Punch line: Wireless operators like Sprint Nextel are building a big business providing free cellular service to the poor. Taxpayers pick up the tab.
Ouch
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Last year, we blogged about the Feds free cellphone service to low income folks.
You see, chatting and texting is an entitlement that tax payers are morally required to subsidize.
Say, what?
The program started with good intentions: to provide every low income household with a landline for emergency use. No long distance. No special service. Just local calls and 911.
No problem.
Well, then landlines became “so yesterday” and the program morphed to cell phones
And, guess what?
Demand is exploding.
According to Business Week:
Companies like Sprint Nextel aren’t driven by altruism.
Serving cash-pinched customers can pay off due to federal government subsidies.
And finding new customers isn’t hard.
Now the poor or unemployed form a large pool of would-be customers.
With unemployment at 9.4 percent and one in six Americans living in poverty, Sprint and TracFone have seen an explosion in sign-ups for the government-subsidized free wireless services.
Applicants have to be eligible for Medicaid or several other low-income assistance programs, have a family income significantly below the local poverty level (poverty guidelines vary by state), or receive food stamps.
In October, 43.2 million received such food assistance, up 14.7 percent from a year earlier.
Despite the rules, it’s reported to be pretty easy to get one of these phones – or to get several of them. Think “no doc” mortgages with fewer controls.
One reported scam is for qualified people to sign up, sell their phones on eBay, and then go back to the government trough for another phone.
But, not to worry.
Also according to Business Week: “A staffer at the Federal Communications Commission, which oversees carriers, says the agency may consider tightening oversight and cost management of the fast-growing program.”
That’s a relief, for sure.
And, oh yeah … under consideration is extending the program to broadband service.
Gimme a break already.
The Homa Files 