Subsidized Cell Phones Provide Significant Economic Gains for Poor and Near-Poor Americans

Recently expanded efforts to put free cell phones into the hands of poor and near-poor Americans eligible for the Federal Communications Commission’s Lifeline Assistance program have the potential to deliver nearly $4 billion annually to eligible Americans, according to a new New Millennium Research Council.

Telecommunications access expert Nicholas Sullivan concludes: “…the subsidized cell phone has been an important economic tool, which generates an average of $259 (per participant) per year. If all 28.5 million adults eligible for Lifeline Assistance were to take advantage of the program and earn at the same rate and level as our sample, it would result in $3.7 billion in fresh income for the poor and near poor. In large states, such as New York, Florida, and California, the gains would exceed $250 million. By this measure, the program is already paying for itself.” The Sullivan report is based on extensive survey data collected by Opinion Research Corporation (ORC) International, which polled 5,541 TracFone SafeLink Wireless customers in 22 states. The new February 2011 analysis is a “bookend” to an earlier NMRC study by Sullivan on the economic benefits of cell phones for the roughly one third of poor Americans without them.