Tracfone Controversy in “Obama Phone” Smartphone Contract

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Tracfone's smartphone scheme could cost government $100 million every month; Tracfone CEO denies Obama is influenced by his financial support of Democrats. Image credit: Lora Williams.

Tracfone’s smartphone scheme could cost government $100 million every month; Tracfone CEO denies Obama is influenced by his financial support of Democrats. Image credit: Lora Williams.

Tracfone Wireless will be part of modernizations proposed for the Federal Communications Commission’s (FCC) Lifeline Program, in a contract that gives struggling households access to cell phones, amid controversy that the CEO of the firm is closely connected with the President.

Tracfone: Ties With the President

The Tracfone contract, which is part of a pilot scheme that aims to increase Internet access via Smartphones amongst low income families, has become subect to criticism following revelations that its CEO, F. J. Pollack, is a financial supporter of Obama, and has made significant financial contributions to the governing party.

Abigail Pollak, wife of the CEO, has helped to raise $1.56 million for Obama and his campaigns since 2007, and the couple were reported to have donated around $270,000 to Democratic candidates in last year’s election.

Obama Phones – The Pilot Scheme: Granting Internet Access to Low Income Families

The so-called ‘Obama Phone’ plan is part of the FCC’s Lifeline Program, which provides phones to families whose income is below 135% of the poverty line. Originally established under Ronald Reagan in the 1980s, the Program has helped millions of American families gain access to basic cell phones.

The entire Lifeline Program already costs around $2.4 billion annually to run, and is undergoing $214 million worth of changes under Obama. The new smartphone scheme, introduced in December 2012 and being piloted at a cost of $13.8 million, aims to add an additional provision to the Program, enabling low income families to access high-speed internet in order to improve their online skills and utilize the Internet for everyday tasks such as shopping, banking, or job-hunting.

Tracfone’s contract is one of 14 awarded by the FCC, with others including trials with internet providers to introduce Broadband access in the homes of poorer families by installing DSL hook-ups for PCs and laptops.

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