Georgia becomes first state to charge $5 for Lifeline phone service

Georgia has become the first state to charge low-income residents $5 a month for what is now free cellphone service aimed at assuring the poor have access to basic communications.

The Georgia Public Service Commission voted 3-2 to approve the measure amid a pending federal lawsuit from a national wireless telephone group. If left unchallenged, however, the fee will be implemented Jan. 31, 2014.

The controversial decision comes after reports of fraud and abuse in the federal cellphone program, called Lifeline. The program was created during the Reagan Administration and expanded in 2005 to cover mobile phones.

A U.S. Government Accountability Office reported that as many as one in six people receiving free cell phones did not meet income or other need-based requirements to receive the free or discounted phone service. The reports of fraud prompted PSC member Doug Everett to call for tighter oversight on the Lifeline program in Georgia.

“Who’s going to really take care of this program … who’s going to audit the telephone companies to make sure they are trying to do what is right,” Everett said.

Commissioners Everett, Tim Echols and Bubba McDonald voted for the measure. Commissioners Chuck Eaton and Stan Wise voted against it.

“Obviously there’s nobody in this room that’s for fraud, we’re all against fraud,” Eaton said. “Personally I have yet to be convinced that the $5 charge would do anything to reduce the fraud.”

The commission voted 3-2 last winter to proceed with planning how the charge would work.

CTIA, a national association of wireless companies, then sued the PSC, saying the decision is illegal because state government agencies cannot regulate what wireless companies charge customers.

The PSC is likely to issue a written order within days. A commissioner can ask that the vote be reconsidered. If that does not happen, the Georgia Secretary of State has 20 days to review the order.

The CTIA is expected to move forward on the lawsuit after that.

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