More ObamaPhone “Good News”

I’ve previously written about the “Lifeline” program here at TAH, now commonly referred to as “ObamaPhones”.  Well, the program is back in the news.  And as was the case previously . . . it’s not exactly in the news for the right reasons.

When I last wrote about the program around 2 1/2 years ago, it was riddled with fraud.  Indicators at the time were that the program’s fraud rate appeared to be about 40%.

As you might recall:  the program is funded by fees collected by the FCC on telecommunications services.  Yeah, you’re reading that correctly:  that means you and I pay for it whenever we pay our phone or Internet service bill.  And since it’s effectively funded by a revolving “slush fund” collected from paying telecommunications users, the program doesn’t get that much visibility – or Congressional oversight.

So, how are things 2 1/2 years later?

BLUF:  the program still appears to be rife with fraud and abuse.  The FCC recently caught one of the program’s service providers – Total Call – internally duplicating sign-up records and collecting excess funds based on those duplicated records (as well as bypassing other program rules).  The FCC is asking Total Call to return around $9.7M worth of those improper fees, plus has assessed them a whopping fine.

Gee, great!  That means the FCC is really “raking them over the coals”– right?

Well, not really.  The FCC is indeed hitting Total Call for $51M – $9.7M to recover fees paid for duplicate claims, plus around $41.3M in fines.  But even including the fines, it appears the FCC will only recover a fraction of the total fees paid to Total Call for their duplicative and bogus claims.

The nearly $10M in bogus fees referenced above represents what Total Call collected from the FCC for 2,587 duplicate claims.  The actual total of duplicate claims paid was 32,498.  The FCC apparently is simply going to ignore the other almost 30,000 bogus duplicate submissions – and recover nothing for those.

Estimates are that the actual loss to the government due to all of those bogus claims was over $84M – not $9.7M.  That means the government is collecting less than 12% or so of what was wrongfully paid to Total Call.  Even including the fines, the FCC is only recovering around 60% or so of the actual loss.

Gee – collect $84+M in bogus fees, then return $9.7M and pay $41.3M in fines.  Doing the math, that means Total Call is somewhere around $39M ahead.  Sounds like a real deterrent to future similar schemes, doesn’t it?

But as bad as that is, that’s not the worst “stinker” here.

The FCC recently voted to expand the “ObanaPhone” program (Lifeline) yet again.  On 1 April 2016, the FCC – in a 3-2 vote – approved expansion of the program to include 3G wireless broadband.

Yeah, you read that right.  Now, not only with ObamaPhone users be able to “phone home” on the taxpayer’s dime – they’ll also have subsidized data services, too.  Can you say “web surfing”?

But wait – I haven’t even told you the best part yet.  The issues with Total Call described above were known to the FCC in late March.  However, information concerning that apparent scam was not released to the public until after the FCC vote on whether to approve the broadband expansion on 1 April.  Further, FCC personnel – including the 5 FCC commission members – were told not to discuss the matter publicly until after the vote.

Now, why might the FCC want to keep this under wraps until after they voted on the program’s expansion?  Well, “Avoiding public outcry and complaints” sounds like one rather obvious answer to me.  “Trying to ‘fly under the radar’ ” regarding the program’s expansion to include wireless broadband also comes to mind.

However, we should be used to crap like this by now.  I mean, really:  based on the past 7+ years we should know to expect stuff like this from “the most transparent Administration in history”.

The Washington Free Beacon has an excellent article that discusses the above.  Their article has more details on the about the FCC’s investigation; about Total Call and it’s checkered past history with the ObamaPhone (formally “Lifeline”) program; and the intentional hiding of the incident until after the recent FCC vote.  It’s IMO definitely worth a read.

Sheesh.  This kind of crap simply needs to stop.  Yesterday.

Category: "The Floggings Will Continue Until Morale Improves", "Your Tax Dollars At Work", Government Incompetence, WTF?