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Free cell phones for poor people?
These free cellphone and minute plans are paid for by the Universal Service Fund, which telecommunications companies must contribute to by law. Free cellphone program for the poor draws critics August 6, 2011 | 7:00 am Is having a cellphone a basic human right? In more than half the states in America, people who are eligible for Medicaid and food stamps may also be eligible for a free cellphone and 250 free minutes a month. A story in the Pittsburgh Tribune-Review that unearthed this program, which has been around for three years, reported that up to 5.5 million people could qualify for a free cellphone and free service in Pennsylvania alone. The article identified two companies that provide free cellphones and free minutes to people who qualify -- Assurance Wireless, a program of Sprint subsidiary Virgin Mobile, and SafeLink, a program from Tracphone Wireless. Neither service is available in California. These free cellphone and minute plans are paid for by the Universal Service Fund, which telecommunications companies must contribute to by law. According to the Tribune-Review story, every cellphone service carrier passes the charge of its contribution on to its American customers. Cellphone users will see a "universal service" charge added to their contract each month. That money funds free cellphones and minutes to the poor and ensures that schools and libraries have secure phone service. Assurance Wireless and SafeLink collect $10 from the Universal Service Fund for each person who signs up for their free service. The phones they give out are stripped down and basic and cost about $10 as well. Earlier this month, Assurance Wireless launched the free cellphone program in Utah. In a news release about the launch, the company cited the high levels of unemployment and pitched the service as a way to help lower income residents of the state get a job. “As we’ve become available in more and more states, Assurance is proud to help customers stay connected to potential employers, medical providers and child care-givers,” Grace Boehm, director for Assurance Wireless, said in a statement. “We look forward to providing this same type of assistance to eligible Utah residents who need support and resources during what continue to be rough economic times for many.” But critics aren't buying it. "Our society cannot afford to give free everything to everybody," Robert Rector, a senior fellow at the Heritage Foundation told the Tribune-Review. "Most poor people already had adequate telephone service and will continue to do so."
Free cell phones for the needy drawing both cheers and jeers By Rachel Weaver, PITTSBURGH TRIBUNE-REVIEW Monday, August 1, 2011 Sharron Walters could not afford one more monthly bill. But without a phone, it would be difficult for Walters, who relies on a wheelchair, to secure rides to and from her daily errands. She also could not keep in touch with her son, who lives out of town. Three months ago, Walters, 48, of Swissvale started using Assurance Wireless, a program of Sprint subsidiary Virgin Mobile that provides free cell phones and 250 monthly minutes to people receiving government support such as Medicaid or food stamps. "The service they provide is just truly a blessing," she said. In Pennsylvania, two programs offer free cell service: Assurance Wireless and SafeLink from Tracfone Wireless, which specializes in "no-contract" cellular service. The federal Universal Service Fund, which all telecommunications providers support as required by federal law, pays for the programs. Amy Storey, a spokeswoman for CTIA - The Wireless Association in Washington, said all U.S. wireless carriers charge consumers a fee to recover the cost of their contribution to the fund, which varies quarterly as determined by the Federal Communications Commission. Assurance Wireless, which is in 26 states and Washington, D.C., started in Pennsylvania in February and is now being publicized in newspaper, TV and radio ads. The company reports more than 5.5 million people could qualify for the program in Pennsylvania. Gary Carter, manager of national partnerships for Assurance, was not able to provide the exact number of people who have signed up. SafeLink, which has been available to Pennsylvanians for three years, is in 39 states. Spokesman Jose Fuentes could not provide an exact number of users in Pennsylvania, but said there are more than 2 million nationwide. "The program is about peace of mind," Carter said. "It's one less bill that someone has to pay, so they can pay their rent or for day care. ... It is a right to have peace of mind." Critics of the program say free cell service is no right, particularly in an unstable economic climate. Robert Rector, a senior research fellow at the Heritage Foundation, a conservative think tank in Washington, said that with $910 billion of the national budget slated for low-income assistance, he finds free cell phone programs "particularly wasteful and unnecessary." "Our society cannot afford to give free everything to everybody," he said. "Most poor people already had adequate telephone service and will continue to do so." George Loewenstein, economics and psychology professor at Carnegie Mellon University, said phone companies could lose money from the programs if customers seek free service when they otherwise might have found a way to pay for it. However, he said, the programs likely benefit the overall economy as having a phone can help people find jobs. "We've hit a tipping point," he said. "It used to be that a public phone was on every corner. As cell phones become more prevalent, public phones are gradually disappearing." Assurance and SafeLink get $10 per subscriber monthly from the Universal Service Fund, which covers the cost of 250 minutes, said Carter. The companies pay for the phones, which Carter describes as "very simplistic models, not smartphones." The primary handset for Assurance users is the Kyocera Jax, which retails for about $10. That model does not have a camera, MP3 player or Bluetooth capability. Assurance pays for its advertising. Agreements run for one year; every 12 months, customers must provide proof of income. The eventual goal, Carter said, is to retain them as paying customers. Roberta Lebedda, 37, of Lincoln Place said she researched the Assurance program after seeing print advertisements and was disappointed to discover she was not eligible for a free phone, even though she helps fund the program through her phone bill. "It's a nicety, not a necessity," she said. "Everybody wants a cell phone, but we don't need it to live." The Telecommunications Act of 1996 requires phone service providers to contribute a percentage of usage revenue each quarter to the Universal Service Fund. It's designed to help schools, libraries and low-income and rural residents secure several types of phone service, including cell service. Customers might notice a "Universal Service" line item on their bills. Rachel Weaver can be reached at 412-320-7948 or via e-mail. |