The Miami company that wants to bring free cellphones to needy Coloradans has scuttled its plan and blames county emergency-service officials for insisting the poor help pay for 911 service.
TracFone Wireless said it temporarily ditched its free cellphone plan — it provides the service in 24 other states — just before Christmas after months of wrangling over the monthly fees that 911 authorities charge telephone customers.
At issue, according to documents filed with the state Public Utilities Commission, is whether consumers who use prepaid wireless phone service — the fastest-growing segment of the telecom industry — should pay the monthly 911 surcharge that consumers with home telephones and regular wireless plans already pay.
Major service provider
TracFone is one of the largest providers of prepaid telephone services in Colorado — in phone cards and cellphones — and doesn’t collect 911 surcharges on those sales.
In addition to not collecting from regular paying customers, emergency service officials are worried county 911 authorities will lose even more revenue if eligible poor get the free cellphones and shut off their home telephones that currently are charged the 911 fee.
“Every telephone capable of dialing 911 should pay the 911 fee,” said Clint Blackhurst, Brighton’s police chief and chairman of the Adams County E-911 Emergency Telephone Service Authority.
Though TracFone did collect 911 surcharges from regular paying Colorado consumers for a time, it’s since stopped, according to the PUC filings. The company says state laws are ambiguous on whether prepaid wireless plans have to collect the fee because it doesn’t actually bill consumers monthly. They buy a card or cellphone loaded with minutes and buy more as the need arises.
Free cellphones to the indigent only compound the problem of uncollected surcharges because they don’t actually purchase them — they are paid for by the federal Universal Service Fund, to which consumers contribute on their monthly telephone bill.
Currently, the USF supplements home phone service to the poor but only as credits on their monthly bill.
Estimates put the amount of lost 911 revenue from free cellphones in Colorado at about $3.3 million a year, with Denver highest at about $820,000. Census estimates say about 385,000 Coloradans are below the poverty line, each theoretically able to get the free cellphone.
TracFone’s proposal for the indigent — called LifeLink — was to provide users with 83 free minutes per month as well as unlimited access to 911 emergency service. Those who currently get USF credit to a home phone get the unlimited 911 access, but receive no free minutes and are charged the 911 fee.
Fees vary across state
The fees used to pay for 911-related services vary and range from as little as 43 cents a month in Adams County to $1.50 in Grand County. The average statewide is 78 cents.
TracFone yanked its PUC petition, opting instead to work with 911 authorities on legislation that would have wireless customers pay the 911 fee at the store. One idea is to charge consumers 1.4 percent of their prepaid purchase.
But that still doesn’t answer the problem of who pays the 911 fee on the free phones to the poor — the original reason emergency service authorities challenged TracFone’s PUC application.
“If they want to tax a family of eight living in a shelter, they can figure out how to do that,” TracFone lawyer Leighton Lang said. “We don’t want to.”
David Migoya: 303-954-1506 or dmigoya@denverpost.com
TracFone Wireless wants to give free cellphones to Colorado’s poor, but county 911 authorities say the indigent should pay their fair share for the service. Here’s the potential impact to the top five counties with the highest populations of poor:
Lost 911 income
**Poor Lost Annual
County *911 Fee Households Revenue
Denver $0.70 73,784 $619,786
El Paso $0.70 39,013 $327,709
Adams $0.70 28,015 $235,326
Jefferson $0.52 25,838 $161,229
Arapahoe $0.43 28,770 $148,453
Statewide 366,887 $3,296,069
* charged monthly ** per U.S. Census Bureau
Source: Colorado 911 authorities
