Phone Subsides for Low Income A Fraud : Expanding A Voter Base

I have written my Senator and called my phone company and actually went to the head of office in my state to question what all of the fees and taxes are for on my phone bill. Not surprisingly of those that were willing to talked about them did reveal any coherent information as to their purpose.

Now it doesn't take much skill to understand when half of the page is taken up by double speak on these taxes, and fees on the bottom line are higher then the actual phone plan, the federal government has to have their hand in this pulling the strings to make us jump to their tune.

When the subside goes up from $819 million in '08 to 2.2 Billion in 2012 there has to be a reason. It's called subsidizing the voter base at the direct expense of the rate payers. How does it feel to know you are paying, subsidizing, a group of voters that vote for more subsides and that are growing every day by the thousands, that are intent on just living the good life while you pick up the tab.

I still don't have any definitive answers from the state, the phone company or my Senator as what all of these charges are for. Is it that no one knows or no one what's to take action, it's just all to complicated and steeped in political butt covering? Believe, this is not going away, and if we don't vote out the progressive Democrats, will only get worse.

Reforming Low-Income Phone Subsidies
Source: Jerry Ellig, "Reforming the FCC's Low-Income Phone Subsidies," Mercatus Center, October 2013.
November 7, 2013

The Federal Communications Commission (FCC) subsidizes phone service for low-income households, funded by the universal service charge assessed on all consumers' phone bills. The cost of this program ballooned from $819 million in 2008 to $2.19 billion in 2012, says Jerry Ellig, a senior research fellow at the Mercatus Center at George Mason University.

• Historically, the FCC's Universal Service Fund has paid for two programs that subsidize telephone service for low-income households.
• Lifeline, the larger program, pays phone companies to reduce monthly subscription fees for low-income households by an average of $9.25 per month.
• Link Up subsidizes one-time connection charges by up to $30. In 2012, the FCC voted to phase out Link Up.

General federal tax revenues do not fund these subsidies. Instead, the FCC assesses a "contribution factor" on phone companies' interstate and international revenues. Though not called a tax, the contribution factor acts like a percentage tax on wired and wireless phone companies' revenues.

Prior to 2013, some households received more than one subsidized telephone line, signed up for Lifeline even though they were not eligible, or remained in Lifeline even though they were no longer eligible.

• FCC audits revealed 1.5 million duplicate subscriptions costing $180 million annually.
• Carriers sometimes received subsidy payments for subscribers who did not actually use the service.
• In 2012, the FCC terminated $30 million worth of subsidies for more than 275,000 Lifeline subscribers who were not using their phones.

Wireless carriers specializing in Lifeline service have dramatically reduced the cost of providing basic phone service. This means it should be possible to serve the same number of subscribers at lower cost, or a larger number of subscribers at the same cost.

Controlling costs while continuing to serve low-income households will likely require some combination of a reduction in the per-line subsidy, a program participation fee for all households and a cap on the program's budget.
Source: Jerry Ellig, "Reforming the FCC's Low-Income Phone Subsidies," Mercatus Center, October 2013.