- Associated Press - Thursday, September 18, 2014

EUGENE, Ore. (AP) - Tens of thousands of low-income Oregon residents already receive a public subsidy to help cover the cost of their cellphone or land line, and the state agency overseeing the program is encouraging more people to apply for the aid.

Using a fee paid by all telephone customers, the government subsidizes the phone service of about 92,000 low-income Oregon residents.

The Lifeline program pays land line and wireless phone carriers in Oregon up to $12.75 per low-income customer per month to apply toward their free or discounted service.

The U.S. government spent $1.8 billion last year on the program, subsidizing service to millions of low-income Americans.

In some other states the program has been abused, with phone carriers failing to verify that applicants qualified for the assistance, and that only one phone per household was being subsidized.



But Oregon officials say that problem has been avoided here by careful administration by the state Public Utility Commission.

The federal government launched the program in 1985, arguing that it had become increasingly difficult to find a job in the modern economy without access to a phone.

The program is funded by the roughly $1.50 per-line per-month Universal Service fee that all phone customers pay nationwide. In Oregon, all phone customers also pay an additional state-mandated 11-cents-per-month fee into the subsidy program.

The Wall Street Journal in 2013 found that among the five top phone carriers, 41 percent of their more than 6 million subscribers “either couldn’t demonstrate their eligibility or didn’t respond to request for certification” for eligibility.

To qualify for the program, people are supposed to be able to prove their low-income status by showing that they are receiving other types of low income assistance.

The problem nationally was twofold: First, the program was generally administered by phone carriers, not a government body, which made recipient verification more difficult. Second, no database existed to ensure that the FCC’s one-phone-subsidy-per-household rule was being obeyed, and there was a high “duplicate rate” - meaning that many customers were receiving subsidies for more than one phone per month. The Wall Street Journal found carriers had little incentive to screen out abuse because more customers meant more revenue for the carriers.

“There weren’t enough protections in place,” said Mark Wigfield, a spokesman for the FCC.

Oregon says it has a duplicate rate of just 0.13 percent, compared to the national duplicate rate of around 50 percent, said Jon Cray, program manager of the Resident Service Protection Fund, which helps fund Oregon’s version of Lifeline.

Wigfield said he doesn’t believe the national rate is that high, adding that from late 2013 to early 2014, a national database “weeded out” 1 million duplicates. There were about 14 million Lifeline subscribers at the end of 2013.

Cray said Oregon’s program has avoided fraud because the Public Utility Commission manages application, approval and oversight.

“In most other states, the carriers who participate in the program administer the program,” Cray said.

To qualify in Oregon, applicants must also be eligible for other low-income programs such as food stamps, Medicaid, Supplemental Sercurity Income or Temporary Assistance for Needy Families. Cray said approximately 90 percent of the program’s customers qualify for food stamps. Oregon’s Lifeline program offers a maximum subsidy of $12.75 a month, combining the federal and state customer fees.

To further avoid fraud, the PUC checks every application through the Department of Human Services database to ensure the applicant is eligible and through its own database of Lifeline customers to double-check whether the applicant isn’t already receiving the program’s benefits.

“The Oregon system is a little different than a lot of other states,” said Rick Thomas, a spokesman for AT&T;, which offers Lifeline services nationally and in some areas of Oregon. “The idea of having a governmental entity determine eligibility rather than having it up there in the private sector is a good idea.”

Earlier this year, the FCC established the National Lifeline Accountability Database to address the high duplicate rate, essentially mirroring the Oregon system.

According to Cray, since the PUC was already managing its program so successfully, the FCC allowed Oregon - along with California, Vermont, Texas and Puerto Rico - to opt out of the database.

“(We) have been involved since 1987,” Cray said. “We have a solid history in the administration of Lifeline.”

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Information from: The Register-Guard, https://www.registerguard.com

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