Universal Charge = Free Cell phones for welfare?

Ever wonder what the Universal Service Charge on your cell phone is used for?  This is an interesting tidbit on how much money is brought in on this program.

The program, which is paid for through a tax on all home phones and cell phones known as the Universal Service Charge, is expected to exceed $1 billion this year, according to Erik Iversen, spokesman for the Universal Service Fund, the quasi-governmental agency set up to administer the program.

That’s up almost 20 percent over last year. And in some markets, the number receiving this benefit is exploding, up 600 percent in New Hampshire and up 900 percent in New Jersey in just two months, according to government figures.

The reason for the uptick this past year is mainly because of Trac-Phone.

Growth was slow until TracFone, a company out of Miami, figured out a way to use the $120-a-year government subsidy to provide a free phone and 60 minutes of free monthly service. Heavily promoted on television, the SafeLink program is a hit with eligible Americans.

Ah, now you want to know, what constitutes who is an eligible American?

Qualification for the subsidy is dependent on income. However, if a person is already enrolled in any of the popular federal welfare programs such as Medicaid, food stamps, low income housing, or the free school lunch, they are automatically eligible for a free cell phone. The cell phones are invaluable to many people trying to get contract or short-term work who do not have a phone number in their homes.

So there must be some kind of agency keeping tabs on ensuring that there is a limitation to fraud.

What concerns critics most is fraud. The program is supposed to be “self-verifying” — that is, as long as a person claims they qualify for the subsidy, no government agency is auditing or enforcing the subscriber rolls.

“We are focused on the carrier and making sure the carriers are submitting the proper information to us,” says Laura Bettencourt, an administrator of the Universal Service Fund. “We are not focused on the subscriber.”

Ah, I get it.  Because it is not your money, and you are not really responsible for it, then you are just moving things around to help everyone get something for free who says they need it.

Glad to see where the fees are going.  Oh, and by the way, this will only get worse as we continue to have kids addicted to having such services as well.