U.S. Government paid $1.6 billion in 2011 to cover the cellular bill for 12.5 million Americans

U.S. Government paid $1.6 billion in 2011 to cover the cellular bill for 12.5 million Americans
Did you ever wonder what the Universal Service Fund is? Many of you are paying monthly into the fund when you receive the monthly invoice from your wireless carrier. The money goes toward a program that started in 2008 which has the U.S. Government shelling out some serious money to help pay the wireless bill for low-income Americans. That first year, the tab came to $772 million, and last year amounted to $1.6 billion to cover 12.5 million wireless accounts. This Lifeline program gives a free feature phone, like those made by Tracfone, and 250 free minutes each month to those qualifying for the plan. Nothing fancy here, folks, the handset is about as basic as you can get these days. The program is funded by the Universal Service Fund fee added to the bills of landline and wireless customers. All carriers pay into the fund, mostly by tacking on that charge to the monthly invoice.

Thanks to the Universal Service Fund, low-income Americans can get a discount or free service for a landline or a cellphone. The program gives a $30 discount for the activation of a handset, and covers $10 monthly on an actual wireless bill. This works out to about 250 free minutes with the kind of plan required for the basic handsets used in the program. Food Stamp recipients, those who receive Medicaid or other Federal Aid, or those who earn as much as 35% over the federal poverty guidelines, qualify for the program.

But as with any Government program, there are those who abuse the system. Businesweek says 269,000 Lifeline customers are getting free service from two or more carriers. Senator Claire McCaskill (D-Mo.) has requested that the FCC investigate and the agency has obliged by building a database to see if a subscriber has more than one subsidized phone. While that might have been a useful tool from the beginning of the program, the FCC says after "modernizing" Lifeline, it has set a target of saving $200 million this year by catching those using the system for more than one account. So far, after ridding the rolls of those 269,000 users with multiple accounts, the FCC says it has saved $33 million.

The next time you are complaining about how "laggy" your high-end smartphone is, or you are upset about the latest feature just added to the newest model which you missed out on buying (like that 3300mAh battery), be thankful that you don't have to qualify for a basic handset from Uncle Sam to obtain cellular service.

source: Time 



1. quakan

Posts: 1418; Member since: Mar 02, 2011

First time I've ever heard of this.

7. megadirk

Posts: 33; Member since: Jul 28, 2011

Yes, also the first time I've heard of this. Although I generally disagree with the idea of paying into a fund that gives other people things for free i.e. medical, groceries; cell phones are NOT a necessity. Yes, it's convenient but in no way does this need to be shelled out for free, no matter how entry level the phones are. At this point it doesn't seem like there is anything else for the government to give to the "low income" group, they've now covered anything you might need in life. Why ever stop using the handouts?

8. Droid_X_Doug

Posts: 5993; Member since: Dec 22, 2010

Try checking how many minutes you used on your cell bill. I bet it is considerably more than 250. How would you like to be blocked from making phone calls after you hit the 250 minute point? Are you starting to get the idea that this 'lifeline' plan isn't exactly unlimited free calling that is paid for by other people paying their bill?

20. megadirk

Posts: 33; Member since: Jul 28, 2011

Not to get into a pissing contest, but I did actually check my minutes, and no, over the past year I haven't gone over 250 in any month. And I never mentioned anything about being unlimited. The point of paying for anybody's minutes is ridiculous. I can afford to pay for my own minutes, data plan, text messages, so thus I am able to pay for someone else's minutes as well? That's just stupid.

51. 14545

Posts: 1835; Member since: Nov 22, 2011

What's your point? Who cares if it is limited to '250 minutes'? The point is the government SHOULDN"T be paying for cell service. End of story. It doesn't matter if it is 2.5 minutes or 2,500 minutes. Typically those that are poor, are poor for a reason. Nobody held a gun to a single mothers head and said she had to procreate 2-3-4 or whatever times. Track down the "baby daddy" and make his a$$ pay for her "free" cell service. WE HAVE A DEFICIT OF 1.2-4 TRILLION, and DEBT north of 15 trillion. WE CAN"T AFFORD TO PAY FOR PEOPLES CELL SERVICE.

19. JC557

Posts: 1920; Member since: Dec 07, 2011

Except nowadays many employers require you to be reachable in as many ways as possible. More often than not, employers see cell phones as a more reliable means of reaching both applicants and employees.

22. megadirk

Posts: 33; Member since: Jul 28, 2011

I agree with this 100%. It cost a total of $30, if the phone isn't on sale, to activate an account and purchase the phone for Verizon's no contract service. The phone even comes with $10 airtime that lasts for 90 days. There is no reason that you can't get that on your own and have it as a phone that potential employers can get a hold of you buy, and if you already have a job it's also a very cost effective option. It's time for people to stop making excuses and relying on the government/fellow citizens and start being responsible for their own ways of communication.

