Providing Cellphones for the Poor

There's a small but rapidly growing number of low-income Americans benefiting from a new wrinkle to a decades-old federal law that provided them with subsidized landline telephone service. In a twist, wireless carriers are receiving subsidies to provide them with a phone and typically 68 minutes of talk time each month. It is a form of wireless welfare that puts a societal stamp on the central role played by the mobile device. The users are not the only ones receiving government assistance. Telecommunications industry analysts said the program, while in its infancy, could benefit mobile phone carriers, who face a steep challenge of their own: most Americans already own a cellphone, so the poor represent a last untapped market. Carriers can receive up to $10 a month in government subsidies, sufficient to cover what amounts to about $3 in service. The opportunity has prompted interest from the nation's biggest carriers, including Sprint Nextel and AT&T. But at the forefront is a much smaller company, Tracfone, a Florida provider of prepaid mobile service that has become the face of the fledgling subsidized cellphone.