Government shutdown or not, the Federal Communications Commission announced a proposal to fine five cellular service providers a total of $14.4 million for violating the rules of its Lifeline phone subsidy program. In case your memory needs to be jogged, Lifeline allows economically disadvantaged people to get subsidized cellphone service through carriers. Assist Wireless, Easy Wireless, Icon Telecom, TracFone Wireless and UTPhone are all in Uncle Sam's crosshairs for allegedly giving multiple subsidized accounts to folks who should have only received one through the program. This development comes after the commission's revelation that 41 percent of last year's subsidies didn't go through the appropriate verification process. The FCC's sanctions don't stop at the multi-million dollar penalty either. If the federal body gets its way, cash collected through duplicate accounts will have to be returned by offending companies.
Update: TracFone reached out to us with a response to the FCC's proposal, saying that the commission's dispute with it involves less than $8,000 and fewer than 850 people -- a drop in the 4 million person Lifeline-customer bucket. Hit the break for the firm's full statement.
TRACFONE WIRELESS, INC., STATEMENT ON FCC ACTION
MIAMI, FL. – October 1, 2013 – TracFone Wireless, Inc., issued the following statement today on behalf of its SAFELINK WIRELESS® service for income-eligible households under the federal Lifeline program:
"Last night, we learned that the Federal Communications Commission (FCC) is disputing TracFone Lifeline wireless billing involving less than $8,000 and involving fewer than 850 people. With almost 4 million Lifeline customers, obviously this is a very small percent.
"We will respond to the FCC at the appropriate time. However, we do not believe that our conduct violated any rules or that the proposed FCC action is warranted. We believe that we have the most sound program in the industry when it comes to wireless Lifeline. TracFone has been a leader in both innovative wireless Lifeline services and in preventing program abuses. We have proposed many reforms to prevent waste, fraud and abuse of Universal Service Fund resources. Some of those proposals were included in the FCC's 2012 Lifeline rules. And TracFone continues to propose additional fraud prevention measures including a ban on in-person distribution of handsets associated with Lifeline services.
"Our goal at TracFone Wireless has always been to do whatever it takes to clear up any such issues as expeditiously as possible. We will have no additional statement on this matter until we submit our response to the FCC."