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Is the Official Unemployment Rate Really Accurate?

One of the prime target groups of the Lifeline Assistance free government cell phone program is America’s unemployed. In an era when a lot of people question whether we really need Lifeline Assistance, it can pay off to take some time to actually look at the statistics. As of April 2014, the official unemployment rate reported by the Labor Department is 6.3%, representing millions of Americans. Being as the unemployment rate in 2009 peaked at 10%, this would seem like a hopeful sign of economic recovery. But is the unemployment rate really accurate, or are things worse than they appear?

During the 2012 re-election campaign for President Obama, some far-right conspiracy theorists indicated that the unemployment rates were being deliberated suppressed to try and bolster the president’s reelection campaign (roughly the same cross-section of people who refer to Lifeline Assistance as “Obama phone”). Ignoring conspiracy theories entirely, it still seems entirely likely that the unemployment rate is actually much higher than the reported rate.

In an academic paper The Evolution of Rotation Group Bias: Will the Real Unemployment Rate Please Stand Up?, authors Krueger, Mas and Niu describe how growing problems with non-response may be decreasing the accuracy of the unemployment rate. Nor is this a trend that has just started; according to the paper, it may have been going on for a couple of decades now.

There are a number of reasons why Americans are ignoring unemployment surveys or even representing themselves improperly. Firstly, overall trust in the government is not exactly at an all-time high. Secondly, the official definition of unemployment is rather specific. The government defines unemployed as, “people who are jobless, actively seeking work, and available to take a job.” People who do not fall within that definition are simply considered “out of the labor force.”

Think how many exceptions there could be to that rule that still count in a broad way as “unemployed.” Consider for example somebody who is actually self-employed, and is struggling with demand problems in their marketplace. That person cannot qualify for unemployment insurance, whether or not they are actively seeking a “job” for somebody else. They may not be actively working, but they may be trying very hard to pull things together again. These people are not included in the statistics.

Also imagine someone who has been unemployed for a very long time, and may have applied to hundreds of jobs to no avail. At this point, sensing resignation, they might give up entirely, being as they are already falling between the cracks. They might move back in with family or friends, relying on charity to survive. Or they might do something else, like work on starting their own business. People in any of these situations would not respond as “unemployed” in the surveys. Or what about someone who does want a job, but is struggling to find any they can apply for because they are disabled and need something highly specific?

On top of this, there are issues that go beyond unemployment, like low wages. Are more Americans finding jobs? Yes, but are they jobs that pay them what they need to survive? No. The majority of these new jobs are minimum wage, and the minimum wage is less than the living wage in most locations across the country. Poverty goes far beyond unemployment, and even above the poverty rate it can be very hard to make ends meet.

These problems draw attention to the real economic weakness that continues to permeate the country, despite improving statistics. Statistics don’t tell the whole story, and programs like Lifeline Assistance which connect the unemployed—all the unemployed, not just those who respond to the survey—to key resources are more important than ever.

There is a reason that Lifeline Assistance eligibility isn’t contingent on just one factor, like filing for unemployment insurance. Even Americans who are not “unemployed” can get Lifeline Assistance if they are participating in another more inclusive government aid program, or if they are living at or below 135% of the poverty threshold. Life for the unemployed is hard—it is even harder for people who cannot qualify as “unemployed” but who are without work or a steady stream of income. And for minimum wage workers, life is an ongoing battle, even with a full time job. Those people need help too, and Lifeline is there for them.

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Assurance Wireless Improves Plans in Arizona and West Virginia

Recently we reported on the exciting new FREEdom Plan that Assurance Wireless is offering in the state of California for unlimited free voice minutes and texts. That isn’t the only state where Assurance is revitalizing its plans; the company is also making improvements to its popular Lifeline plans in Arizona and West Virginia. Now customers in those states will be able to enjoy additional voice minutes and texts as well.

Assurance Wireless got started in the state of Arizona last year. Their original plan provided a free cell phone to customers with 250 free voice minutes per month. Customers who sign up through the 31st of December this year have the opportunity to enjoy 250 free additional voice minutes per month for the first four months as an enrollment promotion. After the fourth month, this will drop back down to 250 free monthly minutes.

Customers will however start receiving unlimited text messages through Free Talk & Unlimited Text, and this will not expire with the voice minute promotion. At the end of the first four months, customers can continue to send and receive unlimited text messages. Assurance customers in Arizona who are already subscribed will be moved over to the unlimited talk plan automatically on a rolling basis, and will be able to enjoy these new benefits as well.

