.

Many prepaid phone companies jumped into the game. The companies receive a monthly government subsidy.

A combination of the wrecked economy, states aggressively signing up people for the program and an increased number of phone companies participating all helped Lifeline grow beyond the government's ability to keep track of its participants.

One phone per household is allowed. A federal audit found that as many as one in six people receiving free cellphones did not meet income or other need-based requirements to receive the free or discounted phone service.

The reports of fraud prompted PSC member Doug Everett to call for tighter oversight on the Lifeline program in Georgia.

"Who's going to really take care of this program . . . who's going to audit the telephone companies to make sure they are trying to do what is right," Everett said.

The Federal Communications Commission overhauled Lifeline in 2012, requiring consumers to reapply for the program annually and to provide better documentation of income. A national database that lets phone companies cross-check and see whether someone already has a Lifeline phone is scheduled to be released to all 50 states next year.

The reforms saved nearly $43 million during the first half of 2012, including $16.5 million in duplicate subscriptions, according to the FCC.

The PSC's new $5 fee will not reduce the amount customers pay to the Universal Service Fund. Rather, the money will go to the phone provider.

PSC Chairman Chuck Eaton said he would rather see those reforms play out before charging people for a subsidized service.

"Obviously, there's nobody in this room that's for fraud. We're all against fraud," said Eaton, who voted against the measure along with Commissioner Stan Wise. "Personally, I have yet to be convinced that the $5 charge would do anything to reduce the fraud." Along with Everett, Commissioners Tim Echols and Bubba McDonald voted for the measure.

In Georgia, the number of Lifeline customers has dropped 35 percent, from 1.1 million in September 2012 to roughly 717,000 in August 2013, because of the FCC reforms to the program and the improved economy. A group of phone companies that provide Lifeline phones to Georgians also have started their own database to keep track of customers.

Consumer groups and say the $5 charge will force more Georgians from the Lifeline rolls. Many, like Alethea Antley, 58, are on a fixed income and do not have the extra money to pay for phone service.

"By the time I pay all of my bills . . . I've got to buy groceries, pay my life insurance, my rent, so where's the extra $5 going to come from? I don't have it," Antley said. "We're really suffering now."

Explore further: Making smartphone browsing 20% faster while reducing power consumption by 40%

3 /5 (2 votes)
add to favorites email to friend print save as pdf

Related Stories

For needy, cell phones can be free

Apr 22, 2009

An obscure federal program that helps poor people pay for phone service is entering the wireless era. Cell phone companies are offering the needy a bargain that the rest of us can only dream about: free service.

FCC set to unveil rules for rural broadband fund

Oct 26, 2011

Federal regulators are set to reveal their plan Thursday for an overhaul of the $8 billion fund that subsidizes phone service in rural areas and for the poor, with the goal of redirecting the money toward broadband expansion.

FCC unveils rules for rural broadband fund

Oct 27, 2011

Federal regulators have unveiled a plan for overhauling the $8 billion fund that subsidizes phone service in rural areas and for the poor. It redirects the money toward broadband expansion.

Recommended for you

Microsoft beefs up security protection in Windows 10

3 hours ago

What Microsoft users in business care deeply about—-a system architecture that supports efforts to get their work done efficiently; a work-centric menu to quickly access projects rather than weather readings ...

US official: Auto safety agency under review

16 hours ago

Transportation officials are reviewing the "safety culture" of the U.S. agency that oversees auto recalls, a senior Obama administration official said Friday. The National Highway Traffic Safety Administration has been criticized ...

Out-of-patience investors sell off Amazon

16 hours ago

Amazon has long acted like an ideal customer on its own website: a freewheeling big spender with no worries about balancing a checkbook. Investors confident in founder and CEO Jeff Bezos' invest-and-expand ...

Ebola.com domain sold for big payout

16 hours ago

The owners of the website Ebola.com have scored a big payday with the outbreak of the epidemic, selling the domain for more than $200,000 in cash and stock.

Hacker gets prison for cyberattack stealing $9.4M

20 hours ago

An Estonian man who pleaded guilty to orchestrating a 2008 cyberattack on a credit card processing company that enabled hackers to steal $9.4 million has been sentenced to 11 years in prison by a federal judge in Atlanta.

Magic Leap moves beyond older lines of VR

21 hours ago

Two messages from Magic Leap: Most of us know that a world with dragons and unicorns, elves and fairies is just a better world. The other message: Technology can be mindboggingly awesome. When the two ...

User comments : 1

Adjust slider to filter visible comments by rank

Display comments: newest first

1 / 5 (1) Oct 16, 2013
Georgia, the state that lost the Civil War and the home of its original settlers, felons deported from England cuz they wanted to save jail money; and home to its favorite thug, 'Newt' , now is again showing its colors......gouging its poorest citizens. This is the state that used a highway robbery type of 'fee system' involving crooked traffic tickets in the depression and afterward that was so bad that the American Automobile Association (AAA) declared the state off limits to its members as so many members and ordinary people by the tens of thousands had been cheated and jailed in extortion schemes. The forcible routing of tourists around this nest of thieves was short lived. Deprived of the blood and money of its victims, the blood sucking sheriffs pulled in their horns. Relics of this period is in the 'string town' shape of small town city maps with town limits extended for miles along highways to facilitate speed fine gouging, etc.