Federal Communications Commissioner Michael O’Reilly penned a recent article in which he provocatively teased readers by saying, “I expect some changes to Lifeline in the not-too-distant future.”
O’Reilly admits that the Lifeline Assistance program grew so rapidly that it “created problematic incentives that opened the door to waste, fraud and abuse that have never been sufficiently resolved.” But instead of tossing the proverbial baby out with the bath water, the Commissioner suggests a series of steps that will assure the viability and integrity of the program well into the future.
Of greatest interest to us was this paragraph:
“I would prefer to ensure that there are adequate controls and deterrents in place before considering a revamp of the program to include broadband. In fact, the Commission is still grappling with the consequences of its previous expansion, so we need to be very cautious about further changes. Moreover, there is a legitimate debate whether the Lifeline program should be abolished or significantly scaled back rather than expanding its mission. I would be open to having a thoughtful debate on the best way to address a perceived need in this communications area rather than bootstrapping the old program with new responsibilities.
This is very good news for consumers. First, O’Reilly confirms our long held belief that the high-speed broadband internet service is coming. We’ll admit that it hasn’t come as quickly as we had hoped for. In fact, we ran an article in mid-2014 predicting that Lifeline Internet (or Lifeline Broadband) would be announced before the end of the year. Our prediction may have been inaccurate in when, but we believe it will eventually be borne out.
Second, we have no fear in regard to O’Reilly’s question as to whether Lifeline should be abolished or significantly cut back. There’s an old saying in Washington, DC that says, Once an entitlement is given, it’s impossible to be taken away.” In other words, politicians live in fear of angering voters. Lifeline has become vital to so many voters that it will be virtually impossible to round up enough votes to eliminate or even scale back the program.
Third, yes, Commissioner O’Reilly, let’s have that discussion about the future of Lifeline. With that in mind, here are his ideas for reforming this valuable program (and our comments following them in parentheses)
“Set a budget for Lifeline.” (Absolutely right, Commissioner. If there’s been one overriding problem with the Lifeline Assistance program, it’s that it hasn’t been handled like a business. O’Reilly argues that Lifeline isn’t an entitlement program and he is correct that it is different than Medicare and Social Security. Nevertheless, we agree that budget controls must be put in place, every dollar treated like the valuable asset that it is, and fraud must be eliminated.)
“No increase in the reimbursement rate for broadband.” (O’Reilly says some proponents of expanding the program to include broadband argue that rates should be increased, but he is against that expansion. We disagree. Lifeline cell phone companies manage to make a profit on a reimbursement rate of $9.25 per month per customer. But broadband is considerably more expensive to deliver to customers and will require more than $9.25 a month to provide any service worth using. You may ask, but how can Comcast’s Internet Essentials offer high-speed, unlimited cable internet for only $9.95 a month? They are able to do so because it’s being subsidized by the standard internet access plans it offers other customers; and the FCC “suggested” they offer Internet Essentials as a condition of approval for their acquisition of NBC. If we want to have widespread options for broadband under the Lifeline program, the reimbursement rate should be raised.)
“Limit services eligible for support.” (Some proponents say customers should be allowed to apply the discount to any service — wired, wireless, broadband, whatever. We wholeheartedly agree with O’Reilly when he says, “Only the Commission can determine which services are supported, and there are limits on what may be funded directly or as a condition of receiving support.” Fraud, waste and abuse are difficult enough issues now and indiscriminately opening the program up at this point can only exacerbate the issue.)
“Prohibit double dipping.” (Here we disagree with O’Reilly. He thinks a household should be allowed to get one discount — the consumer’s choice of Lifeline voice service or broadband service or one discount on bundled services. C’mon, Commissioner, here in the 21st Century we call it providing the needy with basic services, not double dipping.)
“Better target funding to those who really need it.” (O’Reilly believes research that says most Lifeline customers would have subscribed to phone service even without a subsidy. He asks for further comment on the issue. May we suggest that you read some of the heartbreaking comments left by readers of FreeGovernentCellPhones.net. If they don’t convince you of the necessity of the Lifeline program, nothing will.)
“Tighten eligibility requirements.” (O’Reilly thinks the FCC should investigate the income levels at which people are eligible. He thinks 135% of federal poverty guidelines may be too high and make that it should be lowered to help assure that participants are truly needy. Although we abhor the thought of eliminating those who truly need Lifeline Assistance, we agree that eligibility standards should be tightened to eliminate fraud, waste and abuse.)
