Long-standing phone program benefits Iowans

Imagine hunting for a job, finding an apartment or scheduling a doctor's appointment without a phone.

That's why the federal government has been subsidizing phone service for low-income Americans since 1985 - 25 years before some conservatives seized on the phrase “Obama phone” to describe the Lifeline program.

“I think it's a good program,” said Ron Oge, 61, of North Liberty.

He uses his government-subsidized cellphone to schedule doctor's appointments and make plans with friends. Oge's basic phone package - 250 minutes a month, no texting - is covered by the $9.25 a month Lifeline pays phone companies for each qualified subscriber.

Nearly 90,000 Iowans subscribed to Lifeline in 2012, an increase of 60 percent from the previous year. More than 16 million Americans received benefits through the program last year. Those numbers are expected to fall in 2013 because of new rules put in place to stop abuse by some phone companies and recipients.

Some program advocates say new rules requiring recertification every year may prevent the elderly and undereducated from getting vital phone service.

“We have heard from the companies who are saying the people who really need the program aren't applying for it,” said Swati Dandekar, a former Iowa lawmaker from Marion who now serves on the Iowa Utilities Board. “We don't say no to recertification, but make it simpler.”

When President Reagan created the phone subsidy in 1985, landline phones were the only option. Now, cellphones outnumber landlines two-to-one.

Program abuse

The Federal Communications Commission tweaked the law in 2005 and 2008 to allow reimbursement for wireless services, which caused an explosion of providers trying to sell Lifeline packages. This led to abuse by some providers that weren't verifying consumer's eligibility or were allowing more than one phone per household.

Undercover videos posted online and on television networks appear to show some phone providers telling customers its O.K. to sell the phones for drugs or clothing.

“People in the big cities are getting two, three, four phones and selling them for drug money,” Oge said. “I think they ought to be arrested. It gives everyone a bad name.”

Conservatives also started using the phrase “Obama phone” after a 2012 YouTube video showed a woman saying she voted for President Barack Obama because he gave her a phone. Lifeline has been criticized as a government handout.

In fact, phone companies pay for the Lifeline program, often by passing on the cost to customers through universal service fees.

To qualify for the program, people must have an income that is at or below 135 percent of the federal poverty level or participate in a government assistance program, such as Medicaid, food stamps, housing assistance or free and reduced school lunch.

“Anymore now, phone numbers are needed for everything,” said Kafi Dixon, a program manager at Shelter House in Iowa City. “This gives people the ability to be the direct contact so there's not the stigma of leaving the Shelter House's phone.”

Dixon disputes the criticism the phone program is a waste of money. If a phone makes it easier for someone to find a job, that could reduce the person's reliance on government programs.

Plus, “it's not like there are a ton of minutes on these things,” Dixon said. “It's a basic phone that takes care of your basic business needs without much left.”

FCC crackdown

The FCC cracked down on abuse last year with reforms that require carriers to verify eligibility every year. The government also will complete a national eligibility database by the end of the year to make sure no one gets more than one phone per household.

At least two Iowans have been cited for “egregiously ignoring the rule limiting Lifeline subscriptions to one per household,” FCC spokesman Mark Wigfield said. He said he could not provide the citations because the people's names and state names had been blacked out.

The FCC says the reforms saved $214 million in 2012 and are on track to save another $400 million this year. The 2013 savings come from an estimated 4 million subscribers who might be de-enrolled because they didn't meet the deadline for recertifying their eligibility.

Dandekar will present a resolution to the National Association of Regulatory Utility Commissioners in July asking the group to encourage the FCC to streamline the recertification process and speed creation of the national eligibility database.

“This is a safety issue,” she said. “If someone needs help and they need to call 911, how are they going to call without a phone?”