Georgia PSC reignites the debate over ‘free’ cell phones

Last fall, as the presidential contest reached a fever pitch, a video raced across the Internet, featuring an African-American woman in Cleveland who praised President Barack Obama for giving her a free cell phone.

“Everybody in Cleveland — low minorities — got Obama phones,” she said.

Critics decried the clip as racist. Politifact awarded its vaunted “Pants on Fire” rating to Republican claims that the president was attempting to buy votes with cell phones.

Even so, tea party forces built a campaign around the video in an unsuccessful attempt to counter criticism Mitt Romney had endured for declaring — in a video captured by the left — that 47 percent of Americans were too dependent on government handouts to vote Republican.

The phone furor died quickly after Nov. 6. But we in Georgia are about to revive it. With a vengeance.

The state Public Service Commission this morning will hold a public hearing on new rules to require recipients of subsidized cell phone service to pony up $5 a month, and to submit a photo ID that cell phone companies would have to keep on file for three years.

If approved – and passage by the all-GOP utility commission is highly likely — these would be the first restrictions on the federal Lifeline program adopted by any state. (A fee approved in California in 2010 has yet to be implemented.)

“I think [the poor] should have skin in the game. I’m not one of those who believe money should be confiscated from one group and given to another group,” said Doug Everett of Albany, the public service commissioner who proposed the $5 fee.

Some background is in order. Fact-checkers have pointed out that the federal program that offers a $9.25-a-month subsidy to provide phone service to the poor was started in the mid-1980s during the Ronald Reagan years, and was upgraded to include cell phones in 2005 under President George W. Bush. The program is financed by monthly surcharges that show up on most landline and wireless phone bills.

About $1.75 billion collected from you, me and others helped pay for 13.7 million landline and wireless phones nationwide in 2011, according to my Journal-Constitution colleague Kristi Swartz. The subsidy only partially funds landline service, but can cover the entire cost of very basic cell phone service.

Until recently, Republicans have been widely supportive of the privately funded program intended to keep the needy in touch with family, friends, potential employers and medical providers. In August 2009, Everett and Gov. Sonny Perdue even hosted a news conference to encourage more people to take advantage of it.

“Access to local emergency services and community resources is vital to our low-income and elderly residents. The commission wants residents to stay connected and is reaching out to those who need phone service but can’t afford it,” Everett said at the time.

But that was before reports of widespread fraud surfaced, Everett said this week.

Lack of oversight and the cell phone explosion allowed many to cheat the program, according to the Federal Communications Commission, which oversees Lifeline.

Some cell phone companies have created business models based solely on offering cell phones – very basic service, with no broadband access — in return for the $9.25 a month subsidies. Fraud has been suspected in as many as one in six cases nationwide.

But the Great Recession has also made the program more important. About 10 percent of all Georgians now get a subsidized phone via Lifeline.

The FCC now requires phone companies to annually recertify recipients of free phone service, to prevent people from receiving multiple phones – as has happened. But Everett is not satisfied – hence his proposed $5 fee, which would apply only to cell phone service.

As an alternative, PSC Chairman Chuck Eaton proposed the photo ID requirement. But the utility commission is a mysterious place, and instead of picking one or the other, the PSC chose both.

Poor people are unlikely to be happy with the new rules. But cell phone companies don’t like them, either. Bobby Baker, a former PSC member and a Republican, will represent six companies at Thursday’s 11 a.m. hearing.

That $5 fee won’t go to the government, but to the phone companies. “None of my clients asked for it, or even want it. Part of it is the billing hassle,” Baker said. The same goes for the headache of maintaining millions of photo ID files.

None of the other charity programs regulated by the PSC – a fund to allow poor residents to keep the heat on during winter, for instance – require fees or photo ID, Baker said.

Worth noting is the fact that neither Everett nor Eaton want to see the Lifeline program disappear – as do many tea partyers who think we have grown too coddled by safety nets in our society.

“There are some people out there that need this, and therefore I don’t want to totally end it,” Everett said. “There are people who are using it properly.”

- By Jim Galloway, Political Insider

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