Assurance has been operating in West Virginia for much longer—their presence in the state dates back to 2010. The West Virginia plan, like the Arizona plan, traditionally included 250 free voice minutes and texts, and is now also being upgraded to Free Talk & Unlimited Text status.

As in Arizona, new sign-ups have the chance to receive 500 free voice minutes per month for the first four months, after which voice minutes will drop back down to 250. The plan now comes with unlimited texting, and old customers will be migrated to the new unlimited text plan on an ongoing basis.

Assurance Wireless provides service to Americans in need in more than 40 states. In West Virginia, there are more than 51,000 jobless residents. In all, more than 26.5% of West Virginia residents are living below the federal poverty line. In Arizona, the percentage below the poverty line is 26%, but the jobless number is much higher—206,000.

Do you live in a state served by Assurance Wireless? Assurance has plans for residents in Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Utah, Virginia, Washington, West Virginia, and Wisconsin. You can also get Assurance in the District of Columbia.

With Assurance expanding their coverage and boosting their plans throughout the country, you may be able to get an amazing plan in your state. So if you haven’t yet applied for a Lifeline Assistance phone, check out Assurance’s website and the eligibility guidelines to see if you might qualify.

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Who Needs Lifeline Assistance?

This year has seen several high profile cases involving Lifeline Assistance fraud. Lifeline Assistance, the free government cell phone program, provides a free landline or cell phone to Americans in need. It tends to take a lot of heat when companies like Icon Telecom are discovered stealing millions of dollars in government funds. Somehow a lot of the anger gets directed not at the companies that are responsible for the biggest fraud schemes, but toward individuals who inappropriately receive Lifeline Assistance—never mind that many of the fraudulent reimbursements claimed by companies do not even involve real customers.

In the ongoing crossfire over the usefulness of the program, I think that the reality of Lifeline Assistance often falls by the wayside. Politicians keen on dismantling the program paint the average Lifeline customer as someone who is doing just fine on their own and does not really need a Lifeline phone. Considering that Lifeline entitles qualifying customers to $9.25 in discounted phone service, if someone went out of their way to steal $9.25 in telephone services each month, that would be petty theft (faking an application seems like quite a lot of work for petty theft). Stealing millions of dollars of course is anything but petty theft—but again, those stealing the millions are companies, not customers.

So who does need Lifeline Assistance? What does a typical honest Lifeline customer look like?

  • Seniors who are barely getting by on their SSI income
  • Veterans struggling to make a living on SSI benefits
  • Out-of-work, struggling, hard-working Americans of all ages
  • Disabled Americans at all ages who cannot earn money

Sometimes it is easier to get a clear understanding of the importance of a program through examples. Take a look at the following hypothetical examples. These imaginary Lifeline customers represent very real demographics that benefit from Lifeline Assistance:

Kathy and Ted are two seniors ages 64 and 71 living on social security. Between them, their SSI payments cover around $1,500 of their living expenses each month. They have only $12,000 in savings, and neither of them is able to work because of health conditions and low demand for senior workers. They barely are able to pay their mortgage and eat, much less afford anything beyond their basic living expenses, and there is no hope in sight for a new line of income. But thanks to Lifeline Assistance, Kathy and Ted don’t have to worry about paying a cell phone bill. They get to keep in touch with friends and family.

Seniors account for a huge percentage of Lifeline Assistance subscribers. In an economy where it is tough for even the most qualified young worker to get a job, it is almost impossible for most seniors to find gainful employment. Here’s another example of a typical Lifeline customer:

Jeff is a 66-year-old veteran who has worked hard all his life. He recently has had to retire from his job of twenty years because of disabling health problems connected to old injuries he received when he was on active duty overseas. Even though he has social security benefits, he has a hard time paying his basic monthly bills. Because of his disabling injuries, he can no longer work, even if he could find a job. But with a Lifeline Assistance phone, he does not have to worry about staying in touch with his family. He also is able to keep in touch with veteran services that can help him survive.

Disability is a problem that affects many Americans, not just senior citizens and veterans. Many people with disability cannot work, but receive scarcely any income through disability payments.

