FCC chief: Reagan could be proud of 'Obamaphone' program

Acting Federal Communications Commission Chairwoman Mignon Clyburn forcefully defended her agency's phone subsidy program for the poor in a speech on Thursday.

Conservative critics have claimed the FCC's Lifeline program is a wasteful government handout and referred to it as the "Obamaphone" program.

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"Here’s the truth. The Lifeline program long predates the current administration," Clyburn said in the speech at the New America Foundation. "It was actually created during the Reagan administration, so let's give credit where credit is due. The Lifeline program is a legacy President Reagan could be proud of."

Congress first enacted the Lifeline program in 1985, and the FCC expanded the program to cover cellphone service in 2005 during the George W. Bush administration.

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 program is funded through fees that the telephone companies pass on to consumers on their monthly bills.

Sen. David Vitter (R-La.) and Rep. Tim Griffin (R-Ark.) have introduced bills to end the cellphone portion of the program.

“This phone program has expanded far beyond its original intent, and as so many middle class Americans struggle underneath this economy, it is really offensive for Washington to make taxpayers pay for free cell phones for others,” Vitter said in a statement when he introduced his legislation.

But Clyburn said the idea of restricting Lifeline to landline phone service is "one of the most illogical things" she's heard since her appointment.

"Even suggesting this is taking a major step backwards and ignores the critical telecommunications of needy Americans and is out of step with the communications evolution," she said. 

Clyburn acknowledged that the program had been subject to fraud and abuse, but she touted the commission's efforts at reform. 

Last year, the FCC toughened Lifeline's eligibility standards and created a database to ensure that multiple companies were not receiving subsidies to provide service to the same customer.

Those reforms trimmed $200 million from the program last year and are on track to save $2 billion by the end of 2014, according to Clyburn.