There seems to be an ongoing controversy as to whether or not the “phones for the poor” programs by Safelink Wireless, ReachOut Wireless and Assurance Wireless are paid for by U.S. taxpayer dollars. We are going to set the record straight.
Yes and no.
How’s that for clarity? The confusion arises because it depends upon whether or not you think a mandated fee tacked on to the phone bills of virtually almost every American is a tax or not. Some say it is, and some say it isn’t.
Federal Law requires telecom companies to contribute to the Universal Service Fund (USF), which in turn pays for the free cell phones program, in addition to funding telecommunications services (including high-speed Internet access) for eligible schools, libraries and rural health care providers.
A law of economics is that any tax on a corporation always results in the tax being paid by the consumer — taxes are always passed on. And this is the case with the telecom companies “contribution” to the USF. These companies collect the money from everyone that pays for phone service by tacking on a few cents to every phone bill. It’s listed on those bills as the Universal Service Fund.
To put it simply, the U.S. Federal government has mandated that every phone bill include this charge. And the charge, in part, pays companies who provide free cell phones for the poor — like Safelink, Assurance, and ReachOut — for each customer they sign up — some money for the phone and then an amount for each month of service.
Some consider a federally government mandated fee that funds government programs a tax, and some consider it a fee. We think the answer depends upon which side of the politically-charge government phone giveaway you are on.
What do we think? To be honest, to us a tax and a federally mandated fee are one and the same — so call it whichever you which. But that doesn’t mean we don’t think this is a valuable program for those in need. It is.
Want more news from Free Government Cell Phones?
Click here and we'll drop you a line when new articles are up.
{ 62 comments… read them below or add one }
← Previous Comments
I consider myself a liberal, and this free cellphone business pisses me off. They get 250 minutes a month for ‘emergencies’? If you are having this amount of trouble in your life that you are really making 250 minutes of emergency phone calls a month, you do not need a free cell phone, you need a new life. Being liberal does not mean giveaways to people who do not need it. This kind of nonsense is giving a bad name to legitimate services that people in need actually have to have.
I am very tired of paying for other peoples cell phone and house phone. I just looked at my cell phone bill and I paid $5.32 and my home phone I paid $2.63 for Universal Communication Service tax. I just saw a commercial that even said that there is texting on the free phone. I do not even have texting because I can not afford it.
I have to pay the same things on my home phone. We ALL have to. Deal with is what we do cause there is nothing we can do about it short of turning off our home phones. As for the texting on the free phones, that is a lie. There is none on mine. I am one of those that need a free phone. For doctors appts. and alot of other important things. Not all of us are taking advantage. Lots of us need this phone. I wont ever apologize for needing something and asking for help. Hope you never have to go through what others like me have to go through.
You are incorrect, Diane. Your plan may not have texting, but several of the plans offer 250 texts along with 250 voice minutes per month.
Diane, if you have a home phone…you don’t need a cell phone to make doctor appointments, etc., you can use your landline…I call it taking advantage & won’t apoligize for the fact!!!!!
Where were all of you when President Regan signed this??????? 1984……it’s been around for a long time now…….oh, yeh, let’s blame Obama…..yeh, he’s the target…..just throw more bs about him…….yeh, let’s win an election on lies…….
It was Clinton, not Reagan. I got the information straight from my phone company when this law went into effect. Reagan would have never signed a bill for free phones for ALL! Do your homework Donald.
In addition to what jc stated, it was for the lifeline program. The program did not give free services, just helped offset the cost and the primary recipients were the elderly and thise with major medical problems. This allowed them to have a home phone line in case of emergencies. Why couldn’t they just receive old used phones without minutes or a plan…they can still call out to 911 (emergencies, remember). It seemed to be good enough for domestic violence victims who did not have the means. Spew your lies elsewhere.
Actually, it WAS Regan in 1984 for landline phones. And GWB broadened the scope to include cell phones.
Are you still angry?
I agree with some people in here. We hard workers have to pay $39 0r 50$ for a 250minutes.
I wonder what other considerations the government though about before implementing this tax fees. I do believe that maybe olderlie people should have a phone for emergencies. But I have seen young people using this phones, people who stay home, drive BMW & Mercedez, live in nice houses, food stamp, section 8 and more. To me no fare! One of the reasons our country is on debt. I wonder why they didn’t give a code so that they could used a public phone and find out I their benefits. 911 is free on public phone as well.
