LOS ANGELES (YBH) – A Mexico-based wireless company, known in America as Tracfone, is currently the major provider of a U.S. government-subsidized program called SafeLink. SafeLink provides free wireless service to the poor. Tracfone is owned by billionaire Carlos Slim’s America Movil.
According to Safelink’s website, “SafeLink Wireless is a government-supported program that provides a free cell phone and airtime each month for income-eligible customers.”
Free cell service for the poor a hit with users.
The service provides a free cellphone and 60-70 free minutes to qualified recipients in Alabama, Connecticut, D.C., Delaware, Florida, Georgia, Illinois, Maryland, Michigan, New Hampshire, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and Wisconsin. Users can purchase extra minutes from Tracfone’s website. Rates for extra minutes start at $9.99 for 30 minutes. The rate of $0.33 per minute is typical for cell phone users who go over their monthly contracted allotment. Traditional domestic calling cards usually carry a much lower rate, and have been a primary choice for low income phone needs.
Since 1984, via Congressional mandate, “Lifeline” telephone service has been offered to low income Americans. This phone service is paid for by telecommunications companies, which generally recover the cost by charging paying clients a “Universal Service” fee.
According to the FCC website, “This line item appears when a company chooses to recover its USF contributions directly from its customers by billing them this charge. The FCC does not require this charge to be passed on to customers. Each company makes a business decision about whether and how to assess charges to recover its Universal Service costs.” Almost all U.S.-based telecom companies pass this fee along to customers, however.
Lifeline service is available to any family earning less than 135 per cent of Federal poverty guidelines, or if they are a participant in any of the following programs: Medicaid, Food Stamps, Supplemental Security Income (SSI), Federal Public Housing Assistance (Section 8), Low-Income Home Energy Assistance Program (LIHEAP), Temporary Assistance to Needy Families (TANF), or The National School Lunch Program’s Free Lunch Program.
Tracfone director of government relations Jose Fuentes has stated, “Having a telephone service, just in general, is not a privilege, it should be a right . . .everyone should be in contact, everybody should have the opportunity to get a phone call, especially if it’s an employer.”
A New York Times article this past summer featured grateful free cellphone recipients, among them a disabled retiree who already personally pays $159 a month for a land line, cable and high speed internet access for his home. As a recipient of government assistance, he qualifies for a free cell phone, despite earning $1,600 a month take home pay.
Tracfone is anxious to expand beyond the mostly eastern states that have signed onto the program so far. Public Utility Commissions in the remaining states have expressed caution about signing on to the program, especially whether it satisfies the core mandate of a lifeline phone – reliability in an emergency. In California, ATT, T-Mobile and Sprint have all petitioned the PUC for permission to offer the service.
Telecom carriers are eligible for up to $10 per month from the government for each cell phone issued. under the program. As of July, over 1.4 million “Lifeline” cell phones have been issued.
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John Romano is the publisher and editor of Yes, But However!, a musician, a former political correspondent for BBC Radio London, and a serial web entrepreneur. Follow him on twitter: twitter.com/yesbuthowever or John Romano on Google+John Romano article archive.
