The Waste, Fraud and Abuse of Obamaphone Continues
The Lifeline phone program, often referred to as Obamaphone continues with an ever-increasing cost. In four short years it has soared from $819 million to $2.2 billion.
The program was begun in 1984 to ensure that poor people aren’t cut off from jobs, families and emergency services due to inability to pay for phone service. It’s funded by charges that appear on the monthly bills of every landline and wireless-phone customer.
The Lifeline program was started during the Reagan administration with the best of intentions but over the years it has morphed into a full-blown entitlement program. It’s a classic example of the exponential growth of the Federal government. There are hundreds, if not thousands, of programs that have started small and mushroomed out of control.
Of course, we all remember this video:
According to a February 13, 2013 article in the Wall Street Journal the program is fraught with fraud. Last year, the Federal Communications Commission suspecting that many of the newer enrollees were ineligible tightened the rules last year and required carriers to verify that existing subscribers were eligible.
The agency estimated 15% of users would be weeded out, but far more were dropped. A survey of the five top providers of Lifeline conducted by the FCC showed that a staggering 41% of their more than six million subscribers either couldn’t demonstrate their eligibility or didn’t respond to requests for certification.
The program is administered by the nonprofit Universal Service Administrative Co. It pays carriers $9.25 a customer per month toward free or discounted wireless service. Meanwhile, Americans pay an average of $2.50 a month per household to fund a number of subsidized communications programs, including Lifeline.
Until last year the FCC did not require carriers to certify that subscribers were eligible. They were allowed to self-certify and in many states documentation wasn’t required.
Carriers said many of the disqualified subscribers simply didn’t reply when asked to prove their eligibility. They also said the FCC rules on self-certification, and the absence of a national database of participants, made it hard to keep ineligible people from signing up.
Until last year, the FCC allowed consumers to self-certify, without requiring documentation that they met federal poverty guidelines. Subscribers didn’t have to recertify once they were enrolled in the program, and there were few checks on whether households signed up for more than one cellphone. It was an open invitation to fraud and abuse.