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Carriers say most people drop simply didn't respond to requests

The United States government has collected a tax on phone lines under the Lifeline program that began back in 1984. The purpose of this tax was to provide phone service for people who were unable to afford it on their own to ensure that these people weren't cut off from emergency services, jobs, or family. Every American citizen who has a phone line has paid into this Lifeline program.

Payouts in the program in 2008 amounted to $819 million. In 2012, the U.S. government spent $2.2 billion providing free phone service to low-income Americans.
In an effort to squash government waste, the FCC believed that many of the Americans who were claiming the free phone service were not eligible so it tightened the rules last year forcing carriers to verify that existing subscribers were in fact eligible.

The Wall Street Journal reports that far more subscribers to the program were dropped than expected. A review has shown that the top five carrier recipients of Lifeline support had a total of 41% of over 6 million subscribers that couldn't demonstrate their eligibility or simply didn't respond to requests for certification.

These top five carriers were AT&T, Telrite Corp, Tag Mobile USA, Verizon, and Virgin Mobile. Together these carriers account for 34% of all Lifeline subscribers as of May 2012. The Lifeline program is open to subscribers that meet the federal poverty guidelines, are on food stamps, Medicaid, or other assistance programs.

Previous program rules allowed consumers to certify themselves for free phone service without having to prove they met federal poverty guidelines.

Source: Wall Street Journal

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Obama's America
By Arsynic on 2/13/2013 10:45:00 AM , Rating: -1
He would have it no other way.

RE: Obama's America
By d@mn'd on 2/13/2013 11:07:38 AM , Rating: 2
Yeah it's his fault. Let's just blame Obama for everything.

"In the wake of the 1984 divestiture of AT&T, the federal government created the Lifeline program to ensure that any increase in local rates following the break-up of Ma Bell wouldn’t put local phone service out of reach for low-income households. The initial program, implemented in 1985, made carriers whole for waiving new charges for use of local telephone networks by low-income consumers."

Blame Obama, no. Blame Ronald Reagan, yes! - after all you logic, and he was the president in the 80s.

The US political system ripples with this and has for a long time.

RE: Obama's America
By kamiller422 on 2/13/2013 1:18:50 PM , Rating: 2
Yeah it's his fault. Let's just blame Obama for everything.

Has worked for years for Democrats that blame Bush for everything and Reagan before that.

While the program has been around a while, its enrollments and costs have exploded under Obama's watch. This program should resort back to landline only unless cell service equal to or less than landline costs can be acquired. Even then, government should pay up to a certain amount of minutes, a minimal amount. User on hook above that amount.

RE: Obama's America
By retrospooty on 2/13/2013 11:06:13 AM , Rating: 2
I am fairly sure Obama approves of this type of program, and wont likely do anything to stop it, but this program stared in 1984 under Reagan.

RE: Obama's America
By Samus on 2/13/2013 12:29:35 PM , Rating: 2
Retro, clearly every president since 1984 has approved of this program...

RE: Obama's America
By retrospooty on 2/13/2013 12:31:15 PM , Rating: 2
Agreed... That or they just weren't interested in losing the votes or "PR face" by stopping it. I was just commenting on the idiotic "Obamas America" OP... As if he had anything to do with it.

RE: Obama's America
By MadMan007 on 2/13/2013 1:02:00 PM , Rating: 2
lol. So under Obama the FCC investigates and reduces fraud from a program that started and ran unchanged since 1984, and it's Obama's fault? Maybe Obama didn't directly say to do this investigation, but if you want to use the same 'Everything is the responsibility of the President' logic then Obama actually reduced fraud and waste. One moron screaming into a camera about OBAMAPHONE is nothing more than comedy relief, not indicative of 'Omg evil Obama!'

RE: Obama's America
By bah12 on 2/13/13, Rating: -1
RE: Obama's America
By arthur449 on 2/13/2013 2:30:36 PM , Rating: 2
Breaking News: government programs to help the poor cost more in times when there are more people who qualify as poor (or are just using any means necessary to cut costs).

Additionally: carriers determine that money from government reimbursement via such programs is still money, and advertise its existence to capitalize on low income market segments.

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