A recent report in the Washington Examiner exposed a little-observed hearing of the House Subcommittee on Communications and Technology last year. The hearing focused on the "Lifeline Fund" which was intended to provide cell phones to underprivileged individuals for safety and security purposes.
The policy was instituted under the Bush administration, but gained national prominence when a protester outside a Romney for President rally in Cleveland told a citizen journalist why she supported President Obama.
WOMAN: Obama!
REPORTER: You got an Obama phone?
WOMAN: (screaming) Yes! Everybody in Cleveland, low minorities, got Obama phone. Keep Obama in president, you know? He gave us a phone!
REPORTER: He gave you a phone?
WOMAN: He gonna do more!
REPORTER: How did he give you a phone?
WOMAN: You sign up. If you're ... If you on food stamps, you on Social Security, you got low income, you disability ...
Now we're learning that food stamps, Social Security, disability and low income are not the only criteria for receiving the free phones. Breathing, apparently, is the only real qualifier to receive a Lifeline phone.
According to the Examiner, the state of Maryland handed out phones to twice as many eligible Marylanders:
"Moreover, the current number of Lifeline subscribers in Maryland is almost double the number of low income households in the state" who are eligible.
The FCC says it has since instituted some reforms to put a damper on fraud. Until recently, applicants could self-certify their eligibility, and the FCC found millions of dollars of abuse when it finally checked.
The total number of "free" phones handed out in Maryland during the first three years of the Obama presidency was 645,000. That represents a 10,000 percent increase over the phone distribution in 2008.
Before one jumps to the conclusion that this tale is merely an example of underprivileged Americans taking advantage of an out-of-control government program grabbing benefits without any oversight or accountability, you'd only be half right.
It may be true that nefarious individuals are flouting the law and grabbing government benefits they don't deserve, but this program also benefits another opportunistic group, Telecom companies:
The profits to telecom companies from the free, government-provided phone service are so great that in Nebraska alone, 51 corporations, many of them who are not even traditional phone companies building infrastructure and attracting paying subscribers, fought for a piece of the pie.
The companies are paid $9.25 a month by the government for each Obamaphone recipient they sign up. Many advertise aggressively to encourage people to sign up, give them free phones in addition to the free service, and even focus primarily on Lifeline subscribers over paying ones, known as "virtual" networks because these companies make no investment in telephone infrastructure.
A state official said that the clamoring of companies for the $9.25 shows that it is more than enough, and suggested that if the program is truly about altruism, companies should be reimbursed only their actual costs, or could be reimbursed $3 and required to show documentation of any higher actual costs.
Additionally, the "fee" hidden on your phone bill that pays for this program is not considered a "tax" because it is imposed by phone companies, not the government. And, it's not like these "fees" are only paid by the "1%ers."
Rep. Steve Scalise (R., La.) pointed out during the hearing, "A family of four making $35,000 a year is paying for this. They can't get the free phone ... They might not go out to eat one night because that is an important priority that they have set, and it angers them when now they are paying somebody else's free cell phone bill."