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TracFone rates worry poverty groups


AUGUST 12, 2010

TracFone rates worry poverty groups
Lawyers want to see data on fees for going over free minutes

The following article by Tim Feran appeared August 9, 2010 in The Columbus Dispatch. Read below or view the contents on the Dispatch website.

Low-income telephone customers who use the state-subsidized Lifeline cell-phone service might be getting gouged by prepaid wireless phone provider TracFone, poverty law advocates fear.

Under the program in question, TracFone Wireless Inc.'s SafeLink service, qualifying Ohioans can get a free cell phone with 68 free minutes to use each month. Once the free time is used, customers are charged 20 cents a minute.

Although that price is roughly the same as what TracFone charges the public under at least one service plan, two groups consider the additional cost excessive.

Lawyers for Ohio Poverty Law Center and Advocates for Basic Legal Equality Inc./Western Ohio filed a public-records request with the Public Utilities Commission of Ohio last week to find out how many people exceed the 68 minutes and by how much.
 

AUGUST 12, 2010

TracFone rates worry poverty groups
Lawyers want to see data on fees for going over free minutes

The following article by Tim Feran appeared August 9, 2010 in The Columbus Dispatch. Read below or view the contents on the Dispatch website.

Low-income telephone customers who use the state-subsidized Lifeline cell-phone service might be getting gouged by prepaid wireless phone provider TracFone, poverty law advocates fear.

Under the program in question, TracFone Wireless Inc.'s SafeLink service, qualifying Ohioans can get a free cell phone with 68 free minutes to use each month. Once the free time is used, customers are charged 20 cents a minute.

Although that price is roughly the same as what TracFone charges the public under at least one service plan, two groups consider the additional cost excessive.

Lawyers for Ohio Poverty Law Center and Advocates for Basic Legal Equality Inc./Western Ohio filed a public-records request with the Public Utilities Commission of Ohio last week to find out how many people exceed the 68 minutes and by how much.

The PUCO estimates that about 555,000 customers are using the Lifeline Assistance Program designed for low-income residents in Ohio. Slightly more than half use the wireless service option, with the rest using a landline-based service.

State consumer advocates have worried from the beginning of the Lifeline cell-phone program that customers almost inevitably would need time beyond the 68 free minutes, especially because the cell phone would be used as the primary phone line.

"In one or two other states, they're offering 200 minutes," said Michael Smalz, staff attorney for the poverty law center. "There's no explanation why they're offering such a terrible deal in Ohio."

Among the individual plans that TracFone sells to the public, one features 50 minutes per month at about 20 cents per minute; another offers 125 minutes per month at about 16 cents per minute; and a third offers 200 minutes per month at about 15 cents per minute.

"We are seeking information the public clearly has a right to know," Smalz said. The group seeks "to determine whether the general ratepayers' Lifeline subsidy for low-income customers is being spent in a cost-effective manner."

But TracFone is concerned about protecting proprietary information and wants any information the PUCO gives the group to be considered confidential, an attorney for the company said.

"The information they're looking for is something that TracFone files with the PUCO on a quarterly basis," the attorney, Mitchell Brecher, said. "Those reports contain a great deal of proprietary information. TracFone obviously is opposed to unlimited disclosure of that information."

Brecher said that TracFone will ask the PUCO to issue a protective order requiring released information to be treated as confidential.

"We're not objecting to the poverty law center having the data," Brecher said. "We are objecting to them having unfettered access."

If the public-records request is denied, the poverty advocates likely will seek a court order to get the information, Smalz said.

To be eligible for the program, individuals must have a household income at or below 135 percent of the federal poverty guidelines for the landline service or at or below 150 percent of the poverty guidelines for the cell-phone service.

TracFone offers its discounted cell-phone service, called SafeLink, in more than 20 other states and Puerto Rico.

TracFone's SafeLink service uses funds from the federally subsidized Lifeline program, which is meant to give all Americans access to a telephone. The SafeLink program was given special status by the Federal Communications Commission to participate in the Lifeline program, as long as state officials approve.