“Require a minimum contribution.” (O’Reilly points out that many programs require participants to contribute at least 10% of the unaided price and that charging a minimum fee — such as $1 per month — would help reduce fraud, waste and abuse. On one hand, we understand his point and don’t completely disagree with it. On the other hand, we must stand against O’Reilly on this one. We’re not against it because we believe a customer cannot find a dollar or two a month, but because just the process of making the payment will be a barrier for many Lifeline cell phone users. Over the course of running FreeGovernmentCellPhones.net, we have learned that Lifeline users are often not very technically proficient and could have trouble processing a monthly payment electronically. To make matters worse, the Lifeline cell phone companies’, shall we say, streamlined support services would likely be of limited assistance with payment issues that could arise. On top of that, a large number of Lifeline customers do not even have credit cards with which to make monthly payments. And we didn’t even get into the additional expenses for the cell phone companies which would of course be passed along to customers either in even poorer service, lower quality phones or fewer minutes and text.)
“Carrier participation should be voluntary.” (The Federal Communications Commission currently requires all telephone companies to participate in the Lifeline Assistance program. Most of them have no real interest in the program, bury it on their websites, and offer discounts but not free government cell phones. This is a silly waste of resources considering the dozens of companies set up specifically to participate in the Lifeline program. We agree with O’Reilly — let those who want to participate do so without forcing it upon those who don’t.)
“Automatic safeguards against abuse.” (O’Reilly suggests some commonsense ideas such as automatically halting payments — pending further review — if a Lifeline Assistance provider sees a sudden, unexplained increase in its customer base. Great idea, Commissioner O’Reilly. We believe that will help stop waste, fraud and abuse.)
“Require document retention.” We find it hard to believe that providers have not been required to keep documentation of a subscriber’s eligibility to provide greater oversight. This one makes so much sense that we’re actually shocked to discover it isn’t already and hasn’t always been the case. This is 2015 — Hillary Clinton may be allowed to erase the past, but Lifeline free government cell phone providers shouldn’t.
In conclusion, we agree with many of Commissioner O’Reilly’s proposals. He’s not a fan of the program and he seems to be against the proposed Lifeline Broadband concept, but that doesn’t mean he hasn’t given the free government cell phone program a lot of thought. He may want fraud, waste and abuse eliminated for different reasons than we do, but we both agree that they must be eliminated by whatever means necessary.
Many of his ideas are excellent and should be instituted without delay.
Robert C. Manthey says
I just finished reading the above article in it’s entirety. I do agree, after being allowed to read what procedures would be made, in doing what can be done to eradicate or at least keep to a bare minimum any waste, fraud, etc. that is used by customers receiving this service. However, I disagree with either the author when he supports Mr. O’Reilly’s opinion about $135% being too high of a figure when figuring income to be eligible. I’m not sure any longer, but I believe when 2013 rolled into 2015 and the states using the 100% figure (IL, where I am from, being one of them) rose to 133%, I all of a sudden became eligible for a lot of help that I needed and was denied at the 100% figure. Facts: I live on SSDI, under $14,000 annually. $1139 monthly from which comes $650 for rent. Fortunately I have rented from the same people for 15 years and they provide me with a decent place and my utilities are paid for. There was a refrigerator left behind. I bought a stove from friends which new sells for about $500, I paid $150 plus $25 for their mileage (60 miles from their home to my apartment.) I meet the requirements for extra help so my Medicare premium is paid for. In January and February there was a snafu and the premium came out of my check. I pay $123 monthly, always looking for the best deals, for mid-high speed internet and 2 steps above basic cable which when the special ends I am willing to drop to the next lower level. If the percentage change hadn’t taken place I would be living on $218 monthly plus the $15, yes, $15 dollars in food stamps that I receive. In conclusion, I urge the FCC or whoever needs to be urged, do not tighten the best on the income requirements. I never owned a cell phone in my life until a friend told me about this service, about 8 years ago. I don’t do smart phone, simply talk and text. Fortunately, as a bonus, my cable company gave me a Galaxy3 Samsung tablet. I text my friend for free, that saves money or minutes on my cell phone. I do not have data or whatever with my tablet. Other than texting either from home or where WiFi is provided, I play free games.
