Free Prepaid Phones - How Is This Possible?!

Are you looking for free prepaid phones?  If you're eligible, TracFone's SafeLink program, Virgin Mobile's Access/Assurance Wireless, and a number of other Lifeline government sponsored programs offer free cellular phone service for low income households seeking support.

How is this program possible?
Basically, the government is providing these authorized Lifeline programs with money to enable them to offer free prepaid phones.  Of course, I don't know the specifics of the actual contractual agreements, however, I've heard that they get revenue in the realm of $10 per user per month.  While that doesn't sound like much, if the program is constructed efficiently, with low operational costs, it can certainly be a profitable program.  In fact, I have heard senior executives managing similar programs that their Lifeline divisions are in fact profitable to the point where it absolutely makes sense from a business perspective for them to participate.  If it weren't profitable, carriers certainly wouldn't voluntarily support it!

So are our tax dollars going to support this program?  No.  In fact, all telecommunications service providers must contribute to the Federal Universal Service Fund (USF) from their service revenues.  Some wireless companies pass on these fees to customers (which would show up on a postpaid bill), while others choose not to.


So what's the catch?
There honestly really isn't a catch to this free prepaid phone program.  The government believes that as with other services for low income households (ex. food stamps, Medicaid, etc.), access to cell phone service is more than important; it's critical.  In fact, the FCC states that "telephone service is considered a necessity for daily modern life."  The number of minutes included in the free offer varies by provider, and most now include unlimited text messaging as well.  The included minutes are certainly limited, as it's really meant for occasional or emergency use, or to let your family know you're running late, that you'll be home soon, call the doctor, schedule job interviews, etc.  If you're thinking you can take advantage of this program to get free wireless service, and will be able to chat for hours a day without having to add any money of your own, you'll be disappointed.

Are there other options?
As noted, there are number of authorized Lifeline service providers.  If you haven't already read it, learn more about how to qualify, the benefits, and llist of Lifeline providers, by visiting Free Cell Phone Service.  In addition, you can visit the Universal Service Administrative Company’s website, or the Federal Communications Commission’s website to learn more about these programs.  

What states offer the service?
Each program supports various states.  There's an onerous approval process that carriers must do on a state by state basis, so you'll find that there are availability differences between providers simply based on where they've been certified to rollout.  Also noteworthy is that the number of included minutes can vary by state, and California even offers a free smartphone with free included data.

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