Due to a one-of-a-kind historical quirk (not to mention a huge screw-up by the Federal Communications Commission), free government cell phone companies get paid special bonus fees for almost every customer they enroll in Oklahoma. Now the FCC wants to correct its earlier oversight, but Native American tribes object and want to continue violating the spirit of the Lifeline Assistance program.
FreeGovernmentCellPhones.net was the first media outlet to uncover this egregious loophole in the program. Here’s what we said when we exposed the problem back in April of this year:
Why is Oklahoma different?
The Tribal Lands Lifeline program discounts usually apply only to residents of current or former Native American Tribal Lands. In most states those lands (also known by the politically-incorrect term “Indian reservations”) cover relatively small geographic areas and have relatively few residents. But Oklahoma has a special status because the entire state was, at one time, a reservation.
Whoever wrote the law was clearly unaware that virtually all of Oklahoma was once an “Indian reservation”. That quirk means that almost every Oklahoma resident may legally qualify for special discounts that were intended only for Native Americans — if they meet the program’s other standard requirements.
For example, even if Tulsa resident Joe Blow’s mother was 100% Irish and his father was 100% German, he qualifies for special home phone discounts that in other states are reserved for Native Americans living on traditional tribal lands.
Here’s a map that demonstrates the issue. The areas in red, representing 99.9% of the state’s population, are designated as Tribal Lands. Under normal circumstances in Oklahoma and every other state, companies participating in the Lifeline Assistance program are paid $9.25 per customer per month plus an additional $25 per month for each customer residing on traditional Tribal Lanes.
And that’s the rub.
Only 8.6% of the state’s population is Native American, but since 99.9% of the state’s population lives on former or current Tribal Lands, Lifeline Assistance companies are getting paid special, higher Native American rates for customers who are not Native Americans.
This clearly violates the spirt, if not the letter, of the Lifeline Assistance program’s intent. So this is one case where we find ourselves squarely behind the FCC. It’s not fraud because the subsidies are in technical agreement with Lifeline’s written regulations, but it is waste and/or abuse because it’s clearly in violation of the intent of the FCC program. Of course, it’s the FCC’s fault for extending the program without understanding the special nature of Oklahoma’s history, but that does not mean it shouldn’t be corrected now that it understands its earlier oversight.
The FCC, as part of its ongoing effort to eliminate fraud, waste and abuse in the Lifeline Assistance program, wants to go back to the drawing board and redefine tribal lands in Oklahoma to make sure that enrollees who get bonus subsidies intended for Native Americans are actually Native Americans.
Here’s how The Oklahoman explains the specifics:
More than 300,000 Oklahomans receive Lifeline support, with all but several hundred qualifying under the enhanced version of the program, according to federal data. The Oklahoma participants don’t have to be tribal members; they just have to have a mailing address on former reservation lands.
The FCC released an order in June that would drop some urban areas such as Oklahoma City and Norman from the enhanced version of Lifeline for tribal lands. The agency said it wants to use a pre-statehood map of Indian territory that better reflects treaties with the tribes that were removed to Oklahoma.
Much of metropolitan Tulsa would still be covered as tribal lands under the FCC’s order, although the agency wants comments on whether some urban areas should be excluded from coverage under the enhanced Lifeline program.
Seems reasonable, doesn’t it? Especially when you consider that the poverty rate among Native Americans in Oklahoma (12.7%) is far lower than among African-Americans (29.8%), Asian-Americans (22.8%), and African-Americans (29.8%).
Not so fast. Turns out some Oklahoma tribes and Lifeline cell phone companies object to the proposed changes.
Oklahoma’s Choctaw, Citizen Potawatomi and Osage Nations object to the FCC plan because the government watchdog didn’t consult them before the the order was issued.
“We don’t see the relevance of designating a group of people excluded from the service specifically because they live in a particular area urban or rural,” said a letter from the Osage Nation. “Our determination is that where you live has very little basis in whether or not you can afford a service or not.”
The Choctaw also jumped into the battle in a letter from Chief Gary Batton that said, in part, that the FCC “has stumbled in different directions over the past two decades on how it defines ‘tribal lands.”
Unfortunately, Oklahoma has become the national epicenter for fraud in the Lifeline program. Despite the fact that the state ranks only 28th in population, its free government cell phone companies billed the government for $128 million in Lifeline reimbursements in 2014, more than all but one state. More than California which has ten times as many people, more than Texas which has eight times as many.
The worst fraud in the history of the Lifeline Assistance program occurred in the Sooner State. An Edmond cell phone company and one of its contractor that defrauded the program out of $25 million by creating “phantom customers.” The company’s founder, Wes Yui Chew, was sentenced to four-years in the federal penitentiary and Oscar Enrique Perez-Zumaeta, was sent to the Big House for 42 months.
But let’s not conflate fraud with the FCC’s proposed changes. The FCC is merely acknowledging the fact that Oklahoma’s history makes it different than the other states and attempting to revise the regulations to make them more consistent with other states.
We support the effort.