Cell phone subsidies for low-income people: a luxury or necessity?
In addition to food, shelter and medical care, access to a phone is one of life’s bare necessities — at least according to the American federal government.
Those too poor to afford a phone can qualify for federal assistance to help pay either landline or cell phone bills. The program is called LifeLine, but in popular culture, most people likely know it as “Obama phone,” which sprouted from a misconception that LifeLine was started under President Barack Obama.
In fact, phones handed out through the LifeLine program should be more accurately called “Reagan phones” since President Ronald Reagan started the LifeLine program in 1985. It was expanded in 2005 to include prepaid cell phones as they began to replace landline phones for many households.
This year, some legislators have introduced measures to eradicate LifeLine, calling it a form of government waste, calling cell phones luxury items rather than necessities.
But if someone can’t afford a phone, they can’t call a doctor or hear back from a potential employer. For example, how does a school contact a parent during an emergency if they don’t have a phone, asked Ira Dove, director of Haywood County Department of Social Services.
“You are going to miss a lot of information, or you are going to have great difficulty in an emergency if you don’t have access to a phone,” he said. “Most employers assume that they are going to be able to contact someone at a consistent number.”
LifeLine is not funded through taxes. Telephone companies contribute a percentage of their revenues to the federal Universal Service Fund. However, each company typically passes the cost onto its customers in the form of a fee on their phone bills, so it still comes out of consumers’ pockets.
People can find out about LifeLine through their local Department of Social Services, but they do not actually administer it. Participating phone companies implement the program.
“If the client inquires about the program, we advise them about what the program is, and we also let them know that they will need to contact their phone company directly,” Dove said. “It would be up to them to pursue it.”
In Western North Carolina, less than a handful of companies — T-Mobile, Virgin Mobile, TracFone and SafeLink Wireless — offer free cell phones with a limited amount of free monthly texts and minutes. Other companies only offer the LifeLine program for people with landline phones.
Through the different programs, low-income individuals and families can receive up to $12.75 a month off the cost of their phone bill. On average, people receive a $9.25 discount per month, according to the Federal Communications Commission. Depending on the provider, eligible individuals can also receive a free phone. Only one discount is given per household.
Virgin Mobile runs a LifeLine program called Assurance Wireless, which gives participants just more than four hours of free talk and 250 texts a month. Any additional minutes or texts must be paid for.
The average cell phone user sends about 1,000 texts per month and spends more than six hours on calls each month, according to reports by both the Pew Research Center and Nielsen.
“We take for granted every day the things we do with our phone,” said Jack Pflanz, spokesman for Assurance Wireless. “How do you set appointments and follow up with health care providers without a way to communicate?”
Assurance Wireless also provides people with a phone if necessary. The retail value of the free phones is $10, which the company covers.
“We pay for the cost of the phone, the charger, the manual and the shipping,” Pflanz said.
Cell phones in particular have become so prevalent that people generally presume that every American of a certain age owns one.
“It has become a part of who we are. The assumption is that everybody has the ability to communicate,” Dove said.
Although Verizon does not offer LifeLine to North Carolina customers, it does operate a similar program called HopeLine for victims of domestic violence. In Western North Carolina, Verizon Wireless provides free phones, minutes and text messaging to people affected by domestic violence, in partnership with the 30th Judicial District Domestic Violence-Sexual Assault Alliance.
The program allows victims “to safely contact a friend and family to arrange for housing, to secure employment, for job interviews, just to rebuild their lives,” said Karen Shulz, a spokeswoman with Verizon.
Each year, domestic violence organizations reapply with Verizon to participate in the HopeLine program. Then, the organization distributes the phones as they see fit.
“They tell us what their need is,” Shulz said.
People can donate to the program by dropping off their old phones and phone accessories at any Verizon store.