Haha I just got to see a commercial from assurance wireless and one of the lady on the commercial was at the gym lol
To JC – you need to make sure you facts are true: Lifeline was started under REAGAN
The Lifeline program originated in 1984, during the administration of Ronald Reagan; it was expanded in 1996, during the administration of Bill Clinton; and its first cellular provider service (SafeLink Wireless) was launched by TracFone in 2008, during the administration of George W. Bush. All of these milestones were passed prior to the advent of the Obama administration. The Lifeline program is not directly subsidized by taxpayer monies. It is paid for out of the federal Universal Service Fund (USF) through a fee assessed against telecommunications service providers, who may or may not pass those costs along to their customers:
http://www.snopes.com/politics/taxes/cellphone.asp
However i has been expanded under Obama even further. Now they can pay a small amount (like $30) and have unlimited talk, text and web.
The Lifeline program is for a home phone and the service was not free. It was a local calling plan in the days where you may have toll charges for calling accross town. It was a lower cost alternative for those who were elderly, disabled, etc.
The problem with this and most governemnt programs is that they expand to the point of absurdity, not matter which party has control.
However to be fair, in 2008 while bush was president, congress was fully controlled by the Dems. Since Bush didn’t sign it in as an executive order it was congress who passed the bill, Bush just didn’t veto it. Just a little chunk of the way a bill becomes a law, since they dont seem to teach that anymore.
Hate to bursts your bubble Brian..but what you posted is not true! These BUSH phones can not access the web…there is NO “pay a small amount to get this extra” The BUSH phones are cheap LITTLE candy bar phones that can’t take a picture or access the web. You can make/take a call, and yes, Text. That is all. I believe what you are referring to is Straight Talk…its 45.00 a month for unlimited everything…but that is for ANYBODY. It’s just another cell phone company. Has NOTHING to do with the low income phones.
You’re right about the BUSH phones. BUT I dont know of any of them that have the text thing on it. Most of them dont.
The jobs created by “free phones” are overseas. I am disabled and low income (voted Republican,) but heck if I will use an “Obamaphone.” I got one, waited five months to activate (out of shame) when the phone proved to be cheap, battery doesn’t hold a charge, doesn’t activate but I get a message saying “out of air time. Pay for more.” I have spoken to customer service in India, Columbia and Central America. I have not asked for customer service after confirming their location. I have hung up or made my anger clear about their job and my crap phone and then hung up. It’s not the “fees/tax” we need to worry about. It the jobs sent overseas by our “fees and taxes”. If my parents who can afford to put me on their family plan decided to “unfamily” me, I will get a Metro phone (cheap as they are) for $40.00 month and support jobs in my neighborhood and city. Charity begins at home and only counts if it stays at home.
At age 58, I’m am on my parents family plan, but only because they feel guilty. I’m tired of their abuse but at least I have a phone….for now. I was looking at going this route but I can’t afford mentally and physically to be with a phone that doesn’t work.
The other thing I’ve see posted all over here today, is people wondering how us “poor” folks sucking off the system can afford internet? The cheapest I can find is 20.00 a month plus tax for 2mb/s DSL (the slowest available and still allowing basic websites to run…sometimes w/o flash enabled). I don’t have a landline phone as I can’t afford the $16.00 + a month for Lifeline with AT&T….besides that, Lifeline plus $15.00+ for dial-up is more than I pay now.
I have no TV. I get my news and almost all my daily life’s interactions on the PC. I have a radio that gets poor reception so I listen to streaming radio. I don’t use Netflix, etc., I find full movies on Youtube and deal with the buffering.
I have nothing else and can’t get to the library all the time. It’s been a long cold, snowy, icy, winter….yet people have looked at me for years and say crap like, “You don’t look like anything is wrong with you.” or “You don’t look sick”. Pain is INVISIBLE and I do my best to take care of myself because I hate going through life looking as bad as I feel.
Unless you’ve walked in these shoes, don’t assume you even have a clue. I seriously wish people would grow some compassion.
also i think the safelink trac phone is owned by a company in mexico i read that here on the web not long ago?the owner himself is a mexi. why not american 100% put jobs out there for us citizens.
i had 1 of their phones they are remanufactured old phones this is why they have so many problems.
also it boils down to profit for them giving a new up to date phone would cost too much its that profit. having service in other countrys costs less that why when you get service no good english spoken.
this program is 100% abused by those who use period! these phones were made for emeregencys the commercials on tv show the lady broke down on the side of the road.their pitch to the poor to take advantage of tax dollars. lets actually find out who does own the safelink lets find out how much of it is based in the usa? then we ppl need action lets put them out of business in the usa!
