Gov't helps provide free cell phones

GREEN BAY - Every time you pay your phone bill, you're helping people with low incomes get free cell phones. It's part of the Lifeline program.

Green Bay resident Anne Cortez is one of the 13.7 million people in the country in the program. She has been using a Lifeline phone for six months.

"It's always on," Cortez said. "It's an emergency contact number in case anybody from the school with my kids needs to get a hold of me or for a job. It's always on."

"Obviously, in today's society, access to telecommunications is a real essential piece of economic activity," explained Brian Rybarik, head of telecommunications for the Wisconsin Public Service Commission. The PSC administers the Lifeline program in Wisconsin.

Rybarik says Lifeline grew out of the 1996 Telecommunications Act. The goal is to ensure that people in rural areas and people with low incomes had access to home phone service. In 2006, the Federal Communications Commission, or FCC, added pre-paid wireless carriers to the program.

Here's how it works: If you qualify for food stamps, Badger Care, Medical Assistance, the Wisconsin Homestead Tax Credit, Wisconsin Works, Supplemental Security Income (SSI) or the Low Income Home Energy Assistance Program, you automatically qualify for Lifeline.

• Click here to see how you can qualify for the program in Wisconsin

You sign up with one of several wireless providers in the program; the company gives you a free phone and 250 minutes per month. Then the government pays the company $10 per month.

Funding for the program comes from the Universal Service Fund. Phone companies are assessed a fee and they, in turn, pass it along to their customers.

"Essentially it's a surcharge on telecommunications customers," Rybarik said. "It is a fee or surcharge. If you have a phone bill it's part of your cost. You have to pay that amount."

Richard Parins from the Brown County Taxpayers Association says to him, it's a tax.

"You're paying public assistance through your telephone and that I think is unfair, because it's a non-represented tax," Parins said. He doesn't like the fact the one industry is forced to pay for it.

"Our society has chosen to provide public assistance in a wide array of formats already. I don't think we need to have this one in addition," Parins said. "This could probably have been handled somewhere else and done in a way that didn't go out and punish a user of a particular product."

The Universal Service Fund is growing. In 1998, the fund collected $2.3 billion. In 2010, it was up to $8.1 billion.

The money goes towards four programs: More than half of it is used to help keep costs down for rural customers; (Rybarik says that's where much of the growth has occurred.) $2.23 billion is used to fund schools and libraries; $1.75 billion goes to the Lifeline program; about one-percent, $81.5 million, is used for rural health care providers.

Rybarik says in the last few years, the Lifeline program has exploded.

"More and more people use cell phones today than use land line phones so there are tremendously more, almost twice as many wireless numbers in the state of Wisconsin than there are landline assigned numbers. So you look at that, this is what people are using now, this is how people communicate," Rybarik said.

In Wisconsin, 202,700 people are currently using the Lifeline program. The cost is growing rapidly. In 2009, $9.2 million was spent on the program in Wisconsin. Through the first nine months of 2011, $16.3 million had already been spent.

Rybarik says that happened because more cell phone companies are involved in the program and more people are eligible because of the economy.

But according to the FCC, more than two-million people across the country are getting free phones and free minutes and they aren't even eligible for the program. The FCC says up to 15% of the people in the program don't qualify for it. They either are not part of another public assistance program or they're receiving more than one Lifeline benefit.

"Like everything else, they just open these programs up and get people shoveling this out the door as fast as they can and they don't do any kind of protocol testing or means testing or any of those kinds of things," Parins said. "I wouldn't doubt that these phones are being offered to people that can well afford them."

What about in Wisconsin? Rybarik says for several years, the state has run all applicants through a database to make sure they qualify.

"If you apply for the program, I have to run you through the database and you have to be verified before I can give you that benefit," Rybarik said.

The federal government is now following Wisconsin's lead. Earlier this year, the FCC announced that is was going to crack down on fraud and abuse in the Lifeline program. The government is creating a federal database to make sure people who in the program actually quality for it.

Anne Cortez says her Lifeline phone is just that, a lifeline. She says without the program