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How an FCC Free Phone Program Went Rogue

The FCC cracks down on a good policy gone bad

Senator Claire McCaskill found an offer in the mail at her Washington condo last year that sounded too good to be true. The flier said the Missouri Democrat—a millionaire many times over—could apply for a free cell phone, complete with monthly service, paid for by the federal government. From what McCaskill could tell, “you just had to check the box” saying you met the income requirements, submit the form, and collect the phone, she says. The senator suspected something wasn’t right and began looking into it. What she found was a federal giveaway gone astray: In some instances, the government is handing out multiple phones to the same people. And there’s no national tracking system keeping tabs on who’s enrolled—or whether participants even qualify.

That’s not how the government envisioned the program, known as Lifeline, would work. Launched in 1985 to provide discounted land-line service for low-income Americans, it’s funded by the so-called universal service fees that phone companies tack onto bills every month. A family of four with an income of about $30,000 can qualify for a subsidized line, as can people receiving food stamps and other federal aid. The Federal Communications Commission allows states to decide who is eligible and whether applicants need to offer proof of income before they can get a phone.