32. remixfa

Posts: 14605; Member since: Dec 19, 2008

they increased the taxes this year. Remember Obama talking about going after those "rich telecommunication companies", guess what, that was a new tax on YOUR bill. people need to pay attention and quit just thinking you know whats going on. because ya dont obviously. lol. Its something like 2.50 on everyone's phone bill that goes toward this fund every month. check your detailed bill.. its been there for a while. And its a total waist of money. cheap trackphone my ass.. they take that tracphone simcard and stick it into used smartphones.. i see it too often. people, you have a right to personal responcibility, not to mooch.. use your rights.

69. Tarkio

Posts: 30; Member since: Jan 17, 2012

Oh, it's a "waist" is it? This has nothing to do with Obama. If people are abusing the program, that should be addressed, absolutely. "You see it too often," lol. What does that mean? You see someone use minutes they get for free in a different phone? OMG! This is a travesty! Someone gave them an old phone and they talk the exact same 250 minutes on a different handset. That's a real scandal, indeed.

72. remixfa

Posts: 14605; Member since: Dec 19, 2008

the whole program is a waist. and yes, the raise in taxes has everything to do with obama.

74. TerryCrowley

Posts: 194; Member since: Jul 31, 2011

I always thought you were one of the more intelligent posters on Phonearena but you're such dips**t you can't even spell waste right. Tard.

75. remixfa

Posts: 14605; Member since: Dec 19, 2008

really.. the spelling police? really? i also confuse there, their, and they're all the time too. its called dyslexia. u dont want to see what my posts look like before auto correct picks up. auto correct doesnt always get the right form of the word as well. so, if you dont mind..... oi.

2. DirtyDan

Posts: 13; Member since: Jun 13, 2011

I don't think I should be thankful that I have a high end phone. I work hard and support myself to pay for my own phone and service. If I were given a high end phone and free phone service then I'd be thankful.

4. Adianshadows

Posts: 66; Member since: Nov 22, 2011

i was thinking the same exact thing. I'd rather save the 90$ a month and deal with a phone like that for free... yes it would suck but if you are on Federal Aide or have to use food stamps i highly doubt the speed of your free phone is any of your worries

25. thephoneguy92

Posts: 191; Member since: Dec 29, 2011

Thank you for saying exactly what I was thinking

42. ngo2dd

Posts: 896; Member since: Jul 08, 2011

Why don't you go to the prepaid company and pay 35 dollar a month. You chose to stay with the 90$ and don't lied about wanting the basic phone if you have 250 minute for free.

27. Lucas777

Posts: 2137; Member since: Jan 06, 2011

honestly… since when is america a charity fund… i dont mine helping low-income people with (what should be only a few weeks of) unemployment, but this is just ridiculous…. i work hard for my money and lose 60% of it every month to taxes which go towards stuff like this… i mean im sorry they cant afford it, but thats life… cell phone service isnt a "necessity" to live

29. willardcw4

Posts: 170; Member since: Oct 01, 2011

I didn't know there was a tax bracket of 60% (including federal and state).... over-exaggerating? Or do you live somewhere in Connecticut =D

30. Lucas777

Posts: 2137; Member since: Jan 06, 2011

no in california… including federal and state i pay 60 percent on income tax

36. ngo2dd

Posts: 896; Member since: Jul 08, 2011

LOL we all know you are lying. The highest tax bracket is 33% and that is for the one that is in the top 10% of earners. Your state and local does not add up to 27%

40. remixfa

Posts: 14605; Member since: Dec 19, 2008

its pretty hefty, but its not 60%. Maybe if you are adding in SS and Fico as well, then yea, it can get up there quickly. Most people in CA pay between 6-11% state income tax over the already high federal income tax, SS, AMT, and everything else. There is a reason businesses and people are fleeing california at astonishing rates.. its called high taxes. http://www.tax-rates.org/California/income-tax

41. ngo2dd

Posts: 896; Member since: Jul 08, 2011

It is not the taxes. Because people are leaving Michigan and Michigan has lower taxes then California. It has more to do with jobs. The 2010 census show that Michigan was the only state to lose it population.

46. remixfa

Posts: 14605; Member since: Dec 19, 2008

yea over a 10 year period. CA showed huge growth during the dot.com boom and through the last census and they have been leaving like crazy for the last few years. It is the taxes. Many are moving to near by states like NV and taking advantage of the ultra low taxes, which is why NV is experiencing huge growth. That has been well documented time and time again. Do you really feel the need to argue with me about everything? I was in fact backing up your original point, and now you are arguing with me. lol seriously. And, just like the last few times, your wrong. "Since at least 2005, more residents have left California than arrived here from other states." http://articles.latimes.com/2011/nov/27/local/la-me-california-move-20111127 "#3 The state of California currently has the third highest state income tax in the nation: a 9.55% tax bracket at $47,055 and a 10.55% bracket at $1,000,000. #4 California has the highest state sales tax rate in the nation by far at 8.25%. Indiana has the next highest at 7%. #5 Residents of California pay the highest gasoline taxes (over 67 cents per gallon) in the United States. #9 20 percent of the residents of Los Angeles County are now receiving public aid of one kind or another. #10 The number of people unemployed in the state of California is approximately equal to the populations of Nevada, New Hampshire and Vermont combined. #12 Residents of California pay some of the highest electricity prices in the entire nation. #13 The state of California ranks dead last out of all 50 states in the number of emergency rooms per million people." http://endoftheamericandream.com/archives/22-facts-about-california-that-make-you-wonder-why-anyone-would-still-want-to-live-in-that-hellhole-of-a-state http://www.city-data.com/top2/co61.html http://jan.ocregister.com/2011/04/15/more-firms-move-jobs-facilities-out-of-california/57653/ Has anyone done a Taco Check on NGO? lol

