This transcript is automatically generated
About the government's lifeline cell phone program that gives free phones to the -- The program has always -- criticism -- a new report from the FCC's shows just how bad the program was being abused.
A survey of the five lifeline cell providers found that for any -- on.
And -- cents of nearly six million recipients.
Didn't meet the qualifications.
Needed to be part of the program.
Keep in mind this is being paid for with charges on your landline or -- -- here for more.
On this one is Spencer on -- who is who reported this story for the Wall Street Journal and your website is blowing up everybody's focused on this story because -- tests are.
-- scandal like half wiest got to how how was this discovered what is -- -- give -- more her.
So the government.
The other reform program update as of this lifeline in 2010 a year after -- Julius genachowski took of this CC.
And they were concerned that there was a lot of people who are getting.
The subsidies -- the phone service when they were really weren't eligible you have to be you know getting Medicaid or food stamps or some other government assistance program to actually qualified.
The problem was the rules -- written for the program were just really poured so.
Customer self certified to go up to.
A -- store and say -- yeah I'm on government assistance and they didn't have to document it you'd have to provide any group he just had to say he says I did that.
Also there was no verification.
Of the other -- which was one lifeline service per household.
So you had households getting more than one lifeline -- So the FCC woke up to -- they they started cracking down and we got hold with some data right.
Data recertify all their subscribers last year all the carriers who did this we got an early look at some of the data.
And it showed that they were expecting 15% to be weeded out because of the reforms -- and of these five top providers.
41% as you said we were deemed ineligible because either they they didn't qualify or because -- it respond.
To the request to certify.
Yeah I mean it's really amazing because it shows you may have the best intention.
When you start out because of course that's what everyone says that you have people who report can afford phones this that you need to be able to call my -- when you need to be able -- you have children sure you're trying to get -- -- emergencies that sort of thing that this is there's no pay phones -- this on the other thing.
But when you involve the government you end up with 41%.
Waste I mean that just is it's sort of a -- again they don't do free stuff well.
-- yeah you know it's definitely a cautionary tale about.
The risks of government running -- programs.
You know a lot of people are criticizing Obama for the study that's part of the reason why it's become one of the most the most -- -- -- -- what did I start I they're gonna be clear that.
The program actually started under Ronald Reagan administration in 1984 because after they broke up AT&T the government was concerned that.
That local phone rates would go get deliberately hide people can afford phones so -- -- the subsidies to help offset that.
And then in 2005.
Under the Bush Administration.
The use of the program to include prepaid carriers carriers that don't require -- contract.
And that's a really drove the growth of the last two years -- all these prepaid carriers -- out track phone and in companies like that and so.
You have to give the Obama administration some credit for actually realizing there was problems and and saying hey we gotta fix this.
Studies except from here because you're talking about going in and certifying you know that people only have one in house and that they receive other programs.
But you know people are looking -- and saying you really need a cell -- -- they like you mentioned track phone and that's you know giving android -- to people -- it ostensibly so can help them find a job -- it's unclear that these things are realistic and that they are just set up for abuse is -- -- -- parents are really covers the most basic function which is safety and do you insist it's -- -- -- not a cell -- See you can't get someone out there -- -- are at their changes that need to be made beyond just the certifying the basic.
Rules -- was actually many chains that of the fact and just be clear this program includes landline and cellphone right is that the cellphones have been obvious to everyone to cellphone now quite that's -- that's what's driving the growth -- -- -- -- more ripe for abuse because that's people walking around doing whatever -- -- -- to lately and it sort of type your house yeah.
So like other things that we're weeding out were non usage so lot of companies that would give out these phones -- -- would buy them.
And some people just -- and use them because you know -- -- -- yeah well because.
There's potential fraud here regular public there's one example -- Azerbaijan because they would just selling out unsolicited phones the people that even asked for them and so no wonder that it used them here and so they governor that the big issues in the duplicates -- -- -- government getting outlets and you know the process is still taking -- fact the these savings and that's the talk about the money government -- over 200 million dollars on reform.
They're expecting over -- drilling this year and over the next three years two billion dollars savings.
But that's savings on money we're spending it's not real savings while I expected does that not say it's less -- expense it's coming -- we appreciate your time --