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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 bh192012 on 2/13/2013 1:31:01 PM , Rating: 3
But you're proving the wrong point here. $20 a month for 250 minutes is ridiculous for basic government subsidized cell phone service.

As a regular person I can get 250 minutes, 250 txt and 10MB data for $12 a month from Page Plus. I would think a large government contract could get that down to $10 a month. But instead of shopping/bidding they said thanks for the donation, and here's some money big cell companies.

Why pay double for a program? That's before they trim the fat the way they just did. Almost every stupid government program is run like this! They have more than enough revenue, they just blow it cuz they can.

RE: Nonsense
By Mint on 2/13/2013 2:55:23 PM , Rating: 2
Contracts are always written for fixed terms, so $20/month is probably old.

Recent articles peg it at $9.25-$10/mo:

That's right in line with your expectations, but of course it's a lot more fun to assume that the gov't is wasting money by paying double, isn't it...

RE: Nonsense
By bh192012 on 2/13/2013 4:56:33 PM , Rating: 2
See the 41% reduction mentioned above? So even if they are only paying 10$ a month, up to that point it still cost double what it should.

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