Wall Street Journal Continues Curious Campaign against Lifeline Telephone for the Poor

Ideas and Issues

New Orleans   Spencer Ante and the Journal continue their curious, and in many ways deceptive, campaign against the FCC’s lifeline telephone program, which allow the poor to have basic access to a telephone for less than $10 a month for emergency messages and a limited number of texts and calls.  The company’s’  providing the service still make money, just not as much on the regular customers, and if the lifeline customer exceeds the limits, then they make more of course.

Last week in the Journal the front page story was on the significant decrease in lifeline telephone users due to a 2012 policy of the FCC requiring outreach via mail to lifeline telephone holders to re-verify their accounts, since previously eligibility had been accessed through self-certification.  Not to get nostalgic, but last week the Ante and the Journal reported clearly that all sources attributed the decrease to the users failure to respond.  This week, Ante slid over that concession, saying instead, “A Wall Street Journal review of FCC data showed that more than 40% of the subscribers at the program’s top carriers were either ineligible or failed to show that they were unqualified.”  The new spin allows the Journal to advance their unproven claims of fraud in the program, even as the program’s cost and number of users decreased.

The culprit in this story is the new, smaller companies that were allowed in recent years by the FCC to participate in the program and therefore compete for the business.  The legacy companies were not as interested in the smaller profits of the lifeline program, but the new upstarts were anxious to build a customer base and satisfied with the smaller profits of the program, so were involved in aggressive customer outreach in low income communities.  I would have thought the Journal would at least play some lip service to the old school conservative arguments about the benefits of increased competition, free enterprise, etc, etc.  In the age of Murdoch and his communication conglomerate though, the battle cry seems to be to circle the wagons and protect the big boys.   Attacking the poor is of course as old school as it gets, but that is just the way business is done under either paradigm it seems.

The story rakes as one of the smaller outfits over the coals for turning in applications in without a signature in Wisconsin and makes something of 23 people who might have more than one phone.  There seems to be no current comment on one change involving the FCC’s lack of recognition, especially in multi-unit apartment complexes, that qualified individuals might share the same address.  The Journal perhaps sees that as possible fraud, rather than life for the poor.  Neither is there any mention that one of the largest new companies in the market is Mexican billionaire Carlos Slim’s Tracphone operation.  Maybe the Journal wants to tread more carefully in that direction before slinging out more innuendo.

I’m not sure why the Journal has launched this new campaign, but lifeline telephone service is an essential for the poor and elderly, and as I have argued in Citizen Wealth, we need to achieve maximum eligible participation.   The cost of this program dropped in 2012, but it is still unclear if everyone who should be getting the program is receiving the benefit.  Furthermore, as even Ante reported earlier, this service is paid for by consumers and then passed back through the FCC, so this is not a taxpayers’ dollars being misused situation.

If you can figure out the real beef here, call me, maybe?