TracFone Wireless, Inc. Issues Fact Sheet About Wireless Lifeline Hoax And Related Claims

MIAMI, Oct. 11, 2012 /PRNewswire/ -- TracFone Wireless, Inc., issued the following fact sheet today on behalf of its SAFELINK WIRELESS® service for Income-eligible households under the federal Lifeline program:

FACT #1:  There is no "Obama phone."   The Lifeline program has always enjoyed broad bipartisan support and dates back to 1985.  The whole notion of an "Obama phone" is a hoax that has been rebutted by several leading news organizations and fact-checking groups. The simple truth is that the Lifeline program started during the Administration of President Ronald Reagan under a Republican chairman of the Federal Communications Commission (FCC). The program was later refined by a Republican-controlled Congress in 1996 following enactment of the 1996 Telecommunications Act. 

FACT #2:  Taxpayers do not pay a penny for wireless Lifeline.  Cutting the Lifeline program will not reduce the federal deficit by one cent. That is because federal funds do not pay for Lifeline.  The program is not funded with tax dollars.  Instead, this program is funded by contributions from telecommunications companies, which can elect to share the costs of those contributions with their subscribers. Companies that offer free wireless cell phone services pay for the phone themselves. Far from imposing a burden on taxpayers, wireless Lifeline has been documented to help low-income people find and keep jobs, which ultimately reduces spending on public assistance programs.

FACT #3:  Lifeline treats landlines and cell phones exactly the same.  Prior to 2008, the federal Lifeline program offered a benefit of $10 a month for landline phones used by eligible, low-income Americans. In 2008, the Bush Administration's FCC brought Lifeline into the 21^st Century by making available exactly the same benefit for wireless phones.  The federal government had already decided that universal telecommunications access is a national priority and the creation of wireless Lifeline simply extended the goal set more than two decades earlier during the Reagan Administration.  Important note:  Only one Lifeline supported service (landline or wireless) may be obtained by any household. 

FACT #4:  Cell phones are not subsidized under wireless Lifeline.  Companies that offer free phones under Lifeline wireless cover the cost of the phones themselves.  No tax dollars and no portion of Universal Service Fund support is used to offset the free phones that some wireless Lifeline companies provide to their customers. 

FACT #5:  The wireless Lifeline program is tightly regulated to control fraud and abuse.    There is a strict prohibition against beneficiaries receiving Lifeline benefits for more than one phone service.  The FCC recently took actions to further tighten eligibility requirements and transparency in the wireless Lifeline program.  Many of the eligibility requirements that were adopted were done so at the urging of TracFone Wireless.  The FCC included such TracFone-backed reforms as a 60-day non-usage policy, identity checks by using the individual's name, date of birth, Social Security Number and address and most importantly, the creation of a national database to verify applicant information by 2013.  TracFone has been a proven leader in preventing waste, fraud and abuse and is currently working to form public/private partnerships with states to help create the national database and to enable Lifeline providers to access existing state databases. 

FACT #6:  Participation in wireless Lifeline is far below what it should be.   For over 25 years, the Lifeline program was largely dormant, in large part due to telecommunications companies failing to create awareness among low-income families that the service existed.  With the advent of free wireless Lifeline the penetration rates increased.  However, only about a third of eligible households nationwide are currently benefiting from Lifeline.   In 2012, only six states had participation rates exceeding 50 percent of income-eligible households.   That means fewer Americans are without jobs or the ability to keep their jobs.  (Research shows that wireless Lifeline helps people who have jobs keep them and also aids those who need jobs to find them.)  It is important to also note that Americans have been suffering through the worst economic crisis since the Great Depression.  As the economy improves, fewer households would qualify for Lifeline services. 

TracFone Wireless, Inc. is a subsidiary of America Movil S.A.B. de C.V. ("AMX") (BMV: AMX; NYSE: AMX; Nasdaq: AMOV; LATIBEX: XAMXL), AMX is the leading provider of wireless services in Latin America.

SOURCE TracFone Wireless, Inc., Miami, FL

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