Jeff says:

Those who are getting upset about the free phones should realize a few things. First, if you want to be mad at anyone, be mad at the government for their failure to regulate the phone companies enough to force them to charge something closer to actual cost of providing the service. If they did that, you’d save money and low income folks might not need a subsidized phone. I wonder how cell phone rates in the USA compare to those in other industrialized countries – it sure wouldn’t surprise me if we are at the high end of the scale.

Second, the free phone plans give you a really cheap, barebones phone. The one I have is like a small plastic brick (the company actually compares it to a candy bar) – it doesn’t even flip open and has no protective case. It does not have bluetooth (so if you want to go handsfree you have to buy the manufacturer’s handsfree kit). If you want something better, you have to purchase it yourself.

Third, you get a VERY limited number of minutes per month, and EVERYTHING else costs additional money. In the case of Assurance Wireless, they give 200 minutes per month, and that’s actually generous compared to SafeLink (which when I checked, offered something like a paltry 63 minutes a month). Additional minutes cost money. Text messages (incoming or outgoing) cost money, and there is no free allowance. International calls cost money, of course. Calling directory assistance costs money (and they helpfully add it to your contact list before they send you the phone!). So basically the only way you come out ahead with one of these phones is if you use it for emergencies only. , and watch the minutes you use during the month (and they even charge you for checking your usage if you do it too many times in a single day).

My feeling is that the people who provide these free phones have a nice little racket going. First, they get the cost subsidized by the government, so they hardly lose money in any case (in fact I would bet they don’t lose money at all, since these are telephone accounting dollars we are talking about here, and as we know telephone company accounting comes from a magical land of unicorns and fairies, or at least it has about the same basis in reality). But a certain percentage of customers probably go over their monthly allowance, or can’t resist doing a little texting, or download a ringtone or two, and those companies profit off all those things.

I’m smart enough not to do any of those things, and I do appreciate having the phone for emergencies (it came in real handy during a recent power outage). And it’s nice to have when you leave home, in case your car breaks down or something. But no one should think that all us po’ folk are getting gold-plated cell phone service of the same caliber as you would get for your forty bucks a month or whatever you pay. What we get would be like in the old days where some people got really cheap landline service, but were stuck on an 8-party line with lots of noise and hum on the line, in a place where almost every call you had to make was long distance. If you don’t pay much, you sure don’t get much (and yet, I’m personally grateful for what little we get, because in an emergency it can be a real lifesaver).

Jeff says:

Uncle Ken, you are in luck: “Assurance Wireless is currently available in Michigan, North Carolina, New York, Tennessee, and Virginia.” Their web site is at http://assurancewireless.com/

Telecom Guy says:

I worked in telecom until getting hit with a rare disease. Here’s a quick summary, with advice on which to choose at the end.

These plans are the modern version of the Lifeline minimal phone plan that’s been around forever – over 1/2 a century anyway. That gave you the ability to have a phone installed and connected for a few dollars and very minimal calling services. You were billed message units for all local calls depending roughly on the distance. The only add-ons you could get – which you paid extra for – were touch-tone and a short range local calling area at a flat rate. That was a while back; radios had tubes, phones had dials and there were cheap apartments in every city.

The current one applies the Lifeline subsidy to a cell phone. Someone who has a severe health or other issue probably doesn’t have their home any longer, so the costs of setting up phone service are prohibitive. Lifeline wired phones in theory has a $5 install, but you actually have to pay for regular service for several months while the Lifeline application sits until the legal deadline. It’s electronic and they could approve it with an information release and a few keystrokes, but the telco delays it 60-90 days depending on the regs in that state.
So wired Lifeline doesn’t always work for the end user and the carriers want to get out of basic wired phone service altogether e.g. (VZ rips out the standard phone wire once you upgrade to FIOS).

The alternative is using the Lifeline subsidy – about $10/line – on a cell phone. 2 carriers have picked up the ball for that, figuring many of those people will buy a few extra minutes, text messages, dial 411 etc. The telco figures some will be in better shape later and become regular customers. I’m guessing they do just over break even after all expenses if you never buy extra min, and make money if you do. This is _not_ the cell phone service you have on a regular contract:: features vary, but things you take for granted like 3-way calling, forwarding, free nights and wknds etc are not included. The phone will be a simple model you haven’t seen anywhere else, and is has special, simplified firmware. There’s no data function at all – not that you’d expect one.
What you do get:
Tracfone Safelink — 68 min/month — yup, 68 min total, that’s it.
Text messages (don’t know how many)
International calls to 10 #s if they are in participating countries. Sound quality won’t be quite the same, but you can’t beat the price. VoIP is a fine thing
Voicemail, uses those minutes.
And you get to buy more minutes for about 20c min.

Virgin Mobile Assurance: 200 min month
Add’l minutes 10c
Runs on Sprint-Nextel network
Other items – didn’t check.
Most people eligible for one of these will find the Assurance phone is a better deal. Should your situation improve you can easily upgrade to a standard Virgin Mobile or Sprint account, which offer more reliable and complete service than Tracfone can.

So there’s nothing very new here, just translating the past’s wired Lifeline service into the wireless present. Someone who has a grudge against it is about 60 years late.