FCC and Florida State Cracking Down on Abuse of Lifeline Phone Program

In early July we published the article, Good news: FCC reworks Lifeline program to eliminate fraud by checking for people with multiple free cell phone accounts. In that article, we applauded the Federal Communications Commission’s decision to attempt to enforce the rule that says only one Lifeline phone is permitted per household. This was a result of an FCC research project finding that some subscribers are in violation of this rule. Amazingly, until now there has been no mechanism in place to monitor double dipping (or more).

This action is now involving public service departments in various states, and Florida has recently announced that they are working with the FCC to audit records to find families receiving more than one Lifeline phone. Remember, Lifeline not only provides free cell phones, but also — in fact, originally — provides discounted landline phone service. So, in theory, a household could have a number of landline phones, and one cell phone from each of the two cell phone provider in Florida, Assurance Wireless and Safelink Wireless.

Just how rampant is this potential waste? According to a Florida Public Service Commission report, 642,129 Floridians were subscribing to the program as of June 20, 2010. That’s a big number. If just 10% of accounts are fraudulent, at $162 per year subsidy, that’s over $10 million dollars per year.

The Universal Service Administrative Company (USAC), who administers the program, will begin this month contacting people who may have more than one Lifeline phone. People will be contacted by mail, with a warning that they must choose one phone or the USAC will close the extra Lifeline accounts of their choosing.

The article, Regulators say low-income phone program is hemorrhaging millions, which alerted us to this story in Florida, says it is unclear if customers knew that they should have received only one phone. They go on to say that it could be the fault of the FFC itself, because they did not require the phone companies to ask if they were already receiving a Lifeline phone from another carrier.

Oh come on now! The customers well understood that only one Lifeline phone is allowed per household. And they must sign, under penalty of perjury, that they do understand this. In fact, take a look at the exact verbiage above the signature line of the Assurance Wireless application, as an example:

I understand that Lifeline Assistance is only available for one landline or wireless phone per household. If I currently have a Lifeline plan with a different phone service provider, I will notify my current provider when I am approved for Assurance Wireless service.

Will there be punishment for perjury? That’s a laugh. That will never happen. There won’t even be a slap on the wrist. Just a disconnecting of the extra lines.

We applaud the FCC and Florida for cracking down on this fraud and government waste. These days there are not enough dollars to go around and we want to see that the money earmarked for the Lifeline free cell phone program continues to serve those who really need it, and not those who abuse the program.