FactCheck.org clarifies some distortions about “Lifeline, a federally mandated program that reimburses phone companies with a monthly subsidy of $9.25 for each low-income customer who uses a landline or a cell phone. The program has allowed millions of persons living under or just above the poverty line to acquire cell phones — once considered a luxury — for free.
Lifeline is funded by telecom customers who pay a universal service fee as part of their phone bills. The fee technically is not a tax but a cross subsidy, the rules of which are determined by the Federal Communications Commission.
The video gives a wholly one-sided account of the program’s widespread abuse. It’s true that Lifeline’s costs doubled in five years to $1.75 billion in 2011 while tens of millions of dollars have been lost to fraud. Surveys found an average of 9 percent of Lifeline users in 17 states and territories were ineligible for the program, while recent audits found 400,000 instances of one person — or one household — having more than one subsidized connection. Some phones were sold for cash on Craigslist.
The FCC, however, overhauled the program in February, enacting changes that call for building databases to confirm beneficiaries’ eligibility and to identify duplicate subscriptions. The FCC also slashed 75 percent of available subsidies for the program, which eliminated a “perverse” incentive for some phone companies to enroll ineligible persons. The FCC projects its modifications will save up to $2 billion over three years. Griffin’s video ignores those measures while highlighting only the abuses.”
Tags: Anti-poverty strategies, Cell phone
