The Lifeline program provides prepaid cell phone and home phone service at a discounted rate to eligible low-income applicants in all fifty states by eligible telecommunications carriers (ETCs). ETCs are reimbursed for the discounted service from the federal Universal Service Fund (USF).
South Carolina ETCs are required to discount their monthly service by $13.75 per month. They are reimbursed $9.25 per month from the federal USF, and landline ETCs are reimbursed $3.50 per month from the state USF. ETCs providing prepaid cellular service in South Carolina are not reimbursed from the state USF, but are nonetheless required to offer a $13.75 per month discount on their service. All South Carolina ETCs must also agree to contribute to the state USF and pay state E911 fees.
In practice, prepaid cellular Lifeline customers typically receive at least 200 minutes per month of free voice and/or text service, and may purchase additional time if they wish to do so. Most carriers also give new customers a free basic, no-frills, cell phone at sign-up.
Lifeline cell phones have sometimes been referred to as "Obama phones", but the Lifeline program was actually established during the Reagan administration in 1985 to subsidize land line service, and was expanded to include prepaid cell phone service during the administration of George W. Bush, in 2005. While Lifeline is a federal program, all ETCs that transact business within the state must be certified by South Carolina’s Public Service Commission.
To be eligible for the program, applicants must have an annual income at or below 135% of the federal poverty guidelines, or they must already be enrolled in one of the following assistance programs: Medicaid, Supplemental Nutrition Assistance Program (SNAP), Supplemental Security Income (SSI), Federal Public Housing Assistance (Section 8), Low-Income Home Energy Assistance Program (LIHEAP), Temporary Assistance to Needy Families (TANF), National School Lunch Program’s Free Lunch, Bureau of Indian Affairs General Assistance, Tribally-Administered TANF, Food Distribution Program on Indian Reservations, Head Start, or state assistance programs. Lifeline service is limited to one per household. ETCs are required to file plans with the Federal Communications Commission demonstrating that they have adequate policies and procedures in place to prevent fraud and abuse in the program.
While the number of ETCs in South Carolina fell from 47 in 2013 to 41 in 2014, the total telecommunications benefits dollar amounts have grown over the past three years. The national approved disbursal amount for Lifeline in 2012 was $2.19 billion, and South Carolina’s total Lifeline amount for that same year totaled $22,914,325. Just one year later, the combined Lifeline amount for South Carolina increased to $38,456,716, an increase of 40.4%. In contrast to this, the national approved disbursal amount actually decreased from 2012 to 2013, from $2.19 billion to $1.80 billion, a 17.8% reduction. South Carolina’s use of the program saw a slight decrease in 2014, with the amount totaling $34,869,238, which shows that a high number of South Carolinians continue to utilize and be eligible for the program.
South Carolina's high Lifeline participation may be due to the fact that a relatively high percentage of South Carolinians live at or below the poverty level. In 2013, the latest year for which figures are available, the percentage of South Carolinians at or below poverty increased to 18.6%, up from the previous year at 18.3%. During that same period, the national rate was 15.8%. Young South Carolinians suffer comparatively more, with a dramatic increase from 26.9% in 2012 to 27.5% in 2013 for those under the age of 18.
South Carolina Lifeline dollars