Guess Who Paid for Study Advocating Free Prepaid Cell Phones for the Poor?

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A “first of its kind” study by the New
Millennium Research Council (NMRC) concludes $4 billion in income could be generated for the poor by simply giving such folks free prepaid cell phones.

“Subsidized Cell Phones Provide Significant Economic Gains for
Poor and Near-Poor Americans” singles out cash-strapped
states such as California, which currently does not participate in
the Federal Communications Commission's Lifeline Assistance program.

But before you say, “Eureka, I have discovered the answer to reducing the Golden State's safety net!” you need to consider who else would make out from taxpayers buying cell phones for the poor. Here's a hint: It's the industry that funds the NMRC.
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Based on the high volume of identical e-mails that hit my inbox last week, the NMRC really wants you to know how giving the poor free prepaid cell phones will help them find jobs and reduce the burden on governments to assist them.

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“[T]he
subsidized cell phone has been an important economic tool, which
generates an average of $259 (per participant) per year,” reads the report written by Nicholas P. Sullivan, a fellow at the Center for Emerging
Market Enterprises at the Fletcher School and co-chairman of the Fletcher
School Leadership Program for Financial Inclusion.

“If all 28.5
million adults eligible for [the FCC's] Lifeline Assistance were to take advantage
of the program and earn at the same rate and level as our sample, it
would result in $3.7 billion in fresh income for the poor and near-
poor.  In large states, such as New York, Florida and California, the
gains would exceed $250 million. By this measure, the program is already
paying for itself.”

The e-mail trumpeting the study–which you can read at http://www.thenmrc.org–also includes the views of consumer advocate Samuel A. Simon, an NMRC senior fellow:

“Lifeline-supported wireless cell
phone service for poor Americans appears from this study to be exactly
what advocates of universal access to telecommunications services had in
mind when the Universal Service Fund (USF) was created.  Unlike other
USF programs that have been criticized for lining the pockets of
telecommunications companies with unnecessary subsidies, wireless
Lifeline aid is highly targeted and, at very low cost, goes right into
the hands of the American consumers who most need this assistance in
finding work or keeping their existing job.” 

Speaking of pocket-lining and the telecommunications industry, here is what Common Cause says about the New Millennium Research Council:

At first glance, the New Millennium Research Council appears to be a think tank. But the details don't add up. It lists no staff on its website–only a stable of “contributing scholars and experts,” several of whom
are Verizon employees. Guidestar.org, which maintains a database of nonprofit organizations, has no listing for the New Millennium Research Council, nor is NMRC listed in the Internal Revenue Service's Cumulative List of Charitable Organizations.

It turns out that New Millennium Research Council is not a nonprofit
group, but a “project” of Issue Dynamics Inc., a for-profit public-
affairs consulting firm. Issue Dynamics lists a number of telecommunications companies on its
client list–including Verizon, Comcast, BellSouth, SBC Communications
(now AT&T), as well as the United States Telecom Association–the
trade association for the telecom industry.

Anyone think those companies might be salivating at the idea of California taxpayers buying free cell phones for the poor?

Speaking of the poor and the telecommunications industry, if the NMRC is so hellbent on helping the less fortunate, why has it released a different report that concludes municipal Wi-Fi networks are “not in the public interest.”

Having access to free Wi-Fi would help the poor find jobs every bit as much as free prepaid cell phones would.

Can you hear me now?