AUSTELL, Ga. — From her trailer with a rusting roof on Lot 54, Donna James uses the free Samsung cellphone provided by a federal program to speak with friends who give her rides, clerks at medical offices, a caseworker, emergency dispatchers and, of course, bill collectors.
“If it weren’t for my free phone, there were a few times I wouldn’t have made it to the hospital,” said Ms. James, who is unemployed because of chronic health problems and has no other telephone or Internet connection in her home. She is among the 15.3 million people in the United States who receive the Lifeline telephone service because they meet income guidelines or are enrolled in programs like Medicaid or food stamps.
But the fundamental feature of the program on which Ms. James relies — 250 minutes of free wireless service a month — is at the center of a legal battle linked to a new tactic to reduce fraud in the program. The outcome could have far-reaching consequences for the telecommunications industry and for millions of impoverished Americans.
Alarmed by accounts of households that have more than one subsidized phone — a breach of federal guidelines — and other allegations of fraud, the Georgia Public Service Commission voted this year to make this state the first to require phone companies to collect a fee of at least $5 a month from Lifeline users.
As an alternative, in an effort to force the service providers to better police phone usage, the commission also said that the companies could, for the same compensation they already receive from the government, offer participants 500 minutes a month. But the companies denounced that option.
Georgia regulators made their move about three years after the Government Accountability Office reported that officials from 21 states “indicated that they were somewhat or very concerned about consumer fraud in the Lifeline program.”
Georgia’s mandate, which had been scheduled to take effect in January before a judge in Atlanta granted an injunction last week, prompted outrage from some advocates for the poor, and a legal challenge from a trade group that represents cellphone companies. The group argued that Georgia was circumventing federal law to set rates.
But the author of the regulation has argued that the fee’s benefits outweigh the risks, and that it would do much to reduce Georgia’s share of fraud in the Lifeline program, which began in 1985 and was expanded to include wireless coverage two decades later.
“There’s always going to be collateral damage when you’re having a war, and we’re having a war with fraud and abuse,” Commissioner H. Doug Everett told WABE Radio in October.
via In Battle Against Fraud in Free Phone Service, the Poor Might Pay the Price – NYTimes.com.
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