Phone customers pay for program's "Lifeline" phones


Eyewitness News has discovered a program created to provide low-income Americans with emergency phone services has now grown into a multi-billion dollar program paid for with your money.

13 Investigates shows how every time you pay your cell phone bill you are helping someone else get a phone to talk and text for free.

Every second of every day, someone is making a call or sending a text message. Cell phones have become the command center for our daily lives.

"I carry it everywhere. Yeah, it's pretty important. Yeah," said a group of 12-year-old triplets, Olivia, Emelia and Sophia.

The girls can't imagine life without their phones. The modern day necessity comes at a hefty price for Jim Bryant - typically around $400 a month.

Their monthly bill not only pays for their five phone plans, it also goes toward providing free cell service for perfect strangers.

"It's not a right to have a phone so, you know, I think people should have to pay for them," Bryant said.

The Federal Lifeline program offers the free phones. Starting in the 1980s, the FCC has ordered phone companies to pay for providing basic phone service to low-income Americans.

Phone companies now pass that expense along to customers, in the form of the Universal Service Charge on every landline and cell phone bill. The fee varies, but is usually a couple dollars a month - dollars that add up.

The Bryant family, for example, pays approximately $4.83 a month for the Universal Service Charge. That's nearly $60 a year.

To qualify for Lifeline, people must participate in a government program like Medicaid, food stamps, Section 8 housing or free and reduced school lunches. The FCC then pays cell phone companies $9.25 per customer, per month.

Money you pay, like it or not.

The cost of the free cell phones has exploded in the past three years. In 2008, the program cost $772 million, but by 2011, the cost more than doubled to $1.6 billion.

Providers such as Assurance Wireless engage in aggressive marketing tactics, not only on the airwaves, but also through the mail.

Eyewitness News wanted to talk to people who have received a free phone and found several outside of a west Indianapolis unemployment office.

One woman complained about the amount of free minutes offered.

"I think we had the phone for, like, four days and then it was done for the month," she said.

She also said one friend of hers received not only one, but multiple phones, by getting them through different companies.

"There's like three of them that gives you free phones and he went and got phones from all three, but I don't really believe it's abuse if you only get 200 minutes, because your 200 minutes run out in like three days," she said.

"It wasn't designed to create a multitude of phones for people who don't need them," said Texas Congressman Blake Farenthold.

Fed up with what he calls wasteful spending, Farenthold has authored a bill to reform the program and curb fraud by creating a central database of Lifeline users.

"This way, the Lifeline program gets back to what it was intended to be - a lifeline for the poor, the elderly and not a source of free cell phones for everyone in the family," he said.

But Indiana Representative André Carson defends the cell phone component of Lifeline. In a statement to 13 investigates, Carson said, "We should always look for ways to improve these programs, but Lifeline is a valuable and effective, bipartisan tool. And it doesn't rely on a single tax dollar."

Jim Bryant disagrees.

"It's mandatory, so it's a tax," he said.

"Sounds good for the people who's getting the free phones, not for the people who's paying for the people to get free phones," said one couple.

The FCC audited the Lifeline program last year, uncovering 400,000 instances of multiple phones distributed to individual people. In Indiana alone, 16 percent of people who got free cell phones did not qualify for the program.