Poor Get Free Phones

From Matt Richtel at the New York Times:
John Cobb, 59, a former commercial fisherman who is disabled with cirrhosis of the liver and emphysema, lives in a studio apartment in Greensboro, N.C., on a fixed monthly income of $674. He has been hoping to receive more government assistance, and in February, he did.
It came in the form of a free cellphone and free service.
Mr. Cobb became one of a small but rapidly growing number of low-income Americans benefiting from a new wrinkle to a decades-old federal law that provided them with subsidized landline telephone service.
In a twist, wireless carriers are receiving subsidies to provide people like Mr. Cobb with a phone and typically 68 minutes of talk time each month. It is a form of wireless welfare that puts a societal stamp on the central role played by the mobile device.
Mr. Cobb’s cellphone is a Motorola 175. “I feel so much safer when I drive. If I get sick, I can call someone. If I break down, I can call someone,” Mr. Cobb said. “It’s a necessity.”
The users are not the only ones receiving government assistance. Telecommunications industry analysts said the program, while in its infancy, could benefit mobile phone carriers, who face a steep challenge of their own: most Americans already own a cellphone, so the poor represent a last untapped market.
“The low hanging fruit is gone, and the wireless companies are going after the nooks and crannies,” said Roger Entner, a wireless industry analyst with Nielsen. “Oh, the poor: How can we sign them up?”
Carriers can receive up to $10 a month in government subsidies, sufficient to cover what amounts to about $3 in service, Mr. Entner said.
Since November, the number of customers receiving free or subsidized wireless service has doubled to 1.4 million, he said. To be eligible for the program, known as Lifeline, a person must meet federal low-income guidelines or qualify for one of a handful of social service programs, including food stamps or Medicare.
The opportunity has prompted interest from the nation’s biggest carriers, including Sprint Nextel and AT&T.