The Obama Phone?
Q: Has the Obama administration
started a program to use "taxpayer money" to give free cell phones to
welfare recipients?
A: No. Low-income households have been
eligible for discounted telephone service for more than a decade. But the
program is funded by telecom companies, not by taxes, and the president has
nothing to do with it.
FULL QUESTION
Is this e-mail true?
I had a former employee call me
earlier today inquiring about a job, and at the end of
the conversation he gave me his phone number. I asked the former
employee if this was a new cell phone number and he told me yes this
was his "Obama phone."
FULL ANSWER
Welfare recipients, and others, can
receive a free cell phone, but the program is not funded by the government or
taxpayer money, as the e-mail alleges. And it’s hardly new.
How It Works
SafeLink Wireless, the program
mentioned in the e-mail, does indeed offer
a cell phone, about one hour’s worth of calling time per month, and other
wireless services like voice mail to eligible low-income households. Applicants
have to apply and prove
that they are either receiving certain types of government benefits, such
as Medicaid, or have household incomes at or below 135 percent of the poverty
line. Using
2009 poverty guidelines, that’s $14,620 for an individual and a little under
$30,000 for a family of four, with slightly higher amounts for Alaska and
Hawaii.
SafeLink is run by
a subsidiary of América Móvil, the world’s fourth largest
wireless company in terms of subscribers, but it is not paid for directly by
the company. Nor is it paid for with "tax payer money," as the e-mail
claims. Rather, it is funded through the Universal Service Fund, which is
administered by the Universal Service Administrative Company, an independent, not-for-profit corporation set up by
the Federal Communications Commission. The USF is sustained by contributions
from telecommunications companies such
as "long distance companies, local telephone companies, wireless telephone
companies, paging companies, and payphone providers." The companies often
charge customers to fund their contributions in the form of a universal service fee you might see on your monthly phone bill. The fund is then
parceled out to companies, such as América Móvil, that create programs,
such as SafeLink, to provide telecommunications service to rural areas and
low-income households.
History
The SafeLink program has actually
been offering cell phones to low-income households in some states since
2008, not beginning "earlier this year," as the e-mail claims. But
the program is rooted in a deeper history.
When phone lines were first laid out
in the late 19th century, they were not always inter-operable. That is to say
the phone service created by one company to serve one town may not have been
compatible with the phone service of another company serving a different town
nearby. The telecom companies themselves saw the folly in this arrangement, and
so in 1913, AT&T committed itself to resolving interconnection problems as
part of the "Kingsbury Commitment."
That common goal of universal
service became a goal of universal access to service when Congress
passed The Telecommunications Act of 1934. The act created the FCC and
also included in
its preamble a promise "to make available, so far as possible, to all the
people of the United States, a rapid, efficient, Nation-wide, and world-wide
wire and radio communication service with adequate facilities at reasonable
charges.” There was a fear, expressed
by telecom companies themselves, that market forces alone might encourage
companies to pass on providing service to hard-to-reach places. This would both
hurt the people who wouldn’t have service as well as existing customers who
wouldn’t be able to reach them. So the new FCC was tasked with promoting this
principle of "universal service."
This informal practice was codified
when the Universal Service Administrative Company (USAC) was created
as part of the 1996 Telecommunications Act to "ensure all Americans,
including low-income consumers and those who live in rural, insular, high cost
areas, shall have affordable service and [to] help to connect eligible schools,
libraries, and rural health care providers to the global telecommunications
network." The USAC includes four programs to serve rural areas,
high cost areas, rural health care providers, and schools and libraries. Since
1997, USAC has provided discounted land line service to low-income individuals.
(A more limited program to offer assistance to low-income individuals was
created a decade earlier; the telecommunications act expanded and formalized
it.) According to Eric Iversen, USAC director of external relations, the
Universal Service Fund more recently began funding programs that provide
wireless service, such as the pre-paid cellular SafeLink program mentioned in
the chain e-mail.
The president has no direct impact
on the program, and one could hardly call these devices "Obama
Phones," as the e-mail author does. This specific program, SafeLink,
started under President George Bush, with grants from an independent company
created under President Bill Clinton, which was a legacy of an act passed under
President Franklin Roosevelt, which was influenced by an agreement reached
between telecommunications companies and the administration of President
Woodrow Wilson.
Wilson Phones, anyone?
– Justin Bank
Update, Nov. 5: A public relations
representative from SafeLink Wireless contacted us to note that the América
Móvil subsidiary that operates the
SafeLink program and receives funds from the USF is TracFone Wireless, based in
Miami, Fla.
Sources
Mueller, Milton. Universal Service: Competition, Interconnection,
and Monopoly in the Making of the American Telephone System. Cambridge: The MIT Press, 1997.
Press Release, "Research and Markets: America Movil, S.A. de C.V.
– Financial and Strategic Analysis Review,"
Business Wire. 24 Mar 2009.
Government Printing Office, "Federal Register: January 23, 2009 (Volume 74, Number
14)] [Notices] [Page 4199-4201]."
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