Rumor: President Obama is giving away free cell phones

An MSN reader submitted this rumor: President Obama is giving away free cell phones and outsourcing the customer service jobs to India.


UNCONFIRMED:  That President Obama sponsored a program giving away free cell phones and then outsourced the customer service jobs for the program to India

A reader wrote in to MSN News asking about rumors that the so-called “Obama phone” program had outsourced its customer-service support to India. Here’s what we know.

‘Obama phone?’ More like ‘Reagan phone’

It’s true that there is a program called Lifeline in which low-income Americans who meet certain requirements can qualify for a cheap or free cell phone. This program, however, was not started under president Obama, but can trace it’s roots back to the Ronald Reagan era. MSN News spoke with Laura Betancourt, spokesperson for Universal Service Administrative Company, the non-profit company that supports the subsidized phone program. She notes -- as does -- that the the idea of subsidized telephone service was hatched during the Reagan era and that the free cell phone program now in place was started under President George W. Bush, not President Obama.

“Nothing about this program has anything to do with Obama,” Betancourt tells MSN.


Taxpayer funded? Nope

As ABC News and others have noted, Lifeline is not funded by taxpayers, but by telecommunications companies though the aforementioned non-profit, USAC. As notes the funds for the program come from “long distance companies, local telephone companies, wireless telephone companies, paging companies, and payphone providers,” and at no point does US tax revenue pay for the phones or the service.


Outsourced to India? Perhaps, but not by Obama

The second part of the reader’s question has to do with customer service. The reader writes “I understand that outsourcing helps keep the cost down, but isn’t this one of the big reasons that jobs are lacking in America in the first place?”


While it’s likely true that many Lifeline customers have to go through a foreign call center to get their questions answered, that is the result of the individual phone companies’ decisions on where to build their call centers, not any decision of the Obama administration or US government.


How to get a free phone

Betancourt explains that people can find out if they qualify for Lifeline service by checking this website. Some of the stipulations involve already receiving benefits such as Medicaid, or having household incomes at or below 135 percent of the poverty line. Those who believe they qualify will then need to apply for the program through a private phone carrier like AT&T, T-Mobile, CenturyLink or a host of others. Once a person is deemed to qualify for the service, USAC reimburses the phone companies for the cost.


See the misleading “Obama phone” commercial run during the last president campaign



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