WELL FOLKS NO MATTER WHAT SIDE OF THE POLITICAL SPECTRUM YOUR ON , GET USED TO IT. ALL YOU HARD WORKING , BILL PAYING CITIZENS ARE FINALLY GOING TO GET YOUR JUST DESERTS . YOU HAVE BEEN KEEPING US POOR PEOPLE DOWN LONG ENOUGH AND IT IS ABOUT TIME THAT YOU PAY FOR YOUR CRIMES. WE FINALLY HAVE AN ADMINISTRATION IN POWER WHO IS GOING TO EVEN THE SCORE . SO WORK HARD ( GET A SECOND JOB ), WE NEED YOUR TAXES TO GIVE US ALL THE BENEFITS WE DESERVE . IT IS TIME FOR US TO LAY BACK AND ENJOY LIFE FOR A WHILE.
Are you being facetious?
Isn’t laying back and enjoying life what you all have been doing?
WELL PUT CAROL, ITS GONE TO FAR
I AM STILL WAITING FOR MY OBAMA BUCKS
just thought i would give my over view of safelink trac phone?
i was a loyal customer for several years 5+ had problems a few times not getting minutes. seems when you call them it cost minutes i never gave that much thought? well when you reach a dead end 3-4 times with out speaking to any 1 but listening to automated messages this pisses 1 off. then when you do talk to some 1 its not english that can be understood?
i never really used the phone much any how only when i would travel incase of a emergency . i had a landline in my home any how.the minutes keep rolling over for several months i had 1200+ minutes at 1 time to use up.it got to the point where i think they safelink was not loading them each mth?
about 8 mths. ago i had a big blob on the screen when i would turn it on and use it(keep in mind the screen being small hard to see) i call their customer service i had 1 hell of a hard time getting them to give me a new phone. phones dont last for ever! plus not 1 person spoke english so i had a hard time understanding them. so they shipped a new phone to me then the nightmare started the minutes i had 1200+ they gave me a hard time about transfer then . the phone would not activate for some reason? customer service said we will send a new phone. this was on a friday as i recall so i get nothing till monday . monday comes fed-ex comes with a flat package its a new sim card so i put this in the phone it works with all those minutes. great. 4 days later a new phone came i did not need a new phone the 1 i had worked fine. i told customer service that before the sent it. NO NEW PHONE!so i sent it back in the postal bag provided.i been real sick got medical bills i cant pay in my life time even withh blue cross. i got rid of my landline phone to save some cash ported the home phone number to safelink trac phone heck i thought i had 1200+ minutes . 1st of the mth. comes no minutes i try by phone to redeem no luck . so time goes on my minutes run right down from the second i dialed the phone till i hung up.even if no 1 answers. i got down to 28 minutes 1 day so i went to my local walmart to buy minutes i find out the phone is locked. so i call safelink trac phone use up my last 28 minutes talking to them with no help.SO NO MINUTES OR PHONE SERVICE! i emailed them no help or quick response.
at that point i went to a at&t fusion#2 go phone its modern and you can see the screen.i ported that trac phone number to the go phone..
3 days later i get a call and text and email my friend answered the phone when safelink called they wanted to make things right as their email read.plus this was a english speaking lady my friend said she wanted to record the conversation.once she found out that i was not home she turned off the recorder.
after costing me my last minutes and all the b-s.they want to keep me as a customer?
what do you think?
Isn’t having a cell phone a luxury? … as a city letter carrier working in an unprivgleged part of the city I would have to say for the most part the poor got it good, and it seems like its only getting better now, every day since March ive been delivering these phones like hot cakes, I see new public housing with central ac/heating, pathed driveways for there own parking? , I mean wow? Talk about a slap in the face, in the summer these ac units on constant overdrive, guess whos paying that bill too? U guessed it the guy outside dying from heat stroke working so I can pay my on bill!,… its a discrace to all people who try making a honest living and cant qualify for any type of help simply because the goverment says ” u make too much money”? I might just throw in the work towel too “the working man is the sucker” seems true anyways with this goverment!
← Previous Comments