What You Need To Know About The Lifeline Program

So, how is the Lifeline Assistance Program funded?

Not by American tax dollars. The Lifeline Program is not a part of the federal budget, and the US Treasury does not collect or have anything at all to do with Lifeline funds. Instead, the Lifeline Program is funded by the Universal Service Fund (USF) which is funded by contributions from all interstate telecommunication carriers. The carriers typically pass the cost along to all telecom consumers in the form of a small Universal Service fee that is on all monthly phone bills.

Is the Universal Service Fund specifically for the Lifeline Program?

Not at all!  The Universal Service Administrative Company (USAC) manages four total programs that are all funded by the Universal Service Fund.  The lifeline program makes up approximately 23% of the total spending budget of Universal Service Fund.

Is the Obama Phone the same as Lifeline?

Yes and no.  The term “Obama Phone” was coined through the mass circulation of inaccurate political propaganda, and then viral YouTube videos.   The real facts are that the Lifeline program was first introduced in 1985 under President Reagan’s administration, carriers began funding in 1997 under the Clinton Administration, and was expanded to include wireless service in 2005 during the Bush administration.  The election of Obama in 2008 ushered in a new FCC that has adopted rigorous reform designed to eliminate waste, fraud, abuse, and to preserve the program for those who truly need it.

Does the U.S. Government really give away FREE phones under the Lifeline Program?

No, it does not.  Lifeline is a subsidy program that provides for a discount on phone service to qualified low-income individuals.  The distribution of phones is actually completed by authorized companies that incur the initial cost of the phones.  The subsidy paid by the USF is generally about $9.25 per month in most states.  However, in cases where the service is completely free, the customer must use the service at least once every sixty days or service is canceled.  The customer must also maintain eligibility in order to continue receiving the benefit.

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