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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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RE: Nonsense
By GulWestfale on 2/13/2013 11:46:30 AM , Rating: -1
i think the program is a good idea; poor people without a phone cannot ever find a job and thus become less poor. the emergency services access is also important and needed. what i do not understand is this:

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

you cannot let people certify themselves and then ask yourself why you're seeing abuse. there should have been be clear rules in place as to who qualifies in the first place.

RE: Nonsense
By MadMan007 on 2/13/2013 12:58:15 PM , Rating: 2
There are numerous federal and state programs that are self-certifying. If someone knowingly provides false information, it's a criminal offense, obviously that doesn't stop people though. The alternative is to add cost by requiring certification, where the balance lies between reducing fraud and added certification cost is the key to knowing which is better.

RE: Nonsense
By GulWestfale on 2/13/2013 2:40:47 PM , Rating: 2
but doesn't the government already know who is poor, after all they're the same people who mail out welfare checks?

RE: Nonsense
By DanNeely on 2/13/2013 3:39:51 PM , Rating: 2
Welfare is only available to parents of minor children. The unemployed, people working part time or at low paying jobs, or people who are retired without any savings could also fall below that threshold.

The closest thing to a complete record set I think the feds have is tax records; and even those would miss someone who didn't file because they had no income during the past year.

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