FCC Adopts Lifeline Overhaul Order and Rulemaking Notice

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The FCC has released a Fifth Report and Order, Memorandum Opinion and Order and Order on Reconsideration, and Further Notice of Proposed Rulemaking, adopted last month, which FCC Chairman Ajit Pai claims will “institute common sense reforms to combat waste, fraud, and abuse” and correct problems identified by the FCC’s Office of the Inspector General. The recently adopted order will, among other things: (1) prohibit participating carriers from paying commissions to employees or sales agents based on the number of consumers who apply for or are enrolled in the Lifeline program with that carrier; (2) require participating carriers’ employees or sales agents involved in enrollment to register with USAC, the program’s administrator; (3) codify a rule that strengthens prohibitions barring Lifeline providers from claiming “subscribers” that are deceased; (4) take additional steps to better identify duplicate subscribers, prevent reimbursement for fictitious subscribers, and better target carrier audits to identify potential FCC rule violations; (5) increase transparency by posting aggregate subscribership data, including data broken out at the county level, on USAC’s website; and (6) increase transparency with states by directing USAC to share information regarding suspicious activity with state officials. Additionally, the Commission seeks comment on additional measures to combat waste, fraud, and abuse, including ways to ensure the accuracy of carriers’ claims that subscribers are using their Lifeline service on an ongoing basis and whether providers’ practice of providing free cell phones during in-person Lifeline enrollment events encourages ineligible applicants to attempt to enroll in the program. Comments are due 30 days after the Further Notice of Proposed Rulemaking is published in the Federal Register, which has yet to occur.

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