WASHINGTON – A recent undercover report by a CBS affiliate in Denver exposed what appears to be blatant abuse of the government’s Universal Service Fund Lifeline program, the federal initiative that provides free-of-charge cellphones to low-income Americans.
The Lifeline program has become a partisan issue in Washington with GOP members calling for it to be terminated or reformed to prevent such blatant abuse. Others, however, including Federal Communications Commission Chairman Tom Wheeler and Sen. Cory Booker (D-N.J.) have been vocal proponents of expanding the Lifeline program to include broadband.
According to FCC Commissioner Ajit Pai, who presented the CBS undercover report at a commission hearing in May, the entire program is an invitation for fraud.
“From the end of 2008 to 2012, the size of the Lifeline program exploded from $819 million to $2.19 billion,” Pai said, “with annual increases of over 27% each and every year.” Under the program, companies receive $9.95 for qualified subscribers and $34 if those subscribers live on tribal lands.
Despite high incentives and evidence of fraud, the FCC remains committed to the program. In response to an RCR Wireless News inquiry, a FCC spokesman sent a fact sheet on the Lifeline program that includes the statement:
“Congress directed the FCC to ensure that all Americans – including low-income consumers – have access to advanced telecommunications and information services. Since 1985, Lifeline has helped make phone service affordable for low-income Americans. But to continue to serve its statutory purpose, Lifeline must evolve to meet today’s most pressing communications needs, including access to broadband.”
With its renewed commitment to maintain and expand the program, the FCC has sought to make the program more difficult to defraud. New measures include: “Requiring providers to retain documentation regarding the eligibility of their Lifeline customers, to facilitate oversight and audits, extend all record retention requirements from three to 10 years, and to increase program transparency by making key performance data easily available to the public,” according to relevant federal documents.
These measures have done little to assuage critics who see the entire program, despite its origins as a President Reagan-era alternative to welfare, as a massive waste of taxpayer dollars. Sen. David Vitter (R-La.) has previously said, “The FCC has failed to manage Lifeline efficiently in its current form, and I cannot support any expansion of a program that has so few safeguards in place to protect the legitimacy of the program and the American taxpayers who pay into it.”
