PSC Approves New $5 Monthly Fee on Subsidized Phones for Poor

Everett originally proposed the measure in response to a 2010 federal report showing as many as one in six people were getting free phone service through the subsidy program without being eligible. He acknowledged the fee would be unpopular, but said the current system needs to change. 

“There’s always going to be collateral damage when you’re having a war and we’re having a war with fraud and abuse,” said Everett. “We’ve got to come up with a program where only those who are eligible, truly eligible, can get it and now maybe [the fee] will kickstart something where we can do that.”

About 800,000 Georgians receive phone service through the federal Lifeline subsidy program.

Wireless companies strongly oppose the new fee, saying past issues of fraud and abuse have been addressed over the last two years. 

“All it will do is keep poor people out of the program,” said Mitchell Brecher of TracFone Wireless, which serves about 250,000 Georgians in the program.

PSC Chairman Chuck Eaton and Commissioner Stan Wise voted against the fee.

Eaton said it was too early to determine the effectiveness of other recently-adopted reform measures. In addition, he warned the PSC could be accused of overstepping its authority.

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

The PSC actually passed the $5 monthly fee in January, but it was delayed and reworked after pushback from wireless companies. An industry group of wireless companies is suing the PSC over the previous version. 

The fee approved Tuesday is expected to go into effect January 31.