Judge Blocks Georgia’s $5 Fee on Cellphone Service for Poor

A federal judge has stopped Georgia from charging residents to participate in a federal program that provides low-cost or free cellphone service for low-income people.

The decision to halt the $5-a-month fees comes two months after Georgia became the first state to impose fees on people who receive subsidized phone service through the Federal Communications Commission’s Lifeline program. Georgia decided in favor of the $5 charge in order to rein in abuses and discourage aggressive sales tactics. The rule, which was set to take effect in January, required participating carriers to bill Lifeline consumers $5 every month or provide them with 500 minutes of call time per month. Currently, carriers typically provide much less than that. The rationale is that having to offer the extra minutes would be enough to deter companies from aggressively -- and perhaps fraudulently -- hawking free phones. CTIA-The Wireless Association, a trade group that represents the wireless industry, sued the Georgia Public Service Commission, claiming that the fees would harm customers who couldn’t afford to pay them and were preempted by federal law that prohibits states from regulating phone rates. US District Judge Richard W. Story agreed with CTIA, granting a temporary injunction that suspends the fees as the litigation plays out. “[W]hile the status quo may permit some level of fraud to continue, the public interest tilts in favor of providing telephone services to low-income households that otherwise would be unable to afford mobile phones,” Judge Story wrote in a six-page decision.