Lifeline Revisited

January 15, 2013 12:09 pm

by Stefan · 42 comments

UPDATE: According to Chairman Eaton’s office, despite opposition from regulated entities and perhaps some others, the below initiative has passed. The PSC has required providers to charge Lifeline users $5/month, taking a real step to rid this essential program of fraud. Link to come.

Just a bit of a bump…

Right now, the Georgia Public Service Commission is hearing arguments for and against the imposition of a $5 minimum charge on Lifeline telephone service.  As previously discussed here, the Lifeline program is funded by the Federal Universal Service Fund and provides a $9.25 discount to low-income individuals that qualify for other Federal programs.  Certain phone companies have used the Federal program, which is administered by the PSC, to offer free cell phones and a small bucket of minutes.  The program is rife with fraud and abuse and the $5 minimum charge would cure these problems while keeping the program in place for those that need it.

However, the powers that be would like to continue to loot the fund at a rate of $9.25 per line, and it is in their interest to keep giving out “free” phones that are never used.  And it is in the best interest of the “consumer” to get as many phones as possible. So between the two of them, we are finding out where exactly Quantity Demanded goes when Price hits Zero. This vote was pushed back for months, not sure why, but it gives the commissioners a second chance to do the right thing. Hint: it’s not the thing Tracfone wants them to do.

 

 

 

 

 

novicegirl January 9, 2013 at 3:08 pm

Any idea that cuts back on welfare is fine by me, I just wish it went beyond telephones. I’d like to see a state law passed that whenever someone uses food stamps they have to pay Kroger or Publix $5.

Jackster January 9, 2013 at 3:16 pm

Says someone who’s probably never had to use food stamps.

The $5 on a phone isn’t that bad of a deal, since you kind of need a phone (or voicemail at least) to get a job or work.

novicegirl January 9, 2013 at 3:19 pm

I think we agree with each other. $5 for food stamps is a pretty good deal – since food is very important as well.

Stefan January 9, 2013 at 3:49 pm

The point of the charge is prevent companies from giving multiple phones to the same person without checking on duplicates. SNAP doesn’t work the same way.

You used to have to buy food stamps, by the way. They eliminated the buy-in requirement a few years ago.

novicegirl January 9, 2013 at 3:24 pm

Another thing that is great about the $5 minimum charge, is it goes back of the hands of American businesses. So AT&T, Verizon (and if the $5 is implemented on other welfare programs: Kroger, Publix and childcare providers) can use that money to create jobs and grow the economy versus having the Federal Government waste it.

Jackster January 9, 2013 at 4:36 pm

Again, we don’t agree with each other. You seem to be hating on families who depend on SNAP to survive, where $5 means a tank of gas, medication, or to cover the amount of food that SNAP doesn’t cover.

It’s hateful and wrong, and quite honestly, the reason why so many conservatives come off as out of touch with social issues.

Stefan January 9, 2013 at 4:42 pm

Agreed.

xclass January 9, 2013 at 5:03 pm

I’m watching this debate play out with a lot of amusement.

“$5 means a tank of gas, medication, or to cover the amount of food that SNAP doesn’t cover.” How is that any different than charging a fixed income senior an extra $5 for phone service. Warped liberal logic I suppose.

Talk about using a sledgehammer to crack a nut. You’ve got some abuse with multiple cell phones, so your going to charge every recipient of the funds, whether it’s someone using a cell phone or landline, a $5 charge. I can think of a dozen better solutions to crack down on the multiple cell phone sales. The stated intent might be to crack down on multiple cell phones, but look at the actual proposal, it has nothing to do with the cell phones.

I honestly can’t believe that Vincent Fort, the AARP and every other liberal leader/organization isn’t going ballistic over this proposal.

saltycracker January 9, 2013 at 9:43 pm

Forget the fee – Make Walmart/Kroger hold training classes on how to get food stamp users to spend them effectively, maximizing value – :)

I was wondering how the dirty bum in Publix yesterday got his phone – he sure was on his phone a long time……price comparing wine ?

Ed January 10, 2013 at 7:48 am

Yall respondin’ to a troll.

seekingtounderstand January 15, 2013 at 3:21 pm

novicegirl: Look at what food qualifies for food stamps and WIC, you will see that is a republican and democrat corporate welfare program for the food industries.
They are over paying for food thru this government program. They can not use coupons or sales and are limited as to what they can buy.
Its a win for food companies and a loss for tax payers. Those in need of help are just being used.

Vesuvius January 9, 2013 at 8:40 pm

Assessing a $5.00 monthly fee on elderly and low income subscribers does nothing to prevent fraud and is just plain petty. The cell phone providers don’t even want the money, for crying out loud. Too bad the PSC does not have the same enthusiasm for cutting corporate welfare. I would love to see some variation of this type of accountability applied to Georgia Power in its mismanagement of the Vogtle project. I won’t hold my breath, though.