Jean is just thirty-two years old, but she has crippling arthritis along with a slew of other health problems that have left her unable to work. Her situation is bad enough that she receives disability benefits through the government, but they only total out to $600 a month. Her partner works for minimum wage, and between them, they are still living below 135% of the federal poverty level. Each month they worry they will default on their mortgage. But a Lifeline Assistance cell phone takes at least one financial burden off their hands, and helps them communicate with the bank, lenders, and social workers who help them.

Unemployment is still crippling our economy as well. The nationwide unemployment rate as of April 2014 is 6.3%, representing millions of Americans. In many states it is even higher than that. Even among the employed, poverty is common, with the minimum wage even in higher-earning states being barely sufficient to pay the cost of living. Here are a couple more examples of people who benefit from Lifeline.

Ron is a highly qualified engineer who graduated three years ago with a four-year degree. He was at the top of his class, and graduated in hopes of working on cutting-edge hardware applications. Since graduating, he has been unable to find a job, despite applying to hundreds of positions around the country. The demand in his field has simply dropped far too low, and every year that the gap in his resume widens, the harder it is to be taken seriously. Ron’s Lifeline Assistance phone helps him to stay in contact with the food stamp office and the unemployment office, as well as potential employers and his temp agency.

Ron has been unemployed for a long time, despite being a hard-working, qualified American with a degree in a challenging technical field. Some people believe that those who are unemployed are only unemployed because they have no skills or ambition or because they are lazy, but that is simply not true. And even those who settle for lesser jobs cannot necessarily afford to pay their bills.

Heather graduated with a four-year degree but has been unable to find a job in her field, and has had to settle for working at a fast food chain restaurant for her state’s minimum wage of $7.25 an hour. She works full time and only manages to make $1,160 per month—before taxes. Even with a second job, she would probably barely be able to pay rent. She could go homeless any day despite being a hard worker. At least she doesn’t have to worry about losing her link with the outside world, thanks to Lifeline. She can continue searching for a better job and staying in touch with government benefit offices. Despite her full-time job, Heather’s extremely low income qualifies her for more than one government aid program.

This last example should pull into harsh perspective the economic situation in our country. Even full-time employees working whatever jobs they can find are so impoverished that they need food stamps to eat and Medicaid to pay their health bills. These programs are far more expensive than Lifeline Assistance, and yet politicians continue to debate the merit of the Lifeline program. Lifeline allows Americans who are falling through the cracks to literally have a lifeline to the outside world—to the government services they need to survive, and in some cases, potential employers who could give them a means to support themselves at a real living wage.

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Check Out Budget Mobile Lifeline’s Awesome New Plan for Californians

California residents rejoice! Earlier this year we posted a news topic about Lifeline Assistance in California. Despite being a state that was once known for the quality of its benefits, California lagged a bit behind when it came to free government cell phones. Many parts of the state still do not have coverage, but there are now more carriers of Lifeline Assistance serving California than ever before. The state decided to offer incentives to companies to offer more competitive Lifeline packages to Californians. Now Budget Mobile Lifeline has announced its incredible new plan for California residents.

Budget Wireless’ California Plan

With a Budget Mobile California Connect LifeLine Plan, you can get 1000 voice minutes and unlimited text messages absolutely free. Yes, free. No, you do not need to be a member of a Native American tribe to qualify for this awesome plan. No, this is not a one-off promotion for new customers. This is an ongoing plan available to all California residents who qualify for Lifeline Assistance and live in the Budget Mobile service areas.

How awesome is this plan compared to other Lifeline plans? Consider the typical Lifeline Assistance free government phone plan you can get in most states—just 250 free voice minutes and 250 text messages. This is the plan which Budget Mobile offers to residents outside of California. Anywhere outside of the state, 1000 minutes plus unlimited text messages costs $20.

Budget Mobile Top-Up Plans

What if you want more than 1000 voice minutes and you’re living in California? Budget is offering you amazing top-up plans. If you want unlimited voice minutes each month and unlimited text messages, you can pay $17.60 per month. That is less than you would pay for 1000 voice minutes outside of California! For $27.60 per month, you can upgrade to unlimited voice calling plus unlimited text messages plus 3000 MB of data.

Why is Budget Mobile able to offer so much more in California? In most states, Lifeline Assistance free and discounted cell phone plans are paid for out of the Universal Service Fund, which provides $9.25 in reimbursements to carriers. As a result, they can only offer so many free minutes before they end up losing money themselves. The USF provides more reimbursements for tribal members, which is why there are usually better plans available for Native Americans on tribal grounds.

