A federal program to provide free cell phone service to low-income people doesn't always deliver
Six months ago, Joe Howard needed a phone. So when a friend told him about an opportunity to get a phone, including service and texts, for free, Howard jumped at the opportunity.
All Howard had to do was prove he was a low-income person. That was no problem. Howard, a Real Change vendor, received food assistance through the Department of Social and Health Services.
The phones and service he hoped to benefit from are funded through Lifeline, a federal program that provides low-income people with free cell phones and up to 250 minutes of service.
Howard’s local provider would have been Assurance Wireless, part of Virgin Mobile. He filled out his application, expecting the phone would arrive in three weeks, and waited.
Three weeks later, he didn’t have a phone. Four weeks later, still no phone. Six weeks passed. No phone.
“I guess I thought there was some shysting going on,” Howard said, a street way of saying something crooked was going down.
But had he been bamboozled? Or was it something else?
Perhaps it had to do with the address on his application. Howard said he used 77 S. Washington St., the address for Compass Housing Alliance, which provides permanent and affordable housing, as well as services and shelter, to low-income people. A staff person with cha said that close to 700 clients may use that same mailing address for various reasons.
But even if each client submitted a valid application for a free phone, only one would show up at the address. The website for Lifeline, fcc.gov/lifeline, states: “Federal rules prohibit eligible low-income consumers from receiving more than one Lifeline discount per household.”
Howard said that while he never got a letter explaining why he was denied a phone, he’s heard from others who’ve received letters saying they lost out because someone at the address already had phone service.
Jack Pflanz, an Assuarance Wireless spokesperson, said company policy prohibits releasing the number of customers using their phones. Pflanz said the company provides Kyocera Jax cell phones.
Lifeline is a product of the Universal Service Fund (usf). Created by the Federal Communications Commission (fcc) in 1997 to meet a federal mandate, the usf ensures telecommunication companies provide access to affordable service to everyone, regardless of income. Schools and libraries benefit from the usf. Companies can recoup their cost by charging paying customers a universal “service” or “connectivity” fee, listed as a line item on bills.
Last year, Lifeline spent $1.6 million for the program, according to a report by Time magazine.
Participation in Lifeline depends upon eligibility. To qualify, an applicant must prove enrollment in one of numerous federal or state programs, including Supplemental Security Income, Temporary Assistance for Needy Families, Medicare or State Family Assistance.
Eligible programs can vary by state, however. And not every state may be part of a phone company’s program: Assurance Wireless, for example, only serves 31 states and the District of Columbia. The company recently struck up a relationship with 7-11, which will provide information about Assurance Wireless in its convenience stores.
SafeLink Wireless and ReachOut Wireless also provide Lifeline service in other regions of the country.
But Lifeline has come under fire. Last summer, the Pittsburgh Tribune-Review printed an article that said that even though some customers found free service a “blessing,” a representative from the Heritage Foundation, a conservative think tank, disagreed with Lifeline.
“Our society cannot afford to give free everything to everybody,” he told the newspaper.
Earlier this year, the fcc sought to reform the program to fight fraud and abuse. It created databases to enable fully automated verification of ongoing eligibility.
It also established a “one-per-household rule,” defining household as an “economic unit” to ensure that “separate low-income families living at the same address can get connected.”
In a follow-up email, Pflanz wrote that the fcc changes went into effect on June 1, and that people with “temporary addresses” can now benefit from the program. Residents with the same address must certify they are from different households, he wrote.
The changes came too late for Howard. In the end, he had to go another route.
Howard said he went to Radio Shack a couple months ago looking for something simple. The employee suggested he get a phone that cost $1, with monthly service amounting to roughly $30.
Feeling pressured, Howard bought the phone, he said. When the bill came, the services and fees took the cost to roughly $60 a month. He wouldn’t have had to pay anything if he’d received that Lifeline phone.
Now, Howard is locked into a two-year contract and has to pay every month, including a service fee that helps to fund Lifeline’s free phones for others. He hadn’t anticipated losing out on the free phone, or what buying one would cost him.
“It wasn’t what I was expecting,” he said.
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