Texas member proposes ending federally subsidized cellphones

The FCC imposes a tax on phone bills, and has used the money collected to ensure phone service in rural areas of the United States. But part of this Universal Services Fund goes to the “Lifeline/Link-up” program, which subsidizes phone service for low-income customers.

According to Republicans, some phone companies have started to use that subsidy to offer free cell phones and wireless service to low-income customers. That led to some complaints among Republicans over the last few years about the free cellphones offered by the Obama administration, even though the FCC program was in effect before Obama took office.

In July, ending the Lifeline program was voted as a priority program to be shut down under the House Republicans’ “YouCut” feature on the website of House Majority Leader Eric Cantor (R-Va.).

On Thursday, the FCC announced radical changes to its Universal Services Fund, and said it would start to use the fund to help improve broadband Internet access in the United States.