In California, there is more money available to carriers to provide better service, because the state is adding funds to the reimbursements. The amount of money they provide along with the $9.25 from the USF for non-tribal residents of California is comparable to the amount the USF offers for tribal members outside the state. That is why the plans in California are going to be so much better. For tribal members, even more amazing plans will be available.

It will take some time for other carriers to start cropping up in the state and offering these great plans. In the meantime, Budget Mobile’s California plans are available. So if you are currently receiving service through another provider and still putting up with just 250 minutes per month, look into switching to Budget. If you do not currently receive Lifeline, download the application from the Budget Mobile website and see whether you might qualify. Good luck, and enjoy using 1000 free voice minutes per month without paying a dime!

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Assurance Wireless Offers Free Bonus Minutes to New Customers

Looking for an awesome Lifeline Assistance package? Assurance Wireless is one of the “big three” free government cell phone providers, with a presence throughout the country. Their typical plan is 250 free voice minutes and unlimited texts. Right now though they are offering a promotion to new customers for 500 free minutes. This is an exciting special, and will certainly bring a lot of new customers onboard.

How does Lifeline Assistance with Assurance Wireless work? The basic plan is 250 free voice minutes and unlimited texts, as mentioned above. This plan is 100% free. If you need more minutes, you can purchase them. For $5 a month, you can boost your voice minutes to 500. For $30 you can enjoy unlimited talk, text and data. Alternately, you can get a Virgin Mobile Top-Up card and tack on more voice minutes or data as you need to, without paying a monthly rate for service. You can also add on 411 service and international calling.

Assurance Wireless Promotion

Right now with Assurance Wireless’ promotion for new customers, you can get 250 extra voice minutes per month for free. You do not need to be new to Lifeline, simply new to Assurance. You can even switch over from an existing Lifeline carrier. When you apply for Assurance Wireless, you forfeit the discount you receive through your current provider (if you have been receiving Lifeline benefits for more than 60 days you will need to take the extra step of de-enrolling with your current carrier). Once your application is processed, you will be switched over to Assurance to receive your Lifeline benefits.

If you are brand new to Lifeline and have never had a free government cell phone, the process is the same. Just download the application, fill it out, and send it in. To be approved, you must be living at or below 135% of the federal poverty level or receiving government aid through an eligible state or federal program. The turnaround time for applications is pretty fast; you may be talking on your new free cell phone inside of a week.

As a new customer with Assurance Wireless, you will be sent a free phone in the mail, and will then receive 500 free voice minutes and unlimited free texts for the first four months of service. Once the promotion expires at the end of the four months, you will continue to receive 250 free voice minutes and unlimited texts each month (the basic free plan). If you find yourself missing those 500 voice minutes per month, you can boost your plan back up to the same capacity you enjoyed for free for just $5 a month.

Assurance Wireless operates in most states in America. You can get service in AL, AZ, AR, CA (new!), CO, CT, DE, FL, GA, ID, IN, IA, KS, KY, LA, MN, MD, MA, MI, MN, MS, MO, NV, NH, NJ, NM, NY, NC, OH, OR, PN, RI, SC, TN, TX, UT, VA, WA, WV, and WI, as well as the District of Columbia. Visit the Assurance Wireless website for more information on this Lifeline Assistance carrier or to apply for service. Enjoy the outstanding promotion for 500 free voice minutes per month!

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Choosing a Free Government Cell Phone? Read This First!

A few years ago, consumers didn’t have that many options for free government cell phones. In fact, in some states, there were no options at all. In others, there was a handful at best. Now, though, many states have several providers, and some, such as Arkansas, Arizona, Oklahoma, and Kentucky, have more than a dozen different companies to choose from. The biggest providers are ReachOut, Assurance, and Safelink, but there are now many other providers to choose from such as:

Some providers service states all across the country. Others may be focused on just one region, or even a single state. Generally speaking, the more impoverished your state is, the more likely you are to find a lot of different options. You may be tempted to just go with the first one you see, but it is wise to do some research and take advantage of your options to choose a provider and plan which is right for you.

