FCC Chairman Pai Orders Immediate Action on Lifeline Waste, Fraud and Abuse

In a letter to Universal Service Administration Company CEO Vickie Robinson, Federal Communications Commission Chairman Ajit Pai responded to a recent Government Accountability Office report on potential waste, fraud and abuse in the FCC’s Lifeline program and additional internal FCC investigations. “In light of these investigations and their findings, I believe immediate action is warranted.” He called on USAC to implement safeguards in six areas to ensure Universal Service Fund monies are not used by “unscrupulous eligible telecommunications carriers (ETCs)”:

• Audit the ten ETCs with the highest number of potential ineligible Lifeline subscribers
• Review a sampling of Lifeline subscribers each month to determine if they are eligible
• Require ETCs to verify Lifeline subscribers’ eligibility and de-enroll any subscribers who are not eligible
• Refer ETC abuses to the FCC’s Office of Inspector General for possible civil or criminal action
• For addresses with 500 or more Lifeline subscribers, require ETCs to de-enroll subscribers who cannot verify their address and confirm they are “independent economic households” from other Lifeline subscribers -- and, on a quarterly basis, review in a similar way a sampling of addresses with 25 or more subscribers
• Recapture improper payments associated with de-enrolled Lifeline subscribers
• Explore automating the process of detecting oversubscribed addresses
• Step up efforts to identify “phantom,” deceased and duplicate subscribers, de-enroll them, and prosecute ETCs who collect USF funds for serving these fictitious customers
• Require Lifeline sales agents to register with USAC, block new subscribers enrolled by sales agents who are registering too many customers, and stepping up prosecution of fraudulent sales agents.

Chairman Pai asked USAC to report to him on implementation of these safeguards by August 8, 2017.