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U.S. judge halts cell phone service fee for the poor in Georgia

By David Beasley

ATLANTA (Reuters) - A federal judge has blocked Georgia's plan to charge low-income residents $5 per month for cell phone service that currently is provided free of charge.

The fee was set to take effect on January 31 and would have made Georgia the only the U.S. state to charge for the federally subsidized phone service.

"The public interest tilts in favor of providing telephone services to low-income households that otherwise would be unable to afford mobile phones," U.S. District Court Judge Richard Story wrote on Tuesday in a temporary injunction that stops the new fee while a court challenge is pending.

Nationally, about 14 million households participate in the Lifeline phone program, according to the Universal Service Administrative Co, the nonprofit organization that administers the program.

Each qualified household gets 250 minutes per month of free air time. Tax money only pays for the phone service, not the actual phones, the nonprofit said.

The cell phone industry trade association, called CTIA, sued Georgia earlier this year even before the new fee got final approval in October. The association claims that by adding the $5 monthly fee, Georgia is setting cell phone rates, which it does not have the legal power to do.

The Georgia fee was aimed at reducing fraud, but consumer advocates claim it will hurt poor customers who are not abusing the program.

Critics say some telephone companies providing the free service are failing to adequately check household income and are not enforcing the one-per-household limit.

Funding for the program, which was launched in 1985 to expand phone service for the poor, comes from the Universal Service Fee charged to land line and cell phone customers.

"As this is pending litigation, our only comment at this time is that we are consulting with our attorneys on how to move forward," Chuck Eaton, chairman of the Georgia Public Service Commission, said in a statement on Wednesday.

(Editing by Colleen Jenkins and Gunna Dickson)

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