Consumer groups want stricter rules for ‘Obama phone’ program

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“This commonsense reform would be a significant step to quieting the concerns about this vitally important program,” said Don Mathis, the president and chief executive of the Community Action Partnership.


The Lifeline program provides subsidized phone service to Americans with low incomes.

It has been dubbed the “Obama phone” program, but actually began back in 1985 and was expanded to include cellphone service under former President George W. Bush.

It is funded by fees that phone companies pass on to consumers, usually totaling a few dimes per customer. Participants receive an average of about $9.25 each month in discounted service, according to the FCC.

Lifeline gained notoriety among conservative activists and pundits after reports emerged of ineligible applicants receiving multiple phones.

But the consumer groups said on Tuesday that the problem isn’t the program, just “a few bad apples” that take advantage of it by aggressively marketing phones to people who don’t qualify.

Making applicants to the program wait to receive their phones, they say, would eliminate many of the companies’ incentives to sign up people who don’t qualify.

“Low-income consumers aren’t the problem,” said John Breyault, a vice president at the National Consumers League. “The problem is overly-aggressive marketing by a handful of companies. A ban on same-day distribution would both prevent and detect abuses while ensuring that wireless Lifeline supported service remains available for those who qualify.”

Last month, the FCC warned phone companies that they needed to check applicants’ eligibility before signing them up.