Free Cell Phone Service for the Poor to the Tune of $1.6 Billion

Tags

Entitlements, FCC, Federal funding, Government dependency, Government funding, Government spending, Government Waste, Universal Connectivity Fee, Universal Service Fee, Welfare State

BUSINESS WEEK

“…Evan Mensch recently discovered that there are free cell phones. After losing his sales job, the 37-year-old single father of two from Perry, Md., couldn’t afford to continue his regular wireless contract. After learning of the federal program that provides wireless service to the oft-unemployed poor, Mensch signed up for a free Kyocera (KYO) cell phone with 250 free minutes of calling a month through Assurance Wireless, a brand run by Sprint Nextel (S). “Because of Assurance, I was able to get a call back from an employer,” says Mensch, who received a job offer in November after nearly two years without a job.

Sprint Nextel isn’t driven by altruism. Serving cash-pinched customers like Mensch can pay off due to federal government subsidies. And finding new customers isn’t hard. With unemployment at 9.4 percent and one in six Americans living in poverty, Sprint and rival América Movíl’s (AMX) TracFone unit have seen an explosion in sign-ups for the government-subsidized free wireless services they’ve offered for more than a year….”

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While a free cell phone at the cost of taxpayer may have proven beneficial for the individual in the above article, as usual with entitlement programs, there is no shortage of abuse.

More than 12.5 million so-called low income Americans received free cell phones.  The cost for the free cell phones, a whopping $1.6 billion.

As usual with anything remotely connected to the government, there is the lack of oversight.  There are thousands with these free cell phones who do not qualify for the program and probably just as many who have more than one of these free cell phones.

McCaskill Moves to Stop Government Waste in Free Phone Program

“WASHINGTON, D.C. –  A government run cell phone program, ripe for fraud, has caught the attention of oversight advocate U.S. Senator Claire McCaskill who is seeking answers to questions about rampant abuse and waste in the program-and in a letter to the Federal Communications Commission (FCC), McCaskill outlines steps she is taking to stop the fraud in its tracks.

The LifeLine program was created to provide phone service to low-income individuals.  McCaskill’s letter comes after she received a solicitation at her home for a free cell phone from the Lifeline program.  The mailer did not require documentation for proof of eligibility.  McCaskill is, in fact, not eligible for the program.

The Lifeline program is funded by the Universal Service Fund (USF), which receives its resources from a fee telephone users pay on their phone bills.  The FCC oversees the USF and, accordingly, the Lifeline program.

‘…I remain troubled by the expansive potential for the program to be abused, especially since Americans contribute to the program through their monthly phone bills,’ McCaskill wrote in a letter to the FCC.  ‘The current requirements to determine eligibility often do not require customer documentation for participation in Lifeline, which may result in individuals receiving phones who should not be…”

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(Note:  McCaskill is up for re-election this year, not that there’s a connection….)

Several months ago, I telephoned a former associate and left a message on his voicemail.  When he returned my call, he said, “Sorry, I was on the other phone.”

When I asked this individual who lives off the government dole how is it that he does not work but he and his wife who does work can afford a landline in their apartment and two cell phones each, he told me about Safelink and the free phones.

I then asked this individual, “Why do you have two cell phones?” His response, as if I was the stupid one, “Cause it’s free.”

In other words, this couple is beating the system, rather ripping off the system.

Remember last summer when Michelle Obama visited a soup kitchen for the homeless and poor down the street from the White House?

Angry yet America?

For those who would say that this is a Federal program and no tax dollars are used, I say come again?

The Universal Service Fee or Universal Connectivity Fee you see on your monthly phone bills is nothing more than a tax.  Said tax goes into the fund, which finances this giveaway to the poor.

As a child, we did not have a telephone in our home.  For that matter, neither did most of the families who lived on my street.

There were two telephones on my block, one in the record shop down the street and the other in the candy store on the corner.

If you needed to make a telephone call, you went to either of these locations before 6 p.m., Monday through Saturdays.  At other times, we did without and we got along just fine.

Today, there are those who actually believe that it is their right to own a cell phone.  Correction:  Owning a cell phone or landline is not a right, not even for the poor.