Many of you doubtless have doubts and misgivings about the “Lifeline” program – the Federally subsidized program to provide basic phone service to the “poor”. I for one certainly do.
The program is sometimes derisively referred to as the “Obama phone” program. That’s a misnomer. The program dates to 1985, during the Reagan administration. It was begun as a way to subsidize emergency phone service for the poorest of the poor.
It’s funded from the “universal service fee” – one of those incomprehensible mandatory fees tacked onto the phone bills of paying customers. (IMO those fees are intentionally incomprehensible to hide what they’re being used to fund, but that’s another story . . . . )
Originally the Lifeline program was landline-only. But in 2005, the Bush administration opened the program to cell phones.
“Really bad idea, sir.”
From there, soon things began to go off the rails – badly. During the last few years, program costs have skyrocketed. Costs went from around $800 million in 2008 to roughly $2.2 billion in 2012.
The expansion of the program to cell phone service was not only a bad idea from square one. It was also, well, monumentally stupidly run. Applicants were allowed to self-certify that they met program requirements. No documentation was required to back up their self-certification. No periodic re-certification was required. And there were also no effective checks to ensure the “one family, one phone” rule was followed. With cell phones and undocumented self-certification, that’s virtually impossible to do.
That all changed last year, when annual cross-checking and re-certification were first required. The changes produced results that demonstrated just why the program costs had nearly tripled in 4 years – along with showing how rife with fraud the program truly was.
You can probably guess the results. And you’d be right.
There appear to have been roughly18 million Lifeline program participants in 2012. I say “appear to have been” because the exact number of subscribers wasn’t released. It seems some carriers wanted the FCC to keep their individual numbers confidential. However, it was revealed that 6 million subscribers constitute 34% of the program’s subscribers – or about 1/3. And last time I checked, 3 x 6 million = 18 million.
When re-certification was required last year, an . . . interesting thing happened. Regarding the 1/3 of Lifeline subscribers for data was released, 41% of those subscribers asked to re-certify either never responded or were found not to qualify for continued participation.
41% of 6 million works out to a bit short of 2.5 million fraudulent subscribers. Apply that proportion to the overall program, and that means that very likely about 7.4 million out of the 18 million total Lifeline subscribers were getting a fraudulent free phone, courtesy of Uncle Sugar.
Or, more precisely: courtesy of mandatory fees forcibly collected from paying US phone customers, then redistributed by the Federal government. Paying customers like you and me.
Yeah, that’s great. Just freaking great
I’ll give the current Administration credit. They do seem to have made a start on fixing something that’s badly broken. (I can suggest an even better fix: scrap the program entirely and let those who want phones pay for them, like all the rest of us do. But that would probably be “unfair to” or an “undue burden on” someone.) It’s just a pity they couldn’t have done that before pissing away literally billions in fees collected from productive members of society that ended up subsidizing cell phone service to pimps, frauds, criminals, drug dealers, and various other ne’er-do-wells.
Because you know that’s exactly who ended up with many of those fraudulently-obtained Lifeline phones.