Jackster January 9, 2013 at 10:27 pm

Vesuvius – honestly, I haven’t read up much on the issue. My point is that if your cheapest option is $5 for a phone or no phone, $5 is not a bad deal.

Oh, and that comparing it to SNAP is foolish at best.

Ideally, I’d like to know my “Universal Service Fee” is going to something useful, like enabling poor people to get things done.

BTW – with GP, it’s not called corporate wellfare – its called guaranteed margin. As in, if you buy SoCo stock, they will always make money.

Vesuvius January 10, 2013 at 8:42 pm

While $5 may seem like a great deal for a phone, some recipients have incomes that are 130 percent below the poverty level. They don’t have the $5 each month, plain and simple. If forced to pay the Commission-tax each month, they will have to give up the phones. This thwarts the very purpose of the federal program that provides them.

Stefan January 11, 2013 at 10:30 am

There has to be a change in the economic incentives that exist right now. If the company is incentivized to give out as many phones as possible, they will continue to do so. Would you rather the provider pay $5 per line per month? I am sure they’d be more than willing to do so for the unused phones since they don’t cost them anything. So how about this, instead of the consumer paying $5 per month, the provider, at the end of the year, has to pay $5 per line per month for every line that 1) has been shown to be given out improperly (either to a person or household who has already received a phone or to a non-qualified individual) or 2) on any line that shows a usage of zero.

How’s that sound?

Chris Huttman January 15, 2013 at 2:07 pm

Or, if you truly can’t afford the $5, have a church or other charity do it for you.

seekingtounderstand January 15, 2013 at 3:27 pm

Or you could have utilities like Buford Gas who take advantage of many poor people from other counties and are not regulated while they blow over %40 profits on stuff for just there own town. Go look at their new trump buildings and notice the light posts every five feet burning brightly every month while they take from poor people.

DavidTC January 10, 2013 at 1:50 pm

The problem is the way the program is set up makes no sense at all. Here is what should actually be done: Give everyone on welfare or social security or whatever (Instead of, apparently, having an entirely separate program and database for this.) a SIM card that gives them however many minutes a month. Every three months or so they have to call in on the phone and renew the card.

Existing charities can, like they already do, accept old cell phones and give them out, or maybe we can have the government collect those and do it. (And if we actually run into a shortage of phones, we can then start buying very cheap phones and giving them out, but that’s not very likely.)

There. That’s it. Instead of this idiotic program where we apparently are buying single-use phone and giving them out, and people end up collecting multiple ones because the companies giving them out make more money, and because their phones might run out of minutes and the only solution is to switch to an entire different phone! (And so they got a spare one in advance. Or a spare two. Oh, oops, misplaced that one, better get another.)

It’s like this idiotic setup was designed by some sort of cargo cult that had no idea how cell phones actually worked, and had only ever seen and used pre-paid cellphones sold in stores, and had _no idea_ that cellphones didn’t magically stop working after a set amount of time. (Except this analogy doesn’t work, because you can fricking renew pre-paid phones also!)

_Literally_ giving poor people free pre-paid multiple cell phones, instead of, duh, a free cell phone plan, is so idiotic it’s had to understand how this actually came to be. And it would be a good deal more useful to the people getting the phones, who don’t have their damn phone number change all the time. As part of the point of this is to let people have a contact point to apply for jobs, uh, that seems a pretty serious flaw. (OTOH, there is a current solution…they get one phone for personal use, and that gets used a lot and thus replaced a lot, and then get another for business contact, and that doesn’t ever get used so never needs changing so the number is the same. But this is an stupid solution to a problem that shouldn’t exist.)

David Staples January 10, 2013 at 2:36 pm

One problem – you cut out CDMA carriers that don’t use SIM card technology.

gcp January 10, 2013 at 2:26 pm

Suggestion: Make the Federal Universal Service Fund fee voluntary for actual cell phone users that are currently forced to fund this program thus the program would be funded only by those benevolent individuals that believe everyone should have a cell phone.

Stefan January 10, 2013 at 2:39 pm

You mean like we do for public funding of elections?

Chris Huttman January 15, 2013 at 2:08 pm

As a robopollster/autodialer, I suggest keeping the USF and letting people opt out if they let me call their cell phone :)

Vesuvius January 10, 2013 at 8:50 pm

Amusingly, the same Commissioners that are all about ensuring that the desperately poor pay something for cell phones provided under this program are living fat and happy on the public buck themselves. They have free smart phones paid for each month by Georgia taxpayers, not to mention state cars they drive at no cost to themselves with all of the free gas that they can guzzle. But that is “different,” right?

mpierce January 11, 2013 at 3:16 am

So you are suggesting the poor should have to work for their phone instead of paying $5.

