FCC Opens Investigations into Lifeline Fraud Allegations
The FCC’s Enforcement Bureau opened investigations into allegations that Lifeline carriers aren’t properly checking whether their customers are eligible to receive the subsidy, the commission said Monday in an enforcement advisory (http://xrl.us/bmkcfs). “We are actively investigating these allegations, and issue this Enforcement Advisory to alert Lifeline service providers that they face stiff penalties, potentially including revocation of their [eligible telecommunications carrier service] status or their section 214 authorization to operate as carriers, if they do not strictly adhere to the Commission’s rules,” the FCC said.
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The advisory didn’t identify the companies it was probing. Last week, Wisconsin regulators revoked Midwestern Telecom’s eligibility amid allegations of duplicate payments (CD Dec 2 p10). FCC Chairman Julius Genachowski’s staff was horrified over the summer as it pored over data on the Lifeline program and discovered numerous customers who were receiving more than one subsidy, officials said. The commission has launched pilot programs in Florida and Tennessee, the country’s worst offenders.
Staff continues to work on a Lifeline order, FCC officials have said and the record shows. CTIA dispatched lobbyists to the eighth floor last week and urged Genachowski’s aides to create a national database of Lifeline customers to help crack down on duplicate payments, according to an ex parte notice released Tuesday on docket 11-42. But the wireless association also urged the FCC “to adopt proposals that are administratively feasible and consistent across providers on a competitively-neutral basis,” according to the ex parte notice (http://xrl.us/bmkcgr).
TracFone Wireless, one of the largest Lifeline carriers, also took meetings of its own, according to ex parte notices (http://xrl.us/bmkcgv). The company agreed with other commenters that Link-Up support should be eliminated, which “would bring an end to the practice of utilizing Universal Service Fund ('USF') resources by certain ETCs to subsidize their advertising, marketing, customer enrollment, and regulatory compliance costs -- a more blatant abuse of USF resources can hardly be imagined!”
TracFone also said the FCC should stop basing Lifeline payments on ILEC subscriber line charges, another concession. But “TracFone strongly disagrees with Cricket’s proposal to require Lifeline applicants to provide written documentation of program-based eligibility prior to enrollment while maintaining existing sample procedures for annual verification,” the company said in its ex parte notice. “Although Cricket claims that such so-called ‘full certification’ would curb waste, fraud and abuse, it has offered no factual basis for that claim. In fact, nowhere in the extensive record compiled in this proceeding is there any evidence that full certification would prevent waste, fraud and abuse and prevent enrollment by persons not qualified to receive Lifeline benefits.”