Cellular Stimulus: Colorado May Give Free Phones To Poor
Jul 15, 2009 5 Comments ›› Erik Wong
Thousands of low-income Coloradans reliant on public assistance could get a free cellphone under a plan before the state Public Utilities Commission.
If approved, the plan by TracFone Wireless in Miami would make Colorado the 17th state it has settled into with free cell service for the indigent, a form of wireless welfare that proponents say taps into one of the last untapped markets for the telecom technology.
“Our hope is to have it up and running by September,” said Jose Fuentes, TracFone’s director of government relations. “Historically, it’s a very underutilized service, and we’d like that to change.”
The program is a twist on Lifeline, a long-standing federal subsidy that provides low-income families with a break on their land-line telephone bill in order to ensure emergency 911 service.
In Colorado, it’s called LITAP — the Low Income Telephone Assistance Program — and is available to anyone receiving aid from any of six welfare funds: Colorado Works Assistance (TANF), Supplemental Security Income, LEAP, Aid to Needy Disabled, the Old Age Pension Fund and Aid to the Blind.
Statewide, about 65 percent of those eligible participated in Lifeline last year.
The money — more than $800 million in subsidies were paid last year for low-income phone service across the country — comes from the Universal Service Fund, a tax on all telephone lines. Of that amount, Coloradans received nearly $3.2 million in low-income subsidies.
TracFone’s subsidized program, called Safelink Wireless, gives users at least 68 minutes of free cell service each month — in Colorado, it would be 83 minutes — and unlimited access to 911 service even if the minutes are used up.
Users also get a free Motorola phone worth $50, according to the company’s PUC filing. As long as subscribers are on the welfare rolls, they get the phone subsidy.
TracFone is best known as one of the country’s biggest pay-as-you-go phone services, and Safelink subscribers can purchase additional minutes on the government-paid cellphone, Fuentes said.
“Historically, we’ve attracted those who don’t have the means to afford a monthly billing for a land phone or don’t want to be tied to a long-term cell contract,” Fuentes said.
The idea is to convert Safelink users to regular cell customers as they are weaned from the public dole.
Critics question the cellphone idea, mostly pointing to malfunctions or user error that could create a problem in an emergency.
