'Obamaphone' Backers Want to Prevent $5 Charge in Georgia

The low-dollar charge is 'attacking the pocketbooks of low-income Americans,' groups say.

A supporter takes a photograph of President Barack Obama using an iPhone with an image of the president at a campaign rally at the Kissimmee Civic Center Sept. 8, 2012, in Kissimmee, Fla.
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Nearly 800,000 Georgia residents who receive taxpayer-funded cellphone service from the federal Lifeline program may have to pay $5 a month after Jan. 31, angering some advocacy groups clamoring for continued free service.

The new Georgia policy forces companies to either increase the free airtime they provide to 500 hours a month or charge subscribers the fee. It's intended to crack down on fraud, but hasn't been greeted with universal acclaim.

"This represents one of the most direct attacks on low-income consumers in recent memory," said a statement released Thursday by Consumer Action, the League of United Latin American Citizens, the Community Action Partnership, the National Consumers League and the National Grange.

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The groups want Georgia officials to rescind the fee and to discourage other states from imposing similar measures.

"There is no evidence of any kind that suggests imposing a monthly fee on wireless Lifeline users will result in reduced fraud or less abuse of the program," they said. "[N]o other state should follow Georgia in attacking the pocketbooks of low-income Americans in this misguided fashion."

Georgia is the first and - for now - only state to authorize a fee for Lifeline service. The five-member Georgia Public Service Commission voted 3-2 on Oct. 15 to adopt the measure.

Commission spokesman Bill Edge notes, however, that contrary to some reporting the reform doesn't require companies to charge subscribers, so long as they boost the free airtime they provide.

The policy is on-track to take effect next month, Edge said, despite a pending legal challenge from the telecom industry group CTIA.

Brian Fung of The Washington Post reported Oct. 17 that the new charge won't cover the cost of sending paper bills.

The free phone service program is available nationwide to Americans who earn wages up to 135 percent of the federal poverty line. The service is funded by paying phone customers as part of their monthly bills.

The Lifeline program began in 1984 and free cellphone service was first offered in 2008. The program's popularity soared and it currently boasts more than 13 million subscribers.

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Although the program is paid for by the government, it's administered by private companies. Some of these companies aggressively court new customers. Jillian Kay Melchior of the National Journal reported in August she was able to acquire three free-service phones in New York City.

The program received national attention in 2012 when a viral video showed a woman campaigning for President Barack Obama in Cleveland, Ohio, who excitedly talked about free "Obamaphones."

The Federal Communications Commission, which oversees Lifeline disbursements, is cracking down on companies for allegedly abusing the program. The FCC announced Wednesday it will fine three companies a total of $44 million for providing more than one phone for some subscribers. The opponents of state-level regulation say the FCC is the proper regulatory authority.

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