58. ngo2dd

Posts: 896; Member since: Jul 08, 2011

Nice job giving me a article that don't exist the LAtime one. Here is the US census data for yahttp://www.census.gov/prod/cen2010/briefs/c2010br-01.pdf It show a 10% change in population for california. Michigan beside Puerto Rico is the only one with a negative change in population. So much for people moving out. I guess you are one that is wrong. Both Oregon and Hawaii has a higher state tax and both has a positive change in population around 12%. Your sale data is wrong it is 7.25% but it can total up to 9.25 depending where you live.http://en.wikipedia.org/wiki/Sales_taxes_in_the_United_States#cite_note-CAEqualization-52 The electricity cost is base on demand. You know the whole energy crisis it had. And has little to do with tax. It is funny that you state NV because NV has the highest unemployment rate out of all the state at 12.1 http://www.bls.gov/web/laus/laumstrk.htm Gasoline taxes is by Connecticut 68.0 cent. http://www.commonsensejunction.com/notes/gas-tax-rate.html

60. remixfa

Posts: 14605; Member since: Dec 19, 2008

all my links are real try a quick "why are people leaving california" google search and it will pull up every site. again, you should learn to read. but im not going to reiterate everything that ive already written, since it already corrects most all of your points that you are trying to make.. again. you should look up "enron" on that whole energy thing.. lol. wikipedia is not a recognized source for any type of official paperwork, and as thus, it is wrong. you are trying to use Wiki to correct a government backed site like city-data. do you not see the irony in that? lol "moving to" and "employment" are not the same thing. im not even going to get into how unemployment is actually measured and how your statistic is a farce. look it up if you want. lets not even get into how statistically insignificant the difference between CA's unemployment and NV's unemployment is. Also considering NV's unemployment was at 14% just a few months ago, its showing an improvement. But again, thats a statistical farce, and you need to look it up on your own if you want to understand why. also you should check your gas tax info, california is worst in the nation with a blended 41.5 cent per gallon gas tax as of Jan 2012, and the taxes are going up because of the new year. http://www.taxadmin.org/fta/rate/mf.pdf please, stop.. your behind. lol

61. ngo2dd

Posts: 896; Member since: Jul 08, 2011

How am I behind? you state that CA is losing people and the US census show they CA is still gaining people at a faster rate then people are leaving. It is not about just about taxes but where the Jobs are. Michigan has a 6% flat sale taxes but it still lost .6% of it population in the 2010 census. CA has the 7th highest average income in American wow it most really suck living there. http://www.census.gov/statab/ranks/rank29.htmlhttp://www.infoplease.com/ipa/A0104652.html My original post was about how it is not just about the higher taxes and how Michigan was the only state to lose it population.

62. remixfa

Posts: 14605; Member since: Dec 19, 2008

no, obviously you dont know what a CENSUS is. a CENSUS is a once every 10 years count of all the people in the state... legal or otherwise. it does not show yearly projections, increases or decreases. If you were actually able to read a single article that i presented, most of them actually touched on the subject. SINCE 2005 THE STATE HAS BEEN LOSING MORE PEOPLE THAN IT HAS GAINED. Is it really that hard to understand? Good frikkin lord. Really.. please.. can we get a taco check, isle ngo2dd.

48. Lucas777

Posts: 2137; Member since: Jan 06, 2011

ha belive me i know… i live and do my business in california.. yes i exaggerated with 60 but it honestly is not a far cry from 50 which i still think is exorbitant.. with everything including all my other taxes and even deductions it easily reaches 60 and i second pretty much everything remixfa said about Ca… and dont forget the taxes for education that go to the worst ranked (but highest paid) school system in america (LA)

47. Lucas777

Posts: 2137; Member since: Jan 06, 2011

ya i was exagerating. i pay somewhere between 40 and 50& when state and federal income are combined

53. 14545

Posts: 1835; Member since: Nov 22, 2011

You obviously haven't looked into the tax system much, have you? After you factor in property taxes, sales taxes, income taxes, etc, depending on your income it can reach into the 50-60% range. Especially if you're single and and make somewhere in the 75-125k a year range. Yes, some of it is consumption, but it all adds up in the end.

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