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Subsidised Phones for the Poor Could Generate $3.7 Billion in Income

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Recently expanded efforts to put free cell phones into the hands of poor and near poor Americans eligible for the Federal Communications Commission's Lifeline Assistance program have the potential to deliver nearly $4 billion annually to eligible Americans, according to a study published by the New Millennium Research Council (NMRC).

The NMRC is a research body affiliated with the consulting firm, Issue Dynamics, and is reputed to be linked with people associated with telecoms organisations.

The report is based on survey data collected by Opinion Research Corporation (ORC), which polled 5,541 TracFone SafeLink Wireless customers in 22 states.

The report concluded: "…the subsidized cell phone has been an important economic tool, which generates an average of $259 (per participant) per year. If all 28.5 million adults eligible for Lifeline Assistance were to take advantage of the program and earn at the same rate and level as our sample, it would result in $3.7 billion in fresh income for the poor and near poor. In large states, such as New York, Florida, and California, the gains would exceed $250 million. By this measure, the program is already paying for itself."

Lifeline Assistance is a joint federal program operated by the FCC and state public utility commissions that ensures telephone service is available and affordable for low-income subscribers within 135 percent of the federal poverty guidelines. In 2008, recognizing the major national shift in phone usage away from landline and toward wireless, the FCC for the first time opened up the Lifeline Assistance program to prepaid mobile operators. The FCC's same average $10 per month discount on service now applies to both wired and wireless phones.

Wireless Lifeline support for prepaid wireless is now available to low-income Americans in 35 states, as well as the District of Columbia and Puerto Rico.

According to the survey, about half of SafeLink users (49 percent) said the cell phone had "improved their financial situation by helping them find or keep work." For those working or looking for work, the numbers were higher (63 percent); surprisingly, even the retired (39 percent) and disabled (38 percent) said the phone had helped improve their financial situation. Significantly more African Americans (57 percent) than white Americans (43 percent) said the phone had improved their financial situation.

On the web: NMRC - SourceWatch report on the NMRC

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Tags: cell phone  USA