A newly established Fraud Division, operating within the FCC’s Enforcement Bureau, will help protect USF programs from further fraudulent behavior.
The Commission’s Order, released earlier this year and just recently made effective, lists just a few examples of past fraud and abuse of Universal Service programs. DataConnex, for instance, was fined $18.7 million for defrauding the rural health care program, while Sandwich Isles Communications had to return $27 million in improper payments and received a $49 million fine for violations of the high cost program.
As we have heard through the years, however, the Lifeline program has been the most abused. The Fraud Division Order cited just one example of many that could have been given. American Broadband, according to the Commission, was issued a $63 million fine for creating false accounts for dead people and “manipulating the personal information (names, dates of birth and social security numbers) of existing Lifeline subscribers.”
Many of these fraudulent practices occurred under the watch of the previous FCC, which seemed somewhat lax in assuring that Universal Service funds were being distributed legally, properly and fairly. The Lifeline program was especially susceptible to illegal and unethical activities.
Creation of the Fraud Division, with its more stringent and focused enforcement responsibilities, is thus more than a little late. In all probability, it will not be able stop every instance of USF fraud, deception and abuse. it is, nonetheless, a large step in the right direction.