Lifeline Program Offers Affordable Phone Service to Low-Income Americans

11:47 PM, Nov 27, 2013   |    comments
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GREENSBORO, N.C. -- It's a government program you're spending billions on but you probably didn't even know it existed. 

Maybe the phrase - Obamaphone rings a bell?

The Lifeline program has gotten that notorious - but inaccurate name - over the past few years.

The Lifeline program was created under President Ronald Reagan, expanded under President George W. Bush and it's been costing you ever since. 

WFMY News 2's Morgan Hightower discovered while you're paying your phone bills each month - you're also picking up the tab for millions of Americans.  

"With this phone, if I didn't have it, I basically would probably be more homeless than I am now," explained Malea Lial. 

Melea Lial has no house and no car - but for five years she's had a full service cell phone.

She gets 250 free text messages and minutes each month and the phone she makes those calls and texts on - is free too.

"It's a lifeline to me, especially because of the medical problems I have."

That's why the Lifeline program was created in the first place - as a hand-up to help Americans struggling stay connected.

It's funded through the Universal Service Fund which is funded by wireline telephone companies, wireless telephone companies, and certain Voice over Internet Protocol providers. 

Most companies pass those fees onto their consumers. 

That's why in your monthly phone bill - you might see a line item for the "Universal Service Fund."

"Communication is such a vital tool in our world today, that it's just necessary in order to survive," explained Jack Pflanz, Assurance Wireless.

Jack Pflanz works for Assurance Wireless. It's one of the 40 companies in North Carolina that provide this service.

Those companies are paid $9.25 per eligible customer served. 

Last year in North Carolina alone, Assurance Wireless' parent company, Virgin Mobile, was paid nearly $30 million

In order to receive a phone and service - you must qualify. 

Eligible customers must receive SNAP benefits, Medicaid, and other federal programs - or fall in a certain income bracket.

"When we get that information, it's incumbent upon us to make sure that they are eligible and to validate that," explained Pflanz.

There is only one Lifeline phone allowed per household - but there is currently no way to track all the customer - making fraud and abuse widespread. 

The FCC has handed out nearly $50 million in fines in just the last 2 months.

"Is there abuse of programs in the world? Of course but there are so many people out there that simply need a little bit of help," explained Pflanz.

A national database to track lifeline customers is scheduled to launch by the end of this year - but it will only have 5 states' data.

By next year, the goal is to expand to the rest of the country.

Some lawmakers think the Lifeline program has grown to be too expensive and are trying to defund the program. 

Senator David Vitter, R-Louisiana, introduced legislation to "end the mobile phone welfare program." It has not passed.

In the House, Congresswoman Virginia Foxx, R-North Carolina, co-sponsored the "Stop Taxpayer Funded Cell Phones Act of 2011." If passed, it would "prohibit universal service support of commercial mobile service through the Lifeline program."

WFMY News 2

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