A federal court has temporarily stopped Georgia from charging low-income residents a controversial monthly fee for what has been free cellphone service.
The Georgia Public Service Commission recently agreed to add a $5 a monthly fee to what previously had been a free telephone service to assure that low-income consumers had phone service for emergencies. The U.S. District Court for the Northern District of Georgia on Tuesday said by setting a $5 fee, the PSC is improperly regulating mobile phone service, which is not subject to local or state jurisdiction.
“The injunction is just temporary, and we have to decide how we’re going to move forward,” said PSC Chairman Chuck Eaton.
The state became the first in the nation to charge for the service after reports of fraud pushed one PSC member to call for tighter oversight on the program in Georgia. CTIA —- The Wireless Association, a national association of wireless companies, appealed the PSC’s October decision and immediately filed suit.
The Lifeline program was created in 1984, when AT&T was broken up into regional Bell companies, as a way to protect low-income consumers in a newly competitive telephone industry. Low-income consumers may have to go without phone service if they cannot afford the $5 fee, and wireless companies in turn could suffer if they lose customers, U.S District Judge Richard Story wrote in his decision.
“Finally, while the status quo may permit some level of fraud to continue, the public interest tilts in favor of providing telephone services to low-income households that otherwise would be unable to afford mobile phones,” the document said.
Consumers can get a Lifeline-subsidized phone if they make less than 135 percent of the federal poverty guidelines —- for instance, $31,117 for a family of four. They would also qualify if they receive benefits from federal programs such as Low-Income Energy Assistance, National School Lunch or Low-Income Housing Assistance.
In most cases, consumers fill out an application and are supposed to show proof that they qualify. They receive a free bare-bones cellphone and 250 minutes of talk time. When those minutes are used up, customers can buy prepaid cellphone cards to continue using the phone. Using that information, the government is supposed to keep track of the participants.
A combination of the wrecked economy, states aggressively signing up people for the program and an increased number of phone companies participating all helped Lifeline grow beyond the government’s ability to do that.