Another issue is trust. It isn’t just the quality of plans which can vary, but also the quality of providers. In recent years, a number of cases of fraud have come to light. The FCC is cracking down on fraudulent providers, but they can inconvenience customers. Most recently, an Oklahoma Lifeline Assistance company called Icon was convicted of stealing close to $25 million from the Universal Service Fund which reimburses free government cell phone providers. Icon of course will no longer be providing customers with free government cell phone service.

4 Steps to Picking the Right Provider

How can you avoid dealing with a scammy company that is not going to respect you? How do you find a plan which will actually fulfill your needs? Here are 4 steps to choosing the perfect free government cell phone provider.

1. First, determine what your needs are.

Only one free government cell phone is allowed for every household. How many people are in your household, and how many minutes is each of them likely to need each month? Do people in your family prefer to chat using voice or text? Who will you be communicating with, and what kind of long distance needs do you have? Do you need to be able to place international calls to Mexico and other countries, or will domestic minutes be enough? Are you looking for a plan which is 100% free, or are you willing to

pay a little extra to enjoy more voice time or texts? Once you know what your needs are, you can go on to choosing a plan.

2. Compare plans from different providers.

Once you have figured out roughly how many minutes a month you are likely to use, and whether you need more voice minutes or texts, you can cross-compare plans offered by providers you are interested in. While many Lifeline plans are comparable across providers, you may discover that some plans are significantly better than others. Most companies offer only around 250 free minutes, but you may live in a state where 1000 minute plans are available for free. Also make sure you check out Tribal plans if you live on Tribal lands. Tribal plans are typically far superior to ordinary plans!

3. Look up a company’s reputation.

You do not want to deal with a company that already has a shady history. While many fraudulent Lifeline providers such as Icon are pulled off the market, many others are still operating. Some of these companies may have made mistakes and may be making an effort to correct them, but others may be up to no good. Try to choose a provider with a clean record, or a record of improvement. Doing so protects the reputation of the Lifeline Assistance program as a whole, and also protects you. Also make sure the company you are dealing with really is an authorized Lifeline provider! There are companies out there offering “free cell phones for seniors” that are nothing more than scams trying to confuse seniors who are searching for Lifeline.

4. Call up customer service.

This is a smart move to make any time you are going to be dealing with a company on an ongoing basis. Actually take a few minutes to call up a customer service agent and ask them for more information about their plans, billing procedures (where applicable—you may be interested in a subsidized paid plan), and so forth. Try to choose a company with a patient, thorough, knowledgeable and transparent customer service team. That way you will not run into hassles in the future with re-certification or service changes.

The Lifeline Assistance program is rapidly expanding, with service available in many more states and outlying rural areas than ever before. Plans are increasingly competitive, and companies are striving to offer superior service. Taking a few extra minutes to research your options can save you time, hassle and money, and give you access to more free cell phone time and texts!

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Lifeline Assistance: Wasteful or Necessary?

The news headlines this year have been somewhat quieter where the government’s Lifeline Assistance program is concerned. Last year, numerous cases of Lifeline fraud surfaced, and a lot of criticism was leveled at the program by state officials and lobbyists, some of whom even tried to impose additional fees for Lifeline services. While there have not been as many of these stories this year, a cursory search for Lifeline news still turns up plenty of blogs and opinion pieces online. Many of these opinion pieces are ill-informed, and paint an inaccurate picture of Lifeline Assistance. Is Lifeline Assistance a wasteful, fraud-ridden program that needs to go? Or is it a necessary program providing vital services to deserving Americans?

The Roots of Lifeline Assistance

Let’s talk about one of the most rampant myths concerning Lifeline Assistance. In many conservative news rags, you will hear Lifeline phones referred to as “Obama Phones.” This is a misconception, as the Lifeline program actually got its start clear back in the Reagan era—earlier, if you want to count the Postal Act of 1792, which first laid the groundwork for universal communications services. Lifeline Assistance itself came into being in 1985, and was actually created in response to a push from a bipartisan group of senators and congressmen.

So it is a myth (or an outright lie) that Lifeline Assistance is a liberal program created to further the liberal agenda. Lifeline actually came into existence under one of the most conservative presidents this country has ever known, and it was seen as necessary by government officials on both ends of the political spectrum.

In 1996, Congress created the Universal Service Fund (USF) so that consumers “in all regions of the Nation, including low-income consumers and those in rural, insular, and high cost areas, should have access to telecommunications and information service.” Under the Bush administration (again one of the most conservative administrations this country has seen), the program was again expanded. So no, “Obamaphone” does not make any sense as a moniker. Conservative pundits and journalists who refer to Lifeline Assistance as “Obama Phone” are either completely ignorant of the program’s history or are deliberating misleading readers and listeners.

