I\u2019ve previously written about the \u201cLifeline\u201d program here at TAH, now commonly referred to as \u201cObamaPhones\u201d.\u00a0 Well, the program is back in the news.\u00a0 And as was the case previously . . . it’s not exactly in the news for the right reasons.<\/p>\n
When I last wrote about the program around 2 1\/2 years ago, it was riddled with fraud.\u00a0 Indicators at the time were that the program’s fraud rate appeared to be about 40%<\/a><\/em>.<\/p>\n As you might recall:\u00a0 the program is funded by fees collected by the FCC on telecommunications services.\u00a0 Yeah, you’re reading that correctly:\u00a0 that means you and I pay for it whenever we pay our phone or Internet service bill.\u00a0 And since it\u2019s effectively funded by a revolving \u201cslush fund\u201d collected from paying telecommunications users, the program doesn’t get that much visibility – or Congressional oversight.<\/p>\n So, how are things 2 1\/2 years later?<\/p>\n BLUF:\u00a0 the program still appears to be rife with fraud and abuse.\u00a0 The FCC recently caught one of the program’s service providers \u2013 Total Call \u2013 internally duplicating sign-up records and collecting excess funds based on those duplicated records (as well as bypassing other program rules).\u00a0 The FCC is asking Total Call to return around $9.7M worth of those improper fees, plus has assessed them a whopping fine.<\/p>\n Gee, great!\u00a0 That means the FCC is really “raking them over the coals”\u2013 right?<\/p>\n Well, not really.\u00a0 The FCC is indeed hitting Total Call for $51M – $9.7M to recover fees paid for duplicate claims, plus around $41.3M in fines.\u00a0 But even including the fines, it appears the FCC will only recover a fraction of the total fees paid to Total Call for their duplicative and bogus claims.<\/p>\n The nearly $10M in bogus fees referenced above represents what Total Call collected from the FCC for 2,587 duplicate claims.\u00a0 The actual total of duplicate claims paid was 32,498<\/em><\/strong>.\u00a0 The FCC apparently is simply going to ignore the other almost 30,000<\/span> bogus duplicate submissions \u2013 and recover nothing for those.<\/p>\n Estimates are that the actual loss to the government due to all of those bogus claims was over $84M<\/em><\/strong> \u2013 not $9.7M.\u00a0 That means the government is collecting less than 12% or so of what was wrongfully paid to Total Call.\u00a0 Even including the fines, the FCC is only recovering around 60% or so of the actual loss.<\/p>\n Gee \u2013 collect $84+M in bogus fees, then return $9.7M and pay $41.3M in fines.\u00a0 Doing the math, that means Total Call is somewhere around $39M ahead.\u00a0 Sounds like a real<\/u> deterrent to future similar schemes, doesn\u2019t it?<\/p>\n But as bad as that is, that\u2019s not the worst \u201cstinker\u201d here.<\/p>\n The FCC recently voted to expand the \u201cObanaPhone\u201d program (Lifeline) yet again.\u00a0 On 1 April 2016, the FCC \u2013 in a 3-2 vote \u2013 approved expansion of the program to include 3G wireless broadband.<\/p>\n Yeah, you read that right.\u00a0 Now, not only with ObamaPhone users be able to \u201cphone home\u201d on the taxpayer’s dime \u2013 they\u2019ll also have subsidized data services, too.\u00a0 Can you say \u201cweb surfing\u201d?<\/p>\n But wait – I haven\u2019t even told you the best<\/u> part yet.\u00a0 The issues with Total Call described above were known to the FCC in late March.\u00a0 However, information concerning that apparent scam was not released to the public until after the FCC vote on whether to approve the broadband expansion on 1 April.\u00a0 Further, FCC personnel – including the 5 FCC commission members – were told not to discuss the matter publicly until after the vote<\/em>.<\/p>\n Now, why might the FCC want to keep this under wraps until after they voted on the program’s expansion?\u00a0 Well, “Avoiding public outcry and complaints” sounds like one rather obvious answer to me.\u00a0 “Trying to ‘fly under the radar’ ” regarding the program’s expansion to include wireless broadband also comes to mind.<\/p>\n However, we should be used to crap like this by now.\u00a0 I mean, really:\u00a0 based on the past 7+ years we should know to expect stuff like this from “the most transparent Administration in history”.<\/p>\n