One of the many, many fees attached to your phone bill every month, thanks to the 1996 Telecommunications Act, is the Universal Service Fund fee. What does this fee pay for? Among other things, an entitlement program for telephone service including cell phones.
Your tax dollars, hard at work:
Among the typically vague justifications for the levying of the Universal Service Fund fee — the best of which is to “promote the availability of quality services at just, reasonable, and affordable rates” — is that it pays for a program called “Lifeline,” which is not remotely as urgent or necessary as its name suggests. Bottom line: You are paying for millions of other people’s phone service with every call you make.
There are currently 12.5 million wireless accounts registered under the scheme, which is administered by the FCC. Any American citizen who is on food stamps, Medicaid, or who earns up to 135 percent of the federal poverty line can apply. If an application is successful — and, given that the FCC actually advertises it by direct mail, who are we kidding here — the $1.6 billion program will pay for either a cell phone (up to the value of $30, of which there are many available) or a landline installation, and then pay your bill to the tune of $10 a month, which is roughly equivalent to about 250 minutes talk-time on an entry-level handset.
I first wrote about this way back in 2009, noting a company called Safelink Wireless which was selling cell phone service for this program.
The justification for this program is that the poor need phone service to facilitate job search activities. Which is all well and good, except that a) our nation is running a budget deficit of well over $1 trillion, b) phone service is already pretty dang expensive for most of us without these fees and c) it’s hard to imagine any American not having access to a little borrowed phone service to help find a job.
And when you consider the government’s propensity for mission creep, when we look at all the government programs that started small and grew enormous while we weren’t paying attention, the point is clear. This program needs to go. It has already more than doubled in size from $772 million in 2008 to $1.6 billion in 2011.
There’s been plenty of abuse in the program too. In 2011 an FEC audit found that a quarter of a million of the program’s participants, some 269,000 to be exact, had more than one phone paid for by the taxpayers.