I do have one thing I think should be considered seriously and that is that, while it doesn’t affect me, many people share apartments and are in the same and even worse economic conditions that I am. Providing viable proof, I think in 2015 it is necessary that at least two phones, if not more, should be allowed in one household. Example: One has an elderly or disabled family member or friend who doesn’t get out of the house. The other person works at a low paying job that would still meet the requirements. A lot of good one phone does. And a landline isn’t always a consideration. I have up my landline because once I learned about this option, paying $35 with taxes and fees for the lowest priced service I could get through my cable service, AT&T, a name that screams phone service, I gave it up.
I conclusion, I want it to be known that I am extremely grateful for this program.
alex says
I love this website and your comments, its more comprehensive, and actually has a real human posting answers and questions to blogs. I don’t what the beef is with lifeline, it existed in the Reagan era, and people are calling it obamaphones such as a commentator on fox news. Just as we don’t expect people to go back to using horses on the road instead of cars, why the outrage over cell phones since landlines are not being used that often anymore. Landlines cannot be accessed outside the home,and if the line goes bad your out of luck, its absurd a congressman has proposed using lifeline only for landlines.
Most of the waste,fraud,and abuse is probably gone with stringent controls, one per person, and documentation, however that isn’t an excuse to deny legitimate claims or cut lifeline subsidies which come from the phone companies not taxpayer dollars. I also don’t see the outrage that non-life line consumers pay fees to the FCC and phone companies to subsidize rural services which cost a lot more money when most folks can migrate to the city or suburbs (nothing against folks choosing a lifestyle but the argument is hypocrisy).
SS and Medicare are entitlements but its similar to Lifeline and Medicaid, although folks think that just because they pay into it, it’s theirs that isn’t true. Most folks get back more than what they put in and some get back less or none. SS also has a formula bent curve, a person making $100,000 adjusted for inflation over 30 years (close to payroll tax limit) is not going to get twice the benefit of someone making $50,000 over 30 years. Most folks also get more from medicare than they put in. If you are collecting SS and marry someone and have a child with them, they can get additional SS from the government on top of yours (subject to a limit of course).
I don’t meant to change topics but if were having a debate, its important to mention the facts. The main problem with Lifeline is also that folks can’t use their own phones and carriers are forcing folks to buy phones from them, thus making lifeline companies more like a business then to help the poor. The popular idea of GSM which lets you use your own phone has been adopted for two decades, and has rose in popularity in the last decade. Instead most carriers are still using the 20 year old CDMA network to enforce their business decisions while LTE is the new standard.
Doug says
It should be dropped completely…the phone service provider is ripping the Government off..it claims to give 250 minutes, and most likely charges the Government for this time…but never actually gives the customer the actual minutes. It appears the Government just threw this together without any check-points to see the vendor isn’t cheating…or charging for something they aren’t providing…typical Government ran program.
Robert C. Manthey says
I have never been cheated out of the 250, now 300 minutes over the course of at least 8 years. They all claim that monthly minutes do not rollover, but if one doesn’t use 300 minutes in a month, what does it matter? Having been with 3 different carriers, care wireless my current, the prices of extra minutes is minimal. The exception was safelink. Tracfone charges ridiculous prices for extra minutes. $10 plus tax for 30 minutes. Oh, wait, how forgetful of me. They do you the great pleasure of providing you with 70 bonus minutes.
With care wireless, If needed, I can purchase an extra 200 minutes for $10 and those minutes do rollover. I may be lucky or you may have been unlucky but at the risk of repeating myself, I have never been cheated. I would look at other carriers offered in your area. I’m not saying I don’t believe you, I’m saying I wouldn’t stand for it.
Jerry Carpenter says
STEVE’S GOT A GREAT IDEA. AREN’T WE THE “PROGRESSIVE MOVEMENT” AFTER ALL!.
