The Obama Phone, a popular nickname for the Lifeline Assistance Program, has provided many low income households with a free cell phone. But despite its name, the Obama Phone has origins going back way before President Obama.
- 6 Events That Led to Today’s Obama Phone
- Did Obama Start the Obama Phone?
- 6 Events That Led to Today’s Obama Phone
- Who Started the Obama Phone?
6 Events That Led to Today’s Obama Phone
- Kingsbury Commitment (1913, Woodrow Wilson gave AT&T monopoly)
- Communications Act of 1934 (Roosevelt established the FCC)
- Lifeline Assistance program (created by Reagan in 1984)
- Telecommunications Act of 1996 (Clinton and Congress subsidize landline telephones)
- 2005 Lifeline Expansion to Include Wireless Phones (under George W Bush Admin)
- 2016 Lifeline Modernization Order (broadband now included)
Today, the Lifeline Program provides subsidized phone service for low income families. Needy families in both urban and rural areas can get a free mobile phone as long as their income is within 135% of the Federal Poverty Level. Alternatively, welfare recipients can show proof of participation in a program like Medicaid or SNAP food stamps.
The free phone provided to each and every Lifeline Subscriber—or phone service provided to those who bring their own phone to the plan—provides millions of low income Americans with a connection to emergency service, assists in finding and retaining gainful employment, and securing preventative medical care.
The unfortunate reality of today’s America is that millions of Americans cannot pay their phone bill. After all, for a single subscriber phone bills can be around $70 monthly, while for a family of four they can run as high as almost $200. Thankfully, telecommunications companies are required to donate around 21-25% of their profits into a Universal Service Fund which is then used to subsidize phones and phone plans for poor people who could otherwise not have access to this vital service.
A low income subscriber to an Obama Phone plan can get their phone and plan through one of the independent phone companies that offer Obama Phone, which is offered in Puerto Rico and all 50 states except Montana. However, Montana does offer Lifeline to tribal members living below the federal poverty guidelines or who are welfare recipients.
Did Obama Start the Obama Phone?
No, President Barack Obama did not start the Obama Phone program, and in fact, it’s actual name is the Lifeline Assistance Program, which began long before the Obama Administration. The biggest reason that this free cell phone program is associated with Obama is that cell phone usage greatly increased during his tenure. In 2005, the FCC amended the Lifeline Program to offer millions of more low income consumers access to free cell phone service. But as we will see, the story of Obama Phone begins more than a century ago, even though the Lifeline Program itself started under the Reagan Administration. It is more than a partisan contribution by the Democrat or Republican side of politics. It has been a longstanding effort of the FCC to make sure all Americans are connected for purposes of safety, health, education, and developing a robust workforce.
6 Events That Led to Today’s Obama Phone
Kingsbury Commitment (1913, Woodrow Wilson gave AT&T monopoly)
Believe it or not, the story of the Obama Phone may go all the way back to an era when streets were still paved with cobblestones, it was more common to own a horse than a car, and telephones required an operator to connect your call. When phones first came out, networks tended to be smaller regional affairs, with the exception of AT&T. AT&T started to buy up these regional outfits in line with the vision of its president: a unified phone system stretching across the nation. One strategy AT&T used was to refuse to connect with smaller independent networks and force them out of business.
The United States Government was rightfully concerned that AT&T was turning into a monopoly, so they negotiated a settlement named after the vice president of the telecom behemoth: AT&T would divest its controlling interest in Western Union (the telegraph company) and would facilitate connecting its technology to local networks. This set a precedent in tempering the privatization of telecom technology in the United States, along with facilitating the idea that a national unified phone network would benefit the people of America.
Communications Act of 1934 (Roosevelt established the FCC)
The next stop on the historical journey to Obama Phone occurred during the presidency of Franklin Delano Roosevelt (FDR). In 1934, he replaced the Federal Radio Commission with the Federal Communications Commission (FCC) and transferred the responsibility of regulating interstate phone service to the newly formed FCC from the Interstate Commerce Commission. The formation of the FCC highlighted the importance of emerging long distance communication technologies like the radio and phone, for purposes of defense, safety, and commerce.
One of the core lines from the FCC charter promised “to make available, so far as possible, to all the people of the United States, a rapid, efficient, Nation-wide, and world-wide wire and radio communication service with adequate facilities at reasonable charges.” What the Kingsbury Commitment started in 1913, the creation of the FCC solidified just two decades later with a promise by the Federal Government to facilitate communication by phone and make it available to all Americans.
