January 8, 2014
Vol: 21 No: 2

News

FCC launches database to crack down on fraud in free cellphone program

By Rosette Royale , Assistant Editor

Problems with Lifeline:

• Lifeline is a government benefit program that provides discounts on monthly telephone service for eligible low-income consumers.

• The FCC fined three mobile phone carriers because they had duplicate Lifeline subscribers.

• Lifeline is available in every state and on tribal lands. To participate in the program, a consumer must have an income that is at or below 135 percent of the federal poverty rate or participate in one of the following programs:

• Medicaid • Supplemental Nutrition Assistance Program (SNAP) • Supplemental Security Income (SSI) • Federal Public Housing Assistance (Section 8) • Low-Income Home Energy Assistance Program (LIHEAP) • Temporary Assistance to Needy Families (TANF) • National School Lunch Program’s Free Lunch Program • Bureau of Indian Affairs General Assistance • Tribal Temporary Assistance for Needy Families (TTANF) • Food Distribution Program on Indian Reservations (FDPIR) • Head Start (if income eligibility criteria are met)

Source: fcc.gov

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A federal program that provides free prepaid mobile phones to low-income people will launch an online database this spring to eliminate duplicate subscribers.

This March, the Federal Communications Commission (FCC) plans to fully institute a subscriber database to help eradicate fraud in its Lifeline phone program. The database to identify duplicate subscribers is part of an ongoing effort to cut waste and abuse.

More than 15 million people participate in the Lifeline program, according to the FCC. Since 2011, new regulations and guidelines have scrubbed more than 500,000 duplicate subscribers from its rolls, the FCC said.

Subscribers are allowed only one Lifeline phone.

Lifeline subsidizes mobile companies $9.25 a month for each phone, an amount that covers monthly service. The prepaid phones provide 250 minutes of free service a month.

The database is part of a push by the FCC to reduce fraud, waste and abuse caused by both Lifeline subscribers and carriers that provide the mobile service. Some customers have complained that carriers are inefficient and don’t deliver phones as promised (“Hanging up,” RC, July 25, 2012).

Late last year, the commission levied $44 million in fines against Cintex Wireless, Telrite Corporation and Global Connection that had duplicate Lifeline subscribers.

If a subscriber has duplicate phones, the wireless company providing the service can benefit from multiple federal subsidies.

By the end of 2014, the FCC hopes to save more than $2 billion that would have been lost due to fraud and waste.

To be eligible for the program, a potential subscriber must either be at or below 135 percent of federal poverty guidelines — approximately $20,940 for a family of two — or participate in a federal assistance program such as Medicaid, Section 8 public housing assistance or Supplemental Nutrition Assistance Program, which provides food stamps.

While the upcoming online database is part of a national effort to cut down on fraud, states can enact their own methods to achieve similar goals.

Last month, The New York Times reported that the Georgia Public Service Commission voted in 2013 that Georgia Lifeline users pay their wireless providers $5 a month. The charge was set to go in effect this month, but a judge granted an injunction, halting payments. Georgia subscribers are awaiting a final ruling.

The Lifeline program began in 1985 as a way to ensure low-income people had landline phone service.

In 2005, discounts for prepaid mobile phones were incorporated into the program. When Lifeline began, 80 percent of low-income people in the country had phone service. By 2013, the number had risen to 93 percent.

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