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FCC aims to fine five wireless carriers $14 million for Lifeline program violations
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.
FCC: 41 percent of Lifeline phone subsidies in 2012 weren't verified
The FCC took significant steps to cut the waste from its Lifeline phone subsidy program at the start of last year. However, it might not have gone far enough, if an FCC review of the program prompted by the Wall Street Journal is an indicator. Among the top five providers receiving money for telecom service to the poor in 2012, 41 percent of their customers either couldn't or didn't prove they were eligible. The lack of answers leaves a real possibility that some of the $2.2 billion spent on Lifeline in 2012 might have gone to those who didn't need it. In response, the FCC is keen to claim that its reforms may have saved $214 million last year, but it isn't happy that there may still have been money going down the tubes -- it's investigating the accusations and could levy fines of up to $1.5 million per violation. While only Verizon has gone on the record and says it's been dropping customers who wouldn't prove their eligibility, it's likely we'll know more about the potential excesses in the near future.
Following Lifeline reforms, FCC funds pilot programs to improve broadband adoption
Following the FCC's reforms of its Lifeline assistance program, the regulatory agency announced today that it's trimmed subsidy expenditures by a handsome $214 million -- which just so happens to be $14 million more than expected. As part of the agency's original vision for reform, the FCC will put this $14 million surplus (of sorts) toward a handful of programs that seek to improve broadband adoption. In all, 14 pilot projects across 21 states and Puerto Rico will receive funding from Genachowski & Crew, with the goal of providing broadband internet to 75,000 households that currently lack the service. Further, the cash will also be put toward studies that seek to determine efficient methods to increase and retain broadband adoption among low-income citizens. Each pilot program will run for 18 months and is set to begin on February 1st of the coming year. Thanks, FCC: a bit of good news is always nice.
FCC revamps Lifeline phone service, cuts the fat from carriers' bottomlines
With a site redesign freshly under its belt, the FCC's setting its recently honed eye for modernization on other, more pertinent areas of its jurisdiction -- like Lifeline. The universal program, a means of guaranteeing affordable phone service to low-income families, hadn't exactly kept pace with changes in the telecom industry, overlooking consumers' preference for wireless and the growing need for pervasive broadband access. That's all set to change with new measures adopted by the Commission today designed to curb carrier abuse of the antiquated system and automate the enrollment process by eliminating unnecessary duplicate accounts and subsidies. A pilot program to offer and potentially bundle discounted, high-speed internet to eligible participants is also underway, with potential ISP partners currently being solicited for inclusion. All told, the moves could wind up saving the federal agency over $2 billion in misdirected funds over a three-year span, leaving more money on the table to help your average Joe and Jane America step firmly into the 21st century.
