The members of the GOP-led Public Service Commission have proposed charging people $5 a month if they receive the phone service. The U.S. government pays phone companies $9.25 for every customer they serve in the Lifeline program. Commissioner H. Doug Everett, a Republican, proposed the rule change and has argued that people receiving government benefits can pay something. The program – which federal officials and phone companies say was abused – has become a popular target for conservatives. Supporters of the program, started in 1984 under President Reagan’s administration, argue it provides a critical communications link for poor households.
Critics of the change argue that it will punish the poor instead of ferreting out abuse. Companies can avoid the $5 charge if they offer at least 500 minutes of service, though most firms say that wouldn’t be economic.Phone carriers have argued that they would spend more trying to collect the $5 payments from customers than the cash was worth.
TracFone Wireless Inc., which serves roughly 250,000 Georgia households in the program, has acknowledged that people were improperly enrolled in the past. However, the Federal Communications Commission has tightened program rules. Before the rule changes, t The FCC estimated that as many as 15 percent of Lifeline subscribers were ineligible, costing as much as $360 million annually.
TracFone attorney Mitchell Brecher said that while databases will deter fraud, charging poor people will not.
“You would be taking money, $5 per month, $60 per year from the poorest people in the state of Georgia and giving it to telecommunications companies,” he told Everett.
Spending on the program jumped sharply in recent years, which observers attribute to a poor economy and an increased number of telephone carriers who participate. The program saw spending jump from $582 million in 1998 to roughly $2.2 billion in 2012. However, telephone companies say usage rates are coming down in Georgia as the economy improves and tougher rules take effect.
Robert Patillo, an attorney who does volunteer work with the homeless, said the commission was focusing on the wrong people.
“You have the telephone companies that are committing these sins by issuing these additional phones and you’re punishing the consumer,” he said.