ChuckEaton January 11, 2013 at 11:00 am

I’ve never had a taxpayer funded “smart” phone or automobile.

Vesuvius January 15, 2013 at 1:11 pm

Okay, apologies. I stand corrected as to you. But since you did not correct me as to the other four commissioners, I will continue to believe my statements were accurate there.

Today’s vote does nothing more than hurt the elderly and poor. The federal goverment is just about to roll out mandatory anti-fraud measures to safeguard this program from the same abuses the Commission allegedly is trying to prevent. The Commission’s action today was nothing more than punitive to the least among us.

No one aspires to a life of poverty. What rational person would accept any number of free phones to live in such a state? I would hazard a guess no one.

Talk about throwing away the baby with the bath water.

seekingtounderstand January 15, 2013 at 3:32 pm

My favorite is Lt. Casey Cagle, a very nice man who easily wins re-election having a luxury car with full time driver/assistant. When asked why we supply that luxury while they gut other programs during the budget process, the answer was “he needs security protection”.
What on earth does this nice man with little power do to “need such security”? Nothing!
This is why the do what I say, not as I do for both republicans and democrats gets so old.

Romegaguy January 10, 2013 at 9:37 pm

So the PSC wants to hamper a program started by Reagan and expanded by W

David Staples January 11, 2013 at 9:48 am

I would think perhaps only offering a free landline would be a better idea. I would think there’s a lot more room for control / auditing one free line per address than cell phones – unless carriers are somehow limited to perhaps providing one free phone per social security number or something?

ChuckEaton January 11, 2013 at 10:59 am

It’s not really a free line per se. It’s a $10 subsidy, paid directly from the fund to the carrier. The subsidy has been around since Reagan – I think. Traditionally, the $10 was applied to a household’s basic landline bill, which is the way it still works for landline customers. Over the last few years, cell phone companies, especially pre-pay providers, have figured out how to provide a “free” cell phone and 150 monthly minutes in exchange for the $10 subsidy. The companies get the $10 paid directly to them, so no bad debt, and their customers get a free phone.

You’re right, it’s harder to track the pre-pay cell phones, than landline customers with a physical address and traditional billing relationship. Which is why there have been instances of abuse and customers with multiple cell phones. There has been pressure coming from this Commission, and other agencies, for better record keeping, etc… This is part of the reason I made a motion for the photo I.D. requirement and better record keeping. If someone shows up at a tent, for a “free” cell phone, and says, “My name is Bob,” and then shows up a half hour later, for another cell phone, stating, “My name is Joe,” that’s a problem.

I don’t view basic cell phones as more luxurious than a landline phone. To me they are both mediums for communication. Cell phones seem to allow for more opportunities for fraud on the fund, but there are advantages over landlines (I’ve been contacted by someone who works with women’s abuse shelters). I don’t think you could specifically target cell phones, over landlines – seems like it could be discriminatory.

I’m not as comfortable with the $5 charge, but have voted for it in past iterations of the rule (on the theory it’s a deterrent). The $5 is not returned to the fund, or consumers, it’s simply a requirement for AT&T, Tracfone, etc…, to charge their lifeline customers (landline and cell phone) more money. There is a side of me that wonders whether we should let the other deterrents play-out, such as ID, database linking and record keeping, then, if there is a still a problem, consider requiring the companies to charge more money.

ChuckEaton January 11, 2013 at 11:12 am

Of course, if there are a bunch of cell phone companies who have figured out how to provide free cell phone service for $10, while still earning a profit, the Feds should consider reducing the subsidy – instead of having us try to fix it on the back-end.

Ed January 11, 2013 at 1:46 pm

Thanks for the comments, Chuck.

Three Jack January 15, 2013 at 1:27 pm

Why America is bankrupt with little to no chance of righting the ship…see above do-gooder comments supporting all the redistribution programs.

I looked up Lifeline — http://www.fcc.gov/guides/lifeline-and-link-affordable-telephone-service-income-eligible-consumers — and noticed the list of redistribution programs that automatically qualify freeloaders to get a phone (see link, about 1/4 of the way down the page). Great! If you qualify as a freeloader for any other giveaway program, you can skip all the BS and get your phone right away. Government keeps making it easier to be a freeloader while at the same time making it exponentially more difficult to be an honest, hard working, taxpaying American.

My suggestion, end all the redistribution programs…then and only then will freeloaders either decide to get with it or move to a blue state where this kind of non-sense will still be available.

