Free Cell Phones Coming to California, Minus Federal Fraud Protection
by John Sexton
6 Mar 2013
The California Public Utilities Commission has expanded its Lifeline program to include free cell phones. The Commission has also won approval to be exempted from the federal fraud detection network associated with the program.
The new cell phone program will offer “250 talk minutes and 250 text messages” per month to anyone making less than $14,702. A minimum-wage employee working full time makes $15,080 in a year.
The CPUC was already offering low-income individuals the option of signing up for special Lifeline subsidized landlines which cost half what local service normally costs. Some customers, including those on tribal lands, pay just $1 a month. Last week, CPUC expanded the program to include free cell phones and free monthly service.
An FCC survey also found a significant fraud problem associated with Lifeline. An average of 9% of those who received free phones were ineligible under the program’s guidelines. In some states, the rate of fraud was double that. In addition, as many as a quarter of those enrolling in the program refused to respond to queries about their eligibility, making it possible the rate of fraud is even higher.
To combat fraud, the FCC created a database designed to identify recipients of cell phones on an annual basis to ensure they were not receiving multiple service plans. But on Monday, the state of California received conditional permission to opt out of the central verification database despite concerns that California’s verification system is presently at a “heightened” risk for fraud:
Oh, great! One more government program for me (and other rate payers) to subsidize through, in this case, my own cell phone bill. I wonder if the CPUC will also mandate that cell carriers hide this new government-mandated fee (rather than itemize it) so cell service rate payers can’t see what this costs them. Were this just emergency service for seniors or or people with serious disabilities/diseases, I (personally) would not mind much (I’d much prefer such a program be done through a private charity, though). But this goes wa-a-a-a-a-ay beyond that. Cell service rate payers will, mostly, be subsidizing the improvidence of people whose life choices leave them unable to afford to pay for cell service or prepaid cell phones themselves!