Who Uses Lifeline Assistance?

Next you may be wondering who actually uses this program to stay connected. According to one Lifeline provider’s data, the average household with a Lifeline phone has less than $15,000 in annual income. That isn’t enough to support one person, much less a family. Around a third are age 55 or higher (in other words, a large number of Lifeline customers are seniors), and over a third are disabled. The fact is, the vast majority of Lifeline subscribers are customers who are going through extremely difficult times, and who are grateful to have a phone they can use to reach friends and family, emergency services, job lines, and social workers.

Who Commits Lifeline Assistance Fraud?

Many of the opinion pieces you read would have you believe that huge swaths of Lifeline subscribers do not qualify for a free or subsidized cell phone. This is simply not the case though. There is a great deal of fraud associated with Lifeline—that much is true. But it is not coming from individuals. The vast majority of it is coming from companies that contract with the government to provide Lifeline Assistance, called eligible telecommunications carriers (ETCs).

There are plenty of legitimate ETCs out there that provide services fairly, and claim only the reimbursements they truly qualify for from the Universal Service Fund. They follow the rules and do everything they can to remain compliant. But there are fraudulent companies that rip off the government (and the rest of the US population, by extension) by claiming reimbursements for fake subscribers or subscribers who do not really qualify for Lifeline. These companies are responsible for the majority of the abuses in the Lifeline program, not needy individuals who can barely scrape by and simply want to remain in touch with vital services, friends, and family members.

What Have We Learned?

  • “Obama Phone” is a misnomer. The Lifeline Assistance program has its roots in the Reagan administration, and was originally instituted as a bipartisan program supported by both liberals and conservatives.
  • The majority of Lifeline customers are seniors, disabled persons, veterans, and other struggling low- or no-income Americans who are trying desperately to get back on their feet.
  • Lifeline Assistance is marked by unbridled abuse, but that abuse comes largely from companies, not from individuals. The FCC, IRS, and FBI are making an effort to crack down on the abusers.

The Lifeline program is necessary. In 1985, both Republicans and Democrats were able to see that. They worked hand in hand to make sure that everybody in the United States would be able to access vital communications services. A favorite sentiment of conservatives is that everyone should learn to “pull themselves up by their own bootstraps.” The reality is though, nobody can do that without boots.

Low- and no-income Americans who have no access to communication services are cut off from society and from opportunities to improve their lives—including work. The Lifeline Assistance program puts opportunities back into the hands of those who need them, so that they can find jobs and start providing for themselves. This makes Lifeline a low-cost investment in the nation’s poorest, allowing them to someday break free of more expensive government aid programs such as welfare.

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FCC Grants Certification Rule Waivers in Seven States

Last month, it was announced that the Federal Communications Commission (FCC) is granting waivers in seven states for certain Lifeline Assistance recertification rules. These waivers apply to eligible telecommunications carriers (ETCs) in the states of California, Vermont, Utah, Florida, Nebraska, Idaho and Oregon.

In most states, the FCC requires ETCs to review and retain certification forms filled out by subscribers who are applying for free or subsidized cell phones through Lifeline Assistance. The companies themselves are responsible for giving these forms out to potential customers, and then for collecting the forms and filing copies once they have been filled out and turned in.

In the seven states listed above, the FCC will no longer be requiring the ETCs to take care of this task. Instead, the work of dispensing and collecting the forms for assistance will be delegated to the states themselves, which have opted to take care of the responsibility. The state governments will need to send copies of the certification forms to the relevant carriers. The companies will need to retain the copies as usual, so that the paperwork is available should it be needed for an audit or criminal investigation.

The companies in question filed petitions alongside the United States Telecom Association (USTelecom) to get the FCC to change the rules and redistribute the paperwork. The Wireline Competition Bureau over at the FCC decided to grant the petition requests on the basis that the states can aid with compliance. Six of the states have been given a permanent waiver on the rules, on the condition that they agree to be helpful should the USAC or the federal government need to investigate one of the providers operating in their borders. The last state, California, needs to make improvements to its system. The waiver is granted, pending those changes are completed by December 31st, 2014. All the waivers are retroactive from February 1, 2014.

