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The Hill - 'Obama Phone' Viral Video Puts Spotlight on FCC's Phone-access Program

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By Brendan Sasso

Conservatives have seized on a viral video of a woman saying she plans to vote for President Obama because he gave her a free phone, arguing it highlights a wasteful government handout.

The conservative Drudge Report displayed the video at the top of its website last week, and radio host Rush Limbaugh pointed to the video to argue that Obama is making people dependent on the government.

"So these are the people that don't like Romney because of what he said about the 47 percent? No, these are the 47 percent," Limbaugh said. "She knows how to get this free Obama phone. She knows everything about it. She may not know who George Washington is or Abraham Lincoln, but she knows how to get an Obama phone, and she knows that Romney sucks, and she ends up at a Romney rally."

Although there is no such thing as an "Obama phone," there is a federal program to help low-income people get access to phones.

The program, called Lifeline, is managed by the Federal Communications Commission and began long before President Obama took office.

Congress first enacted the Lifeline program in 1985, during the Reagan administration. In 2005, under President George W. Bush, the FCC expanded the program to cover low-cost cellular service.

The program pays for phone service, not the phones themselves. But many companies that receive funding through the program offer free and low-cost phones to their subscribers.

The discounts average $9.25 per month for qualifying households, and the program is funded through fees that the telephone companies pass on to consumers on their monthly bills.

The point of the program is to ensure that everyone has access to basic communications services, especially during emergencies.

"For more than 25 years, the Lifeline program has played a vital role in ensuring that the neediest among us stay connected to our communications networks," FCC Chairman Julius Genachowski said in a statement earlier this year.

But even the FCC acknowledges that the costs of the program have ballooned in recent years. By 2011, Lifeline was costing phone subscribers $1.75 billion per year.

Genachowski said the program "created perverse incentives for some carriers" and "invited fraud and abuse."

Rep. Tim Griffin (R-Ark.) has attacked Lifeline as a "government-run, taxpayer-funded program that's running wild and costing more and more." He authored a bill that would ban Lifeline from supporting cellphone service.

In January, the FCC overhauled the program in an attempt to bring down its cost.

The commission toughened eligibility standards and created a database to ensure that multiple companies were not receiving subsidies to provide service to the same customer.

The reforms are on track to bring down the cost of the program by $200 million this year and $2 billion over three years, according to the FCC.

"That is a lot of money in the pockets of American consumers who otherwise would have been contributing to a program that was wasting funds on duplicative benefits, subsidies for ineligible consumers, or fraudulent misuse of Lifeline funds," Genachowski said in a statement when the commission adopted the reforms.


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