Sunday, November 18, 2012

ObamaPhones or ReaganPhones?

Can you really get free phones and free airtime under the "Obamaphone" program?  Yes, No, and Maybe.  It is not an Obama program, and you have to be pretty poor to get the phone.

Some readers have written about the "Obamaphone" program, and it was the subject of a popular YouTube video, where a young woman extols the virtues of the "Obamaphone" and says that is why we should all vote for Obama.  But there is some misinformation about the program and what it encompasses.

Snopes has a pretty good summary of the so-called Obamaphone program.   Forbes also has an article on the subject.  This is a program started under Reagan, to give landlines to the poor for free or at a subsidized price.  As phones have transitioned from landlines to cell phones, so has the program.

However, the program is not funded by  "taxpayer dollars" but rather by that ubiquitous "universal service access fee" that is part of your landline or cell phone bill.   So yes, the rest of us pay for the program, with our phone bills.

Safelink, a division of Tracphone, has pretty aggressively marketed this program.  It is not hard to "qualify" for this program, as it relies only on your qualification for an existing federal program (welfare, food stamps, etc.) or your income limit.   Assets are not counted, so you can be a millionaire and get a phone, so long as your income makes you qualify.

However, qualification varies from State to State.  Here in Georgia, they just wanted to know if I was already on a federal program, or what my income was:

Select your Household Income Level

Total Person in HouseholdMaximum Annual IncomeMaximum Monthly Income

That's it - just check off the box and you're in.  Of course, you aren't supposed to LIE on the application, but they don't seem to go out of their way to check.   And, you are supposed to continually re-certify that you are eligible for the phone, over time.  And you do have to AGREE to the following terms (does anyone read the fine print?):

250 Minute Plan

We strongly recommend you use all remaining minutes on your phone as it does not include carryover of unused minutes. Each month, your phone will reset to 250 minutes regardless of any unused minutes that may have remained on your phone. Carryover of unused airtime minutes are available for up to 3 consecutive months if you purchase and add to your phone any TracFone Airtime Card such as the 60, 120, 200 or 450 Airtime Minutes Cards. You can select a different plan in the next step.

Penalty of Perjury

Under title 18 U.S.C. § 1621, whoever willfully states as true any material matter which he does not believe to be true in a statement under penalty of perjury, is guilty of perjury and shall, except as otherwise expressly provided by law, be fined or imprisoned not more than five years, or both.
I acknowledge that providing fraudulent documentation/information in order to receive assistance is punishable by law.

I certify under penalty of perjury that:

But of course, this is a program ripe for fraud.  People can just lie about income.  And students and the like, who have low incomes, can qualify for free phones.   Folks on Social Security can get them as well.  And people who work "under the table" and have little or no reported income, can get one, too.

Is this really necessary?   Consider that a basic pay-as-you-go plan, such as I use, can cost $100 a year for 1000 minutes, why do the poor get 250 minutes a month for free?

Like with foodstamps, it would not be hard to qualify for this program, if you structure your income to meet the limits.  And in fact, since qualification for foodstamps gets you "in", getting even $10 a month in Foodstamps is worthwhile, if it gets you the free phone.   Maybe this explains why the average foodstamps benefit is less than $150 - it is a gateway to other free swag.

But, you say, 250 minutes a month is chump change!   Of course, you can buy more minutes on these plans, if you use them a lot, so the 250 minutes is just a gateway for Safelink to make more sales of per-minute cards.  In fact, your 250 minutes don't roll over unless you buy additional minutes.  That is a pretty sweet inducement, right off the bat, to buy at least a 60-minute card.

Is this a major travesty?  Come sumptin' be done about it?

Well, first, let's stop lying about it.  The phones are not from President Obama, but are part of a program that traces its roots back to Ronald Reagan.  The wireless part of the program was signed into law by President Bush.   But no one calls them "BushPhones" do they? 

Second, eligibility is determined at the State level - and my State, which is firmly "Red" has very lax eligibility requirements - as it does for food stamps.

So, this program could be cut back at the State level, simply by making it harder to apply for and by tightening qualification requirements.   Don't all fall all over yourselves trying to do it, now!

Perhaps the local pols want to keep this as a festering issue, as it allows them to use it as a cudgel to whack the President.   They can do something locally, but choose not to, as it is easier to blame the Prez.

New laws have been passed to try to rein in the program.  Others have proposed cancelling it altogether.  The point is, Obama ain't handing out phones - lawmakers are.  And lawmakers, even on a State level, in a Red State, don't seem too bothered to do much about it, other than complain that the "other guy" is giving away the store.

And of course, it goes without saying that Tracphone no doubt lobbies to continue this program, as it is a big money-maker for them.  Like with military spending, once there is a business that is making money from the deal, they will no doubt make sure the deal keeps going on.   And I suspect, if you follow the money, the Tracphone people have paid a lot to lobbyists and to political campaigns over the years.

Act shocked.