Telecommunications: Additional Action Needed to Address Significant Risks in FCC's Lifeline Program, Report to Congressional Requesters   [open pdf - 8MB]

"Created in the mid-1980s, FCC's [Federal Communications Commission] Lifeline provides discounts to eligible low-income households for home or wireless telephone and, as of December 2016, broadband service. Lifeline reimburses telephone companies that offer discounts through the USF [Universal Service Fund], which in turn is generally supported by consumers by means of a fee charged on their telephone bills. In 2016, Lifeline disbursed about $1.5 billion in subsidies to 12.3 million households. In 2010, GAO [Government Accountability Office] found Lifeline had limited abilities to detect and prevent ineligible subscribers from enrolling. FCC adopted a reform order in 2012 to enhance Lifeline's internal controls. GAO was asked to examine FCC's reforms. This report discusses, among other objectives, (1) the extent to which Lifeline demonstrates effective performance towards program goals, and (2) steps FCC and USAC [Universal Service Administrative Company] have taken to enhance controls over finances, subscribers, and providers, and any weaknesses that might remain. GAO analyzed documents and interviewed officials from FCC and USAC. GAO analyzed subscriber data from 2014 and performed undercover tests to identify potential improper payment vulnerabilities. The results of GAO's analysis and testing are illustrative, not generalizable. [...] GAO makes seven recommendations, which FCC generally agreed with, including that FCC take action to ensure the preliminary plans to transfer the USF from a private bank to the U.S. Treasury are finalized and implemented expeditiously."

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Public Domain
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Government Accountability Office: http://www.gao.gov/
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