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FCC Fines Telcos $14.4 Million For Defrauding Lifeline Program
by Karl Bode 10:22AM Wednesday Oct 02 2013
Just before the government shut down and the FCC website went dark, the agency announced (Google cache) that it was fining five wireless carriers for abusing the Lifeline program. Lifeline, which provides subsidized phone service for the poor, was created by the Reagan administration in 1985 and expanded by Bush in 2005.

It has however been a popular target by Conservatives of late who affectionately refer to the program as the "Obamaphone" program. Supporters, like acting FCC Chairwoman Mignon Clyburn, insist it provides valuable help to low-income families. Usually.

According to the FCC, TracFone Wireless, Icon Telecom, Assist Wireless, Easy Wireless and UTPhone all abused the system by collecting duplicate subsidies for "thousands" of accounts, something the FCC says the companies should have been aware of. The companies are not only facing $14.4 million in fines, but they'll need to repay all the duplicate monies taken from the program.

"Collecting support for duplicate Lifeline service – the practice we address in these cases – is not only illegal, it diverts resources from legitimate users of the program and is unquestionably within the power and duty of Lifeline providers to prevent," FCC boss Mignon Clyburn said in a statement. "It must stop."

Tracfone owner and Mexican billionaire Carlos Slim said in a statement that he does "not believe that our conduct violated any rules or that the proposed FCC action is warranted."


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reply to IowaCowboy

Re: My personal opinion

I don't think punishing those who legitimately qualified makes sense. In this case it was the companies failing to police their sales to gain extra profit.
Yes, there are some users who knowingly get a discount they don't qualify for, but based on ads I've seen the companies are pushing an "ANYONE CAN QUALIFY" attitude/belief, when they are clearly in the position to KNOW that the law is one phone per household either wired or wireless, and a discount of the USF and federal taxes plus the base long distance charge (leaving $8-10 for the user to pay.)

Any feature charges are the users responsibility.