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Not on Welfare or Living Below Poverty Line? Never Mind, Here’s Your Free Obamaphones

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Photo Credit: National Review The Federal Communications Commission oversees the so-called Lifeline program, created in 1984 to make sure impoverished Americans had telephone service available to call their moms, bosses, and 911. In 2008, the FCC expanded the program to offer subsidized cell-phone service, and since then, the expenses of running the program have soared. In 2012, the program’s costs had risen to $2.189 billion, up from $822 million before wireless carriers were included. As of June, there were 13.8 million active Lifeline subscriptions.

To be eligible for Lifeline, the applicant is supposed to be receiving some significant government benefit — food stamps, Medicaid, Supplemental Security Income, public housing assistance, etc. But because welfare eligibility has expanded under the Obama administration, more people than ever before are qualified to receive “free” cell-phone service — part of the reason why Lifeline mobiles have become commonly known as Obamaphones. Alternatively, applicants can qualify if their household income is less than 136 percent of the federal poverty line.

But as with any federal program with too much funding, too little oversight, and perverse financial incentives, Lifeline has become infamous for rampant fraud and abuse. There have been news reports about recipients flaunting dozens of subsidized phones. And in February, the Wall Street Journal reported on an FCC audit of the top five Lifeline providers, which found that “41% of their more than six million subscribers either couldn’t demonstrate their eligibility or didn’t respond to requests for certification.”

The FCC supposedly buckled down on eligibility standards last year and established other safeguards aimed at reducing fraud. I was curious about how tough it was to get one of these phones, so last month, I hit the streets of New York. And out of respect for the law and my journalistic integrity, I did not lie to obtain a phone.

Read more HERE about how the author acquired two free Obamaphones even though she didn’t lie and obviously didn’t qualify.

The $100,000 Obamaphone for Millionaires

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Photo Credit: National Review The Obamaphone lady is moving up in America: She isn’t a rabble-rouser in Cleveland anymore, but a real-estate developer in Maui, a ski-resort owner in Breckenridge, and a dedicated golfer in Scottsdale — and, more important, the telephone companies that serve them. And she isn’t costing taxpayers a couple hundred bucks a year in subsidies, but more than $100,000 per household.

That’s the finding of a new study released by economists Thomas Hazlett of George Mason University and Scott Wallsten of the Technology Policy Institute, who have turned their attention to the aptly named “high-cost fund” administered by the Federal Communications Commission and supported by the 16 percent universal-service tax levied on everybody from landline users to voice-over-IP customers. The fund has spent some $64 billion on carrier subsidies since 1998, and while there is some dispute about how many additional households have phone connections thanks to those outlays, the highest estimates run around 600,000, meaning a cost of more than $100,000 per household.

The program was originally developed to help extend basic communications to poor people in remote rural areas without telephone service. But the United States ran out of poor people in remote rural areas without telephone service a good long while ago. The administrators of federal programs fear nothing so much as looking for a job in the private sector, so the program found new products to subsidize, such as broadband internet, and new places to subsidize them: No more dirt farms in the sticks, but high-end developments — “mansion-lined gated golf communities” in the words of Dave Herman of the Alliance for Generational Equity, which sponsored the study.

According to Hazlett, the $4.5 billion-a-year program has connected at most 0.5 percent of U.S. households to telephone service.

Read more from this story HERE.

World’s Richest Man Gets Richer Supplying Obamaphones to Poor

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A Mexican telecom mogul who holds the title of world’s richest man, and one of President Obama’s top donors are both getting even richer from the U.S. government program that supplies so-called “Obamaphones” to the poor.

Carlos Slim, who has an estimated net worth of $70 billion, owns a controlling stake in TracFone, which makes $10 per phone for each device it provides to poor Americans. The company, whose president and CEO is Frederick “F.J.” Pollak, also makes money from extra minutes and data plans it sells to subscribers who get phones and service through the government’s Lifeline program. The program, which began in the mid-1980s, has exploded in the past four years after being expanded from supplying landlines to the poor to providing cellular phones.

The phones came into the national spotlight after a viral video surfaced on YouTube in which a Cleveland, Ohio, woman praised the president, saying he needed to be re-elected because he gives out free phones.

“Everybody in Cleveland, every minority, got an Obama phone. Keep Obama as president. He gave us a phone. He gonna do more,” the woman said in the video.

Slim’s Movil America owns TracFone and recently snapped up service provider Simple Mobile for $100 million. TracFones and Simple Mobile service are huge players in the Lifeline program through the company’s “SafeLink Wireless” brand. TracFone had 3.8 million subscribers through the federal program as of late 2011.

Read more from this story HERE.