BlogIn the LoopNews

Wireless Companies Suing Over New Fee

Wireless companies are suing the Georgia Public Service Commission over a $5 fee the PSC wants the companies to charge low-income customers who get subsidies for free basic cellphone service from the federal government.

Even though the Lifeline program was started under President Reagan and expanded by President George W. Bush, “Obamaphones” became a conservative meme when a video of a black lady saying she is voting for Obama because he gave her a free phone went viral last year.

Since then, Republicans have been targeting Lifeline, and the all-GOP PSC recently approved the $5 monthly fee, saying it will weed out fraud and abuse. Wireless companies say they don’t want to go through the hassle of billing people.

In response to the federal lawsuit, the PSC will vote to allow wireless companies to double the Lifeline plan’s minutes and texts to 500 each rather than charge a fee, Commissioner Tim Echols said. Bobby Baker, a former PSC member turned lawyer who represents Lifeline providers, says having to provide more minutes would force companies out of the program.

“It might be cheaper for them to double the minutes than for a company like Tracfone to create a billing system,” Echols says.