WesleyC January 15, 2013 at 4:29 pm

The simple reality is that if the “Obamaphones” video had not gone viral in the right-wing blogosphere, the PSC would never have tackled this issue. We’re talking about very little money going toward a small program that’s been around since Ronald Reagan. Not exactly a pressing public problem or a priority for the state — just a way to gin up headlines and perhaps political goodwill from the GOP base for future electoral ambitions.

Stefan January 15, 2013 at 6:12 pm

“very little money” is over 100 million in Georgia alone last year.

Vesuvius January 15, 2013 at 8:42 pm

There was not one case of documented fraud in Georgia presented to the PSC supporting the implementation of this monthly fee under the federal program. The three PSC commissioners voting for it won’t do their job to ensure that ratepayers are charged just and reasonable rates for the regulated utilities they are in bed with. Bills for electricity have increased dramatically over the past seven years and will skyrocket even more with the disaster that is Vogtle. No commissioner has expressed any concern there. But given the chance to act outside of their authority and impose a fee on the poor and elderly, somehow a moral imperative exists to do so.

But then again, the poor and elderly are not big campaign donors like the executives of AGL and Georgia Power, which is why things work out like they do.

Two of these commissioners are up for election next year. I hope voters will hold this unwarranted act against them.

Andre January 15, 2013 at 11:00 pm

Just a couple of questions, Vesuvius, since you’re erupting over the PSC “voting against the poorest among us”:

Did you know the State of California has a Lifeline phone program similar to Georgia?

Did you also know the California Lifeline program charges participants a minimum of $5.47 for basic phone service? Here’s the link if you don’t believe me — (http://bit.ly/SHdYXp).

Vesuvius January 16, 2013 at 5:25 pm

I have been following the issues and am aware of the set up in California.

Irrespective of whether I knew these things, what exactly is your point? Because California does it Georgia should do it, too? Channeling my Mother for a moment, if California jumped off a building, should Georgia do it, too?

But if we are looking to California as aspirational for all things utility, Georgia should follow its lead and increase its use of solar in this state, and by more than the crumbs that were just tossed out by the PSC on the eve of two re-election campaigns. Let the PSC also lead the charge for a law change so I can lease solar panels from a third-party to meet my household’s electric needs. This is a huge deal in California. But since that would be the beginning of the end of Georgia Power’s monopoly power in its service areas, we could never have that.

It should be noted that before sticking it to the poor and elderly with its rule, no investigation whatsover was done by PSC staff to determine what level of fraud, if any, exists in Georgia regarding the use of Lifeline. The PSC has no data that it can point to showing any abuses in this state. No evidentiary hearings were held on the issue, only opportunities for interested parties to comment on the rule as proposed. Yesterday’s action was strictly based on a bad feeling that – yuck – low income Georgians have to be taking advantage of the program because folks in other states have abused it. If you know any lawyers, they will tell you that these types of hunches are completely useless as evidence in any legal proceeding.

Bottom line: the decision to impose a monthly fee on Lifeline program users is just plain bad policy. It does not decrease by one cent the amount of the subsidy that I will have to pay each month on my phone bill to fund the program. What will happen now is that otherwise qualified, needy Georgians who are on the Program but cannot pay the new charge will be removed from it. A lose-lose for all involved.

jimdays January 16, 2013 at 10:41 am

As usual, the truth isn’t mentioned.
1) any politition advocating a fee for lifeline is getting a kickback from a major cell phone provider
2) the cost of providing basic cell phone service is the same cost as providing a email box, in other words, essentialy free
3)Why would a major cell phone provider want to curb life line? The reason is, due to the proliferation of lifeline users, the cell phone providers are nearly running out of telephone numbers. Then wealthy people won’t be able to sign up the the profitable $100/ month data plan because there won’t be enough new telephone numbers. The simple solution is to make phone numbers 8 digits (with 3 digit area code). Then, even states like Vermont that have already run out of telephone numbers (because Vermont only has one area code) , and don’t provide any lifeline, will be able to get lifeline. Problem solved.

Stefan January 16, 2013 at 4:53 pm

Seriously? The wireless carriers industry group was against.

That’s completely wrong about phone numbers. And an extra digit? You just add more area codes.

Vesuvius January 16, 2013 at 5:40 pm

The fund that provides the money for the Lifeline program also is used for other subsidies, including one to independent phone companies operating in rural areas in Georgia. They have gotten more than tens of millions of dollars from the fund to goldplate their systems, courtesy of ratepayers.

Word on the street is that they are the ones that orchestrated this result. Why? Out of a fear that less money will be available to them on a going forward basis because of increased subscribership under the Lifeline Program.

I have no idea whether this is true. However, it would not surprise me in the least if it is.

MouthoftheSouth January 16, 2013 at 9:08 pm

I heard former commissioner Bobby Baker was back at the PSC arguing against the minimum charge. Can anyone confirm? I always liked that guy.

Comments on this entry are closed.