Fraud is in the Air

Indianapolis, IN

#1 Apr 26, 2013
http://www.bloomberg.com/news/2013-04-25/rich...

Congressional Republicans want to rein in a $2.2 billion U.S. mobile-phone subsidy for the poor, saying it’s riddled with fraud and benefits the world’s richest man, Mexican billionaire Carlos Slim.

Slim’s TracFone Wireless Inc. received about a quarter of the funds from the U.S. government’s Lifeline program, according to the latest figures. Today, a House subcommittee asked why the program, paid for by fees charged to U.S. phone subscribers, tripled in cost since 2008.

“It’s not fair that people save and work and pay for phones from whatever funds they have, and other people get them for free,” Representative Tim Griffin, an Arkansas Republican who wants to eliminate the mobile subsidy, said in an interview before the hearing.“It’s not fair the biggest beneficiary of this is Carlos Slim, the billionaire owner of TracFone.”

Slim owns Mexico’s biggest phone company, America Movil SAB (AMXL), which offers mobile service in 17 Latin American countries and the U.S. Its TracFone unit is the largest recipient under the U.S. Federal Communication Commission’s Lifeline program, taking in $451.7 million, or 28 percent, of payments in 2011, the last year for which records are available.

“It doesn’t matter who owns the company,” Jose Fuentes, a spokesman for Miami-based TracFone, said in an interview.“Tim Griffin needs to focus on finding jobs, not trying to focus on a valuable program.”

‘Obama Phone’

The Lifeline program subsidizes monthly service, and carriers give away phones. Recipients generally can’t earn more than 135 percent of the federal poverty line, which in most states is $23,550 for a family of four.

Rules limiting phones to one per household may be violated in some cases, Representative Greg Walden, an Oregon Republican who chairs the subcommittee, said today.“We are spending large sums of money and probably squandering much of it,” Walden said.

The program has seen “explosive growth,” said Representative Marsha Blackburn, a Tennessee Republican, at the hearing.“It’s why so many of our constituents are questioning the program and are questioning the use of the ’Obama phones’ as they are commonly called.”

Started in 1985, Lifeline pays companies $9.25 per customer per month. It disbursed $772 million in 2008 and $2.2 billion last year, according to the Universal Service Administrative Co., a Washington-based nonprofit that oversees the subsidies.

TracFone is the largest prepaid wireless company in the U.S., with 23.2 million customers at the end of March and $4.8 billion in revenue last year. Lifeline accounts for about 3.6 million of those customers, Fuentes said.

Program Trimmed

Largest U.S. telephone company AT&T Inc.(T) took in $274.9 million and third-largest wireless provider Sprint Nextel Corp.(S), based in Overland Park, Kansas, received $273.5 million, according to the FCC. AT&T’s share includes aid for wired phone customers.

The FCC last year moved to trim the Lifeline program. The agency voted to set up a database of participants, which is under construction, to prevent households from collecting more than one subsidized phone service from different companies.

The FCC also told carriers to check eligibility of customers annually, which can be shown through enrollment in social assistance programs.

more at: http://www.bloomberg.com/news/2013-04-25/rich...

Tell me when this thread is updated:

Subscribe Now Add to my Tracker

Add your comments below

Characters left: 4000

Please note by submitting this form you acknowledge that you have read the Terms of Service and the comment you are posting is in compliance with such terms. Be polite. Inappropriate posts may be removed by the moderator. Send us your feedback.

Indianapolis Discussions

Title Updated Last By Comments
Review: Big O'S C B Shop (Dec '13) 9 hr Speedy 10
BEWARE-Julia Cox is a bird scammer and dishonest 11 hr Dave 7
Looking For A Former Band Member 16 hr Former Bandmate 3
smack in the chops for NOBAMA 16 hr Simon 47
Obama wants to be impeached 16 hr Simon 23
Police make arrest in 15-year-old Dominique All... 17 hr bite me 1
The Burger Chef Murders (Dec '13) 19 hr The Crime Stopperz 15
Indianapolis Dating
Find my Match

Indianapolis People Search

Addresses and phone numbers for FREE

Indianapolis News, Events & Info

Click for news, events and info in Indianapolis

Personal Finance

Mortgages [ See current mortgage rates ]

NFL Latest News

Updated 12:50 pm PST

NBC Sports12:50PM
Rob Gronkowski fined $8,268 for bouncer move
NFL 1:30 PM
Colt McCoy 'pushing' Robert Griffin III, Gruden says
Bleacher Report 4:00 AM
Colts' Week 12 Preview vs. Jags
NBC Sports 9:51 AM
Colts cut return man Griff Whalen, sign RB Zurlon Tipton
NFL10:14 AM
Colts promote Zurlon Tipton, waive Griff Whalen