Companies that are operating under the new system with the waived rules will go through the state’s notification system when accepting new customers. They will not have to actually retain copies of subscriber certifications, but they must at all times retain copies of eligibility notifications sent out to them by their respective state agencies.

Why are all of these changes important? The government’s Lifeline Assistance program provides free government cell phones to low- or no-income customers. This is a vital service which helps to connect the country’s struggling lower class with potential employers as well as other state and federal programs which may help them. By staying connected with the world, low- and no-income customers can work toward improving their living conditions, and eventually may earn enough money that they can come off of Lifeline Assistance and other government aid programs.

Unfortunately the Lifeline program has a lot of problems with rampant fraud and abuse. Most of the waste does not actually come from the subscribers, but rather from the ETCs themselves. Every year, the FCC discovers through its investigations that there are companies out there which are accepting more money in government reimbursements than they actually qualify for based on their legitimate subscribers.

The FCC is eager to support states that want to play an active role in the Lifeline program and provide some additional oversight in subscriber certifications and sign-ups. In the seven states where the waivers have been granted, state agencies will be closely involved with the ETCs and their sign-ups. Since certifications will go through the states themselves, it should be much more difficult for ETCs to fraudulently claim reimbursements.

Based on how events play out with these seven states, this change may very well pave the way for similar modifications of the rules throughout the United States and Puerto Rico. Within a year or two, it should be clear if the state government oversight is helping to curb abuse. At that point, if the results are positive, it is entirely likely that the FCC will change procedures everywhere. Lifeline is an important program for low- and no-income Americans, and steps like these help to keep this necessary service running.

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Icon Telecom Pleads Guilty of Lifeline Fraud

Last month, the federal government charged Icon Telecom, a Lifeline Assistance provider in Oklahoma, with fraud. Icon is not the first Lifeline provider to be charged with fraud, but the case was one of the most expensive. As a result, it has taken on a very high profile. Icon Telecom was charged with stealing around $25 million from the US government (and indirectly, cell phone subscribers around the country).

Now the company and its owner have plead guilty of money laundering as well as falsifying a statement made to the Federal Communications Commission (FCC). According to the decision handed down by Sanford C. Coats, U.S. Attorney for the Western District of Oklahoma, Icon and its owner, Wes Yui Chew, will forfeit $27 million seized by investigators.

If you are not familiar with how Lifeline Assistance works, essentially a number of different private companies around the country contract with the US government to provide free and subsidized cell phones to low- and no-income customers. They are them reimbursed by the government for providing those services, via the Universal Service Fund. Regular phone subscribers pay into this pool when they pay their cell phone bills; it is generally a small charge listed near the bottom of any cell phone bill.

Lifeline providers are usually reimbursed $9.25 per month for most of their qualifying low-income customers. Tribal customers receive enhanced services, and providers are reimbursed $34.25 for each. Oklahoma includes a number of Tribal Lands, and as a result, companies operating OK can generally claim higher reimbursements through the Universal Service Fund.

Icon Telecom operated in Oklahoma, providing Lifeline Assistance phones from July 2011 to September 2013. At the start of that time, the company reported that they had 2,200 subscribers taking advantage of their Lifeline services. Late in 2012, they reported they had an unbelievable 135,364 subscribers. During the time the company operated, Lifeline claimed around $58,283,329 in reimbursements, and employed 10 persons.

Chew pled guilty to the first count in money laundering, for a transfer of more than $20 million in April of 2013 to a personal bank account. He then pled guilty to the second count, that of falsifying information to the FCC, on behalf of his company, Icon. These events took place in April and May of 2013 respectively. During a USAC audit request, Icon misled investigators, by deliberating manufacturing fake customer recertification forms, complete with made up signatures.

Chew and Icon have agreed to forfeit $20,542,740.73, seized by investigators from Chew’s personal Ally Bank account on October 4, 2013. Neither Chew nor his company will be contesting this action. Furthermore, an additional $6,485,933.82 was seized three days later on October 7, 2013 from two Icon accounts over at BancFirst. Neither Icon nor Chew will be contesting this action either.

What will happen to Chew and Icon? The company may be fined up to $500,000. Chew himself could serve up to 10 years in prison. He will be fined either $250,000 or twice the amount of money he obtained criminally during the transfer, whichever amount turns out to be greater.

