The members of the GOP-led Public Service Commission have proposed charging people $5 a month if they receive the phone service. The U.S. government pays phone companies $9.25 for every customer they serve in the Lifeline program. Most firms provide the service for less than the government subsidy, meaning the companies make a profit and customers pay no out-of-pocket costs.
Commissioner H. Doug Everett, a Republican, proposed the rule change and has argued that people receiving government benefits can pay something for them. The program — which federal officials and phone companies say was abused — has become a popular target for conservatives who deride it as government waste. Supporters argue it provides a critical communications link for poor households.
“You’re taking money now from some of the poorest people of the world and giving it to other people who haven’t worked for it,” Everett said during a hearing Thursday.
Critics of the change argue that it will punish the poor instead of ferreting out abuse. Companies can avoid the $5 charge if they offer at least 500 minutes of service, though most firms say that wouldn’t be economic.
Several phone carriers have argued that they would spend more trying to collect the $5 payments from customers than the actual cash was worth.
TracFone Wireless Inc., which serves roughly 250,000 Georgia households in the program, has acknowledged that people were improperly enrolled in the past. However, the Federal Communications Commission has tightened program rules and will soon unveil a database designed to catch households that improperly receive funding.
Before the rule changes, the FCC estimated that as many as 15 percent of Lifeline subscribers were ineligible, costing the public as much as $360 million annually.
TracFone attorney Mitchell Brecher said that while databases will deter fraud, charging poor people more money will not.
“You would be taking money, $5 per month, $60 per year from the poorest people in the state of Georgia and giving it to telecommunications companies,” he told Everett.
The Lifeline program started in 1984 under President Ronald Reagan’s administration. Spending jumped sharply in recent years, which observers attribute to a poor economy and an increased number of telephone carriers who participate.
The program saw spending jump from $582 million in 1998 to roughly $2.2 billion in 2012. However, telephone companies say usage rates are coming down in Georgia as the economy improves and tougher rules take effect.
Robert Patillo, an attorney who does volunteer work with the homeless, said the commission was focusing on the wrong people.
“You have the telephone companies that are committing these sins by issuing these additional phones and you’re punishing the consumer,” he said.