The word on the street is you can get a free cell phone – and free minutes – from the government these days. These free phones became a national topic thanks the popularity of a YouTube video of a Cleveland resident shouting about her “Obama phones”. As you can imagine, this subject brings with it political controversy and mass confusion. Who exactly is giving out these free phones? Who is paying for them? What’s Obama got to do with it?
Contrary to popular belief – and yes, even this article title – the government is not giving out free cell phones. The term we’re looking for is not free but subsidized. A government subsidy is a grant paid by the government to an enterprise that benefits the public. The government does this with all sorts of enterprises, from agriculture to sustainable energy. The enterprise we’re talking about when we talk about “Obama phones” is the Universal Service Fund. And one of the Fund’s many projects is making telephone communication universally available to all Americans.
They call the service LifeLine and it is provided in every state. Services are provided by the largest telecom companies. In fact, the government requires most telecoms to pay into the Universal Service Fund whether they provide the LifeLine service or not. Carriers frequently pass this responsibility on to customers as a monthly surcharge. If you have a phone plan you can easily find the few dollars a month that are being charged to your bill for the Universal Service Fund.
The fee added to the phone bills seems like a tax to a lot of Americans. Many around the nation are furious about this program, citing government largesse and spinning the connotation of the nickname “Obama phones” to front an attack on the President’s welfare policies. However, this program started way back in 1985 under the Reagan administration as part of a universal access initiative, ensuring every individual could connect with jobs, family and the 911 services. Originally the program provided subsidized landline phone service for low-income individuals. The program introduced cell phone service as the public began to drop their landlines in favor of mobile devices.
But what about eligibility? Are you qualified to receive your very own “Obama phone”?
Eligibility varies from state to state, but generally if you earn less than $14,000 a year you can get a phone subsidy. If you have an income that is at or below 135% of the federal poverty guidelines or if you are eligible for other forms of government assistance like Medicaid or food stamps, you qualify to receive up to $10 per month in phone subsidies. People living on tribal lands may qualify for additional discounts and assistance. The free cell phone minutes again vary from state to state. For example, residents of the District of Columbia are given 55 minutes while those in Louisiana receive 250 minutes.
Now, if you’re eligible to get a government phone, you’re not alone. Currently there are over 28 million adults eligible for these phone subsidies. I agree, that number is ridiculously high. There are 17 million households signed up for the program where four years ago there were only 7 million. This mass increase is largely because of the recession, which increased the number of eligible people.
But there may be another reason for the huge increase in households signing up for the program: Tracfone Wireless. Tracfone appears to be cornering the market in subsidized phone service. Owned by Carlos Slim (the richest man in the world), Tracfone Wireless specializes in providing service for LifeLine customers. Through impeccable advertising Tracfone has skyrocketed above its competitors. The advertisements for Tracfone’s “free phones” attracted millions of people. Tracfone now has over 4 million subscribers in its LifeLine program, called SafeLink, and collected $452 million last year from the program’s subsidies. That’s far more than any provider (the runners-up, AT&T and Spring, each collected around $274 million).
So now that you know the basics I’m sure you’re dying to know how to apply for these “free” phones. If you want to receive a cell phone through Tracfone Wireless, go to the SafeLink website and first determine if the program is offered in your state. If the program is available in your state and you think you qualify, click the “Apply” button. Fill out the application on the following page. You will be asked for your name, a valid mailing address, any phone number you may already have, your birth date, and the last four numbers of your Social Security number. Once you complete the application, you will print off the signature page and sign and mail or fax it to the address indicated. If your state allows you to qualify based on income instead of participation in a government assistance program, you will be required to provide either copies of four months of pay stubs, a letter from your employer, the previous year’s tax return, or your employer W-2 form. You can also call SafeLink to request a hard copy of the application if you do not have internet access.
So I guess the final question is, are you the next lucky owner of an “Obama phone”?