Lifeline Assistance Program (created by Reagan in 1984)
But it would be several decades before the policies of the government took another dramatic step toward Obama Phone. Though the FCC charter had spoken of aspirations to provide every American with reasonably priced means of long distance communication, it wasn’t until Ronald Reagan took office that those aspirations became more tangible with the Lifeline Program.
The Lifeline Assistance Program was created in an era when consumers were still using landlines and cell phones were not practically available to the public. Lifeline provided discounts to these consumers so they could enjoy the benefits of phone service. There was also no consumer internet at the time of Lifeline’s creation, so the program did not really apply to dial up connectivity, and in fact, it would not develop applicability to internet service until some years later. In any case, it was a huge step forward in making sure that every American would have the opportunity to utilize a technology of connectivity that had already existed for over a hundred years.
Telecommunications Act of 1996
America came one step closer to the realization of the Obama Phone during the Clinton Administration. Both houses of Congress approved the Telecommunications Act and it was signed into law by President Clinton, effectively subsidizing landline communications for low income users. The subsidy would be drawn from The Universal Service Fund, which was created by the FCC just one year after the Telecommunications Act, in 1997. This created the possibility for a subsidized phone program to exist without placing the burden of funding it on the government or the general public.
The Universal Service Fund, contrary to popular belief, is not taxpayer funded. Rather, privatized telecom companies like AT&T, Sprint, and Verizon are required to pay 21% of their profits to the fund. The monies in this fund are then used to subsidize phone service for low income consumers, who can obtain a free cell phone and phone service through one of the independent Obama Phone providers in their state. But in 1996, the Telecommunications Act was only relevant in terms of subsidizing landlines.
2005 Lifeline Expansion to Include Wireless Phones
During The second Bush Administration, cell phone usage rapidly expanded, and the FCC acted accordingly. The first free cell phone subsidized by the Lifeline Assistance Program was given to a consumer just three years later in 2008, a few months before Obama took office.
Since it came at the end of the Bush administration and since it was during Obama’s tenure that the program really took off, Lifeline has become associated with his name. But the foundation had already been laid for Lifeline to mostly provide cell phone services, as many consumers started switching to using a mobile phone more frequently than a landline.
2016 Lifeline Modernization Order
With the advent of smartphones, consumers now use cell phones for a whole lot more than making voice calls, or even texting. Consumers use phones to browse the internet for enjoyment or to quickly locate information on the go. They play games, shop, manage their finances, check in on their business, and use their cell phones to perform a whole myriad of other functionalities.
Even with the advent of home-based internet service, some low income consumers are unable to afford broadband service, which creates a sort of digital divide in terms of opportunities relating to healthcare, employment, and even homework. The Lifeline Modernization Order is all about closing this digital divide with a plan that will be phased in through 2021.
Consumers can elect to have either (1) fixed or mobile broadband service, (2) fixed or mobile voice service only, or (3) bundles that include both. By 2021, the voice only option will be phased out in most locations. What this means is that the Lifeline Assistance Program will be helping consumers enjoy fixed (as in, landline or home-based) or mobile service that provides both calling plans and the functionalities of broadband internet.
Who Started the Obama Phone?
The most accurate answer to this question is probably the FCC, or the Federal Communications Commission. That’s the branch of the Federal Government responsible for monitoring communications in the United States, which includes things like radio, television, phone usage, and internet. Remember that FDR signed the FCC into law, but it did not yet subsidize landline communication. It wasn’t until much later that the government began to subsidize landline usage and eventually expanded offerings to cell phone usage.
But as interesting as the history is, a more useful question for low income consumers might be: What is Obamaphone? Obama Phone, or the Lifeline Assistance Program, provides a free cell phone and/or broadband service to low income households. The vision of the Obama Phone program is to bridge the digital gap and provide more opportunity for low income individuals and families, since cell phones and internet service are vital tools for safety, gainful employment, education, and even well being.
Lifeline subscribers can make doctor’s appointments. They can call their doctor with questions. They can call 911 for police, fire, and paramedic services. With a phone, people can make plans with friends and call family members who live far away. They can seek out mental health help. They can browse for jobs and call a prospective employer about an upcoming interview if they need to reschedule on short notice…something that would be hard to do without a cell phone. In short, Obama Phone keeps America connected and improves the quality of life for its subscribers.