Pai Addresses Waste, Fraud and Abuse in Lifeline Program

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In recent testimony before the U.S. Senate Committee on Homeland Security and Governmental Affairs, FCC Chairman Ajit Pai confirmed what many of us already knew, or at least suspected: That there has been massive corruption in the Lifeline program over several years.

Pai testified that before becoming Chairman, he conducted a thorough investigation of the Lifeline program which, “revealed significant abuses of the program by Lifeline providers…And GAO’s May 2017 report confirmed some of the same issues I identified in my investigation.” He found, because of inadequate safeguards, unplugged loopholes, lack of verification procedures, and unscrupulous sales agents:

– Millions of Lifeline participants could not be confirmed as having participated in any qualifying programs, including Medicaid, SNAP or SSI.

– In violation of the one subsidy per household rule, multiple subscribers — 10,000, representing over $90.000 per month in the worst case — were associated with just one address.

– Providers have wrongfully claimed support for phantom or deceased subscribers, as well as multiple benefits claimed for a great number of single subscribers.

– Commissions were paid to sales agents based on the number of new subscribers added to the program, incentivizing them to seriously abuse enrollment procedures.

With Congress and the new FCC now more thoroughly involved, the Lifeline program will almost assuredly get straightened out and cleaned up. In fact, Chairman Pai outlined several new measures to improve Lifeline compliance that he has asked USAC and the FCC’S Enforcement Bureau to undertake.

It’s just too bad that corrupt Lifeline providers, with little past FCC oversight or enforcement, stole $ millions and millions from telecommunications users over many years — money that was illegally taken from the FCC’s USF budget, and that could very well have been directed toward high cost funding for RLEC broadband services.