The good news: Millions of American are talking on free cell phones right now. The bad news: You’re paying for it.

A couple years ago, Michelle Obama was seen serving risotto at a soup kitchen down the street from the White House. She was surrounded by poor people frantically snapping photos of her with their cell phones.

One couldn’t help but wonder how people whose financial situations are so precarious that they eat at a soup kitchen, yet can afford cell phones.

Do a little Googling and you’ll quickly discover that there’s the equivalent of a government soup kitchen for cell phones. Sign up and the government will give you a free cell phone and 250 free minutes each and every month.

Well, maybe not. You’re probably not eligible.

Prepare To Be Outraged

Here’s how Safelink Wireless, one of those companies involved in the scam, describes the free government phones program on its website:

“Lifeline Assistance is part of a program that was created by the government to provide discounted or free telephone service to income-eligible consumers. To help bring you this important benefit, SafeLink Wireless is proud to offer Lifeline Service. Through our Lifeline Service you will receive FREE cellular service, a FREE cell phone, and FREE Minutes every month! SafeLink Wireless Service does not cost anything – there are no contracts, no recurring fees and no monthly charges.”

If you’re not outraged by this program yet, hold on. Because you will be. It turns out that you only qualify if you’re already getting other assistance from the government.

Who Qualifies?

Want a free phone? Too bad, because if you pay taxes, you probably don’t qualify. Now that may be a bit of an exaggeration, but it’s generally true, because the fact is you don’t qualify unless:

• You already participate in other State or Federal assistance program such as Federal Public Housing Assistance, Food Stamps and Medicaid.


• Your total household income is at or below 135% of the poverty guidelines set by your State and/or the Federal Government.


• No one in your household currently receives Lifeline Service through another phone carrier.
• You have a valid United States Postal Address. In order for us to ship you your free phone you must live at a residence that can receive mail from the US Post Office. Sorry, but P.O. Boxes cannot be accepted.

Here’s where they really get tough. In addition to meeting those guidelines, you will be required to provide proof of your participation in an assistance program, or proof of your income level.

Welcome to the United States 2011. The more freebies you get, the more freebies you qualify for.

Illegal Alien? Who Cares?

Did you see anything on the list of qualifications that says you have to be a citizen or even a legal resident of the United States to qualify? It seems to be a glaring omission, doesn’t it?

Two of the three biggest companies involved in this scam have Spanish language websites, leading to the not-too-unreasonable conclusion that a significant percentage of the free cell phones applicants conceivably could be, may be, might be undocumented aliens. You know, people who live in the United States, but don’t speak English.

Who’s Scamming Who?

At least three large companies are involved in the free government cell phone scam. We were angered when we read their websites. And you probably will be, too.

Because it turns out that if you’re an average, hardworking American citizen who pays for your own cell phone or land line telephone, you’re also paying for these deadbeats’ free cell phones and free minutes.

Want proof? Check out your own phone bill. You’ll see that a little extra charge called the “Universal Service Fund” is added to your bill every month. For example, in our latest phone bill. The charge for the Universal Service Fund is 75 cents.

Now 75 cents might not sound like much, but Wikipedia says there are nearly 300 million cell phones in the United States and another 300 million land lines. Do the math. At 75 cents each, that adds up to a lot of money.

Turns out this isn’t a new program, just a new twist on an old program. The Universal Service Fund was created many years ago to bring telephone service to the rural parts of the country that were under-served by private phone companies. But when Bill Clinton signed the Telecommunications Act of 1996, the Universal Service Fund was expanded to include, you guessed it, free cell phones for the poor. No matter where they live.

Is This Really a Government Program?

Proponents of the free government cell phone scam say it’s not paid for with “tax payer money.” But that’s what advertising people call weasel wording. Let’s review:

It’s paid for by a federal government-mandated fee that’s automatically added to your phone bill every month. It’s administered by the Universal Service Administration Company, an organization set up by the Federal Communications Commission, which parcels the money out to private phone companies set up just to give away these free government cell phones.

In other words, it’s no different than a sales tax collected by a merchant and sent to the government, which spends it as they see fit. In this case, the merchant just happens to be your phone company.

It Gets Worse

As if it’s not bad enough that you’re paying for free cell phone service for other people when it’s tough enough to pay for your own, it gets even worse.

There are three primary companies providing the LifeLine service – SafeLink Wireless, Assurance Wireless and ReachOut Wireless. Safelink, the largest player in the business, is owned by the world’s richest man, Mexican multi-billionaire Carlos Slim.

The free government cell phone scam is very profitable for the companies involved. Obviously. A billionaire like Carlos Slim wouldn’t be involved otherwise.

Each customer costs the cell phone company about $3 per month for phone and minutes. But the Universal Service Fund pays the cell phone companies $10 per month for each customer.

It’s a brilliant scam. The government skims a few cents off the top of every phone bill, launders it through the free cell phone scam, and into the already stuffed pockets of a foreign billionaire.

The rich get richer. The poor get something for nothing. And you get screwed.