One of the major Lifeline Service providers indicated its plan to discontinue support to the federal Lifeline phone program, which provides subsidized phone service to low-income Americans. The carrier was supposedly having just a couple of hundreds of Lifeline subscribers. Have we grown out of our need for the Lifeline program? Is it no longer a necessity?
Recent times have seen lots of questions looming over the whole program. How do we, as a user, perceive the brouhaha around the Lifeline program? Let’s have an altogether different perspective of the situation.
Let’s be frank. We can’t close our eyes to the fact that the lifeline program helps millions of consumers afford one of the basic necessities of modern life – access to telecommunications. Lifeline is managed by the Universal Service Administration Company (USAC), a federally-chartered not-for-profit corporation that administers money for a variety of telecommunications subsidy programs.
Lifeline is funded by telecommunications companies that provide interstate services, including long-distance telephone companies, wireless carriers, and VoIP carriers. These companies are allowed to pass along the cost of this program to their end-users through a line item fee on customers’ bills (usually listed as “USF Fee”).
Lifeline program has grown considerably since the program was expanded to subsidize wireless phone service in addition to landline phone service. However, recent reforms have reduced spending by $178 million and the FCC estimates that these reforms will save $2 billion by the end of 2014.
Still reeling? Time to roll some facts here. According to a study by the New Millennium Research Council, almost 49% of Lifeline subscribers said the cell phone had “improved their financial situation by helping them find or keep work.” For those working or looking for work, the numbers were higher (63%); surprisingly, even the retired (39 %) and disabled (38 %) said the phone had helped improve their financial situation. Significantly more African Americans (57%) than white Americans (43%) said the phone had improved their financial situation. Do we still need more facts to know the importance of the Lifeline program?
The Lifeline program subsidizes telephone service, not the telephones themselves. Companies that offer “free” cell phones recoup the cost of the handset through profits generated by the subsidized cell phone service. According to the NMRC study, the LifeLine wireless subsidy generates a return $1.08 in economic activity for every dollar invested in the program.
Still feel that US as a country doesn’t need a Lifeline program?
Be a part of the revolution. Join the program and keep the line ringing!