Tuesday, March 22, 2011

Who's Cell Phone Are You Paying For?

Having a full time job, it's not very often that I have a chance to watch daytime television so I don't get to see the commercials that are targeted to the demographic that does. Well I was home today and among the commercials for personal injury lawyers and trade schools, there was one commercial that caught my eye by a company called SafeLink Wireless that advertised free cell phone and airtime each month for income-eligible customers as part of a government supported program. Needless to say, I was stunned that my tax dollars were paying for someone else cell phone.

The good news is that they are not, and SafeLink Wireless points that out on their website. But the devil is always in the details and while our tax dollars are not paying for it, we as consumers still are.

You may not realize that, I didn't until I did some digging, the FCC as part of the Telecommunications Act of 1996 was mandated to create the Universal Service Administrative Company (USAC) which through the Universal Service Fund (USF) provides for, among other things, "discounts that make basic, local telephone service affordable for more than 7 million low-income consumers." and guess what, cell phones now qualify.

So where does the money come from? Thankfully not the FCC (although almost $5M a year is budgeted for USF "Audit Support" *). Rather the funding comes from "contributions" based on projected quarterly earnings from all telecommunications companies that provide service between states. Now do you think that these companies just eat their "contributions" or do you think that we pay for it by way of higher prices? I'm betting the latter.

It gets better, now there is even discussion to include internet access into the program which means we will not only pay for someone on public assistance to text away but we will be paying for them to surf the web too.

What this amounts to is just another form of income redistribution, plain and simple. Thank you Leviathan.

2 comments:

  1. The FCC's been imposing round about taxes for years. It's just another sign our government is hard at work on behalf of the American people.

    It's time to defund the FCC.

    ReplyDelete
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