Thune Questions Efficiency of Phone and Internet Subsidy Program

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By Tara Jeffries

Lawmakers may have to revamp a Federal Communications Commission telephone and internet service subsidy program for low-income households to address concerns that it is plagued by fraud, a leading Senate Republican said Sept. 6.

The FCC’s existing Lifeline program “could be an ineffective means of increasing telephone subscribership among low-income consumers,” Senate Commerce, Science and Transportation Chairman John Thune (R-S.D.) said during a committee hearing on alleged fraud and abuse in the program. Thune questioned whether Lifeline’s problems might extend beyond ones the Government Accountability Office reported on in June. The GAO said then it couldn’t verify Lifeline program eligibility for more than a third of the recipients it studied—36 percent, or about 1.2 million out of 3.5 million.

Thune said lawmakers may include changes to the program in an FCC reauthorization bill. He also said that the FCC is responsible for ensuring that Lifeline is meeting the needs of low-income people, and it doesn’t need legislation to do that. Thune’s committee is unlikely to tackle an FCC reauthorization bill this year, he said.

“If we come back to that issue,” Thune told reporters after the hearing, referring to an FCC reauthorization, Lifeline “is certainly something that could fall into that overall rubric.”

Seto Bagdoyan, the GAO’s director of forensic audits, pointed to what he described as lax verification standards in the program. But Lifeline advocates say it’s a conduit to crucial communications services for the poorest consumers, and that the GAO report doesn’t reflect program changes the FCC made last year, such as a national verification program currently in the works.

“The report doesn’t fully account for the ongoing efforts of the FCC to modernize, reform, and strengthen the Lifeline program,” Sen. Brian Schatz (D-Hawaii), the top Democrat on Commerce’s Communications, Technology, Innovation and the Internet Subcommittee, said about the GAO’s findings at the hearing.

Other witnesses said that Lifeline provides critical services for lower income people—especially those hit by disasters such as Hurricane Harvey or Hurricane Irma, which is approaching the United States as one of the biggest Atlantic hurricanes ever recorded.

The FCC “must ensure that everyone has access,” Jessica Gonzalez, senior counsel and deputy director at the public interest group Free Press, said.

To contact the reporter on this story: Tara Jeffries at tjeffries@bna.com

To contact the editor responsible for this story: Keith Perine at kperine@bna.com

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