Steve Matte says
For those who are eligible for Lifeline services already through
programs like –
◾Supplemental Nutrition Assistance Program (Food Stamps or SNAP)
◾Medicaid
◾National School Lunch Program’s Free Lunch Program
◾Supplemental Security Income (SSI)
◾Federal Public Housing Assistance (Section 8)
◾Low-Income Home Energy Assistance Program (LIHEAP)
◾Temporary Assistance to Needy Families (TANF)
◾Bureau of Indian Affairs General Assistance
◾Tribally-Administered Temporary Assistance for Needy Families (TTANF)
◾Food Distribution Program on Indian Reservations (FDPIR)
Why not come up with some kind of an entitlement card, one simple
way, food stamps in my state are provided by an EBT card.
This card works just like a debit card but only works for food items.
So an Electronic Benefit Transfer (EBT) for the Lifeline program.
Takes the money from behind the scenes and gives it to the user.
So this card would work just like a debit card but only works for
the Lifeline programs. This way if one didn’t need the use of the Lifeline service in any one given month the balance could build.
(such as a Hospital stay, lost device, etc…)
Allowing for – as in food ads with a SNAP EBT card, your free to shop at whoever has the best price.
Just like the SNAP’s program doesn’t give the money to a grocery
food chain business/dealer. Lifeline shouldn’t either.
So to should be the Lifeline program, and with the maybe soon to be
Broadband being added to the Lifeline program, to me this makes
so much more sense.
With the money going directly to the Lifeline service providers, it
really spurs these companies to NOT give GOOD or even MODEST
customer service.
(Probably cause they look at you as just an entitliee and not as a
bill payer).
BUT – unlike, SNAP’s Card – as in food ads with a SNAP EBT card, your free to shop at whoever has the best price, with a Lifeline EBT
card your free to find the service provider who gives you the best
Customer Service…
What do you think?
Can you add to or build on these ideals?
Thanks, Steve
alex says
Some EBT cards have a “Cash benefit” component, so its not far-fetched, also many ebt cards are also health insurance cards, so it’s not far-fetched, but since they are other subsidized programs it may be hard to implement, although it could be done, its not likely. They could however automatically gives those who qualify a voucher.
anthony t says
How about unlimited minutes like California !!!!!!
Gerard Picard says
My concern is that some states Ca being one do not subsidize those of us that use our own phones and carriers. Oregon if I recall allows the 9.25 to be subtracted from ones monthly cell boll. I’m on t-mobile barely affording my bill. I inquired to a subsidy they said NOT in Ca.However they do allow the free cell phones etc. I think they should allow those that make the sacrifice of owning or been gifted their own phones to also get that same deduction. Seems fishy to me ….l
How dolike these companies lobby to force us to use their phones.
How do I go about contacting our legislature to rethink that decision.
David Sutherland says
I’m really tire of hearing about this so-called ‘waste, fraud, and abuse’ syndrome that goes with every poverty program. People have to sign their lives away with threats of federal fines and prison time to get any of it. There is always going to be some ‘waste, fraud, and abuse in any setting, be it for rich or for poor. Whenever a receipient is able to bring home an extra hundred or three dollars their benefits are cut, thereby keeping them in this viscious circle of poverty and encouraging the lying and cheating. What of the ‘waste, fraud, and abuse’ by the rich. Do a study and see who is ripping off who and by how much. I think you’ll find the differences astonishing and poverty programs with their ‘waste, fraud, and abuse’ are just a drop in the bucket.
dds
alex says
Yes, your exactly right, folks act as if the US is like Nigeria or some other corrupt country (although there is corruption in other matters), in which benefits are not monitored or scrutinized.
The meager amount and restrictions on welfare and annual checks and verification with threat of jail or prison is there. The low amount of welfare keeps folks “trapped in poverty”, folks say if you teach a man to fish, you’ll feed him for a lifetime, I agree but what if there’s no money for the boat or fishing equipment? It’s not absurd, in Alaska SNAP benefits can be used to purchase said equipment.
In addition restrictions on saving money and building assets are there regardless of political party, folks can be penalized for saving money in the bank since welfare is only “supposed to be for the very poor”, and then like the proposed Lifeline restriction 100% of poverty level is not going to be enough.
Anyways, after all the ranting, its seems that farm subsidies and rural subsidies some of which go to broadband and telephone probably have little oversight and a lot of waste fraud and abuse but its not publicized.
Robert C. Manthey says
Oh, boy, are you right. When we got our COLA for 2015 my SS rose $19. My food stamps decreased $11 due to increase of income. The same thing happened the previous year. At this rate, I’ll be paying SNAP just to own a worthless card.