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California Handing Out Free Cell Phones

Posted by Steve Markowitz on January 9, 2013

One of the many US federal government handout programs is “Lifeline Assistance”.  Through this program, the government offers cellular phones, landlines and Internet services to lower income individuals.  In 2012 the cost of this program exceeded $8 billion with the telephone giveaway portion being about $1.75 billion, double what it was only four years ago.  Nationwide, the program now offers assistance to 17 million households.

cell-phoneThe cell phone handouts are accomplished through private telecom companies.  They subsidize services for recipients deemed eligible by the government and are compensated via a surcharge the companies are allowed to add to the bills of paying customers.  This is yet another grotesque example of crony capitalism with one of the benefited providers being Tracfone owned by the Mexican telecom magnet Carlos Slim, one of the world’s wealthiest citizens.

California is the latest state to join the federal government’s cell phone handout program.  It is estimated that over 4.5 million of the state’s residents will be eligible for the cell phones.  This will eventually cost taxpayers over $450 million annually.

The cell phone handouts are troubling on many levels.  First, it is hard to understand by what authority the government takes funds from some Americans to pay for the convenience of others.  In addition, like many government initiatives, this program is right for abuses.  In fact a critic of the program, Missouri Democratic Senator Claire McCaskill, was outraged when she received a solicitation from a company indicating her eligibility for a free cell phone.  In addition, all that is required to be eligible for the program is proof of receipt of some other federal assistances.  Not required is proof of US citizenship.

Lifeline Assistance is an outgrowth of a program started by the Federal Communications Commission during the administration of Ronald Reagan.  Government handouts often start out with the best of intentions, but are corrupted as they are implemented and grow.  As we ask taxpaying Americans to pay their “fair share”, i.e. more taxes, it is reasonable to ask recipients of handouts to give up some of the free conveniences.


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