Also relevant is the case of Oscar Enrique Perez-Zumaeta. This Mexican national, owner of PSPS Sales, helped Chew and Icon in their fraud scheme, and faces a 10-count indictment. His trial will be held on August 12th, 2014. To this point, he has plead not guilty on all charges.

The case against Zumaeta, Chew and Icon is a stark reminder of how serious the issues of fraud and waste surrounding Lifeline Assistance are. Abuses like these sadly are quite common, and every year, new cases emerge against companies across the nation. The recovery of millions of dollars in stolen funds does offer hope however that the FCC, IRS, and FBI are starting to pull their act together. Last year, the FCC announced that they will be more aggressively pursuing cases of Lifeline Assistance abuse.

Despite the problems plaguing the program, Lifeline is an essential service which helps to keep the nation’s most disenfranchised from slipping through the cracks. With a Lifeline cell phone, a low-income or unemployed individual can stay in communication with friends and family, and can also reach out to government aid workers and potential employers. Without this kind of access, it is more difficult for Americans in tough circumstances to get back on their feet and start earning money again. That is why Lifeline needs to exist. With the recession still in swing and the minimum wage far below basic living standards in most states, programs like these are more important than ever.

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Blue Jay Wireless Brings Former USAC Program Manager Onboard

Blue Jay Wireless recently made Lifeline Assistance headlines when they were approved as a new provider in the state of Kentucky. Most recently, Blue Jay made the news again when it was announced that they have hired former USAC Program Manager Lauren Moxley to act as the Regulatory and Public Relations Manager for the company. USAC stands for Universal Service Administrative Company. If that sounds familiar to you, it is probably because you have read about the Universal Service Fund in some of our other articles on Lifeline Assistance.

Lifeline Assistance is the nation’s free government cell phone program. This program provides low- and no-income Americans with a subsidized cell phone which they can use to keep in touch with friends, family, potential employers, state aid workers, and others. The program is financed through the Universal Service Fund. If you pay a standard cell phone bill, you have probably noticed the Universal Service Fund fee on your own phone bill. The companies which contract with the US government to provide Lifeline Assistance cell phones to low income customers are reimbursed for their service through the fund.

The fact that Lauren Moxley used to work for USAC is thus a big deal. A lot of the companies that offer free government cell phone service through the Lifeline Assistance program have come under fire in recent years for fraud (intentional and otherwise) relating to reimbursements through the Universal Service Fund. Many companies have claimed reimbursements which were not owed to them, which has ended up costing the government—and Americans everywhere—millions of dollars.

Lauren Moxley’s experience as Program Manager over at USAC will help her to steer Blue Jay Wireless around the accounting pitfalls which can cause companies to mistakenly claim more reimbursements than they should. The fact that they have brought her onboard also proclaims to the government and to the public that they intend to comply with regulations.

“The addition of Lauren to our team is such an important coup for Blue Jay on many different levels,” explained David Wareikis, President and CEO of Blue Jay Wireless. “She brings a unique and important insight from the regulatory level of our industry. Her intimate understanding of the rules, regulations and policy reforms is a truly invaluable asset.”

While she was working over at USAC, Lauren Moxley spent most of her time dealing with compliance issues. During that time, she reviewed ETC designation orders and also worked on putting together reports which were available to the public. Prior to her employment with USAC, Moxley worked at One Economy Corporation. One Economy Corporation is a non-profit which specifically works to help improve the lives of the underserved and underprivileged through technology. While working at One Economy Corporation, Moxley researched extensively into the Universal Service Fund and came up with policy recommendations to improve Lifeline Assistance and bring broadband into Lifeline’s service offerings.

Lauren Moxley has been a key player in Lifeline Assistance for a number of years now, and throughout her career she has played a vital role in expanding the program while simultaneously stemming regulatory concerns. This will be her first role with a Lifeline Assistance company. Her extensive knowledge and experience working from the regulatory end will now form a foundation for Blue Jay Wireless to continue its rapid expansion across the country.

Blue Jay Wireless currently provides service to 14 states as well as Puerto Rico. Most recently, Blue Jay was approved to offer Lifeline Assistance to customers in Kentucky. There are two free programs for Kentucky residents as well as several other low-cost plans for tribal residents. These programs are comparable to those offered by the company in other states through the USA. With Lauren Moxley onboard, Blue Jay Wireless is sure to start bringing new innovations to their services while building a strong, positive relationship with customers and with the FCC.

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