TracFone issues ‘fact sheet’ pouring scorn on Carlos Slim, ‘Obamaphones’ story

15 Oct 2012

TracFone Wireless, the US mobile virtual network operator (MVNO) 98.2% owned by Carlos Slim’s America Movil (AM), has issued a ‘fact sheet’ on behalf of its Safelink Wireless service for low-income households under the federal ‘Lifeline’ programme. Last week, a number of media outlets, including Fox News, printed stories suggesting that Mexican telecoms tycoon Slim – the world’s richest man – was earning money from a US government programme that supplied so-called ‘Obamaphones’ to the poor. Fox News reported that Slim, who has an estimated net worth of USD70 billion, makes USD10 per phone for each device it provides to poor Americans. In response, the fact sheet sets out the following:

‘Fact #1: There is no ‘Obamaphone’. The Lifeline programme has always enjoyed broad bipartisan support and dates back to 1985. The whole notion of an Obamaphone’ is a hoax that has been rebutted by several leading news organisations and fact-checking groups. The simple truth is that the Lifeline programme started during the Administration of President Ronald Reagan under a Republican chairman of the Federal Communications Commission (FCC). The programme was later refined by a Republican-controlled Congress in 1996 following enactment of the 1996 Telecommunications Act’.

Other facts include:

Fact #2: Taxpayers do not pay a penny for wireless Lifeline;

Fact #3: Lifeline treats landlines and cell phones exactly the same;

Fact #4: Cell phones are not subsidised under wireless Lifeline. Companies that offer free phones under Lifeline wireless cover the cost of the phones themselves;

Fact #5: The wireless Lifeline programme is tightly regulated to control fraud and abuse; and

Fact #6: Participation in wireless Lifeline is far below what it should be.

Industry insiders have noted that the timing of the Obamaphones story has been engineered to provoke controversy as the US presidential election, which is due to be held on 6 November, fast approaches. Incumbent Democratic President Barack Obama is running for a second and final term; his major challenger is former Massachusetts Governor, Republican Mitt Romney.

United States, TracFone Wireless