Assurance is able to offer the free service because it obtains a per-customer subsidy through a federal program whose goal is to improve land-line and wireless phone access. Customers who exceed the 200-minute allowance have to pay for subsequent service at 10 cents per minute.
The subsidy comes from the Federal Communications Commission's Universal Service Fund, which supports a program called Lifeline. The program helps provide for telephone access in under-served areas across the United States.
Assurance is the second company in six months to offer low-income residents with free cellphone plans in Maryland. In November, TracFone Wireless Inc. announced they would give free cell phones and 64 free minutes a month to eligible low-income customers in Maryland through its service, Safelink Wireless.
Customers eligibile for the cell phone programs typically have to be participating in a federal program, such as Medicaid, food stamps, public housing, or they may qualify based on low income. Potential customers can call 800-395-2171 or visit www.assurancewireless.com on the Internet.